Exhibit 99.10
EXECUTION COPY
by and between
and
ALLSCRIPTS-MISYS HEALTHCARE SOLUTIONS, INC.
dated as of June 9, 2010
CONTENTS
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Clause |
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1. Arsenal Exchange |
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2 |
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1.1 Authorization of Additional Arsenal Shares; Arsenal Exchange; Newco Merger |
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2 |
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1.2 Cooperation of Arsenal |
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3 |
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2. Coniston Transaction |
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3 |
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2.1 Repurchase of Exchange Shares |
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3 |
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2.2 Public Secondary Offering |
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4 |
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2.3 Coniston Closing |
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9 |
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2.4 Coniston Closing Deliveries |
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2.5 Withholding Taxes |
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10 |
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3. Contingent Repurchase Transaction |
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10 |
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3.1 Contingent Repurchase of Arsenal Shares |
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10 |
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3.2 Contingent Repurchase Closing |
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11 |
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3.3 Contingent Repurchase Closing Deliveries |
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11 |
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4. Representations and Warranties of Manchester |
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11 |
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4.1 Organization; Authority; Execution and Delivery; Enforceability |
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4.2 No Conflicts; Consents |
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12 |
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4.3 Litigation |
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13 |
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4.4 Repurchase Shares; Contingent Repurchase Shares |
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13 |
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4.5 Newco Capitalization; No Liabilities or Obligations |
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14 |
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4.6 The Newco Shares; Arsenal Shares Owned by Newco |
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15 |
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4.7 Brokers |
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16 |
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4.8 Taxes |
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16 |
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5. Representations and Warranties of Arsenal |
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16 |
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5.1 Organization; Authority; Execution and Delivery; Enforceability |
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16 |
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5.2 No Conflicts; Consents |
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17 |
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5.3 Litigation |
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18 |
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5.4 Change of Control |
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18 |
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5.5 The Exchange Shares |
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19 |
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5.6 Financial Capability |
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19 |
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5.7 Brokers |
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20 |
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5.8 Emerald Definitive Agreement |
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20 |
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6. Additional Agreements |
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20 |
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6.1 Arsenal Financing |
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20 |
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6.2 Emerald Merger |
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21 |
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6.3 Manchester Shareholder Circular |
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21 |
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6.4 Amendment to Arsenal By-laws |
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22 |
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6.5 Appointment of Arsenal Directors and Arsenal Chairman |
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22 |
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6.6 Voting Agreement |
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22 |
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6.7 Public Announcements |
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23 |
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6.8 Further Assurances |
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6.9 Use of Names |
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24 |
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6.10 Section 16 Matters |
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24 |
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6.11 Termination of Stock Repurchase Agreement |
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24 |
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6.12 Patriot Merger Agreement |
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24 |
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6.13 India Migration |
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25 |
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6.14 Arsenal Exchange Sub |
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26 |
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Clause |
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7. Conditions Precedent |
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26 |
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7.1 Conditions Precedent to the Coniston Closing |
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26 |
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7.2 Conditions Precedent to the Contingent Repurchase Closing |
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27 |
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8. Termination |
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28 |
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8.1 Termination Prior to Coniston Closing |
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8.2 Effect of Termination |
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9. Survival; Indemnification |
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9.1 Survival |
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9.2 Indemnification by Arsenal |
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9.3 Indemnification by Manchester |
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9.4 No Consequential Losses |
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9.5 Indemnification Procedures |
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9.6 Indemnification Payments |
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10. Tax Matters |
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31 |
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10.1 Tax Indemnification |
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10.2 IRS Private Letter Ruling |
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10.3 Tax Returns |
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35 |
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10.4 Refunds and Credits |
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35 |
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10.5 Cooperation |
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36 |
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10.6 Taxes on Parties |
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36 |
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10.7 Franchise Taxes |
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37 |
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10.8 Contests |
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37 |
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10.9 Further Tax Assurances |
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10.10 Tax Indemnity Credit Support |
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10.11 Expenses |
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10.12 Predecessors and Successors |
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10.13 Survival |
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11. Miscellaneous |
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11.1 Notices |
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43 |
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11.2 Amendments and Waivers |
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45 |
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11.3 Expenses |
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45 |
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11.4 Successors and Assigns |
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46 |
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11.5 Governing Law |
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11.6 Enforcement; Consent to Jurisdiction |
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11.7 WAIVER OF JURY TRIAL |
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47 |
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11.8 Counterparts; Third-Party Beneficiaries |
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47 |
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11.9 Severability |
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48 |
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11.10 Entire Agreement |
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48 |
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11.11 Construction |
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11.12 Headings and Captions; Exhibits and Schedules |
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49 |
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Signatories |
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50 |
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Exhibits |
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Exhibit 1 Form of Amendment to Arsenal Second Amended and Restated Certificate of Incorporation |
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Exhibit 2 Form of Amendment to Arsenal Third Amended and Restated Certificate of Incorporation |
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Clause |
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Exhibit 3 Commitment Letter |
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Exhibit 4 Form of Emerald Definitive Agreement |
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Exhibit 5 Form of Amendment to Arsenal By-laws |
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Exhibit 6 Voting Agreement |
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Exhibit 7 Form of Manchester Announcement of Coniston Transaction |
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Exhibit 8 Form of Joint Announcement of Emerald Transaction |
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Exhibit 9 Form of Section 16 Resolutions |
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Exhibit 10 Arbitration Procedures |
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Exhibit 11 Form of Bank Guarantee |
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Exhibit 12 Form of Amended and Restated Relationship Agreement |
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Exhibit 13 Registration Rights Agreement |
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Exhibit 14 Form of Transitional Services Agreement |
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BETWEEN:
(1) |
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MISYS PLC, a public limited company formed under the Laws of England and Wales (Manchester),
and |
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(2) |
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ALLSCRIPTS-MISYS HEALTHCARE SOLUTIONS, INC., a Delaware corporation (Arsenal), |
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together, the Parties. |
WHEREAS:
(A) |
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Manchester currently owns, indirectly through its Subsidiaries Kapiti Limited (Kapiti) and
ACT Sigmex Limited (ACTS), one hundred percent (100%) of the partnership interests of Misys US
DGP (DGP). |
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(B) |
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Manchester currently owns, indirectly through its Subsidiaries Misys Patriot US Holdings LLC
(MPUSH) and Misys Patriot Limited (MPL), 79,811,511 Arsenal Shares as of the date hereof. |
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(C) |
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Manchester is in the process of implementing an internal reorganization of its US corporate
structure (the US Reorganization). |
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(D) |
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In connection with the US Reorganization, DGP will acquire 61,308,295 Arsenal Shares from
MPUSH and will be converted from a Delaware general partnership into a Delaware corporation
(Newco). |
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(E) |
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After completion of the US Reorganization, Kapiti and ACTS will own one hundred percent
(100%) of the issued and outstanding shares of common stock of Newco (the Newco Shares) and
Newco will own 61,308,295 Arsenal Shares. |
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(F) |
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After completion of the US Reorganization, Kapiti and ACTS desire to transfer the Newco
Shares to Arsenal in exchange for 61,308,295 newly issued Arsenal Shares (such newly issued
Arsenal Shares, the Exchange Shares, and the transfer of the Newco Shares to Arsenal in
exchange for the Exchange Shares, the Arsenal Exchange). |
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(G) |
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Simultaneously with the consummation of the Arsenal Exchange, Manchester and Arsenal desire
to effect the following transactions: (i) a repurchase by Arsenal of the Arsenal Shares owned
by MPL and a portion of the Exchange Shares from Kapiti and ACTS; (ii) a secondary public
offering by Kapiti and ACTS of additional Exchange Shares (the Secondary Offering Shares, and
the transactions described in clauses (i) and (ii) together being the Coniston Transaction);
and (iii) upon the closing of the Emerald Transaction (as defined below) (the Emerald
Closing), if Manchester so elects, a repurchase by Arsenal from Kapiti and ACTS of the
Contingent Repurchase Shares (as defined below). |
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(H) |
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Manchester and Arsenal acknowledge that the Repurchase Consideration (as defined below)
includes consideration for the agreement by Manchester to divest its Control over Arsenal. |
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(I) |
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Concurrently with the execution of this Agreement, Arsenal is entering into a Merger
Agreement with Eclipsys Corporation (Emerald) pursuant to and subject to the terms and
conditions of which the stockholders of Emerald would receive newly issued Arsenal Shares as
consideration (the Emerald |
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Transaction), it being understood that under no circumstances would the Emerald Transaction
be consummated prior to the Coniston Closing (as defined below), and it being further
understood that the failure of the Emerald Transaction will in no way prejudice the
consummation of the Coniston Transaction. |
(J) |
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Concurrently with the closing of the Coniston Transaction, Manchester and Arsenal intend to
amend and restate the Relationship Agreement (as defined below) and Arsenal intends to amend
and restate the Arsenal Constitutional Documents (as defined below) as provided herein. |
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(K) |
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The Audit Committee of the Arsenal Board of Directors has approved this Agreement and the
other Transaction Documents and the transactions contemplated hereby and thereby. |
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(L) |
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In furtherance of the objectives set forth above, Manchester and Arsenal desire to enter into
this Agreement and the other Transaction Documents to govern the Arsenal Exchange, the
Coniston Transaction, the Contingent Repurchase (as defined below) and the other transactions
contemplated hereby and thereby. |
NOW, THEREFORE, each of Manchester and Arsenal, intending to be legally bound to the extent
provided in this Agreement, hereby agree as follows:
1. |
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ARSENAL EXCHANGE |
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1.1 |
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Authorization of Additional Arsenal Shares; Arsenal Exchange; Newco Merger |
(a) |
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As promptly as reasonably practicable after the date hereof (or, if the Parties so agree in
writing, upon the record date for the Arsenal stockholder meeting held for the purpose of
obtaining the Arsenal Stockholder Approval), Manchester shall cause its direct and indirect
Subsidiaries as holders of Arsenal Shares to act by written consent in lieu of a meeting to
(i) approve an amendment to the Arsenal Second Amended and Restated Certificate of
Incorporation (in the form attached as Exhibit 1) to authorize 350 million Arsenal
Shares and (ii) approve the issuance to Kapiti and ACTS of the Exchange Shares (the Arsenal
Written Consent). As promptly as reasonably practicable after the date hereof (or, if the
Parties so agree in writing, upon the record date for the Arsenal stockholder meeting held for
the purpose of obtaining the Arsenal Stockholder Approval), Manchester shall cause its direct
and indirect Subsidiaries as holders of Arsenal Shares to act by written consent in lieu of a
meeting to approve amendments to Arsenal’s Third Amended and Restated Certificate of
Incorporation (in the form attached as Exhibit 2) to become effective immediately
following the Coniston Closing (except as otherwise set forth therein) (the Additional Written
Consent, and collectively with the Arsenal Written Consent, the Written Consents).
Notwithstanding anything to the contrary contained herein, Arsenal shall not file Arsenal’s
Fourth Amended and Restated Certificate of Incorporation until after the Coniston Closing. |
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(b) |
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On the Coniston Closing Date (as defined below), upon the terms and subject to the conditions
contained herein, Manchester shall cause Kapiti and ACTS to transfer, convey and deliver the
Newco Shares to Arsenal, free and clear of all Liens (other than any Liens or restrictions
imposed solely by virtue of applicable securities laws), and in exchange therefor Arsenal
shall issue to Kapiti and ACTS the Exchange Shares, free and clear of all Liens (other than
any Liens or restrictions imposed solely by virtue of applicable securities laws). |
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(c) |
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If a ruling substantially to the effect of Core Ruling (4) is received as part of the IRS
Private Letter Ruling, immediately following the receipt of such IRS Private Letter Ruling
(but in no event prior to the Coniston Closing Date), in the manner set forth in the IRS
Private Letter Ruling, Arsenal shall cause |
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Newco to merge with and into a newly formed, wholly owned Subsidiary of Arsenal that is, or
otherwise elects to be, disregarded as an entity separate from its owner for US federal tax
purposes (Exchange Sub), with Exchange Sub continuing as the surviving entity. This
Agreement shall constitute a plan of reorganization pursuant to which, if such merger
occurs, the Arsenal Exchange and such merger, taken together, are intended to constitute a
“reorganization” under Code section 368(a), of which Arsenal and Newco are parties. |
(d) |
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If a ruling substantially to the effect of Core Ruling (4) is not received as part of an IRS
Private Letter Ruling, Arsenal shall not cause Newco to merge with and into Exchange Sub or
liquidate Newco and will not consider such a merger or liquidation any earlier than the
two-year anniversary of the Coniston Closing Date. |
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1.2 |
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Cooperation of Arsenal |
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(a) |
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Arsenal and Manchester shall cooperate, and take, or use their respective commercially
reasonable efforts to cause to be taken, all actions, and to do, or use their respective
commercially reasonable efforts to cause to be done, all things necessary, proper or advisable
under applicable Laws to consummate and give effect to the transactions contemplated by
Section 1.1 in accordance with the terms of this Agreement. |
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(b) |
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Without limiting the foregoing, by a date as soon after the execution of this Agreement as is
reasonably practicable, which date the Parties currently expect will be within ten (10)
business days after the date hereof, Arsenal shall prepare and file with the SEC an
information statement meeting the requirements of Regulation 14C under the Exchange Act and
shall prepare any other notice required under the General Corporation Law of the State of
Delaware, if any, to be sent to Arsenal stockholders to the extent required to give effect to
the actions taken by the Written Consents. Arsenal shall respond to any comments or requests
for additional information from the SEC or its staff as soon as practicable after receipt of
any such comments or requests, and shall cause the information statement to be mailed to its
stockholders at the earliest practicable time (and in no event later than five (5) business
days after indication from the SEC staff that no further comments on the information statement
will be forthcoming). Arsenal shall notify Manchester promptly upon the receipt of any
comments from the SEC or its staff or any other government officials and of any request by the
SEC or its staff or any other government officials for amendments or supplements to the
information statement. Arsenal shall supply Manchester with copies of all correspondence
between Arsenal or any of its representatives, on the one hand, and the SEC or its staff or
any other government officials, on the other hand, with respect to the information statement.
Prior to responding to any such comments or requests or the filing or mailing of the
information statement, Arsenal shall provide Manchester with a reasonable opportunity to
review and comment on any drafts of the information statement and all related correspondence
and filings and shall give reasonable consideration to all comments proposed by Manchester.
Manchester shall use all commercially reasonable efforts to cooperate with Arsenal and its
advisers to provide as promptly as reasonably practicable any information or responses to
comments or other assistance reasonably requested by Arsenal in connection with the foregoing. |
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2. |
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CONISTON TRANSACTION |
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2.1 |
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Repurchase of Exchange Shares |
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Upon the terms and subject to the conditions of this Agreement, at the Coniston
Closing, Manchester shall cause MPL, Kapiti and ACTS to sell, transfer, convey and deliver
to Arsenal, free and clear of all Liens (other than any Liens or restrictions imposed solely
by virtue of applicable securities laws) and |
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Arsenal shall buy from MPL, Kapiti and ACTS, 24,442,083 Arsenal Shares held by MPL, Kapiti
and ACTS (the Repurchase Shares) for an aggregate consideration of $577.4 million (the
Repurchase Consideration) at a price per Arsenal Share equal to $23.62. The Repurchase
Consideration includes consideration in the amount of $4.80 per Arsenal Share for the
agreement by Manchester to divest its Control over Arsenal, which consideration is an
integral part of this Agreement without which the Parties would not have entered into this
Agreement or the transactions contemplated hereby. The Repurchase Consideration shall be
paid in U.S. dollars by wire transfer of immediately available funds to the Manchester Bank
Account. |
2.2 |
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Public Secondary Offering |
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(a) |
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Upon the terms and subject to the conditions of this Agreement (including satisfaction of the
Offering Conditions), Manchester shall use commercially reasonable efforts to, and shall cause
Kapiti and ACTS to use their respective commercially reasonable efforts to, conduct a
secondary public offering of the Secondary Offering Shares (the Secondary Offering) pursuant
to which Kapiti and ACTS shall sell to the Lead Underwriters (as defined herein) and one or
more of the underwriters set forth on Schedule 2.2(a) (the Underwriters), together
with any syndicate established by such Underwriters, pursuant to a customary underwriting
agreement, subject to the immediately following sentence, no fewer than 36,000,000 Secondary
Offering Shares or such greater number of Secondary Offering Shares that in the reasonable
good faith judgment of the board of directors of Manchester is necessary to maintain
compliance immediately after the Coniston Closing with Sections LR 9.2.2A and LR 6.1.4(2) of
the Listing Rules (UK) of the UK Listing Authority and London Stock Exchange (the Minimum
Secondary Offering Shares), which number of Secondary Offering Shares shall be determined
prior to the Launch Date and sold to the public by the Underwriters at the maximum price
achievable under the circumstances but in any event at a price to the public of not less than
$16.50 per Secondary Offering Share (the Floor Price). Subject to Section 2.2(b)
below, the aggregate number of Secondary Offering Shares sold by Kapiti and ACTS to the
Underwriters in the Secondary Offering shall not, when combined with the Repurchase Shares,
result in Manchester holding, directly or indirectly, fewer than 15.5 million Arsenal Shares
(or such lesser number of Arsenal Shares as may be agreed by the Audit Committee of the
Arsenal Board of Directors) prior to any exercise of the Underwriters’ over-allotment option
(the Greenshoe). |
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(b) |
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To the extent the sale by Kapiti and ACTS of Arsenal Shares to the Underwriters pursuant to
the Greenshoe would result in Manchester’s direct or indirect shareholding in Arsenal falling
below 15.5 million Arsenal Shares (or such lesser number of Arsenal Shares as may be agreed by
the Audit Committee of the Arsenal Board of Directors) (the Manchester Greenshoe Limit) then
Arsenal shall have a right of first refusal to issue and sell pursuant to the Greenshoe such
number of Arsenal Shares as is equal to the difference between the number of Arsenal Shares
required to satisfy the Greenshoe and the number of Arsenal Shares that Manchester may sell
without falling below the Manchester Greenshoe Limit (the Arsenal Right of First Refusal).
Arsenal shall notify Manchester and the Lead Underwriters in writing within two (2) business
days after Arsenal receives the Launch Notice (as defined below) as to whether it wishes to
exercise the Arsenal Right of First Refusal in the event the Underwriters exercise the
Greenshoe. If Arsenal fails to so notify Manchester and the Lead Underwriters of its
intention to exercise the Arsenal Right of First Refusal or notifies Manchester and the Lead
Underwriters that it does not wish to exercise the Arsenal Right of First Refusal, Manchester
shall be entitled to fully participate in the Greenshoe notwithstanding the Manchester
Greenshoe Limit. |
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(c) |
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Subject to paragraph (g) below, upon the terms and subject to the conditions of this
Agreement and the Relevant Provisions (as defined below) of the Registration Rights Agreement,
prior to the receipt of both (x) the Emerald Stockholder Approval and (y) the Arsenal
Stockholder Approval, Manchester shall |
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determine in its commercially reasonable discretion the date of the launch of the Secondary
Offering (the Launch Date). In exercising its commercially reasonable discretion in
selecting a Launch Date, Manchester agrees to consult regularly with the joint book running
Underwriters of the Secondary Offering designated as such on Schedule 2.2(c) (the
Lead Underwriters) to determine the earliest date reasonably practicable at which the Lead
Underwriters believe market conditions and legal and regulatory requirements, including
satisfaction of the Offering Conditions, would permit the Minimum Secondary Offering Shares
to be sold to the public by the Underwriters at the maximum price achievable during the
offering period provided for herein, but in any event at a price to the public of not less
than the Floor Price. If Manchester selects a Launch Date pursuant to this Section
2.2(c), then Manchester shall notify Arsenal of such Launch Date as well as the number
of Minimum Secondary Offering Shares (and the information relied upon by the board of
directors of Manchester in determining the number of the Minimum Secondary Offering Shares)
by written notice given not less than five (5) business days prior to the intended Launch
Date (the Launch Notice). |
(d) |
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If a Launch Notice is delivered pursuant to paragraph (c) above, and prior to the Launch Date
Manchester reasonably determines that it would not be feasible or in the best interests of
Manchester to proceed on the then scheduled Launch Date or if the Offering Conditions no
longer continue to be met on or after the then scheduled Launch Date, Manchester shall notify
Arsenal of the postponement of the then scheduled Launch Date or Secondary Offering and shall
deliver to Arsenal a new Launch Notice establishing a new Launch Date and the process set
forth in paragraphs (c), (e), (g), (i) and the penultimate sentence of paragraph (b) of this
Section 2.2 shall apply in respect of such new Launch Date mutatis mutandis. |
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(e) |
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Upon the terms and subject to the conditions of this Agreement and the Relevant Provisions of
the Registration Rights Agreement, after the receipt of both (x) the Emerald Stockholder
Approval and (y) the Arsenal Stockholder Approval, so long as (i) the Manchester Shareholder
Approval has been obtained, (ii) the actual five (5) trading day volume weighted average price
of the Arsenal Shares has exceeded and continues to exceed the Floor Price and (iii) each of
the Offering Conditions (other than clause (iv) of the definition of “Market Disruption” and
clauses (vii) and (viii) of the definition of “Offering Conditions” (collectively, the Special
Offering Conditions)) is met, then Arsenal shall be entitled to deliver to Manchester a
written demand that Manchester proceed with the Secondary Offering (a Launch Demand). Within
two (2) business days after receipt by Manchester of such Launch Demand, Manchester shall, if
each of the Offering Conditions (including the Special Offering Conditions) continues to be
met, select a Launch Date within the subsequent five (5) trading day period that Manchester
reasonably determines after consultation with the Lead Underwriters is the most likely date
during such five (5) trading day period to result in a sale to the public by the Underwriters
of the Minimum Secondary Offering Shares at the maximum price achievable during such offering
period, but in any event at a price to the public of not less than the Floor Price;
provided, that, if the Launch Demand is delivered during the Market Holiday or within
five (5) trading days prior to the commencement of the Market Holiday, then Manchester shall
select as the Launch Date the first trading day after the expiration of the Market Holiday.
If Manchester selects a Launch Date pursuant to this Section 2.2(e), then Manchester
shall promptly notify Arsenal of such Launch Date as well as the number of Minimum Secondary
Offering Shares (and the information relied upon by the board of directors of Manchester in
determining the number of Minimum Secondary Offering Shares) by written notice (also referred
to herein as the Launch Notice). If following receipt of a Launch Demand, Manchester fails to
select a Launch Date, postpones a then scheduled Launch Date or Secondary Offering or fails
thereafter to establish a new Launch Date, in each case because of a failure of any of the
Offering Conditions to be met, Manchester shall, within one (1) business day of such failure
or postponement, provide Arsenal and Emerald with the information relied upon by the board of
directors |
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of Manchester in determining that any such Offering Condition fails to be met, including the
material information and advice provided to Manchester by any of the Lead Underwriters
relating to such matter. |
(f) |
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If a Launch Notice is delivered pursuant to paragraph (e) above and (x) prior to the then
scheduled Launch Date the board of directors of Manchester determines in its reasonable good
faith judgment to postpone such Launch Date because either (1) prior to such Launch Date the
Offering Conditions no longer continue to be met or (2) the board of directors of Manchester
determines in its reasonable good faith judgment that the Offering Conditions will not be met
during the eight (8) business days immediately following such Launch Date or (y) after the
Launch Date the board of directors of Manchester determines in its reasonable good faith
judgment to postpone the Secondary Offering because the Offering Conditions no longer continue
to be met, Manchester shall notify Arsenal of the postponement of the then scheduled Launch
Date (in the case of subclause (x)) or Secondary Offering (in the case of subclause (y)) and
shall deliver to Arsenal a new Launch Notice establishing a new Launch Date at the earliest
date reasonably practicable thereafter at which the Offering Conditions are expected to be
satisfied and market conditions and legal and regulatory requirements would permit the Minimum
Secondary Offering Shares to be sold to the public by the Underwriters at a price of not less
than the Floor Price and the process set forth in paragraphs (e), (i) and the penultimate
sentence of paragraph (b) of this Section 2.2 shall apply in respect of such new
Launch Date mutatis mutandis. |
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(g) |
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Upon the terms and subject to the conditions of this Agreement and the Relevant Provisions of
the Registration Rights Agreement, if the Emerald Definitive Agreement is terminated in
accordance with its terms, after the date of such termination, so long as (i) the Manchester
Shareholder Approval has been obtained, (ii) the actual five (5) trading day volume weighted
average price of the Arsenal Shares has exceeded and continues to exceed the Floor Price and
(iii) each of the Offering Conditions (other than the Special Offering Conditions) is met,
then Arsenal shall be entitled to deliver to Manchester a Launch Demand (a Termination Launch
Demand). Within two (2) business days after receipt by Manchester of such Termination Launch
Demand, Manchester shall, if each of the Offering Conditions (including the Special Offering
Conditions) continues to be met, select a Launch Date within the subsequent twenty (20)
trading day period that Manchester reasonably determines after consultation with the Lead
Underwriters is the most likely date during such twenty (20) trading day period to result in a
sale to the public by the Underwriters of the Minimum Secondary Offering Shares at the maximum
price achievable during such offering period, but in any event at a price to the public of not
less than the Floor Price; provided, that, if the Termination Launch Demand is
delivered during the Market Holiday or within five (5) trading days prior to the commencement
of the Market Holiday, then Manchester shall select a Launch Date within the ten (10) trading
day period after the expiration of the Market Holiday. If Manchester selects a Launch Date
pursuant to this Section 2.2(g), then Manchester shall promptly notify Arsenal of such
Launch Date as well as the number of Minimum Secondary Offering Shares (and the information
relied upon by the board of directors of Manchester in determining the number of Minimum
Secondary Offering Shares) by written notice (also referred to herein as the Launch Notice).
If following receipt of a Termination Launch Demand, Manchester fails to select a Launch Date,
postpones a then scheduled Launch Date or Secondary Offering or fails thereafter to establish
a new Launch Date, in each case because of a failure of any of the Offering Conditions to be
met, Manchester shall, within one (1) business day of such failure or postponement, provide
Arsenal with the information relied upon by the board of directors of Manchester in
determining that any such Offering Condition fails to be met, including the material
information and advice provided to Manchester by any of the Lead Underwriters relating to such
matter. |
|
(h) |
|
If a Launch Notice is delivered pursuant to paragraph (g) above and (x) prior to the then
scheduled Launch Date the board of directors of Manchester determines in its reasonable good
faith judgment to postpone such Launch Date because either (1) prior to such Launch Date the
Offering Conditions no |
6
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|
longer continue to be met or (2) the board of directors of Manchester determines in its
reasonable good faith judgment that the Offering Conditions will not be met during the eight
(8) business days immediately following such Launch Date or (y) after the Launch Date the
board of directors of Manchester determines in its reasonable good faith judgment to
postpone the Secondary Offering because the Offering Conditions no longer continue to be
met, Manchester shall notify Arsenal of the postponement of the then scheduled Launch Date
(in the case of subclause (x)) or Secondary Offering (in the case of subclause (y)) and
shall deliver to Arsenal a new Launch Notice establishing a new Launch Date at the earliest
date reasonably practicable thereafter at which the Offering Conditions are expected to be
satisfied and market conditions and legal and regulatory requirements would permit the
Minimum Secondary Offering Shares to be sold to the public by the Underwriters at a price of
not less than the Floor Price and the process set forth in paragraph (i) and the penultimate
sentence of paragraph (b) of this Section 2.2 shall apply in respect of such new
Launch Date mutatis mutandis. |
(i) |
|
Unless the Launch Date specified in a Launch Notice or in response to a Launch Demand has
been rescheduled in accordance with Section 2.2(d), (f) or (h), on the
Launch Date specified in a Launch Notice or in response to a Launch Demand, Manchester shall
request that Arsenal (and Arsenal shall), and Manchester and Arsenal shall use their
respective commercially reasonable efforts to cause, the Lead Underwriters to publicly
announce the commencement on the Launch Date of and conduct a road show that lasts not more
than five (5) business days beginning on the Launch Date assuming full-time participation by
Arsenal’s CEO and CFO during that period in accordance with Section 2.2(k). At the
end of such five (5) business day period (or such lesser period as agreed to by Manchester
after consultation with the Lead Underwriters), assuming continued satisfaction of the
Offering Conditions, Manchester shall formally request, and shall use its commercially
reasonable efforts to cause, the Lead Underwriters to execute and deliver an underwriting
agreement in reasonably customary form, reasonably satisfactory to the Lead Underwriters and
that contains terms not inconsistent with Section 2.4(m) and 2.5(a) of the Registration Rights
Agreement, for a firm commitment, fixed price underwritten public offering that includes the
highest price the Lead Underwriters are prepared to offer to the public for the Minimum
Secondary Offering Shares, which price is equal to or greater than the Floor Price (an
Acceptable Underwriting Agreement). If the Lead Underwriters present Manchester and Arsenal
with an Acceptable Underwriting Agreement, then Manchester and Arsenal shall promptly execute
and deliver, and Manchester shall cause Kapiti and ACTS to execute and deliver, such
Acceptable Underwriting Agreement and agree to be bound thereby, and thereafter Manchester and
Arsenal shall comply with such Acceptable Underwriting Agreement and shall use their
respective commercially reasonable efforts to cause the Secondary Offering to be completed.
Manchester and Arsenal shall not execute an Acceptable Underwriting Agreement that prevents
either Manchester or Arsenal from complying with its obligations under this Section
2.2. |
|
(j) |
|
Offering Conditions shall mean (i) a shelf registration statement has been filed with the SEC
and is effective that permits Manchester, Kapiti and ACTS to conduct the Secondary Offering
(the Secondary Offering Registration Statement), (ii) Arsenal has complied with its
obligations under Section 2.2(k) and the Relevant Provisions of the Registration
Rights Agreement (except for any failures that have not had and would not reasonably be
expected to have a material adverse effect on the Secondary Offering, including by affecting
the ability of the Lead Underwriters to enter into an Acceptable Underwriting Agreement),
(iii) Arsenal has advised Manchester that the Secondary Offering Registration Statement, the
related prospectus and any documents incorporated or deemed to be incorporated therein by
reference (x) are appropriately responsive in all material respects to the requirements of the
Securities Act and/or the Exchange Act, as applicable, and (y) do not contain any untrue
statement of a material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, (iv) Arsenal has advised Manchester
that it is prepared to enter into an underwriting agreement satisfactory to the Underwriters
and is able to cause to be delivered the opinions |
7
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|
of counsel and “cold comfort” letters from its independent certified public accountants, in
each case as contemplated by such underwriting agreement and Section 2.4(m) of the
Registration Rights Agreement, (v) no Market Disruption is then in effect, (vi) no SEC stop
order that would suspend the effectiveness of the Secondary Offering Registration Statement
is in effect and no proceedings for the issuance of an SEC stop order have been initiated,
(vii) no pending earnings announcement or other material disclosure regarding Arsenal or
Emerald is determined by the board of directors of Manchester, in its reasonable good faith
judgment after receipt of advice from the Lead Underwriters, to warrant a delay in such
offering because a failure to so delay is expected to materially interfere with the ability
to sell the Minimum Secondary Offering Shares at or above the Floor Price and (viii) the
actual five (5) trading day volume weighted average price of the Arsenal Shares is not
determined by the board of directors of Manchester, in its reasonable good faith judgment
after receipt of advice from the Lead Underwriters, to fail to exceed or continue to exceed
the Floor Price by an amount sufficient to permit the Secondary Offering to be completed at
or above the Floor Price. Relevant Provisions of the Registration Rights Agreement means
Sections 2.1, 2.3(a), 2.4, 2.7, 2.8 and 2.9(a) and (b) thereof. |
(k) |
|
Without limiting in any way Manchester’s rights under the Relevant Provisions of the
Registration Rights Agreement, from the date of this Agreement until the Coniston Closing,
Arsenal shall, and shall cause its Affiliates and each of its and their respective
representatives to, and shall use its commercially reasonable efforts to cause Emerald and its
Affiliates and each of their respective representatives to, use each of their commercially
reasonable efforts to provide all cooperation reasonably requested by Manchester or the
Underwriters in connection with the Secondary Offering, including using commercially
reasonable efforts to (a) cause appropriate executive officers and employees of Arsenal and
Emerald (i) to be reasonably available to meet with the Underwriters, rating agencies and
prospective investors in meetings, presentations, road shows and due diligence sessions (it
being understood, and Arsenal agrees, that during the road show that occurs after the Launch
Date, the participation of Arsenal’s CEO and CFO shall be required on a full-time basis
including travel to meet prospective and current investors), (ii) to provide reasonable and
customary management and legal representations to auditors and (iii) to provide reasonable and
timely assistance with the preparation of business projections and similar materials, (b)
otherwise reasonably cooperate with the marketing efforts of Manchester and the Underwriters
for the Secondary Offering, (c) furnish Manchester and the Underwriters and their respective
counsel promptly with all reasonable and customary financial information regarding Arsenal and
Emerald and all documents reasonably necessary for their due diligence review as shall exist
(or if not existing, using commercially reasonable efforts to prepare such reasonable and
customary financial information) and as may be reasonably requested by Manchester or the
Underwriters, (d) promptly prepare a registration statement, prospectus and prospectus
supplement for the Secondary Offering and provide Manchester and the Underwriters and their
respective counsel with a reasonable opportunity to review and comment thereon, (e) obtain
customary comfort letters from the auditors of Arsenal and Emerald and consent from such
auditors for use of any of their audit reports (including but not limited to by including such
reports in any offering or information documents for the Secondary Offering, including any
registration statement or related prospectus) and SAS 100 reviews, (f) obtain customary legal
opinions or other certificates or documents of Arsenal and Emerald as may reasonably be
requested by Manchester or the Underwriters, (g) prepare any financial information as required
by the rules and regulations of the SEC and (h) take such reasonable and customary further
actions that the Underwriters or their counsel deem reasonably necessary or required in order
to consummate the Secondary Offering, in each case as promptly as reasonably practicable and
to the greatest extent practicable to permit the Secondary Offering to be launched on or prior
to the Launch Date in accordance with the Registration Rights Agreement. From the date of
this Agreement until the Coniston Closing, Manchester shall, and shall cause its Affiliates
and each of its and their respective representatives to, use commercially reasonable efforts
to provide all cooperation reasonably requested |
8
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|
by Arsenal and the Underwriters in connection with the Secondary Offering, including using
commercially reasonable efforts to (a) furnish Arsenal promptly with all reasonable and
customary information regarding Manchester required in connection with the registration
statement and prospectus for the Secondary Offering and (b) obtain customary legal opinions
or other certificates or documents as may reasonably be requested by Arsenal or the
Underwriters, in each case as promptly as reasonably practicable and to the greatest extent
practicable to permit the Secondary Offering to be launched on or prior to the Launch Date
in accordance with the Registration Rights Agreement. |
(l) |
|
If notwithstanding compliance with the provisions of this Section 2.2 the Lead
Underwriters do not offer an Acceptable Underwriting Agreement at the end of the scheduled
road show following a Launch Date, then until this Agreement terminates or expires in
accordance with its terms the process set forth in paragraphs (e), (g) and (i) of this
Section 2.2 shall apply in respect of any new Launch Date mutatis mutandis. |
|
(m) |
|
The closing of the Greenshoe (the Greenshoe Closing) shall take place at the time and in the
manner provided in, and upon the terms and subject to the conditions of, the Underwriting
Agreement. |
|
(n) |
|
For avoidance of doubt, notwithstanding anything to the contrary contained herein, the
Parties acknowledge and agree that (A) while Manchester agrees to use its commercially
reasonable efforts to cause the Lead Underwriters to do so, Manchester is unable to cause the
Lead Underwriters to offer to execute an Acceptable Underwriting Agreement and nothing herein
is intended to (x) imply any commitment on the part of the Lead Underwriters to do so or (y)
represent the ability of the Lead Underwriters to sell the Minimum Secondary Offering Shares
at a price to the public of not less than the Floor Price and (B) the execution by the Lead
Underwriters of an Acceptable Underwriting Agreement is a condition to the Secondary Offering. |
|
(o) |
|
For avoidance of doubt, notwithstanding anything to the contrary contained herein or in the
Registration Rights Agreement, the Parties acknowledge and agree that Arsenal is entitled to
file an automatic universal shelf promptly after execution of this Agreement, copies of which
have been made available to Manchester. |
|
2.3 |
|
Coniston Closing |
|
|
|
The closing of the Arsenal Exchange and the Coniston Transaction (the Coniston Closing)
shall take place as soon as reasonably practicable, but in no event later than three (3)
business days following the satisfaction of all conditions precedent to closing of the
Coniston Transaction set forth in Section 7.1 (other than those conditions that by
their nature are to be satisfied at the Coniston Closing, but subject to the satisfaction of
those conditions), or at such other time and date as shall be mutually agreed between
Manchester and Arsenal (the Coniston Closing Date). |
|
2.4 |
|
Coniston Closing Deliveries |
|
|
|
At the Coniston Closing: |
|
(a) |
|
Manchester shall cause Kapiti and ACTS to transfer, convey and deliver to
Arsenal the Newco Shares, free and clear of all Liens (other than any Liens or
restrictions imposed solely by virtue of applicable securities laws); |
|
|
(b) |
|
Arsenal shall issue to Kapiti and ACTS the Exchange Shares, free and clear of
all Liens (other than any Liens or restrictions imposed solely by virtue of applicable
securities laws); |
9
|
(c) |
|
Manchester shall cause MPL, Kapiti and ACTS to sell, transfer, convey and
deliver to Arsenal the Repurchase Shares, free and clear of all Liens (other than any
Liens or restrictions imposed solely by virtue of applicable securities laws); |
|
|
(d) |
|
Arsenal shall deliver to Manchester the Repurchase Consideration; |
|
|
(e) |
|
Manchester shall deliver to Arsenal the resignations of Manchester’s current
nominees to the Arsenal Board of Directors (other than those being nominated by
Manchester pursuant to the Amended and Restated Relationship Agreement); |
|
|
(f) |
|
Arsenal shall deliver to Manchester the certificate called for in Section
7.1(b)(vi) and (vii), and Manchester shall deliver to Arsenal the
certificate called for in Section 7.1(c)(v) and (vi); |
|
|
(g) |
|
Each Party shall deliver to the other Party duly executed counterparts of each
Transaction Document that is to be entered into on the Coniston Closing Date; |
|
|
(h) |
|
Manchester shall deliver to Arsenal a statement from Newco as provided for
under the Code and applicable Treasury regulations certifying that Newco is not, and
has not been, a “United States real property holding corporation”; |
|
|
(i) |
|
Manchester shall deliver to Arsenal the corporate books and records of Newco,
including true and correct copies of all documents relating to the US Reorganization;
and |
|
|
(j) |
|
Manchester shall cause the PLR Bank Guarantee and the Historic Bank Guarantee
to be delivered to Arsenal. |
2.5 |
|
Withholding Taxes |
|
|
|
All consideration delivered pursuant to this Section 2 or Section 3
shall not be reduced by, and shall be made free and clear of, any withholding or similar
Taxes (provided that the statement described in Section 2.4(h) shall have been
delivered). |
|
3. |
|
CONTINGENT REPURCHASE TRANSACTION |
|
3.1 |
|
Contingent Repurchase of Arsenal Shares |
|
|
|
Upon the satisfaction of all conditions precedent necessary for closing of the Emerald
Transaction (other than that the Coniston Closing shall have occurred and other than those
conditions that by their nature are to be satisfied on the date of the closing of the
Emerald Transaction), Arsenal shall provide written notice stating the same to Manchester in
the form of a certificate signed by duly authorized representatives of both Arsenal and
Emerald. Manchester shall have ten (10) business days after receipt of such certificate to
provide a written notice (the Contingent Repurchase Election Notice) to Arsenal requiring it
to purchase the Contingent Repurchase Shares (the Contingent Repurchase). If Manchester
provides the Contingent Repurchase Election Notice, then the Contingent Repurchase
Consideration shall be paid by Arsenal at the Contingent Repurchase Closing in U.S. dollars
by wire transfer of immediately available funds to the Manchester Bank Account. |
10
3.2 |
|
Contingent Repurchase Closing |
|
|
|
The closing of the Contingent Repurchase (the Contingent Repurchase Closing) shall take
place on the later of (i) the second business day after the Emerald Closing and (ii) the
fifth business day after Manchester has provided the Contingent Repurchase Election Notice,
or at such other time and date as shall be mutually agreed between Manchester and Arsenal
(the Contingent Repurchase Closing Date), in either case subject to the satisfaction of all
conditions precedent to the Contingent Repurchase Closing set forth in Section 7.2. |
|
3.3 |
|
Contingent Repurchase Closing Deliveries |
|
|
|
At the Contingent Repurchase Closing: |
|
(a) |
|
Manchester shall cause Kapiti and ACTS to sell, transfer, convey and deliver to
Arsenal the Contingent Repurchase Shares, free and clear of all Liens (other than any
Liens or restrictions imposed solely by virtue of applicable securities laws); and |
|
|
(b) |
|
Arsenal shall deliver to Manchester the Contingent Repurchase Consideration. |
4. |
|
REPRESENTATIONS AND WARRANTIES OF MANCHESTER |
|
|
|
Manchester represents and warrants to Arsenal that: |
|
4.1 |
|
Organization; Authority; Execution and Delivery; Enforceability |
(a) |
|
Manchester is a public limited company duly formed and validly existing under the Laws of
England and Wales. |
|
(b) |
|
Manchester has all necessary corporate power and authority to enter into this Agreement and
each Transaction Document to which it is, or will be, a party, and, subject to obtaining the
Manchester Shareholder Approval, to perform its obligations under this Agreement and each such
Transaction Document and to complete the Coniston Transaction and the Contingent Repurchase.
The execution, delivery and performance by Manchester of this Agreement, each of the Written
Consents and each Transaction Document to which it is, or will be a party, and, subject to
obtaining the Manchester Shareholder Approval, the completion of the Coniston Transaction and
the Contingent Repurchase have been duly authorized and all necessary corporate proceedings on
the part of Manchester have been taken. This Agreement has been, and each of the Written
Consents and each Transaction Document to which Manchester is, or will be, a party has been or
will be, duly executed and delivered by Manchester, and assuming the due authorization,
execution and delivery by each other party, constitutes a legal, valid and binding obligation
of Manchester, enforceable in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, moratorium or other similar laws of general
application relating to or affecting creditors’ rights generally and except for the
limitations imposed by general principles of equity. |
|
(c) |
|
Kapiti is a limited company duly formed and validly existing under the Laws of England and
Wales and a Subsidiary of Manchester. ACTS is a limited company duly formed and validly
existing under the Laws of England and Wales and a Subsidiary of Manchester. MPL is a limited
company duly formed and validly existing under the Laws of England and Wales and a Subsidiary
of Manchester. Each of Kapiti and ACTS have all necessary corporate power and authority to
complete the Arsenal Exchange, the Coniston Transaction and the Contingent Repurchase. MPL
has all necessary corporate power and |
11
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|
authority to complete the Coniston Transaction. The completion of the Arsenal Exchange, the
Coniston Transaction and the Contingent Repurchase have been duly authorized and all
necessary corporate proceedings on the part of each of Kapiti and ACTS have been taken. The
completion of the Coniston Transaction has been duly authorized and all necessary corporate
proceedings on the part of MPL have been taken. |
(d) |
|
At the Coniston Closing Date, Newco will be a corporation duly formed and validly existing
under the Laws of the State of Delaware. At the Coniston Closing date, Newco will have full
power and authority to own or lease and to operate and use its assets and properties and to
conduct its business as then conducted. True and complete copies of the certificate of
incorporation and all amendments thereto and of the by-laws, as amended to date, of Newco will
have been delivered to Arsenal on or prior to the Coniston Closing Date. |
|
(e) |
|
Immediately prior to the date of this Agreement, the board of directors of Manchester (or a
duly constituted committee thereof), at a meeting duly called and held, duly adopted
resolutions resolving to: (i) recommend that Manchester’s shareholders approve the
transactions contemplated by this Agreement in the manner required by LR13.3.1R(5) of the
Listing Rules of the Financial Service Authority; and (ii) approve this Agreement, each
Transaction Document to which Manchester is, or will be, a party and the transactions
contemplated hereby and thereby, including the Coniston Transaction and the Contingent
Repurchase. |
|
4.2 |
|
No Conflicts; Consents |
|
(a) |
|
The execution, delivery and, subject to obtaining the Manchester Shareholder Approval,
performance of this Agreement by Manchester and of each of the Written Consents and each
Transaction Document to which it is, or will be, a party do not, and, subject to obtaining the
Manchester Shareholder Approval, the completion of the Coniston Transaction and the Contingent
Repurchase will not, (i) conflict with or violate the articles of association of Manchester,
(ii) conflict with or violate any applicable Law or Order applicable to Manchester or its
assets or (iii) breach or constitute a default (or an event that with notice or lapse of time
or both would become a default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in any loss of any benefit under, or the creation
or imposition of any Lien on any of Manchester’s assets pursuant to, any material Contract or
other instrument or obligation to which Manchester is a party or by which Manchester or its
assets are otherwise bound; except, in the case of clauses (ii) and (iii), for any breach,
violation, termination, default, acceleration, creation or change that would not, individually
or in the aggregate, materially impair the ability of Manchester to perform its obligations
hereunder or prevent the consummation of any of the transactions contemplated hereby by
Manchester. |
|
(b) |
|
The completion of the Arsenal Exchange, the Coniston Transaction and the Contingent
Repurchase will not, (i) conflict with or violate the articles of association of Kapiti or
ACTS, (ii) conflict with or violate any applicable Law or Order applicable to Kapiti or ACTS
or their respective assets (including the Newco Shares), or (iii) breach or constitute a
default (or an event that with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or cancellation of, or
result in any loss of any benefit under, or the creation or imposition of any Lien on any of
the assets of Kapiti or ACTS (including the Newco Shares) pursuant to, any material Contract
or other instrument or obligation to which Kapiti or ACTS is a party or by which Kapiti or
ACTS or their respective assets (including the Newco Shares) are otherwise bound; except, in
the case of clauses (ii) and (iii), for any breach, violation, termination, default,
acceleration, creation or change that would not, individually or in the aggregate, materially
impair the ability of Kapiti or ACTS to |
12
|
|
perform its respective obligations hereunder or prevent the consummation of any of the
transactions contemplated hereby by Kapiti or ACTS. |
(c) |
|
The completion of the Coniston Transaction will not, (i) conflict with or violate the
articles of association of MPL, (ii) conflict with or violate any applicable Law or Order
applicable to MPL or its assets or (iii) breach or constitute a default (or an event that with
notice or lapse of time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in any loss of any benefit
under, or the creation or imposition of any Lien on any of the assets of MPL pursuant to, any
material Contract or other instrument or obligation to which MPL is a party or by which MPL or
its assets are otherwise bound; except, in the case of clauses (ii) and (iii), for any breach,
violation, termination, default, acceleration, creation or change that would not, individually
or in the aggregate, materially impair the ability of MPL to perform its obligations hereunder
or prevent the consummation of any of the transactions contemplated hereby by MPL. |
|
(d) |
|
Other than the filing with the UK Listing Authority of the Circular, the execution, delivery
and performance by Manchester of this Agreement and each Transaction Document to which it is,
or will be, a party do not, and the completion of the Coniston Transaction and the Contingent
Repurchase will not, require any Governmental Authorization to be obtained by Manchester,
Kapiti, ACTS, MPL or Newco or any filing with any Governmental Authority to be made by
Manchester, Kapiti, ACTS, MPL or Newco. |
|
4.3 |
|
Litigation |
|
|
|
As of the date of this Agreement, there are not any (a) Proceedings pending or, to the
Knowledge of Manchester, threatened against or affecting Manchester, Kapiti, ACTS, MPL,
Newco or any of their respective Affiliates or (b) investigations by any Governmental
Authority that are pending or, to the Knowledge of Manchester, threatened against or
affecting Manchester, Kapiti, ACTS, MPL, Newco or any of their respective Affiliates that,
in either case, would, individually or in the aggregate, materially adversely affect the
ability of Manchester to perform its obligations under this Agreement or any Transaction
Document to which it is, or will be, a party or affect the ability of Manchester, Kapiti,
ACTS, MPL, Newco or any of their respective Affiliates to complete the Arsenal Exchange, the
Coniston Transaction or the Contingent Repurchase in accordance with the terms hereof. |
|
4.4 |
|
Repurchase Shares; Contingent Repurchase Shares |
|
(a) |
|
Assuming Arsenal complies with its obligations under this Agreement and is not in breach of
its representations and warranties in Section 5.5, at the Coniston Closing Date, MPL,
Kapiti and ACTS will own, in the aggregate, at least 79,811,511 Arsenal Shares free of any
“adverse claim” (within the meaning of Section 8-102(1) of the UCC). Assuming Arsenal
complies with its obligations under this Agreement and is not in breach of its representations
and warranties in Section 5.5, at the Coniston Closing Date, the Repurchase Shares (a)
will not be subject to any Liens, claims, charges, mortgages, security interests, pledges,
reversions or other property interests and (b) will not be subject to, and none of MPL, Kapiti
or ACTS will be party to or otherwise bound by, any options, voting proxies, other voting
arrangements, arrangements to sell, assign or transfer, preemptive, subscription, call, put or
other similar rights relating to the Repurchase Shares that purport to (i) prohibit MPL,
Kapiti or ACTS from transferring the Repurchase Shares to Arsenal as contemplated by this
Agreement or (ii) affect the Repurchase Shares or Arsenal after such transfer. Assuming
Arsenal complies with its obligations under this Agreement and is not in breach of its
representations and warranties in Section 5.5, upon delivery of the Repurchase Shares
in exchange for the Repurchase Consideration on the Coniston Closing Date, Arsenal will
acquire good, valid and marketable title to all of the Repurchase Shares free and clear of all |
13
|
|
Liens, other than any Liens or restrictions imposed on the Repurchase Shares solely by
virtue of applicable securities laws. |
(b) |
|
Assuming Arsenal complies with its obligations under this Agreement and is not in breach of
its representations and warranties in Section 5.5, at the Contingent Repurchase
Closing Date, Kapiti and ACTS will own, in the aggregate, at least the number of Arsenal
Shares set forth in the Contingent Repurchase Election Notice free of any “adverse claim”
(within the meaning of Section 8-102(1) of the UCC). Assuming Arsenal complies with its
obligations under this Agreement and is not in breach of its representations and warranties in
Section 5.5, at the Contingent Repurchase Closing Date, the Contingent Repurchase
Shares (a) will not be subject to any Liens, claims, charges, mortgages, security interests,
pledges, reversions or other property interests and (b) will not be subject to, and neither
Kapiti nor ACTS will be party to or otherwise bound by, any options, voting proxies, other
voting arrangements, arrangements to sell, assign or transfer, preemptive, subscription, call,
put or other similar rights relating to the Contingent Repurchase Shares that purport to (i)
prohibit Kapiti or ACTS from transferring the Contingent Repurchase Shares to Arsenal as
contemplated by this Agreement or (ii) affect the Contingent Repurchase Shares or Arsenal
after such transfer. Assuming Arsenal complies with its obligations under this Agreement and
is not in breach of its representations and warranties in Section 5.5, upon delivery
of the Contingent Repurchase Shares in exchange for the Contingent Repurchase Consideration on
the Contingent Repurchase Closing Date, Arsenal will acquire good, valid and marketable title
to all of the Contingent Repurchase Shares free and clear of all Liens, other than any Liens
or restrictions imposed on the Contingent Repurchase Shares solely by virtue of applicable
securities laws. |
|
4.5 |
|
Newco Capitalization; No Liabilities or Obligations |
|
(a) |
|
At the Coniston Closing Date, the authorized capital stock of Newco will consist of one
hundred thousand (100,000) common shares, par value $0.01 per share, of which sixty-one
thousand three hundred eight (61,308) common shares, constituting the Newco Shares, will be
issued and outstanding. At the Coniston Closing Date, except for the Newco Shares, there will
be no shares of capital stock or other equity securities of Newco issued, reserved for
issuance, held by Newco as treasury stock or outstanding. At the Coniston Closing Date, the
Newco Shares will be duly authorized, validly issued, fully paid and nonassessable and will
not be subject to or issued in violation of any purchase option, warrant, call option, right
of first refusal, preemptive right, subscription right or any similar right under any
provision of the General Corporation Law of the State of Delaware, the certificate of
incorporation or bylaws of Newco or any Contract to which Newco is a party or Newco or the
Newco Shares are otherwise bound. At the Coniston Closing Date, there will not be any bonds,
debentures, notes or other indebtedness of Newco having the right to vote (or convertible
into, or exchangeable for, securities having the right to vote) on any matters on which
holders of Newco Shares may vote. At the Coniston Closing Date, there will not be any
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 Newco is a party or by which Newco or the Newco Shares
are bound (i) obligating Newco 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, Newco, (ii) obligating Newco to issue, grant, extend or enter into any such
option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or
(iii) that give any Person the right to receive any economic benefit or right similar to or
derived from the economic benefits and rights accruing to holders of Newco Shares. At the
Coniston Closing Date, there will not be any outstanding contractual obligations of Newco to
repurchase, redeem or otherwise acquire any shares of capital stock of Newco. |
14
(b) |
|
At the Coniston Closing Date, except for the Arsenal Shares owned by it, Newco will not,
directly or indirectly, (i) own, of record or beneficially, any outstanding voting securities
or other equity interests in any corporation, partnership, limited liability company, joint
venture or other entity or (ii) Control any corporation, partnership, limited liability
company, joint venture or other entity. From and after June 1, 2010, except for the Arsenal
Shares owned directly or indirectly by it and the Subsidiaries listed on Schedule
4.5(b) (which have no operations), Newco will not, directly or indirectly, (i) own, of
record or beneficially, any outstanding voting securities or other equity interests in any
corporation, partnership, limited liability company, joint venture or other entity or (ii)
Control any corporation, partnership, limited liability company, joint venture or other
entity. True and correct copies of any Contracts relating to the previously completed steps
contemplated by the Restructuring Slides have been provided to Arsenal. |
|
(c) |
|
At the Coniston Closing Date, other than the ownership of capital stock of its Subsidiaries
and Arsenal Shares, neither Newco nor any predecessor of Newco will have (i) conducted any
business activities within the five (5) years prior to the date thereof, (ii) any liabilities
(whether absolute, contingent or accrued) other than liabilities related to any Tax, (iii) any
Contracts binding upon it other than those pursuant to this Agreement, the Transaction
Documents and the transactions contemplated hereby and thereby, (iv) any operations of any
kind whatsoever or (v) any obligations other than obligations related to any Tax, routine
corporate filings in the State of Delaware or those pursuant to this Agreement, the
Transaction Documents and the transactions contemplated hereby and thereby. No other business
entity has been merged into Newco or any predecessor of Newco within the past five (5) years. |
|
4.6 |
|
The Newco Shares; Arsenal Shares Owned by Newco |
|
(a) |
|
At the Coniston Closing Date, Kapiti and ACTS will own, in the aggregate, 100% of the Newco
Shares free of any “adverse claim” (within the meaning of Section 8-102(1) of the UCC). At
the Coniston Closing Date, the Newco Shares (a) will not be subject to any Liens, claims,
charges, mortgages, security interests, pledges, reversions or other property interests and
(b) will not be subject to, and neither Kapiti nor ACTS will be party to or otherwise bound
by, any options, voting proxies, other voting arrangements, arrangements to sell, assign or
transfer, preemptive, subscription, call, put or other similar rights relating to the Newco
Shares that purport to (i) prohibit Kapiti or ACTS from transferring the Newco Shares to
Arsenal as contemplated by this Agreement or (ii) affect the Newco Shares or Arsenal after
such transfer. Upon delivery of the Newco Shares in exchange for the Exchange Shares on the
Coniston Closing Date, Arsenal will acquire good, valid and marketable title to all of the
Newco Shares free and clear of all Liens, other than any Liens or restrictions imposed on the
Newco Shares solely by virtue of applicable securities laws. |
|
(b) |
|
At the Coniston Closing Date, Newco will own 61,308,295 Arsenal Shares free of any “adverse
claim” (within the meaning of Section 8-102(1) of the UCC). At the Coniston Closing Date, the
Arsenal Shares owned by Newco (a) will not be subject to any Liens, claims, charges,
mortgages, security interests, pledges, reversions or other property interests and (b) will
not be subject to, and Newco will not be party to or otherwise bound by, any options, voting
proxies, other voting arrangements, arrangements to sell, assign or transfer, preemptive,
subscription, call, put or other similar rights relating to the Arsenal Shares owned by it
that purport to affect the Arsenal Shares owned by Newco or Arsenal after the Coniston Closing
Date. Upon delivery of the Newco Shares in exchange for the Exchange Shares on the Coniston
Closing Date, Newco will continue to have good, valid and marketable title to all of the
Arsenal Shares owned by it free and clear of all Liens, other than any Liens or restrictions
imposed on the Arsenal Shares owned by Newco solely by virtue of applicable securities laws. |
15
4.7 |
|
Brokers |
|
|
|
Other than as set forth on Schedule 4.7, the fees and expenses of which shall
be paid by Manchester, no Person has or will have, as a result of the Coniston Transaction
or the Contingent Repurchase, any right, interest or valid claim against or upon any Party
for any commission, fee or other compensation as a finder or broker because of any act or
omission by Manchester, Kapiti, ACTS, MPL, Newco, their respective Affiliates or any of
their respective representatives. |
|
4.8 |
|
Taxes |
|
|
|
Except as set forth on Schedule 4.8, to the Knowledge of Manchester: |
|
(a) |
|
all material Taxes (whether or not shown on any Tax Return) owed by Newco or any Company
Group, or for which Newco or any Company Group may otherwise be liable, have been timely paid; |
|
(b) |
|
each of Newco and each Company Group has filed all material Tax Returns required to be filed
by it and has paid all Taxes shown thereon to be payable; |
|
(c) |
|
all such Tax Returns are complete and accurate in all material respects and disclose all
material Taxes required to be paid by Newco and each Company Group for the periods covered
thereby; |
|
(d) |
|
Newco has not been a member of any Company Group other than the one of which it is presently
the common parent, and Newco does not have any liability for Taxes of another Person under
Treasury Regulation § 1.1502-6 (or any similar provision of state, local or foreign law) under
any tax indemnification arrangement, as transferee or successor; and |
|
(e) |
|
during the last five (5) years, neither Newco nor any current or former Subsidiary of Newco
nor any member of any Company Group has been a party to any transaction treated by the parties
thereto as one to which Section 355 of the Code (or any similar provision of state, local or
foreign law) applied. |
|
|
|
For purposes of this Section 4.8, all references to Newco shall include any
predecessor of Newco. |
|
5. |
|
REPRESENTATIONS AND WARRANTIES OF ARSENAL |
|
|
|
Arsenal represents and warrants to Manchester that: |
|
5.1 |
|
Organization; Authority; Execution and Delivery; Enforceability |
|
(a) |
|
Arsenal is a corporation duly incorporated, validly existing and in good standing under the
Laws of the State of Delaware. |
|
(b) |
|
Arsenal has all necessary corporate power and authority to (i) enter into this Agreement and
each Transaction Document to which it is, or will be, a party, (ii) subject to obtaining and
the effectiveness of the Arsenal Written Consent, perform its obligations under this Agreement
and each such Transaction Document and to complete the Arsenal Exchange, the Coniston
Transaction and the Contingent Repurchase and (iii) subject to obtaining and the effectiveness
of the Written Consents and obtaining the Arsenal Stockholder Approval, complete the Emerald
Transaction. The execution, delivery and performance by Arsenal of this Agreement and each
Transaction Document to which it is, or will be a party, and, subject to obtaining the Arsenal
Written Consent, the completion of the Arsenal Exchange, the Coniston Transaction and the
Contingent Repurchase and, subject to obtaining and the effectiveness |
16
|
|
of the Written Consents and obtaining the Arsenal Stockholder Approval, the Emerald
Transaction, have been duly authorized and all necessary corporate proceedings on the part
of Arsenal have been taken. This Agreement has been, and each Transaction Document to which
Arsenal is, or will be, a party has been or will be, duly executed and delivered by Arsenal,
and assuming the due authorization, execution and delivery by each other party, constitutes
a legal, valid and binding obligation of Arsenal, enforceable in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy, insolvency,
moratorium or other similar laws of general application relating to or affecting creditors’
rights generally and except for the limitations imposed by general principles of equity. |
(c) |
|
The board of directors and the Audit Committee of Arsenal, at a meeting duly called and held,
duly adopted resolutions resolving to: (i) recommend that Arsenal’s stockholders approve the
transactions contemplated by this Agreement and the Emerald Definitive Agreement; and (ii)
approve this Agreement, the Emerald Definitive Agreement, each Transaction Document to which
Arsenal is, or will be, a party and the transactions contemplated hereby and thereby,
including the Coniston Transaction, the Emerald Transaction and the Contingent Repurchase, in
the manner required by the General Corporation Law of the State of Delaware and Arsenal’s
Second Amended and Restated Certificate of Incorporation and Bylaws. |
|
5.2 |
|
No Conflicts; Consents |
|
(a) |
|
Other than as set forth on Schedule 5.2(a), the execution, delivery and performance
of this Agreement by Arsenal and of each Transaction Document to which it is, or will be, a
party do not, and the completion of the Arsenal Exchange and the Coniston Transaction will
not, (i) assuming Manchester complies with its obligations under this Agreement, conflict with
or violate the certificate of incorporation, bylaws or other organizational documents of
Arsenal, (ii) conflict with or violate any applicable Law or Order applicable to Arsenal or
its assets or (iii) breach or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in any loss of any benefit under, or the
creation or imposition of any Lien on any of Arsenal’s assets pursuant to, any material
Contract or other instrument or obligation to which Arsenal is a party or by which Arsenal or
its assets are otherwise bound; except, in the case of clauses (ii) and (iii), for any breach,
violation, termination, default, acceleration, creation or change that would not, individually
or in the aggregate, materially impair the ability of Arsenal to perform its obligations
hereunder or prevent the consummation of any of the transactions contemplated hereby by
Arsenal. |
|
(b) |
|
Assuming that all consents, approvals, authorizations and other actions described in
Section 5.2(e) have been obtained and all filings and obligations described in
Section 5.2(e) have been made, the completion of the Emerald Transaction and the
Contingent Repurchase will not, other than as set forth on Schedule 5.2(a), (i)
assuming Manchester complies with its obligations under this Agreement, conflict with or
violate the certificate of incorporation, bylaws or other organizational documents of Arsenal,
(ii) conflict with or violate any applicable Law or Order applicable to Arsenal or its assets
or (iii) breach or constitute a default (or an event that with notice or lapse of time or both
would become a default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in any loss of any benefit under, or the creation
or imposition of any Lien on any of Arsenal’s assets pursuant to, any material Contract or
other instrument or obligation to which Arsenal is a party or by which Arsenal or its assets
are otherwise bound; except, in the case of clauses (ii) and (iii) as they relate to the
Emerald Transaction, for any breach, violation, termination, default, acceleration, creation
or change that would not, individually or in the aggregate, have an Arsenal Material Adverse
Effect or materially impair the ability of Arsenal to perform its obligations hereunder or
under the Emerald Definitive |
17
|
|
Agreement or prevent the consummation of any of the transactions contemplated hereby or
thereby by Arsenal. |
|
(c) |
|
The completion of the merger with Newco will not, (i) conflict with or violate the
certificate of incorporation or bylaws of Exchange Sub, (ii) conflict with or violate any
applicable Law or Order applicable to Exchange Sub or its assets or (iii) breach or constitute
a default (or an event that with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration or cancellation
of, or result in any loss of any benefit under, or the creation or imposition of any Lien on
any of the assets of Exchange Sub pursuant to, any material Contract or other instrument or
obligation to which Exchange Sub is a party or by which Exchange Sub or its assets are
otherwise bound. |
|
(d) |
|
Other than filings with the SEC and the filing of the amendments to Arsenal’s certificate of
incorporation with the Secretary of State of the State of Delaware, the execution, delivery
and performance by Arsenal of this Agreement and each Transaction Document to which it is, or
will be, a party do not, and the completion of the Arsenal Exchange and the Coniston
Transaction will not, require any Governmental Authorization to be obtained by Arsenal or
Exchange Sub or any filing with any Governmental Authority to be made by Arsenal or Exchange
Sub. |
|
(e) |
|
No filing or registration with, or authorization, consent or approval of, any Governmental
Authority is required by or with respect to the completion by Arsenal of the Emerald
Transaction and the Contingent Repurchase, except (i) in connection, or in compliance, with
the provisions of the HSR Act, the Securities Act and the Exchange Act, (ii) for the filing of
the amendments to Arsenal’s certificate of incorporation and the certificate of merger with
the Secretary of State of the State of Delaware and appropriate documents with the relevant
authorities of other states in which Arsenal or any of its Subsidiaries is qualified to do
business, (iii) such filings, authorizations, orders and approvals as may be required by
applicable Takeover Laws, (iv) applicable requirements, if any, of state securities or “blue
sky” laws and Nasdaq, (v) applicable requirements, if any, under foreign or supranational laws
relating to antitrust and to competition clearances and (vi) such other consents, orders,
authorizations, registrations, declarations and filings the failure of which to be obtained or
made would not, individually or in the aggregate, have an Arsenal Material Adverse Effect or
materially impair the ability of Arsenal to perform its obligations under the Emerald
Definitive Agreement or prevent the consummation of any of the transactions contemplated
thereby by Arsenal. |
|
5.3 |
|
Litigation |
|
|
|
As of the date of this Agreement, there are not any (a) Proceedings pending or, to the
Knowledge of Arsenal, threatened against or affecting Arsenal, Exchange Sub or any of their
respective Affiliates or (b) investigations by any Governmental Authority that are pending
or, to the Knowledge of Arsenal, threatened against or affecting Arsenal, Exchange Sub or
any of their respective Affiliates that, in either case, would, individually or in the
aggregate, materially adversely affect the ability of Arsenal to perform its obligations
under this Agreement or any Transaction Document to which it is, or will be, a party or
affect the ability of Arsenal, Exchange Sub or any of their respective Affiliates to
complete the Arsenal Exchange, the Coniston Transaction or the Contingent Repurchase in
accordance with the terms hereof or the Emerald Transaction in accordance with the terms of
the Emerald Definitive Agreement. |
|
5.4 |
|
Change of Control |
|
|
|
No Contract with any employee, officer or director of Arsenal or its Subsidiaries to
which Arsenal or any of its Subsidiaries is a party or is otherwise bound contains any
“change of control” or similar |
18
|
|
provision that would be triggered, in whole or in part, or that would otherwise give rise to
any payment or acceleration of any benefit to such employee, officer or director, or loss of
any benefit to Arsenal or its Subsidiaries, as a result of the completion of the Coniston
Transaction, the Emerald Transaction or the Contingent Repurchase. |
5.5 |
|
The Exchange Shares |
|
|
|
At the Coniston Closing Date, the Exchange Shares will have been duly authorized,
validly issued and be fully paid and non-assessable. At the Coniston Closing Date, the
Exchange Shares (a) will not be subject to any Liens, claims, charges, mortgages, security
interests, pledges, reversions or other property interests and (b) will not be subject to,
and Arsenal will not be party to or otherwise bound by, any options, voting proxies, other
voting arrangements, arrangements to sell, assign or transfer, preemptive, subscription,
call, put or other similar rights relating to the Exchange Shares that purport to (i)
prohibit Arsenal from transferring the Exchange Shares to Kapiti and ACTS as contemplated by
this Agreement or (ii) affect the Exchange Shares or Kapiti or ACTS after such transfer.
Upon delivery of the Exchange Shares in exchange for the Newco Shares on the Coniston
Closing Date, Kapiti and ACTS will acquire good, valid and marketable title to all of the
Exchange Shares, which will be fully paid, nonassessable and free and clear of all Liens,
other than any Liens or restrictions imposed on the Exchange Shares solely by virtue of
applicable securities laws. |
|
5.6 |
|
Financial Capability |
|
(a) |
|
Attached as Exhibit 3 hereto is a true and complete copy of a commitment letter (the
Commitment Letter), pursuant to which X.X. Xxxxxx Securities Inc., JPMorgan Chase Bank, N.A.,
Barclays Bank PLC, Barclays Capital, UBS Securities LLC and UBS Loan Finance LLC (the
Financing Source) have agreed, subject to the terms and conditions set forth therein, to
provide financing in the aggregate amount set forth therein (the Financing). |
|
(b) |
|
As of the date hereof, except as set forth in the Commitment Letter, there are no conditions
precedent to the obligations of the Financing Source to provide the Financing or that would
permit the Financing Source to cancel or reduce the total amount of the Financing. |
|
(c) |
|
As of the date hereof, subject to its terms and conditions, the Financing, if funded in
accordance with the Commitment Letter, together with available cash, would provide Arsenal
with acquisition financing (i) on the Coniston Closing Date sufficient for Arsenal to complete
the purchase of the Repurchase Shares at the Coniston Closing and to pay related fees and
expenses incurred by Arsenal or for which Arsenal is responsible and (ii) on the Contingent
Repurchase Closing Date sufficient for Arsenal to complete the purchase of the Contingent
Repurchase Shares at the Contingent Repurchase Closing and to pay related fees and expenses
incurred by Arsenal or for which Arsenal is responsible, in each case on the terms and subject
to the conditions contemplated hereby and thereby. |
|
(d) |
|
As of the date hereof, the Commitment Letter, in the form so delivered, is a legal, valid and
binding obligation of Arsenal and, to the Knowledge of Arsenal, the Financing Source, and
(assuming that the Commitment Letter constitutes such obligation of the Financing Source) is
in full force and effect and enforceable in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, moratorium or other
similar laws of general application relating to or affecting creditors’ rights generally and
except for the limitations imposed by general principles of equity. |
19
5.7 |
|
Brokers |
|
|
|
Other than as set forth on Schedule 5.7, the fees and expenses of which shall
be paid by Arsenal, no Person has or will have, as a result of the Coniston Transaction, the
Emerald Transaction or the Contingent Repurchase, any right, interest or valid claim against
or upon any Party for any commission, fee or other compensation as a finder or broker
because of any act or omission by Arsenal, any of its Affiliates or any of its or their
respective representatives. |
|
5.8 |
|
Emerald Definitive Agreement |
|
|
|
Attached as Exhibit 4 is a true, complete and correct copy of the Emerald
Definitive Agreement. As of the date of this Agreement, (i) the Emerald Definitive
Agreement has not been amended, supplemented or modified in any respect and (ii) except to
the extent enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar Laws affecting the enforcement of creditors’ rights
generally and by the effect of general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at Law), the Emerald Definitive
Agreement, upon execution by the parties thereto, will be in full force and effect, and will
be a valid and binding obligation of Arsenal and Merger Sub (assuming the valid
authorization, execution and delivery of the Emerald Definitive Agreement by Emerald and the
validity and binding effect of the Emerald Definitive Agreement on Emerald, which to the
Knowledge of Arsenal is the case) and, to the Knowledge of Arsenal, Emerald and the other
parties thereto. There are no conditions precedent related to the Emerald Transaction,
other than as set forth in the Emerald Definitive Agreement. No state of facts exists or
event has occurred which, with or without notice, lapse of time or both, would constitute a
breach or default on the part of Arsenal or Merger Sub under any term or condition of the
Emerald Definitive Agreement that would, with or without notice, lapse of time or both,
result in the failure to satisfy the condition set forth in Section 6.2(a) of the Emerald
Definitive Agreement. |
|
6. |
|
ADDITIONAL AGREEMENTS |
|
6.1 |
|
Arsenal Financing |
|
|
|
Without limiting any of its obligations under this Agreement and/or the Commitment
Letter, during the period from the date hereof to the earlier of (i) the Contingent
Repurchase Closing Date or, if Manchester elects not to require Arsenal to complete the
Contingent Repurchase, the Coniston Closing Date and (ii) that date on which this Agreement
is terminated, (a) Arsenal shall pay, or cause to be paid, the commitment fees specified in
the Commitment Letter as and when due and shall use commercially reasonable efforts to
comply with its obligations and enforce its rights under the Commitment Letter in a timely
manner, including, if necessary, taking legal action in connection therewith, (b) without
the consent of Manchester (which consent shall not be unreasonably withheld), Arsenal shall
not agree to any material amendment or modification to the Commitment Letter, or any waiver
of any provision or remedy thereunder, if such amendment, modification, waiver or remedy
adds new (or adversely modifies existing) conditions to the consummation of the financings
contemplated by the Commitment Letter or reduces the aggregate amount of the Financing in
any material respect (without a corresponding increase in another portion of the Financing);
provided that Arsenal may amend or modify the Commitment Letter (i) to add lenders,
lead arrangers, book runners, syndication agents or similar entities that had not executed
the Commitment Letter as of the date hereof or (ii) otherwise so long as the terms would
not, taken as a whole, adversely impact the ability of Arsenal to consummate the
transactions contemplated by this Agreement or the other Transaction Documents, (c) if any
portion of the Financing becomes unavailable on the terms and conditions contemplated in the
Commitment Letter, Arsenal shall use its commercially reasonable efforts to arrange for the
unavailable portion of the |
20
|
|
Financing to be provided from alternative sources as promptly as practicable in an amount
sufficient to consummate the purchase of the Repurchase Shares and the Contingent
Repurchase; provided that Arsenal shall not be required to enter into any financing
arrangements on terms that, taken as a whole, are less favorable to Arsenal in any material
respect than those contemplated by the Commitment Letter and (d) Arsenal shall keep
Manchester reasonably and promptly informed with respect to all material activity concerning
the status of the Financing contemplated by the Commitment Letter and shall give prompt
notice to Manchester of any material adverse change with respect to such Financing of which
Arsenal becomes aware. Without limiting the foregoing, Arsenal shall notify Manchester
promptly, and in any event within two (2) business days, if at any time (i) the Commitment
Letter shall expire or be terminated for any reason, (ii) the Financing Source notifies
Arsenal that it no longer intends to provide part or all of the Financing to Arsenal on the
terms set forth therein or (iii) for any reason Arsenal no longer believes in good faith
that it will be able to obtain all or any portion of the Financing contemplated by the
Commitment Letter on the terms described therein. Manchester shall, and shall cause its
Affiliates and each of its and their respective representatives to, provide all cooperation
reasonably requested by Arsenal, the Financing Source or their respective representatives in
connection with the Financing. Except for the transactions contemplated by this Agreement
and the Transaction Documents, Arsenal shall not, and shall not permit any of its Affiliates
to, without the prior written consent of Manchester (which consent shall not be unreasonably
withheld), enter into any transaction, including any merger, acquisition, joint venture,
disposition, lease, contract or debt or equity financing, which transaction at the time of
such transaction is reasonably expected to materially impair, delay or prevent consummation
of the Financing contemplated by the Commitment Letter. |
6.2 |
|
Emerald Merger |
|
|
|
Notwithstanding anything contained herein or in the Registration Rights Agreement to
the contrary, until the Coniston Closing, Arsenal shall under no circumstances (a) waive the
Coniston Condition or (b) agree to any other material amendment to the Emerald Definitive
Agreement. |
|
6.3 |
|
Manchester Shareholder Circular |
|
|
|
To the extent Manchester has not already done so, by a date as soon after the execution
of this Agreement as is reasonably practicable, but in any event no later than five (5)
business days after the date hereof, Manchester shall file with the UK Listing Authority a
draft of the form of circular to be posted to the shareholders of Manchester in connection
with the Manchester Shareholders Meeting (as defined below) (the Circular). Not more than
two (2) business days after the SEC has cleared the Form S-4 Registration Statement relating
to the Emerald Transaction, Manchester shall file with the UK Listing Authority an updated
draft of the Circular and request the document be approved for mailing and thereafter
Manchester shall use commercially reasonable efforts to procure that as promptly as
reasonably practicable, the approval of the UK Listing Authority for the Circular is
obtained, and, subject to their fiduciary duties arising under the UK Companies Xxx 0000 and
under English Law and their obligations under the Listing Rules issued by the UK Listing
Authority, the board of directors of Manchester (or a duly appointed committee thereof)
shall recommend that Manchester’s shareholders approve the Coniston Transaction and the
Contingent Repurchase and that statements of such recommendation are included in the
Circular. As soon as reasonably practicable (and in any event within one (1) business day)
after the approval by the UK Listing Authority of the form of the Circular, Manchester shall
mail the Circular to the shareholders of Manchester in order to call, give notice of,
convene and hold a meeting of its shareholders or any adjournment or postponement thereof
(the Manchester Shareholders Meeting) for the purpose of obtaining a resolution that is
passed by a simple majority of those present in person or by proxy and entitled to vote on
approving the Coniston Transaction and the Contingent Repurchase (the Manchester Shareholder
Approval). The Circular |
21
shall to the extent reasonably practicable be mailed to the shareholders of Manchester
concurrently with the mailing of the information statement to Arsenal stockholders in
accordance with Section 1.2(b). The Manchester Shareholders Meeting shall be
conducted within fifteen (15) days following the mailing of the Circular to the shareholders
of Manchester. Manchester shall respond to any comments or requests for additional
information from the UK Listing Authority as soon as reasonably practicable after receipt of
any such comments or requests. Manchester shall notify Arsenal and Emerald as soon as
reasonably practicable (and in any event within one (1) business day) upon the receipt of
any comments from the UK Listing Authority or any other government officials and of any
request by the UK Listing Authority or any other government officials for amendments or
supplements to the form of Circular. Prior to responding to any such comments or requests
or the filing or mailing of the form of Circular or the Circular, Manchester shall provide
Arsenal and Emerald with a reasonable opportunity to review and comment on any drafts of the
Circular and all related correspondence between Manchester or any of its representatives, on
the one hand, and the UK Listing Authority or any other government officials, on the other
hand, and shall give reasonable consideration to all comments proposed by Arsenal or Emerald
with respect to such drafts or correspondence. Manchester shall supply Arsenal and Emerald
with copies of all correspondence between Manchester or any of its representatives, on the
one hand, and the UK Listing Authority or any other government officials, on the other hand,
to the extent such correspondence relates to Arsenal, Emerald, any of the Transaction
Documents or the transactions contemplated thereby or discloses information that is
reasonably expected to materially affect the timing or the ability to consummate such
transactions. Arsenal shall use all its reasonable efforts to cooperate with Manchester and
its advisers to promptly provide any information or responses to comments or other
assistance reasonably requested by Manchester in connection with the foregoing.
6.4 |
|
Amendment to Arsenal By-laws |
As promptly as reasonably practicable after the Coniston Closing, each of Manchester
and Arsenal shall use its respective commercially reasonable efforts to facilitate
amendments to Arsenal’s By-laws in the form attached as Exhibit 5.
6.5 |
|
Appointment of Arsenal Directors and Arsenal Chairman |
The initial nominees for election to the Arsenal Board of Directors, including
Manchester’s initial nominees pursuant to Section 3.1 of the Amended and Restated
Relationship Agreement, and the nominee for election as the first non-executive Chairman of
Arsenal pursuant to Section 4 of the Amended and Restated Relationship Agreement, in each
case who will serve immediately following the Coniston Closing, are forth on Schedule
6.5. Prior to the Coniston Closing, if any individual set forth on Schedule 6.5
shall not be eligible to serve in such capacity as a result of death, resignation,
disqualification or any other cause, then a replacement for such individual shall be filled
in accordance with Schedule 6.5.
Manchester, Arsenal, Emerald, MPUSH and MPL are concurrently entering into the Voting
Agreement (substantially in the form attached as Exhibit 6), pursuant to which
Manchester has agreed to cause its direct and indirect Subsidiaries to vote certain of their
Arsenal Shares in accordance with the terms and subject to the conditions set forth in the
Voting Agreement.
22
Manchester shall issue a public announcement (substantially in the form attached as
Exhibit 7) regarding this Agreement and the transactions contemplated hereby.
Concurrently Arsenal and Emerald shall issue a joint public announcement regarding the this
Agreement, the Emerald Definitive Agreement and the transactions contemplated hereby and
thereby (substantially in the form attached as Exhibit 8). Except as required by
Law or by the requirements of any securities exchange on which the securities of a Party are
listed, the Parties shall cooperate as to the timing and contents of any other press release
or other public announcement in respect of this Agreement or the transactions contemplated
hereby or any communication with any news media with respect thereto.
(a) |
|
Arsenal and Manchester shall each use their commercially reasonable efforts to (i) obtain as
promptly as practicable all Governmental Authorizations set forth on Schedule 6.8(a)
and (ii) make, as promptly as practicable, all filings and other submissions to Governmental
Authorities in connection with this Agreement and the Transaction Documents and the
consummation of the transactions contemplated hereby and thereby, in each case, as may be
required under applicable Law; provided that each of Arsenal and Manchester shall
consult and cooperate with each other in connection with the making of all such filings,
including subject to any restrictions imposed by applicable Law, providing copies of all such
documents to the non-filing party and its respective advisors prior to filing. |
(b) |
|
To the extent permitted by applicable Law, each Party shall promptly notify the other Party
and Emerald of any communication it or any of its Affiliates receives from any Governmental
Authority relating to the matters that are the subject of this Agreement or any Transaction
Document, and permit the other Party to review in advance any proposed communication by such
Party to any such Governmental Authority. No Party shall agree to participate in any meeting
with any Governmental Authority in respect of any filing, investigation or other inquiry
related to the transactions contemplated by this Agreement or any Transaction Document unless
it consults with the other Party in advance and, to the extent permitted by such Governmental
Authority, gives the other Party the opportunity to attend and participate at such meeting.
Subject to any applicable confidentiality agreements, to the extent permitted by applicable
Law, the Parties shall coordinate and cooperate fully with each other in exchanging such
information and providing such assistance as the other Party may reasonably request in
connection with the foregoing. Subject to any applicable confidentiality agreements, to the
extent permitted by applicable Law, the Parties will provide each other with copies of all
correspondence, filings or communications between them or any of their representatives, on the
one hand, and any Governmental Authority or member of the staff of any Governmental Authority,
on the other hand, with respect to this Agreement, the Transaction Documents and the
transactions contemplated hereby and thereby. Notwithstanding the foregoing, other than as
set forth in Section 6.3, Manchester shall not be required to involve Arsenal or
Emerald in the process of obtaining the approval of the UK Listing Authority for the Circular
or any clearance, notification or filing that Manchester may be required or may elect to make
with HM Revenue & Customs in the UK, other than keeping Arsenal and Emerald reasonably
informed with respect to the foregoing. |
(c) |
|
Arsenal and Manchester shall cooperate, and use their commercially reasonable efforts to
take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary,
proper or advisable to consummate the transactions contemplated by this Agreement and the
Transaction Documents as promptly as reasonably practicable. Arsenal shall use its
commercially reasonable efforts to ensure that the conditions set forth in Sections
7.1(a), 7.1(b) and 7.2 are satisfied, insofar as such matters are within
the control of Arsenal, including by executing a customary underwriting agreement containing
terms |
23
consistent with the Registration
Rights Agreement, and Manchester
shall use its commercially reasonable
efforts to ensure that the conditions
set forth in Sections 7.1(a), 7.1(c)
and 7.2 are satisfied, insofar as
such matters are within the control
of Manchester, including by causing
Kapiti and ACTS to execute an
Acceptable Underwriting Agreement
containing terms consistent with the
Registration Rights Agreement. The
Parties further covenant and agree,
with respect to a threatened or
pending preliminary or permanent
injunction or other legal prohibition
that would prevent the Parties from
consummating the transactions
contemplated hereby or by the
Transaction Documents, to use their
commercially reasonable efforts to
prevent or lift the entry, enactment
or promulgation thereof, as the case
may be. If so requested by either
Party, Manchester and Arsenal shall
enter into a customary joint defense
agreement to cooperate in mutual
litigation seeking to prevent or lift
any such injunction or other legal
prohibition.
Following the Coniston Closing, Arsenal shall not represent that Arsenal or any of its
Affiliates retains any connection with Manchester other than as set forth in this Agreement
and the other Transaction Documents, and shall as soon as reasonably practicable make all
filings with any office, agency or body and take all other actions necessary to effect the
elimination of any reference to the name ‘Manchester’ in the corporate names, registered
names or registered fictitious names of Arsenal and its Affiliates.
The Board of Directors of Arsenal has approved the resolutions attached as Exhibit
9 hereto and shall, prior to the Coniston Closing, if requested to do so by Manchester,
take all such further actions consistent with such resolutions as may be reasonably
necessary or appropriate pursuant to Rule 16b-3(d) and Rule 16b-3(e) under the Exchange Act
to exempt the acquisition and disposition of Arsenal Shares pursuant to the terms of this
Agreement by Manchester and its Affiliates (including Kapiti, ACTS and MPL) from the
application of Section 16 of the Exchange Act.
6.11 |
|
Termination of Stock Repurchase Agreement |
The Parties hereby agree and acknowledge that the Stock Repurchase Agreement dated as
of February 10, 2009 by and among Manchester, MPL, MPUSH and Arsenal shall, upon the
completion of the Coniston Closing, be terminated and of no further force and effect without
any notice or other action by any Person.
6.12 |
|
Patriot Merger Agreement |
The Parties hereby agree and acknowledge that, notwithstanding anything herein to the
contrary, no claim or request for indemnification shall be brought under or pursuant to this
Agreement if and to the extent such claim or request is a Tax actually imposed on Manchester
Health Care Systems, LLC with respect to its own activities (and, without limitation, not by
reason of Treas. Reg. 1.1502-6 or any similar provision of state, local or foreign Law) that
was, could have been or is capable of being brought under the Agreement and Plan of Merger,
dated as of March 17, 2008, by and among Manchester, Manchester Healthcare Systems, LLC,
Arsenal Healthcare Solutions Inc. and Patriot Merger Company, LLC.
24
(a) |
|
As soon as reasonably practicable after the date of this Agreement, the Parties shall
negotiate in good faith a definitive agreement (the India Migration Plan) to implement: (i)
the transfer of employment of Manchester India Employees from the relevant Manchester Group
Member to Arsenal (or any of its Affiliates); (ii) the novation and assignment of the India
Lease from the relevant Manchester Group Member to Arsenal (or any of its Affiliates); and
(iii) the transfer (in a manner to be determined between the Parties in the India Migration
Plan) of the benefits and obligations of the relevant Manchester Group Member under the HP
Mercury Licence as they relate to the software development activities of Arsenal (and its
Affiliates) undertaken in India as at the date of this Agreement. Each Party shall use its
respective commercially reasonable efforts to obtain any necessary third Person consents or
approvals in connection with the India Migration Plan. |
|
(b) |
|
If the Parties enter into the India Migration Plan, Schedule B to the Transitional Services
Agreement shall cease (in accordance with the terms of the Transitional Services Agreement),
and the relevant provisions of paragraphs (c) and (d) of this Section 6.13 shall
apply, with respect to each transfer contemplated in Section 6.13(a) from the date
such transfer is completed in accordance with the India Migration Plan. |
|
(c) |
|
If the Parties enter into the India Migration Plan, from and after the date on which the
relevant transfer is completed, Arsenal shall indemnify and hold harmless Manchester (or the
relevant Manchester Group Member) against all Losses relating to or arising from: (i)
Manchester India Employees, with respect to the transfer of their employment to Arsenal (or
any of its Affiliates) or to their subsequent employment (or any termination thereof) by
Arsenal (or any of its Affiliates); (ii) the India Lease, with respect to any act or omission
of Arsenal (or its Affiliates) thereunder that occurs after the novation and assignment of the
India Lease in accordance with the India Migration Plan; and (iii) the assumption by Arsenal
(or its Affiliates) of the benefits and obligations under the HP Mercury Licence or any act or
omission of Arsenal (or its Affiliates) with respect thereto that occurs after the date of
such assumption. |
|
(d) |
|
If the Parties enter into the India Migration Plan, from and after the date on which the
relevant transfer is completed, Manchester shall indemnify and hold harmless Arsenal (or the
relevant Arsenal Group Member) against all Losses relating to or arising from: (i) Manchester
India Employees, with respect to the period prior to the transfer of their employment to
Arsenal (or any of its Affiliates); (ii) the India Lease, with respect to any act or omission
of Manchester (or its Affiliates) thereunder that occurs prior to the novation and assignment
of the India Lease in accordance with the India Migration Plan; and (iii) the HP Mercury
Licence, with respect to any act or omission of Manchester (or its Affiliates) with respect
thereto that occurs prior to the date of assumption by Arsenal (or its Affiliates) of the
benefits and obligations under such license. |
|
(e) |
|
Under the India Migration Plan: (i) as part of the novation and assignment of the India
Lease, Arsenal shall assume the obligation to pay the lease deposit to the landlord in respect
of the India Lease if the landlord gives written consent therefor; provided, that if
the consent of the landlord is not obtained, Arsenal shall pay Manchester (or its relevant
Affiliates) the amount of such deposit so long as the landlord has given written consent or
acknowledgement to Arsenal and Manchester that the lease deposit held by the landlord belongs
to Arsenal and not to Manchester; (ii) Arsenal shall have the right, but not the obligation,
to notify Manchester that it wishes to purchase, at net book value as at the date of such
notice, all PCs, telephones and other equipment owned by Manchester (or its relevant
Affiliates) and used by Manchester India Employees as at the date of such notice; (iii)
Manchester shall provide (and shall procure that its relevant Affiliates provide) reasonable
IT resources and project management capabilities to enable Arsenal to execute and complete the
India Migration Plan; provided, that |
25
Manchester shall not be required to pay or
provide services which would result in any
“out of pocket” IT expenses (including costs
such as cabling costs, new equipment, third
party costs and fees and internet service
provider costs and fees) to assist Arsenal in
the execution and completion of the India
Migration Plan; and (iv) Arsenal shall bear
the cost for (and shall be responsible for
obtaining landlord consent to) any
modifications it wishes to make to the
property which is the subject of the India
Lease.
6.14 |
|
Arsenal Exchange Sub |
At such time as Arsenal shall cause Newco to merge with and into Exchange Sub in
accordance with Section 1.1(c), Exchange Sub shall: (i) be a limited liability
company duly formed, validly existing and in good standing under the Laws of the State of
Delaware; (ii) be a wholly owned Subsidiary of Arsenal, disregarded as an entity separate
from its owner for US federal tax purposes; and (iii) have all necessary power and authority
to complete the merger with Newco as contemplated by this Agreement. At such time as
Arsenal shall cause Newco to merge with and into Exchange Sub in accordance with Section
1.1(c), the completion of the merger with Newco shall be duly authorized and all
necessary proceedings on the part of Exchange Sub will have been taken.
7.1 |
|
Conditions Precedent to the Coniston Closing |
(a) |
|
Neither Party shall be obligated to complete the Coniston Closing if, on the Coniston Closing
Date, any Law, injunction or other legal prohibition preventing the closing of the Coniston
Transaction shall be in effect; provided, that if any such Law, injunction or other
legal prohibition preventing the Coniston Transaction is in effect, then the Parties shall use
their respective commercially reasonable efforts to remove such injunction or other legal
prohibition and proceed with the Coniston Closing. |
|
(b) |
|
The obligation of Manchester to complete the Coniston Closing is subject to the satisfaction
on or prior to the Coniston Closing Date of the following conditions: |
|
(i) |
|
Manchester shall have, concurrently with and as part of the Coniston Closing,
completed the Secondary Offering (A) of no fewer than the Minimum Secondary Offering
Shares and (B) at a price to the public per Secondary Offering Share of not
less than the Floor Price; |
|
|
(ii) |
|
the Manchester Shareholder Approval shall have been obtained; |
|
|
(iii) |
|
each of the Transaction Documents required to be delivered by Arsenal at the
Coniston Closing shall have been duly executed and delivered by Arsenal; |
|
|
(iv) |
|
the Financing contemplated by the Commitment Letter shall have been consummated
in all material respects in accordance with the terms of the Commitment Letter; |
|
|
(v) |
|
there shall have been no material changes to the Emerald Definitive Agreement
that were not approved by Manchester; |
|
|
(vi) |
|
the representations and warranties of Arsenal made in this Agreement that are
qualified as to materiality shall be true and correct, and those not so qualified shall
be true and correct in all material respects, in each case as of the date of this
Agreement and the Coniston Closing Date as though made as of such time, except to the
extent such representations and warranties expressly relate to an earlier date (in
which case such representations and warranties qualified as to |
26
|
|
|
materiality shall be true and correct, and those not so qualified shall be true and
correct in all material respects, on and as of such earlier date), and Manchester
shall have received a certificate signed by an authorized officer of Arsenal to such
effect; and |
|
|
(vii) |
|
Arsenal shall have performed or complied in all material respects with all
obligations and covenants (other than Section 6.2, which Arsenal shall have
performed or complied with in all respects) required by this Agreement and the Relevant
Provisions of the Registration Rights Agreement to be performed or complied with by
Arsenal by the Coniston Closing Date, and Manchester shall have received a certificate
signed by an authorized officer of Arsenal to such effect. |
(c) |
|
The obligation of Arsenal to complete the Coniston Closing is subject to the satisfaction on
or prior to the Coniston Closing Date of the following conditions: |
|
(i) |
|
each of the Transaction Documents required to be delivered by Manchester at the
Coniston Closing shall have been duly executed and delivered by Manchester; |
|
|
(ii) |
|
the Financing contemplated by the Commitment Letter shall have been consummated
in all material respects in accordance with the terms of the Commitment Letter; |
|
|
(iii) |
|
Manchester shall have, concurrently with and as part of the Coniston Closing,
completed the Secondary Offering of no fewer than the Minimum Secondary Offering
Shares; |
|
|
(iv) |
|
Arsenal shall have received the Solvency Letter and such letter shall not have
been withdrawn or modified in any material respect; |
|
|
(v) |
|
the representations and warranties of Manchester made in this Agreement that
are qualified as to materiality shall be true and correct, and those not so qualified
shall be true and correct in all material respects, in each case (other than
Section 4.4(b)) as of the date of this Agreement and the Coniston Closing Date
(and, in the case of Section 4.4(b), as of the date of this Agreement and the
Contingent Repurchase Closing Date) as though made as of such time, except to the
extent such representations and warranties expressly relate to an earlier date (in
which case such representations and warranties qualified as to materiality shall be
true and correct, and those not so qualified shall be true and correct in all material
respects, on and as of such earlier date), and Arsenal shall have received a
certificate signed by an authorized officer of Manchester to such effect; and |
|
|
(vi) |
|
Manchester shall have performed or complied in all material respects with all
obligations and covenants required by this Agreement to be performed or complied with
by Manchester by the Coniston Closing Date, and Arsenal shall have received a
certificate signed by an authorized officer of Manchester to such effect. |
7.2 |
|
Conditions Precedent to the Contingent Repurchase Closing |
The obligation of each of Manchester and Arsenal to complete the Contingent Repurchase
Closing is subject to the satisfaction on or prior to the Contingent Repurchase Closing Date
of the following conditions:
|
(a) |
|
Manchester shall have elected to require Arsenal to complete the Contingent
Repurchase in accordance with Section 3.1; |
27
|
(b) |
|
the Emerald Transaction shall have been completed; and |
|
|
(c) |
|
no Law, injunction or other legal prohibition preventing the Contingent
Repurchase Closing shall be in effect; |
provided, that if any Law, injunction or other legal prohibition preventing the
Contingent Repurchase Closing is in effect, the Parties shall use their respective
commercially reasonable efforts to remove such injunction or other legal prohibition and
proceed with the Contingent Repurchase Closing.
8.1 |
|
Termination Prior to Coniston Closing |
(a) |
|
This Agreement and the transactions contemplated hereby may be terminated at any time prior
to the Coniston Closing: |
|
(i) |
|
by Manchester or Arsenal, if the Coniston Closing has not been completed on or
prior to December 9, 2010 (the Outside Date); |
|
|
(ii) |
|
by Manchester or Arsenal, if the Manchester Shareholder Approval shall not have
been obtained at the Manchester Shareholders Meeting, or at any adjournment or
postponement thereof, at which the final vote thereon was taken; |
|
|
(iii) |
|
by Manchester, if any of the conditions set forth in Sections
7.1(b)(vi) or 7.1(b)(vii) shall have become incapable of fulfilment;
provided, that Manchester shall provide Arsenal and Emerald ten (10) business
days’ prior written notice stating its intention to terminate pursuant to this
Section 8.1(a)(iii) and the basis for such termination (it being understood
that Manchester shall be obligated to provide such written notice as soon as reasonably
practicable after Manchester becomes aware of such breach); |
|
|
(iv) |
|
by Arsenal, if any of the conditions set forth in Sections 7.1(c)(v) or
7.1(c)(vi) shall have become incapable of fulfilment; provided, that
Arsenal shall provide Manchester ten (10) business days’ prior written notice stating
its intention to terminate pursuant to this Section 8.1(a)(iv) and the basis
for such termination (it being understood that Arsenal shall be obligated to provide
such written notice as soon as reasonably practicable after Arsenal becomes aware of
such breach); |
|
|
(v) |
|
by either Manchester or Arsenal in the event that any Governmental Authority
shall have issued an Order or taken any other action permanently enjoining or otherwise
permanently prohibiting the Coniston Transaction and such Order or other action shall
have become final and nonappealable; or |
|
|
(vi) |
|
by the mutual written consent of Arsenal and Manchester (and with the written
consent of Emerald), which consent, in the case of Arsenal prior to the Coniston
Closing, shall be approved by the Audit Committee of the Arsenal Board of Directors; |
provided, however, that the right to terminate this Agreement under
this Section 8.1(a) shall not be available to any Party whose breach or failure to
fulfil any obligation under this Agreement shall have been the cause of, or shall have
resulted in, the failure of the Coniston Closing to be completed before the Outside Date.
28
(b) |
|
In the event of termination by Manchester or Arsenal pursuant to this Section 8.1,
written notice thereof shall forthwith be given to the other Party and this Agreement and the
Coniston Transaction shall be terminated, without further action by either Party. |
8.2 |
|
Effect of Termination |
If this Agreement is terminated as provided in Section 8.1, this Agreement
shall become null and void and of no further force and effect, except for the provisions of
Sections 11.3, 11.5, 11.6 and 11.7 and there shall be no
liability to any Person hereunder on the part of Arsenal or Manchester; provided,
however, that nothing in this Section 8.2 shall be deemed to release any
Party from any liability for any willful and material breach by such Party of any provisions
of this Agreement prior to such termination or to impair the right of any Party to seek
specific performance or injunctive or similar relief for a breach by any other Party of its
obligations under this Agreement.
9. |
|
SURVIVAL; INDEMNIFICATION |
(a) |
|
The representations and warranties of the Parties contained in this Agreement or in any
certificate or other writing delivered pursuant to this Agreement or in connection with this
Agreement shall not survive the Coniston Closing; provided that, in the event the
Coniston Closing occurs, the representations and warranties contained in Sections 4.1,
4.4, 4.5, 4.6, 4.7, 5.1, 5.5, and 5.7
(and the certificates delivered in accordance with Sections 7.1(b)(vi) and
7.1(c)(v) related thereto) and the representation delivered pursuant to Section
10.10(a)(i) shall survive indefinitely. |
|
(b) |
|
The obligations of the Parties under this Agreement that by their terms contemplate
performance after the Coniston Closing (including those set forth in this Section 9)
shall survive the Coniston Closing Date until the performance thereof in accordance therewith. |
|
(c) |
|
Except with respect to any claims that cannot be waived as a matter of law, after the
Coniston Closing, the indemnification expressly provided for herein (including Section
10) shall be the sole and exclusive remedy for monetary damages for any breach of
warranties, covenants or agreements herein by either Party or otherwise arising out of the
transactions contemplated hereby, and no Party shall have any right of rescission;
provided, however, that the foregoing shall not limit the right of either
Party to seek specific performance or injunctive or similar relief for a breach by any other
Party of its obligations under this Agreement. No Person shall be entitled to indemnification
for a breach of representation or warranty hereunder if, on the date hereof, such Person had
Knowledge of the actual breach of the representation or warranty with respect to which such
Person is seeking indemnification hereunder. |
9.2 |
|
Indemnification by Arsenal |
In the event the Coniston Closing occurs, from and after the Coniston Closing in
perpetuity, Arsenal shall indemnify each Manchester Group Member from and against and shall
hold each such Manchester Group Member harmless from any and all Losses incurred or suffered
by such Manchester Group Member arising out of any breach of (i) the representations and
warranties contained in Sections 5.1, 5.5, and 5.7 (and the
certificate delivered in accordance with Section 7.1(c)(v) related thereto) or (ii)
any covenant, in either case, made or to be performed by Arsenal pursuant to this Agreement.
29
9.3 |
|
Indemnification by Manchester |
(a) |
|
In the event the Coniston Closing occurs, from and after the Coniston Closing in perpetuity,
Manchester shall indemnify each Arsenal Group Member from and against and shall hold each such
Arsenal Group Member harmless from any and all Losses incurred or suffered by such Arsenal
Group Member arising out of any breach of (i) the representations and warranties contained in
Sections 4.1, 4.4, 4.5, 4.6, and 4.7 (and the
certificate delivered in accordance with Section 7.1(b)(vi) related thereto) and the
representation delivered pursuant to Section 10.10(a)(i) or (ii) any covenant, in
either case, made or to be performed by Manchester pursuant to this Agreement. |
|
(b) |
|
In the event the Arsenal Exchange occurs, from and after the Coniston Closing Date in
perpetuity, Manchester shall indemnify each Arsenal Group Member from and against and shall
hold each such Arsenal Group Member harmless from any liabilities or obligations of Newco and
all Losses incurred or suffered by such Arsenal Group Member in connection with Newco, in each
case arising at or prior to the Coniston Closing Date or relating to the period at or prior to
the Coniston Closing Date. |
|
(c) |
|
Except as otherwise provided in this Agreement, the sole provision of this Agreement relating
to indemnification for Taxes shall be Section 10. |
9.4 |
|
No Consequential Losses |
Notwithstanding anything herein to the contrary, no Party shall be liable to any other
Party or its Affiliates for special, indirect, consequential, punitive or exemplary Losses
(other than any such Losses payable to a third Person).
9.5 |
|
Indemnification Procedures |
(a) |
|
Any Arsenal Group Member or Manchester Group Member (the Indemnified Party) seeking
indemnification hereunder shall give to the Party obligated to provide indemnification to such
Indemnified Party (the Indemnitor) prompt notice (a Claim Notice) describing in reasonable
detail the facts giving rise to any claim for indemnification hereunder and shall include in
such Claim Notice the amount or the method of computation of the amount of such claim, and a
reference to the provision of this Agreement upon which such claim is based. After the giving
of any Claim Notice pursuant hereto, the amount of indemnification to which an Indemnified
Party shall be entitled under this Section 9 shall be determined: (i) by written
agreement between the Indemnified Party and the Indemnitor; (ii) by a final judgment or decree
of any court of competent jurisdiction; or (iii) by any other means to which the Indemnified
Party and the Indemnitor shall agree. |
|
(b) |
|
The Indemnified Party shall have the right to conduct and control, through counsel of its
choosing, the defense, compromise or settlement of any pending or threatened action at law or
suit in equity by or against a third Person (a Third Person Claim) as to which indemnification
will be sought against such Indemnified Party, and in any such case the Indemnitor shall
cooperate in connection therewith and shall furnish such records, information and testimony
and attend such conferences, discovery proceedings, hearings, trials and appeals as may be
reasonably requested by the Indemnified Party in connection therewith. The Indemnitor may
participate, through counsel chosen by it and at its own expense, in the defense of any such
Third Person Claim as to which the Indemnified Party has so elected to conduct and control the
defense thereof. The Indemnified Party shall not, without the consent of the Indemnitor
(which consent shall not be unreasonably withheld), pay, compromise or settle any such Third
Person Claim. Notwithstanding the foregoing, the Indemnified Party shall have the right to
pay, settle or compromise any such Third Person Claim without such consent (if required),
provided that in such event |
30
|
|
the Indemnified Party shall waive any right to indemnity therefor hereunder unless such consent
is unreasonably withheld. |
9.6 |
|
Indemnification Payments |
Except as otherwise required by applicable Law or pursuant to a “determination” under
Section 1313(a) of the Code (or any comparable provision of state, local, or non-U.S. Law),
Manchester, Arsenal and their respective Affiliates shall treat any and all payments under
this Section 9 or Section 10 (including any payment made under the PLR Bank
Guarantee or the Historic Bank Guarantee) as an adjustment to the Repurchase Consideration
for all Tax purposes. Any such payments under this Section 9 or Section 10
shall be increased by an amount required to fully indemnify the recipient for any
liabilities for Taxes (other than Taxes resulting from a reduction in Tax basis, but
including any withholding Taxes imposed on any such payments) resulting from the receipt or
payment of such indemnity obligations (including any payment made under the PLR Bank
Guarantee or the Historic Bank Guarantee), and reduced by any Tax benefit (and increased by
any Tax detriment) actually realized by the recipient as a result of the payment or
incurrence of the Losses giving rise to such indemnity obligations.
(a) |
|
In the event the Arsenal Exchange occurs, from and after the Coniston Closing Date,
Manchester shall be liable for and shall pay, and shall indemnify each Arsenal Group Member
from and against and hold each of them harmless from (i) Taxes imposed on Newco, or for which
Newco may otherwise be liable, as a result of having been a member of a Company Group
(including Taxes for which Newco may be liable pursuant to Treas. Reg. 1.1502-6 or similar
provisions of state, local or foreign Law as a result of having been a member of a Company
Group), (ii) Taxes imposed on Newco, or for which Newco may otherwise be liable, for any
taxable year or period that ends on or before the Coniston Closing Date and, with respect to
any Straddle Period, the portion of the Straddle Period ending on and including the Coniston
Closing Date (determined on a “closing of the books basis” by assuming that the books of Newco
were closed at the close of the Coniston Closing Date), (iii) Transaction Taxes and (iv) Taxes
imposed on any Arsenal Group Member (or for which any Arsenal Group Member would otherwise be
liable) as a result of any failure by Manchester to comply with its obligations pursuant to
this Agreement. |
|
(b) |
|
In the event the Arsenal Exchange occurs, from and after the Coniston Closing Date, Arsenal
shall be liable for and shall pay, and shall indemnify each Manchester Group Member from and
against and hold each of them harmless from (i) Taxes imposed on Newco, or for which Newco may
otherwise be liable, for any taxable year or period that begins after the Coniston Closing
Date and, with respect to any Straddle Period, the portion of the Straddle Period beginning
after the Coniston Closing Date and (ii) Taxes imposed on any Manchester Group Member (or for
which any Manchester Group Member would otherwise be liable) as a result of any failure by
Arsenal to comply with its obligations pursuant to this Agreement; provided,
however, that, without limiting Arsenal’s liability pursuant to Section
10.1(b)(ii), Arsenal shall not be liable for or pay and shall not indemnify any Manchester
Group Member from or against or hold any of them harmless from any Taxes for which Manchester
is liable pursuant to Section 10.1(a) or otherwise pursuant to this Agreement. |
|
(c) |
|
Manchester or Arsenal, as the case may be, shall provide reimbursement for any Tax paid by
one Party, all or a portion of which is the responsibility of the other Party pursuant to this
Section 10. Payment by the indemnifying Party of any amount due under this
Section 10 shall be made within ten (10) calendar |
31
|
|
days following written notice by the indemnified
Party that payment of such amount is due;
provided, that if the indemnified Party is
required to make a payment to a Taxing Authority,
the indemnifying Party shall not be required to
make any payment earlier than three (3) calendar
days before such payment is due, unless the Tax
liability is otherwise contested with the relevant
Taxing Authority, in which case the payment shall
be made not later than three (3) calendar days
before the date any Taxes owed as a result of the
settlement or resolution of the contested Tax are
required to be paid. In no event shall Arsenal or
any of its Affiliates be obligated under this
Agreement to pay any Tax in anticipation of
Manchester filing a claim for a refund therefor.
This Section 10.1(c) shall in all respects be
subject to Section 10.10. |
10.2 |
|
IRS Private Letter Ruling |
(a) |
|
As soon as is reasonably practicable, Manchester shall prepare and file with the IRS the IRS
Private Letter Ruling Request seeking an IRS Private Letter Ruling that contains the Core
Rulings, the Alternative Core Rulings (if applicable) and the Non-Core Rulings. |
|
(b) |
|
Arsenal shall be afforded a reasonable opportunity to review and comment on all submissions
to the IRS relating to such IRS Private Letter Ruling and any such comments received in a
timely manner shall be reasonably considered by Manchester prior to filing the IRS Private
Letter Ruling Request or such other submissions with the IRS. Manchester shall provide
Arsenal with a copy of the IRS Private Letter Ruling Request and each other submission
relating to the IRS Private Letter Ruling within three (3) business days after its submission
to the IRS. |
|
(c) |
|
Manchester shall, promptly upon receipt (but no later than three (3) business days after
receipt), provide Arsenal with copies of all written correspondence received from the IRS in
relation to the IRS Private Letter Ruling Request, any supplemental submission relating
thereto or the IRS Private Letter Ruling and shall promptly update Arsenal with respect to any
other relevant communications and/or correspondence with the IRS related to the IRS Private
Letter Ruling Request, any supplemental submission relating thereto or the IRS Private Letter
Ruling. |
|
(d) |
|
Manchester shall afford the officers, employees and authorized representatives of Arsenal
(including independent public accountants and attorneys) reasonable access during normal
business hours to the employees and business and financial records and documents of
Manchester, Newco or any of their respective Affiliates that may be relevant and reasonably
required to verify the accuracy and completeness of material facts, representations and
requested rulings included in any submission related to the IRS Private Letter Ruling and to
otherwise assess whether the IRS Private Letter Ruling complies or is expected to comply with
this Section 10.2. Arsenal agrees that such investigation shall be conducted in such
a manner as not to interfere unreasonably with the operations of Manchester, Newco or their
respective Affiliates. No investigation made by Arsenal or its representatives hereunder
shall affect Manchester’s liability hereunder nor affect Arsenal’s ability to provide an
Objection Notice or Rejection Notice. |
|
(e) |
|
Arsenal shall be entitled, subject to required IRS consent, to have two individual
representatives, selected by Arsenal and reasonably acceptable to Manchester, participate
(solely as observers) in any conference (including any previously scheduled teleconference)
Manchester or its representatives may have with the IRS in connection with the IRS Private
Letter Ruling Request, any supplemental submission relating thereto or the IRS Private Letter
Ruling (including, without limitation, any pre-submission conference with the IRS). With
respect to any conference or previously scheduled teleconference, Manchester shall provide
notice thereof to Arsenal a reasonable amount of time in advance thereof. |
32
(f) |
|
Notwithstanding any other provisions of this Agreement, Arsenal shall be granted no less than
ten (10) business days to review and comment on the IRS Private Letter Ruling Request to be
submitted to the IRS by Manchester prior to its submission, and during such period Manchester
shall afford the officers, employees and authorized representatives of Arsenal (including
independent public accountants and attorneys) access pursuant to Section 10.2(d). |
|
(g) |
|
Promptly following the date hereof, the Parties shall begin the process of selecting an
Independent Arbitrator pursuant to the arbitration procedures set forth in Exhibit 10,
and within thirty (30) calendar days thereafter shall select an Independent Arbitrator in
accordance with Exhibit 10, and shall provide such Independent Arbitrator for review
copies of the IRS Private Letter Ruling Request and any supplemental submissions relating
thereto, in order for the Independent Arbitrator to familiarize himself or herself with the
contents of the IRS Private Letter Ruling Request and any supplemental submission to prepare,
if required under this Agreement, to act as the Independent Arbitrator in accordance with
Exhibit 10 should any Objection Notice or Rejection Notice be delivered pursuant to
this Section 10.2. The costs and expenses of the Independent Arbitrator prior to the
delivery of any Objection Notice or Rejection Notice shall be shared equally by the Parties. |
|
(h) |
|
At any time prior to the issuance of the IRS Private Letter Ruling, Arsenal shall be
permitted to provide one or more written notices to Manchester (each, an Objection Notice)
stating that it believes that the IRS Private Letter Ruling Request (or the form of IRS
Private Letter Ruling Request provided to Arsenal pursuant to Section 10.2(f)) or any
supplement thereto (i) may omit a substantially material ruling or rulings not reflected as a
Core Ruling or (as applicable) an Alternative Core Ruling in Schedule 10.2, (ii) may
require a modification of one or more Core Rulings or (as applicable) Alternative Core Rulings
or (iii) may be based on assumptions or representations with respect to which there is
material uncertainty, may contain any material misstatement of fact or law or may fail to
state material relevant facts or law, in each case that would materially undermine or
frustrate the purpose of seeking the IRS Private Letter Ruling as that purpose is reflected in
Schedule 10.2, and in each case stating with specificity the facts and circumstances
giving rise to such belief (subclause (i), (ii) and (iii), each a Claimed Defect);
provided, however, that no Objection Notice shall be delivered after the
submission of the IRS Private Letter Ruling Request except (x) based on a request by the IRS
for information or representations related to the IRS Private Letter Ruling, IRS Private
Letter Ruling Request or any supplement thereto or (y) based on a change in facts or based on
new considerations, in each case relating to the IRS Private Letter Ruling, IRS Private Letter
Ruling Request or supplement thereto; provided, however, that no Objection
Notice shall impair Manchester’s ability to comply with any request by the IRS relating to the
IRS Private Letter Ruling, IRS Private Letter Ruling Request or supplement thereto or with any
requirements of Law. If Arsenal shall have delivered an Objection Notice after the submission
of the IRS Private Letter Ruling Request and Manchester shall dispute whether the Objection
Notice was properly delivered under the first proviso of the preceding sentence and shall have
so notified Arsenal in writing within two (2) business days of receipt by Manchester of such
Objection Notice, in the absence of an agreement between the Parties, the Parties shall engage
in the arbitration procedures set forth in Exhibit 10. |
|
(i) |
|
Within two (2) business days following delivery of an Objection Notice, or, in the event of a
dispute as to the ability of Arsenal to deliver such Objection Notice pursuant to the first
proviso of Section 10.2(h), then not later than two (2) days following the resolution
of such dispute, Arsenal and Manchester shall consult in good faith with each other in an
attempt to reach a common view of whether, as a result of the circumstances set forth in the
Objection Notice, the IRS Private Letter Ruling Request (or form thereof) or supplement
thereto has the Claimed Defect stated in the Objection Notice. The delivery of an Objection
Notice prior to the submission of the IRS Private Letter Ruling Request shall not preclude
Manchester from making such submission. |
33
(j) |
|
If, within five (5) business days following delivery of the Objection Notice, the Parties are
unable to (1) agree whether, as a result of the circumstances described in the Objection
Notice, the IRS Private Letter Ruling Request (or form thereof) or supplement thereto does
have the Claimed Defect stated in the Objection Notice or (2) agree on amendments to the IRS
Private Letter Ruling Request (or changes to the form of IRS Private Letter Ruling Request to
be submitted) or any supplement thereto to address the Claimed Defect stated in the Objection
Notice, the Parties shall engage in the arbitration procedures set forth in Exhibit
10. |
|
(k) |
|
Any Objection Notice that the parties agree in writing is, or that the arbitrator determines
is, valid shall constitute a Valid Objection Notice, and any Objection Notice that the parties
agree in writing is not, or that the arbitrator determines is not, valid shall constitute a
Dismissed Objection Notice. In the case of any Valid Objection Notice, Manchester shall make
such amendments to the IRS Private Letter Ruling Request (or changes to the form of IRS
Private Letter Ruling Request to be submitted) or supplements thereto to address the Claimed
Defect stated in the Valid Objection Notice. Any rulings added or modified in resolving any
Objection Notice shall constitute Core Rulings or (as applicable) Alternative Core Rulings and
Schedule 10.2 shall be deemed amended accordingly. |
|
(l) |
|
Within five (5) business days following issuance of the IRS Private Letter Ruling, Manchester
shall provide a copy thereof to Arsenal. If Arsenal believes that (1) the IRS Private Letter
Ruling does not contain the Core Rulings or (as applicable) the Alternative Core Rulings and
does not meet the purpose of obtaining such IRS Private Letter Ruling, as that purpose is
reflected in Schedule 10.2 or (2) there is a Valid Objection Notice and Arsenal
believes that Manchester has not made amendments to the IRS Private Letter Ruling Request (or
changes to the form of IRS Private Letter Ruling Request to be submitted) or supplements
thereto to address the relevant Claimed Defect stated in the Valid Objection Notice, then it
must, within five (5) business days following receipt of the copy of the IRS Private Letter
Ruling, deliver to Manchester written notice that the IRS Private Letter Ruling does not meet
such requirements (a Rejection Notice). If, within such period, Arsenal does not deliver to
Manchester a Rejection Notice, Arsenal shall be deemed to have accepted the IRS Private Letter
Ruling. |
|
(m) |
|
If Arsenal shall have delivered to Manchester the Rejection Notice, the Parties shall engage
in the arbitration procedures set forth in Exhibit 10 to determine (1) whether the IRS
Private Letter Ruling contains the Core Rulings or (as applicable) the Alternative Core
Rulings or otherwise meets the purpose of obtaining such IRS Private Letter Ruling, as that
purpose is reflected in Schedule 10.2 and (2) if there is a Valid Objection Notice,
whether Manchester has made amendments to the IRS Private Letter Ruling or the IRS Private
Letter Ruling Request (or changes to the form of IRS Private Letter Ruling Request) or
supplements thereto to address the relevant Claimed Defect stated in the Valid Objection
Notice. |
|
(n) |
|
The IRS Private Letter Ruling, as accepted pursuant to Section 10.2(l) or as approved
pursuant to the arbitration procedures set forth in Exhibit 10, shall constitute the
Accepted IRS Private Letter Ruling. |
|
(o) |
|
Prior to the issuance of the IRS Private Letter Ruling, Arsenal shall not, except as
otherwise provided in this Agreement, and after the date of the issuance of the IRS Private
Letter Ruling neither Arsenal nor Manchester shall, make any supplemental submissions to, or
otherwise communicate with, the IRS relating to the IRS Private Letter Ruling or any IRS
Private Letter Ruling Request or other submission to the IRS relating thereto without the
prior written consent of the other Party (such written consent not to be unreasonably
withheld). |
|
(p) |
|
From and after the date hereof (whether before or after the Coniston Closing Date), neither
Manchester nor Arsenal shall take or fail to take, and neither shall cause or permit its
respective Affiliates to take or |
34
|
|
fail to take, in each case any action contrary to any fact, representation or other
statement in the IRS Private Letter Ruling, IRS Private Letter Ruling Request or other
submission to the IRS relating thereto, without the prior written consent of the other Party
(such written consent not to be unreasonably withheld) or except as required by Law. |
(q) |
|
After the Coniston Closing Date, neither Manchester nor Arsenal shall file, and neither shall
cause or permit its respective Affiliates or Newco to file, any Tax Return that is
inconsistent with the IRS Private Letter Ruling, IRS Private Letter Ruling Request or other
submission to the IRS relating thereto or the IRS Private Letter Ruling, except with the prior
written consent of the other Party (such written consent not to be unreasonably withheld) or
except as required by Law. |
(a) |
|
Manchester shall timely file or cause to be timely filed when due (except as provided in
Section 10.3(d), taking into account all extensions properly obtained and taking into
account all opportunities to accelerate the due date of such returns) all Tax Returns that are
required to be filed by or with respect to Newco or any Subsidiary of Newco for any tax
periods ending on or prior to the Coniston Closing Date. In each case, Manchester shall remit
or cause to be remitted any Taxes due in respect of such Tax Returns. Except as otherwise
required by applicable Law, all Tax Returns required to be filed in accordance with this
Section 10.3(a) shall be prepared and filed in a manner consistent with past practice
and in accordance with Section 10.2(q) and Section 10.9(e). Prior to
Manchester filing such Tax Returns, Arsenal shall have a reasonable opportunity to review and
comment on such Tax Returns. |
|
(b) |
|
Manchester shall timely file or cause to be filed complete and correct 2010 and 2011 US
federal income Tax Returns for Newco on or before the respective due dates for the filing of
such Tax Returns (in accordance with Section 10.3(d)) and (i) with respect to each
such filing shall make the disclosure required by, and otherwise comply with, Section
6662(i)(2) the Code and (ii) if it chooses to do so, provide disclosure and otherwise comply
with Section 10.10(a)(i). Not later than ten (10) business days prior to filing
Newco’s 2010 and 2011 US federal income Tax Returns, Manchester shall provide a correct and
complete copy of such Tax Returns (including all schedules and attachments thereto) to
Arsenal, and Arsenal shall have a reasonable opportunity to review and comment on such Tax
Returns. |
|
(c) |
|
Arsenal shall timely file or cause to be timely filed when due (taking into account all
extensions properly obtained) all Tax Returns that are required to be filed by or with respect
to Newco for any Straddle Periods. Except as otherwise required by applicable Law, all Tax
Returns required to be filed in accordance with this Section 10.3(c) shall be prepared
and filed in a manner consistent with past practice and in accordance with Section
10.2(q) and Section 10.9(e). Prior to Arsenal filing such Tax Returns, Manchester
shall have a reasonable opportunity to review and comment on such Tax Returns. |
|
(d) |
|
Notwithstanding anything herein to the contrary, (i) the 2011 US federal income Tax Return
for Newco shall be timely filed without regard to any extensions and (ii) the 2010 US federal
income Tax Return for Newco shall be timely filed taking into account extensions pursuant to
the Code not in excess of six (6) months in the aggregate; provided, that in no event
shall the due date for the 2010 US federal income Tax Return (taking into account extensions)
be later than March 1, 2011. |
If Arsenal or any of its Affiliates receives a credit with respect to, or refund of,
any Tax for which Manchester is liable under this Agreement, Arsenal shall pay or cause to
be paid over to Manchester the amount of such refund or credit within fifteen (15) days
after receipt thereof or entitlement thereto
35
except to the extent attributable to the carryback of losses, credits or similar items from
a taxable year or period that begins after the Coniston Closing Date and is attributable to
Newco. In the event that any refund or credit of Taxes for which a payment has been made
to Manchester by Arsenal or an Affiliate thereof is subsequently reduced or disallowed,
Manchester shall indemnify and hold harmless Arsenal or such Affiliate for any Tax assessed
against Manchester by reason of the reduction or disallowance. If and to the extent Arsenal
fails to pay or cause to be paid to Manchester an amount of refund or credit in accordance
with this Section 10.4, Manchester shall be permitted to reduce any amounts owing to
any Arsenal Group Member under this Agreement by such unpaid amount.
After the Coniston Closing Date, each of Manchester and Arsenal shall (and shall cause
their respective Affiliates to):
(a) |
|
timely sign and deliver such certificates or forms as may be necessary or appropriate to
establish an exemption from (or otherwise eliminate, reduce or mitigate), or file Tax Returns
or other reports with respect to, Transfer Taxes; |
|
(b) |
|
furnish or cause to be furnished to each other, as promptly as reasonably practicable, such
information and assistance relating to Newco (to the extent within the control of such Party),
including access to books and records in any forum or medium, as is reasonably necessary for
the preparation and filing of all Tax Returns (including the timely execution of any Tax
Returns) under Section 10.3; |
|
(c) |
|
cooperate with each other in the conduct of any audit or other Proceeding relating to Taxes
involving Newco (including executing any powers of attorney or other authorizations reasonably
requested to allow a party responsible for defending against or handling the Proceeding to
represent Newco in the Proceeding but not to take any action contrary to this Agreement).
Notwithstanding any other provision of this Agreement to the contrary, the Parties will
preserve all information, records or documents relating to the liability for Taxes relating to
the operations of Newco with respect to Pre-Closing Tax Periods until the earlier of (i)
ninety-one (91) days after the expiration of any applicable statute of limitations or
extensions thereof and (ii) six (6) years following the Coniston Closing Date; |
|
(d) |
|
make available as reasonably requested all information, records and documents relating to
Taxes of Newco attributable to any Pre-Closing Tax Period, Transaction Taxes or Post-Closing
Franchise Taxes; and |
|
(e) |
|
furnish the other Party with copies of all correspondence received from any Taxing Authority
in connection with any Tax audit or information request related to Taxes of Newco with respect
to any such taxable period or such identified Taxes. |
(a) |
|
Subject to and without limiting the provisions of Section 10.1, in the event the
Arsenal Exchange occurs, Manchester shall be liable for and shall pay, and shall indemnify
each Arsenal Group Member from and against and hold each of them harmless from (i) any Taxes
imposed on any Arsenal Group Member or for which any Arsenal Group Member may otherwise be
liable as a direct result of the Arsenal Exchange (excluding, in each case, Newco) and (ii)
Taxes imposed by withholding (including any liability for failure to withhold such Taxes) on
the delivery of the Exchange Shares or the payment of the Repurchase Consideration, the
Contingent Repurchase Consideration or any other consideration delivered pursuant to the
transactions contemplated by this Agreement. |
36
(b) |
|
Subject to and without limiting the provisions of Section 10.1 or Section
10.6(a) above, all Transfer Taxes imposed on either Party as a result of the transactions
contemplated by this Agreement shall be borne by the Party required by Law to pay such Taxes. |
If Core Ruling (4) is not received as part of any IRS Private Letter Ruling, Manchester
agrees that, notwithstanding any other provision of this Agreement, as an adjustment to the
Repurchase Consideration, Manchester shall reimburse Arsenal for, and shall indemnify each
Arsenal Group Member from and against any franchise Taxes imposed upon Newco for calendar
years 2011 and 2012 (Post-Closing Franchise Taxes), with such reimbursements payable at the
times pursuant to Section 10.10(c). The Parties agree that they will each use
commercially reasonable efforts to eliminate or otherwise mitigate the imposition of such
Post-Closing Franchise Taxes.
(a) |
|
If written notice of any pending or threatened Proceeding, audit, notice or assessment with
respect to the IRS Private Letter Ruling or Taxes or Tax Returns of Newco, in each case, (i)
for any Taxable period ending on or prior to the Coniston Closing Date or (ii) with respect to
any Tax for which Manchester could reasonably be expected to have an indemnification
obligation under this Agreement, is received by Arsenal, its Affiliates or Newco (a Tax
Claim), Arsenal shall, and shall cause its Affiliates and/or Newco to, notify Manchester
promptly in writing of such Tax Claim. |
|
(b) |
|
The failure of a party to notify another pursuant to any provision of this Section
10.8 shall not constitute a waiver of any claim to indemnification under this Agreement
except to the extent of any prejudice to the indemnifying party. |
|
(c) |
|
Manchester, at its expense, shall have the right to defend Newco in connection with any such
Tax Claim and to control the discussions and other proceedings that may occur in an effort to
resolve any such Tax Claim; provided, that Manchester shall have no right to represent
Newco’s interests in any Tax Proceeding, audit, notice or assessment unless Manchester has
first (i) notified Arsenal in writing of Manchester’s intention to do so and (ii) agreed with
Arsenal in writing that as between Manchester and Arsenal, Manchester shall be liable for any
Taxes that result from such Tax Claim; provided, further, that Manchester, on
a timely basis, shall keep Arsenal reasonably informed of the progress of any such Tax Claim
and shall permit Arsenal and its representatives (at Arsenal’s cost and expense) to
participate (solely as observers) in the discussions and other proceedings that may occur in
an effort to resolve any such Tax Claim and shall not settle or compromise any such Tax Claim
(to the extent such settlement or compromise would increase any Tax of Newco or any Arsenal
Group Member attributable to a Post-Closing Tax Period) without the consent of Arsenal (such
consent not to be unreasonably withheld). |
10.9 |
|
Further Tax Assurances |
(a) |
|
Arsenal shall not make, and shall cause its Affiliates not to make, an election under section
338(g) of the Code with respect to Newco. |
|
(b) |
|
Neither Manchester nor Arsenal shall, and each shall not cause or permit its respective
Affiliates or Newco to, formally or informally, amend, re-file or otherwise modify any Tax
Return of Newco relating to a Pre-Closing Tax Period, or any Tax period with respect to which
Transaction Taxes are or may be payable, without the prior written consent of the other Party,
which consent shall not be unreasonably withheld; provided, however, that if
as a result of any such amendment, re-filing or modification the |
37
|
|
statute of limitations for a taxable period would be extended beyond a relevant Fixed
Release Date provided for in Section 10.10(a) or (b), then Arsenal shall be
entitled to withhold its consent in its discretion unless the Parties delay the Fixed
Release Date to a date that is coterminous with the expiration of the extended statute of
limitations. |
(c) |
|
Without limiting anything to the contrary in this Agreement, after the date hereof, neither
Manchester nor Arsenal shall, and each shall not cause or permit its respective Affiliates or
Newco to, agree to, or cause, any waiver, extension or suspension of the statute of
limitations relating to any Taxes of Newco, or for which Newco could be liable, for any
Pre-Closing Tax period, or any Tax period with respect to which Transaction Taxes are or may
be payable, without the prior written consent of the other Party, which consent shall not be
unreasonably withheld; provided, however, that if as a result of any such
waiver, extension or suspension the statute of limitations for a taxable period would be
extended beyond a relevant Fixed Release Date provided for in Section 10.10(a) or
(b), then Arsenal shall be entitled to withhold its consent in its discretion unless
the Parties delay the Fixed Release Date to a date that is coterminous with the expiration of
the extended statute of limitations. |
|
(d) |
|
Neither Manchester nor Arsenal shall file any Tax Return, make any Tax refund claim,
carryback or carryforward any Tax items, or otherwise take any action that would cause any Tax
Return of Newco or any of its Affiliates or any Tax item related thereto (to the extent
relating to any Taxable period ending on or prior to the Coniston Closing Date or any Straddle
Period, or to any period with respect to which a Transaction Tax may be imposed) to be subject
to examination or challenge by any Taxing Authority if there otherwise could be no further
challenge by such Taxing Authority in respect thereof, and neither Manchester nor Arsenal
shall violate or otherwise take any action inconsistent with any condition or other term of
any closing agreement or similar document relating to any such period. |
|
(e) |
|
Except as otherwise required by applicable Law, without the consent of Arsenal, Newco shall
not, and shall cause its Subsidiaries not to, claim any federal or state income tax
deductions, losses or credits in computing its federal, New York State or other material state
taxable income for its 2010 and 2011 taxable years that are materially in excess of or
different in type from those set forth on Schedule 10.9. Except as otherwise required
by Law, without the consent of Manchester, Newco shall, and shall cause its Subsidiaries to,
file its federal, New York State and other material state Tax Returns for any Post-Closing Tax
Period in a manner consistent with past practice and Schedule 10.9, to the extent that
failure to do so could adversely impact the Tax Returns of Newco and its Subsidiaries filed
for any Pre-Closing Tax Periods. |
|
(f) |
|
Each of Manchester and Arsenal shall, and shall cause each of their respective Affiliates and
Newco to, promptly deliver to the other Party all IRS Forms and other relevant Tax documents
referred to in Section 10.10 that it receives that could reasonably be expected to be
relevant to such other Party in connection with any termination or release of, or demand for
payment pursuant to, the PLR Bank Guarantee or Historic Bank Guarantee pursuant to Section
10.10. |
|
(g) |
|
With respect to any release of the PLR Bank Guarantee pursuant to Section 10.10(a) or
any release of the Historic Bank Guarantee pursuant to Section 10.10(b), which release
is predicated on the receipt of Audit Closing Evidence, Manchester shall endeavor in good
faith to obtain Audit Closing Evidence consisting of an IRS Form 870-AD or IRS Form 866. |
|
(h) |
|
Provided that Newco has timely filed complete 2010 and 2011 US federal income Tax Returns (in
accordance with Section 10.3(d)) and such Tax Returns include disclosure with respect
to the potential Transaction Tax intended to meet the requirements of Section
6501(e)(1)(B)(ii) of the Code, Arsenal shall seek, as promptly as reasonably practicable
thereafter, to obtain an opinion from KPMG (or other |
38
|
|
nationally recognized accounting firm selected by
Arsenal and reasonably acceptable to Manchester), in
form and substance reasonably satisfactory to
Arsenal, that the requirements of Section
6501(e)(1)(B)(ii) of the Code have been satisfied. |
10.10 |
|
Tax Indemnity Credit Support |
(a) |
|
Manchester shall, at or prior to the Coniston Closing, obtain a bank guarantee from one of
the banks listed on Schedule 10.10(a) (the PLR Bank Guarantor) in favor of Arsenal
(substantially in the form attached as Exhibit 11) in an aggregate amount of US$168
million (the PLR Bank Guarantee). Arsenal shall not demand payment under the PLR Bank
Guarantee unless and until each of the Transaction Tax Conditions or the Post-Closing
Franchise Tax Conditions, as the case may be, shall have been satisfied following receipt by
Manchester from Arsenal of a request for payment in accordance with the Transaction Tax
Condition or Post-Closing Franchise Tax Condition, as the case may be. The PLR Bank Guarantee
shall be fully released and terminated ten (10) business days after receipt by Arsenal of a
written notice from Manchester (which notice shall be sent concurrently by Manchester by
facsimile to the PLR Bank Guarantor) that the earliest of the following has occurred (such
notice specifying the event giving rise to such permitted release and termination, including a
copy of the applicable IRS form or other relevant documentation in the case of subclause (x)):
(w) receipt by Manchester of the Accepted IRS Private Letter Ruling, (x) the closing of the
IRS examination of each of Newco’s 2010 and 2011 US federal income tax return (as evidenced by
Manchester’s receipt of an IRS Form 870, IRS Form 870-AD for all items and without exceptions,
IRS Form 866 or closing agreement or similar written evidence of closing (Audit Closing
Evidence)) and (y) March 15, 2017 (each, a condition for the release and termination of the
PLR Bank Guarantee); provided, however, that: |
|
(i) |
|
the date in clause (y) shall be March 15, 2014 (in lieu of March 15, 2017),
provided (A) Newco timely files complete 2010 and 2011 US federal income Tax Returns
(in accordance with Section 10.3(d)), (B) such Tax Returns include disclosure with
respect to the potential Transaction Tax sufficient to meet the requirements of Section
6501(e)(1)(B)(ii) of the Code and, not later than ten (10) business days prior to March
15, 2014, Arsenal shall have received, at Arsenal’s expense, an opinion from KPMG (or
other nationally recognized accounting firm selected by Arsenal and reasonably
acceptable to Manchester), in form and substance reasonably satisfactory to Arsenal,
that such requirements have been satisfied and (C) Manchester provides a written
representation to Arsenal on March 15, 2014 that neither it nor any of its Affiliates
has taken any action prohibited by Section 10.9(b) or Section 10.9(c)
that would result in any waiver, extension or suspension of the statute of limitations
with respect to the Newco 2010 or 2011 US federal income Tax Return; |
|
|
(ii) |
|
if a ruling substantially to the effect of Core Ruling (4) is not received as
part of any IRS Private Letter Ruling, any release or termination pursuant to this
Section 10.10(a) shall not reduce the PLR Bank Guarantee to an amount less than
US$3 million prior to April 15, 2011 or less than US$1.5 million prior to April 15,
2012; and |
|
|
(iii) |
|
any release or termination pursuant to this Section 10.10(a) shall not
reduce the PLR Bank Guarantee to an amount less than the sum of (i) any amount with
respect to which Arsenal has requested payment from Manchester under the Transaction
Tax Conditions (which remains unpaid) and (ii) the amount, set forth in a written
notice from Arsenal to Manchester, of Transaction Taxes with respect to which Newco or
any Arsenal Group Member has received a written notice of proposed adjustment, a
written revenue agent’s report, a written notice of deficiency or other written
assertion of a specific adjustment or deficiency (including reasonably estimated
penalties and interest); provided, however, that the limitation in this
Section |
39
|
|
|
10.10(a)(iii) shall not apply with respect to any release or termination
resulting from the receipt by Manchester of the Accepted IRS Private Letter Ruling in
accordance with this Section 10.10(a). |
The limitations in Section 10.10(a)(ii) and (iii) shall be cumulative.
In the event an amount of the PLR Bank Guarantee is not fully released pursuant to
Section 10.10(a)(ii), $1.5 million of such unreleased amount shall subsequently be
released ten (10) business days after receipt by Arsenal of a written notice from Manchester
(which notice shall be sent concurrently by Manchester by facsimile to the PLR Bank
Guarantor) delivered on or after April 15, 2011, and the remaining $1.5 million of such
unreleased amount shall be released ten (10) business days after receipt by Arsenal of a
written notice from Manchester (which notice shall be sent concurrently by Manchester by
facsimile to the PLR Bank Guarantor) delivered on or after April 15, 2012; provided,
however, that the aggregate amount otherwise so released shall be reduced by the
aggregate amount for which Arsenal has demanded payment pursuant to a Post-Closing Franchise
Tax Condition (which remains unpaid). In the event an amount of the PLR Bank Guarantee is
not released pursuant to the limitation in clause (ii) of Section 10.10(a)(iii),
such unreleased amount shall be fully released and terminated ten (10) business days after
receipt by Arsenal of a written notice from Manchester (which notice shall be sent
concurrently by Manchester by facsimile to the PLR Bank Guarantor) upon the closing of the
IRS examination for the taxable year relating to such notice, adjustment or report (as
evidenced by Manchester’s receipt of Audit Closing Evidence relating to such year);
provided, however, that if Manchester reasonably believes that the
unreleased amount of the PLR Bank Guarantee exceeds the amount necessary to fund the
potential Tax liability identified in any such notice, adjustment or report (including
reasonably estimated penalties and interest) (any such excess, an Excess PLR Unreleased
Amount), Manchester shall be entitled to deliver one or more notices to Arsenal of such
belief and stating in reasonable detail the reasons for such belief (the Excess PLR
Guarantee Notice). Within five (5) business days following delivery of an Excess PLR
Guarantee Notice, Arsenal and Manchester shall consult in good faith with each other in an
attempt to reach agreement as to whether an Excess PLR Unreleased Amount exists and, if so,
the amount thereof. If, within five (5) business days following delivery of the Excess PLR
Guarantee Notice, the Parties are unable to agree as to whether an Excess PLR Unreleased
Amount exists or, if it is agreed to exist, the amount thereof, Manchester shall have the
right (but not the obligation) to cause the Parties to engage in the arbitration procedures
set forth in Exhibit 10 to make such determination. Any release of a portion of the
PLR Bank Guarantee pursuant to the immediately preceding proviso shall occur ten (10)
business days after receipt by Arsenal of a written notice from Manchester (which notice
shall be sent concurrently by Manchester by facsimile to the PLR Bank Guarantor) after any
such agreement by the Parties or any such determination made through the arbitration
procedures.
(b) |
|
Manchester shall, at or prior to the Coniston Closing, obtain a bank guarantee from one of
the banks listed on Schedule 10.10(a) (the Historic Bank Guarantor) in favor of
Arsenal (substantially in the form attached as Exhibit 11) in an aggregate amount of
US$45 million (the Historic Bank Guarantee). Arsenal shall not demand payment under the
Historic Bank Guarantee unless and until each of the Historic Tax Conditions shall have been
satisfied and Manchester shall have received a written notice from Arsenal that each such
Historic Tax Condition has been satisfied. The Historic Bank Guarantee shall be reduced by
the following amounts (paragraphs (i) through (iv), each, a Tranche): |
|
(i) |
|
US$27 million (or Tranche Amount, if different) ten (10) business days after
the receipt by Arsenal of a written notice from Manchester (which notice shall be sent
concurrently by Manchester by facsimile to the Historic Bank Guarantor) that the
earlier of the following has occurred (such notice specifying the event giving rise to
such permitted reduction, including a copy of the applicable IRS form or other relevant
documentation in the case of subclause (x)): (x) the closing of the IRS examination of
all of Newco’s 2007 to 2009 US federal income Tax |
40
|
|
|
Returns (as evidenced by the receipt of Audit Closing Evidence for each such year)
and (y) March 15, 2014; |
|
(ii) |
|
US$6.75 million (or Tranche Amount, if different) ten (10) business days after
the receipt by Arsenal of a written notice from Manchester (which notice shall be sent
concurrently by Manchester by facsimile to the Historic Bank Guarantor) that the
earlier of the following has occurred (such notice specifying the event giving rise to
such permitted reduction, including a copy of the applicable IRS form or other relevant
documentation in the case of subclause (x)): (x) the closing of the IRS examination of
Newco’s 2010 US federal income Tax Return (as evidenced by the receipt of Audit Closing
Evidence for such year) and (y) March 15, 2017; |
|
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(iii) |
|
US$5.40 million (or Tranche Amount, if different) ten (10) business days after
the receipt by Arsenal of a written notice from Manchester (which notice shall be sent
concurrently by Manchester by facsimile to the Historic Bank Guarantor) that the
earliest of the following has occurred (such notice specifying the event giving rise to
such permitted reduction, including a copy of the applicable IRS form or other relevant
documentation in the case of subclause (x) or (y)): (x) the filing by Newco of amended
0000 Xxx Xxxx Xxxxx Tax Returns reflecting and in accordance with the closing of the
IRS examination of the corresponding Newco 2009 US federal income Tax Return and
payment of any and all New York State Taxes shown as owing thereon (y) the closing of
such IRS examination without the need to file such amended 2009 New York State Tax
Return reflecting such closing (in the case of subclause (x) or (y) as evidenced by the
receipt of Audit Closing Evidence with respect to such federal income Tax Return for
such year) and (z) March 15, 2014; and |
|
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(iv) |
|
US$5.85 million (or Tranche Amount, if different) ten (10) business days after
the receipt by Arsenal of a written notice from Manchester (which notice shall be sent
concurrently by Manchester by facsimile to the Historic Bank Guarantor) that the
earlier of the following has occurred: (x) the closing of the examination by the
relevant Taxing Authority of all of Newco’s New York State Tax Returns for taxable
years ended May 31, 2007 to May 31, 2009 and North Carolina State Tax Returns for
taxable years ended May 31, 2007 to May 31, 2009 (as evidenced by the receipt of a
North Carolina Department of Revenue Notice of Tax Assessment, executed NY State
Department of Taxation and Finance Form DO-356, or closing agreement or similar written
evidence of closing) and (y) December 31, 2014; |
provided, however, that with respect to any Tranche, any release or
termination pursuant to this Section 10.10(b) with respect to such Tranche shall not
reduce the Tranche Amount for such Tranche to an amount less than the sum of (1) any amount
with respect to which Arsenal has requested payment from Manchester under the Historic Tax
Conditions (which remains unpaid) and (2) the amount, set forth in a written notice from
Arsenal to Manchester, of Taxes (other than Transaction Taxes) with respect to which Newco
or any Arsenal Group Member has received a written notice of proposed adjustment, a written
revenue agent’s report, a written notice of deficiency or other written assertion of a
specific adjustment or deficiency (including reasonably estimated interest and penalties).
In the event an amount of the Historic Bank Guarantee is not fully reduced by a Tranche
Amount pursuant to the limitation in clause (2) of the proviso of the preceding paragraph,
such unreduced amount of the Historic Bank Guarantee shall be fully released and terminated
upon the closing of the IRS or relevant Taxing Authority examination for the taxable year
relating to such notice, adjustment or report (as evidenced by Manchester’s receipt of Audit
Closing Evidence (or similar forms or evidence under relevant state or local Tax Law)
relating to such year); provided, however, that if Manchester reasonably
believes that the unreleased amount of the Historic Tax Bank Guarantee exceeds the amount
41
necessary to fund the potential Tax liability identified in any such notice, adjustment or
report (including reasonably estimated interest and penalties) (any such excess, an Excess
Historic Unreleased Amount), Manchester shall be entitled to deliver one or more notices to
Arsenal of such belief and stating in reasonable detail the reasons for such belief (the
Excess Historic Guarantee Notice). Within five (5) business days following delivery of an
Excess Historic Guarantee Notice, Arsenal and Manchester shall consult in good faith with
each other in an attempt to reach agreement as to whether an Excess Historic Unreleased
Amount exists and, if so, the amount thereof. If, within five (5) business days following
delivery of the Excess Historic Guarantee Notice, the Parties are unable to agree as to
whether an Excess Historic Unreleased Amount exists or, if it is agreed to exist, the amount
thereof, Manchester shall have the right (but not the obligation) to cause the Parties to
engage in the arbitration procedures set forth in Exhibit 10 to make such
determination. Any release of a portion of the Historic Bank Guarantee pursuant to the
immediately preceding proviso shall occur ten (10) business days after receipt by Arsenal of
a written notice from Manchester (which notice shall be sent concurrently by Manchester by
facsimile to the Historic Bank Guarantor) after any such agreement by the Parties or any
such determination made through the arbitration procedures.
If, at any time from and after July 1, 2011, Manchester reasonably believes that an
Excess exists with respect to any of the Tranche described in clause (i), the Tranche
described in clause (ii) or the Tranche described in clause (iii), Manchester shall be
permitted to provide one or more written notices to Arsenal of such belief and stating in
reasonable detail the reasons for such belief (the Reduction Notice). Within five (5)
business days following delivery of a Reduction Notice, Arsenal and Manchester shall consult
in good faith with each other in an attempt to reach agreement as to whether such an Excess
exists and, if so, the amount of such Excess. If, within five (5) business days following
delivery of the Reduction Notice, the Parties are unable to agree as to whether an Excess
exists or, if it is agreed to exist, the amount of such Excess, Manchester shall have the
right (but not the obligation) to cause the Parties to engage in the arbitration procedures
set forth in Exhibit 10 to make such determination.
Tranche Amount shall mean, for each Tranche, (i) the dollar amount indicated for such
Tranche, (ii) plus or minus the Excess Deduction Amount for such Tranche, (iii) minus any
Excess and (iv) minus the amount of the Historic Bank Guarantee released according to the
terms of such Tranche.
Excess with respect to a Tranche shall mean the amount (determined by the Parties or
pursuant to the arbitration proceedings set forth in Exhibit 10, if so elected) by
which the Tranche Amount for such Tranche exceeds the amount necessary to fund anticipated
Tax liabilities with respect to the Tax Returns related to such Tranche.
The Historic Bank Guarantee shall be reduced by the aggregate Excess for each Tranche.
Excess Deduction Amount shall mean, based on the Tax Returns filed by Newco, the amount
of decrease in actual cash Tax payable by Newco with respect to its 2010 or 2011 taxable
year directly as a result of the additional claimed deduction for the 2010 or 2011 taxable
year in excess of the deductions for such year set forth on Schedule 10.9, but in no
event in excess of $5 million. The Tranche Amount for the Tranche described in clause (i)
shall be decreased, and the Tranche Amount for the Tranche described in clause (ii) shall be
increased, by the Excess Deduction Amount.
(c) |
|
Transaction Tax Conditions shall mean (i) there has been an assessment of such Tax pursuant
to section 6201 of the Code, an IRS Form 870, an IRS Form 870-AD for all items and without
exceptions, closing agreement or similar written evidence of closing, a reduction in an
otherwise allowable refund (to the extent such refund is not otherwise for the account of
Manchester) or a “determination” under section 1313(a) of the Code, in each case with respect
to a Transaction Tax imposed on Newco or any |
42
|
|
other Arsenal Group Member, or
for which Newco or any other
Arsenal Group Member is liable,
under applicable Law and (ii)
Manchester has failed to make
payment of such Tax to or on
behalf of Newco or such other
Arsenal Group Member within seven
(7) business days after a request
by Arsenal therefor (which
request shall be sent
concurrently by Arsenal by
facsimile to the PLR Bank
Guarantor). Historic Tax
Conditions shall mean (i) there
has been an assessment of such
Tax pursuant to section 6201 of
the Code, an IRS Form 870, an IRS
Form 870-AD for all items and
without exceptions, closing
agreement or similar written
evidence of closing, a reduction
in an otherwise allowable refund
(to the extent such refund is not
otherwise for the account of
Manchester) or a “determination”
under section 1313(a) of the Code
(or similar provision or form of
relevant state or local Tax Law,
including a North Carolina
Department of Revenue Notice of
Tax Assessment or executed NY
State Department of Taxation and
Finance Form DO-356), in each
case with respect to a Tax
described in Section 10.1(a)
(other than a Transaction Tax)
imposed on Newco or any other
Arsenal Group Member, or for
which Newco or any other Arsenal
Group Member is liable, under
applicable Law and (ii)
Manchester has failed to make
payment of such Tax to or on
behalf of Newco or such other
Arsenal Group Member within seven
(7) business days after a request
by Arsenal therefor (which
request shall be sent
concurrently by Arsenal by
facsimile to the Historic Bank
Guarantor). Post-Closing
Franchise Tax Conditions shall
mean (i) Manchester has failed to
make a payment of Post-Closing
Franchise Taxes to Arsenal within
seven (7) business days after a
written demand by Arsenal
therefor delivered not earlier
than ten (10) business days prior
to the due date therefor (which
request shall be sent
concurrently by Arsenal by
facsimile to the PLR Bank
Guarantor). |
Except as otherwise provided in Exhibit 10, in connection with any Proceeding
between the Parties arising out of or relating to this Section 10, the prevailing
Party in such Proceeding will be entitled to recover from the other Party all out-of-pocket
Losses incurred in connection with such Proceeding, in addition to any other relief to which
it may be entitled.
10.12 |
|
Predecessors and Successors |
Except to the extent the context clearly requires otherwise, all references to Newco in
this Section 10 and defined terms used in this Section 10 or otherwise
relevant for purposes of this Section 10 shall include all of its predecessors and
successors.
Notwithstanding any other provision of this Agreement to the contrary, the obligations
of the Parties set forth in this Section 10 shall survive until ninety (90) days
after the expiration of the applicable statute of limitations (taking into account any
applicable extensions or tollings). Further, to the extent the survival provisions of this
Section 10 and Section 9 conflict, the survival provisions of this
Section 10 shall control.
All notices, requests, claims, demands and other communications required or permitted
to be given under this Agreement shall be in writing and shall be delivered by hand, sent by
fax or sent by international overnight courier service and shall be deemed given when so
delivered by hand or fax (if received prior to 5 p.m. in the place of receipt and such day
is a business day in the place of receipt;
43
otherwise, any such notice, request or communication shall be deemed not to have been
received until the next succeeding business day in the place of receipt), or one (1)
business day after mailing in the case of international overnight courier service, to the
respective Parties at the following addresses (or at such other address for a Party as shall
be specified in a notice given in accordance with this Section 11.1):
if to Manchester, to:
Misys plc
Xxx Xxxxxxx Xxxxxx
Xxxxxxxxxx
Xxxxxx X0 0XX, XX
Telephone: x00 (0)00 0000 0000
Fax: x00 (0)00 0000 0000
Attention: General Counsel
with a copy to:
Xxxxx & Xxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Telephone: x0 000 000 0000
Fax: x0 000 000 0000
Attention: A. Xxxxx Harwich
if to Arsenal, to:
Allscripts-Misys Healthcare Solutions, Inc.
000 Xxxxxxxxxxx Xxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Telephone: x0 000 000 0000
Fax: x0 000 000 0000
Attention: General Counsel
with a copy to:
Sidley Austin LLP
Xxx Xxxxx Xxxxxxxx
Xxxxxxx, XX 00000
Telephone: x0 000 000 0000
Fax: x0 000 000 0000
Attention: Xxxxxxxxx X. Xxxxxxxx; Xxxx X. Xxxxxxxx
and
Xxxxxxx & Xxxxxx LLP
00 X. Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Telephone: x0 000 000 0000
Fax: x0 000 000 0000
Attention: Xxxxxx X. Xxxx
44
if to Emerald, to:
Eclipsys Corporation
Xxxxx Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
Telephone: x0 000 000 0000
Fax: x0 000 000 0000
Attention: General Counsel
Chief Financial Officer
with a copy to:
King & Spalding LLP
0000 Xxxxxxxxx Xxxxxx, XX
Xxxxxxx, XX 00000
Telephone: x0 000 000 0000
Fax: x0 000 000 0000
Attention: Xxxx X. Xxxxxx, Xx.; C. Xxxxxxx Xxxxxx
11.2 |
|
Amendments and Waivers |
(a) |
|
Any provision of this Agreement may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed, in the case of an amendment, by each Party and Emerald (in
the case of the provisions with respect to which Emerald is a third party beneficiary), or in
the case of a waiver, by the Party against whom the waiver is to be effective and, in the case
of a waiver or amendment by Arsenal prior to the Coniston Closing, approved by the Audit
Committee of the Arsenal Board of Directors. |
|
(b) |
|
Any waiver of any term or condition of this Agreement shall not be construed as a waiver of
any subsequent breach, or a subsequent waiver of the same term or condition or a waiver of any
other term or condition, of this Agreement. The failure of either Party to assert any of its
rights hereunder shall not constitute a waiver of any of such rights. No failure or delay by
either Party in exercising any right, power or privilege under this Agreement shall operate as
a waiver thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege. Other than
as expressly set forth herein, the rights and remedies provided in this Agreement shall be
cumulative and not exclusive of any rights or remedies provided by Law. |
Other than as set forth in this Agreement or in any Transaction Document, all costs and
expenses (including fees and disbursements of counsel, accountants and other advisors)
incurred in connection with the preparation, negotiation, execution, delivery or performance
of this Agreement and the completion of the Coniston Transaction, the Emerald Transaction
and the Contingent Repurchase shall be paid by the Party incurring such cost or expense.
45
11.4 |
|
Successors and Assigns |
The provisions of this Agreement shall be binding upon and inure to the benefit of the
Parties and their respective successors and permitted assigns; provided that neither
Party may assign, delegate or otherwise transfer any of its rights or obligations under this
Agreement without the consent of the other Party, which consent, in the case of Arsenal
prior to the Coniston Closing, shall be approved by the Audit Committee of the Arsenal Board
of Directors. Any attempted assignment in violation of this Section 11.4 shall be
void. If Manchester effects any voluntary liquidation of all or substantially all of its
assets in one or a series of transactions (or any other transaction with a similar effect)
at a time when Manchester is Solvent, Manchester shall ensure adequate protection for its
indemnification obligations set forth in this Agreement. If Manchester effects any
liquidation of all or substantially all of its assets in one or a series of transactions (or
any other transaction with a similar effect) involuntarily or at a time when Manchester is
not Solvent, Manchester shall use its commercially reasonable efforts to ensure adequate
protection for its indemnification obligations set forth in this Agreement.
This Agreement (and any claims or disputes arising out of or related to this Agreement
or the transactions contemplated hereby or to the inducement of any Party to enter into this
Agreement, whether for breach of contract, tortious conduct or otherwise and whether
predicated on common law, statute or otherwise) shall in all respects be governed by and
construed in accordance with the Laws of the State of Delaware, including all matters of
construction, validity and performance, in each case without reference to any conflict of
law rules that might lead to the application of the Laws of any other jurisdiction. Each
Party irrevocably and unconditionally waives any objection to the application of the Laws of
the State of Delaware to any action, suit or proceeding arising out of this Agreement or the
transactions contemplated hereby and further irrevocably and unconditionally waives and
agrees not to plead or claim that any such action, suit or proceeding should not be governed
by the Laws of the State of Delaware.
11.6 |
|
Enforcement; Consent to Jurisdiction |
(a) |
|
The Parties agree that irreparable damage would occur in the event that any of the provisions
of this Agreement were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the Parties shall be entitled to seek an injunction or
injunctions or other appropriate equitable relief to prevent breaches of this Agreement and to
enforce specifically the terms and provisions of this Agreement in the Delaware Court of
Chancery (unless such court shall lack subject matter jurisdiction over such action, in which
case, in any state or federal court located in Delaware), this being in addition to any other
remedy to which they are entitled at law or in equity, and the Parties hereby waive in any
such proceeding the defense of adequacy of a remedy at law and any requirement for the
securing or posting of any bond or any other security related to such equitable relief. |
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(b) |
|
Each Party irrevocably and unconditionally submits to the exclusive jurisdiction of the
Delaware Court of Chancery, or if such court is unavailable, any state or federal courts
located in Delaware, for the purposes of any suit, action or other proceeding arising out of
this Agreement or the transactions contemplated hereby. Each Party hereby agrees that it will
not bring any action relating to this Agreement or the transactions contemplated hereby in any
court other than the Delaware Court of Chancery (unless such court shall lack subject matter
jurisdiction over such action, in which case, in any state or federal court located in
Delaware). Each Party hereby waives formal service of process and agrees that service of any
process, summons, notice or document by U.S. registered mail to such Party’s respective
address set forth above shall be effective service of process for any action, suit or proceeding |
46
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|
in Delaware with respect to any matters to which it has submitted to jurisdiction in
this Section 11.6. Each Party irrevocably and unconditionally waives any objection
to the laying of venue of any action, suit or proceeding arising out of this Agreement or
the transactions contemplated hereby in such courts and hereby and thereby further
irrevocably and unconditionally waives and agrees not to plead or claim in any such court
that any such action, suit or proceeding brought in any such court has been brought in an
inconvenient forum. |
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(c) |
|
Notwithstanding the foregoing, each of the Parties agrees that it will not bring or support
any action, cause of action, claim, cross-claim or third-party claim of any kind or
description, whether in law or in equity, whether in contract or in tort or otherwise, against
the Financing Source in any way relating to this Agreement or any of the transactions
contemplated hereby, including but not limited to any dispute arising out of or relating in
any way to the Commitment Letter or the performance thereof, in any forum other than the
Supreme Court of the State of New York, County of New York, or, if under applicable Law
exclusive jurisdiction is vested in the Federal courts, the United States District Court for
the Southern District of New York (and appellate courts thereof). |
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(d) |
|
Notwithstanding any other provision of this Agreement or any Transaction Document to the
contrary, in the event that, prior to the Coniston Closing or, if the Coniston Closing does
not occur, at any time after the date hereof (i) there is any action or determination to be
made by Arsenal hereunder that would require approval of the Arsenal Board of Directors or any
committee thereof, (ii) there is any action, suit, proceeding, litigation or arbitration
between Arsenal and Manchester or (iii) there is any disputed claim or demand (including any
claim or demand relating to enforcing any remedy under this Agreement or any Transaction
Document) by Arsenal against Manchester, or by Manchester against Arsenal, all actions or
determinations of Arsenal prior to the Coniston Closing or, if the Coniston Closing does not
occur, at any time after the date hereof or any determinations of Arsenal relating to any such
action, suit, proceeding, litigation, arbitration, claim or demand (including all
determinations by Arsenal whether to institute, compromise or settle any such action, suit,
proceeding, litigation, arbitration, claim or demand and all determinations by Arsenal
relating to the prosecution or defense thereof), shall be made and approved by the Audit
Committee of the Arsenal Board of Directors. |
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11.7 |
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WAIVER OF JURY TRIAL |
|
|
|
EACH PARTY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY ACTION,
PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) DIRECTLY OR
INDIRECTLY RELATING TO ANY DISPUTE ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. Each Party (a) certifies that no
representative, agent or attorney of the other Party has represented, expressly or
otherwise, that such other Party would not, in the event of litigation, seek to enforce the
foregoing waiver and (b) acknowledges that it and the other Party have been induced to enter
into this Agreement by, among other things, the mutual waivers and certifications in this
Section 11.7. |
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11.8 |
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Counterparts; Third-Party Beneficiaries |
|
|
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This Agreement may be signed in any number of counterparts (including by fax or other
electronic signature), each of which shall be an original, with the same effect as if the
signatures were upon the same instrument. This Agreement shall become effective when each
Party shall have received a counterpart of this Agreement signed by the other Party. Prior
to the Emerald Closing, Emerald shall be, subject to compliance by Emerald with Section 11 of this Agreement, a third party
beneficiary of |
47
|
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Sections 1, 2, 4, 6.3, 6.4,
6.7, 6.8, 6.13, 8.1(a)(vi), 10.2, the first sentence
of 10.10(a), the first sentence of 10.10(b), 11 and, only as such
provisions relate to actions to be taken prior to the Coniston Closing, 10.3,
10.9(b), 10.9(c) and 10.9(d) of this Agreement; provided,
that any claim brought by or on behalf of Emerald against Manchester or Arsenal prior to the
Emerald Closing shall be subject to the limitations on liability described in the final
sentence of Section 9.1(c), Section 9.4 and the final sentence of
Section 9.6 and, provided, further, that notwithstanding anything
herein to the contrary, if the Termination Fee (as defined in the Emerald Definitive
Agreement) is paid in full and accepted by Emerald in accordance with Section 5.5(g) of the
Emerald Definitive Agreement, such payment shall be the sole and exclusive remedy (other
than the right to seek specific performance or injunctive relief pursuant to Section
11.6(a)) of Emerald and its Affiliates under this Agreement or any Transaction Document
(or with respect to any claims or disputes arising out of or related to this Agreement or
any Transaction Document or the transactions contemplated hereby or thereby or to the
inducement of any party (including Emerald) to enter into this Agreement or any Transaction
Document, whether for breach of contract, tortious conduct or otherwise and whether
predicated on common law, statute or otherwise), and Emerald and its Affiliates shall be
precluded from any other remedy (or seeking any other remedy) against Arsenal, Manchester
and their respective Affiliates for monetary damages under this Agreement or any Transaction
Document (or with respect to any claims or disputes arising out of or related to this
Agreement or any Transaction Document or the transactions contemplated hereby or thereby or
to the inducement of any party (including Emerald) to enter into this Agreement or any
Transaction Document, whether for breach of contract, tortious conduct or otherwise and
whether predicated on common law, statute or otherwise). Except as provided in the
immediately foregoing sentence, this Agreement is for the sole benefit of the Parties and
their successors and permitted assigns and nothing express or implied in this Agreement is
intended or shall be construed to confer upon any Person other than the Parties any legal or
equitable rights or remedies under this Agreement. |
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11.9 |
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Severability |
|
|
|
If any provision of this Agreement (or any portion thereof) or the application of any such
provision (or any portion thereof) to any Person or circumstance shall be held invalid,
illegal or unenforceable in any respect by a court of competent jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision of this
Agreement (or the remaining portion thereof) or the application of such provision to any
other Person or circumstances. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith
to modify this Agreement so as to effect the original intent of the Parties as closely as
possible in a mutually acceptable manner in order that the transactions contemplated hereby
are completed as originally contemplated to the greatest extent possible. Notwithstanding
the foregoing, the Parties intend and agree that all provisions regarding consideration to
be paid hereunder (including Sections 2.1 and 3.1) are an integral part of
this Agreement without which there would be no agreement and are not severable herefrom. |
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11.10 |
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Entire Agreement |
|
|
|
This Agreement and the Transaction Documents constitute the entire agreement and
understanding between the Parties with respect to the subject matter of this Agreement and
the Transaction Documents and supersede all prior agreements and understandings, both oral
and written, between Manchester and Arsenal with respect to the subject matter of this
Agreement and the Transaction Documents, including the Proposed Deal Structure dated
February 5, 2010. The Exhibits and Schedules are an integral part of this Agreement and are
incorporated by reference into this Agreement for all purposes. |
48
11.11 |
|
Construction |
|
|
|
Unless the context of this Agreement otherwise clearly requires, (i) references to the
plural include the singular, and references to the singular include the plural, (ii)
references to any gender include the other genders, (iii) the words “include,” “includes”
and “including” do not limit the preceding terms or words and shall be deemed to be followed
by the words “without limitation”, (iv) the terms “hereof”, “herein”, “hereunder”, “hereto”
and similar terms in this Agreement refer to this Agreement as a whole and not to any
particular provision of this Agreement, (v) the terms “day” and “days” mean and refer to
calendar day(s) and (vi) the terms “year” and “years” mean and refer to calendar year(s). |
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11.12 |
|
Headings and Captions; Exhibits and Schedules |
|
|
|
The headings and captions in this Agreement and in the table of contents are included for
convenience of reference only and shall be ignored in the construction or interpretation of
this Agreement. All Annexes, Exhibits and Schedules to this Agreement are integral parts of
this Agreement and are incorporated in and made a part of this Agreement as if set forth in
full. Certain terms used in this Agreement shall have the meanings ascribed to such terms
in Annex 1 hereto. Any capitalized terms used in any Schedule or Exhibit but not
otherwise defined therein shall have the meanings as defined in this Agreement. All
references to Sections or Exhibits contained in this Agreement shall be to Sections or
Exhibits of or to this Agreement unless otherwise stated. |
[SIGNATURE PAGE FOLLOWS]
49
SIGNATORIES
IN WITNESS WHEREOF, Manchester and Arsenal have caused their respective duly authorized officers to
execute this Agreement as of the day and year first above written.
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MISYS PLC
|
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By: |
/s/ J. Xxxxxxx Xxxxxx
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Name: |
J. Xxxxxxx Xxxxxx |
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Title: |
Chief Executive Officer |
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ALLSCRIPTS-MISYS HEALTHCARE SOLUTIONS, INC.
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By: |
/s/ Xxx X. Xxxxxxx
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Name: |
Xxx X. Xxxxxxx |
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Title: |
President |
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ECLIPSYS CORPORATION, solely in its capacity
as a third party beneficiary in accordance
with Section 11.8 hereof
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By: |
/s/ Xxxxxx X. Xxxx
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Name: |
Xxxxxx X. Xxxx |
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Title: |
President and CEO |
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50
ANNEX 1
CERTAIN DEFINITIONS
Acceptable Underwriting Agreement shall have the meaning ascribed to such term in Section
2.2(i) hereof.
Accepted IRS Private Letter Ruling shall have the meaning ascribed to such term in Section
10.2(n) hereof.
ACTS shall mean ACT Sigmex Limited, a limited company formed under the Laws of England and Wales
and a Subsidiary of Manchester.
Additional Written Consent shall have the meaning ascribed to such term in Section 1.1(a)
hereof.
Affiliate shall mean, with respect to any Person, any other Person that directly, or indirectly
through one or more intermediaries, Controls or is Controlled by, or is under common Control with,
such Person. For purposes of this Agreement, Manchester and its Subsidiaries, on the one hand, and
Arsenal and its Subsidiaries, on the other hand, shall not be deemed Affiliates of each other.
Agreement shall have the meaning ascribed to such term in the Introduction hereof.
Alternative Core Rulings shall mean those rulings identified as such in Schedule 10.2.
Amended and Restated Relationship Agreement shall mean the Amended and Restated Relationship
Agreement to be entered into between the Parties on the Coniston Closing Date substantially in the
form attached as Exhibit 12.
Arbitration Notice shall have the meaning ascribed to such term in Exhibit 10.
Arsenal shall mean Arsenal Inc., a Delaware corporation.
Arsenal Arbitration Candidates shall have the meaning ascribed to such term in Exhibit 10.
Arsenal Constitutional Documents shall mean the Third Amended and Restated Certificate of
Incorporation and By-laws of Arsenal.
Arsenal Exchange shall have the meaning ascribed to such term in the Recitals hereof.
Arsenal Group Member shall mean (i) Arsenal and its Affiliates, (ii) the directors and officers of
each of Arsenal and its Affiliates and (iii) the respective successors and assigns of each of the
foregoing.
Arsenal Material Adverse Effect shall mean any event, occurrence, fact, condition, effect, change
or development (any one or more of which is referred to in this definition as a “Circumstance” and
collectively as “Circumstances”) that, individually or when taken together with all other
Circumstances, is, or is reasonably expected to be, materially adverse to the business, assets,
liabilities (contingent or otherwise), financial condition or results of operations of Arsenal and
its Subsidiaries, taken as a whole; provided, however, that none of the following
shall constitute, and no event, effect, change or development to the extent resulting from any of
the following, shall constitute, or be taken into account in determining whether there has been, an
Arsenal Material Adverse Effect: (i) any Circumstances affecting the national or world economy or
financial, banking, credit, securities or commodities markets, taken as a whole, except to the
extent Arsenal is adversely affected in a disproportionate manner as compared to other comparable
companies in the industry in which Arsenal operates;
51
(ii) any Circumstances generally affecting the industries in which Arsenal or its Subsidiaries
operate, except to the extent Arsenal is adversely affected in a disproportionate manner as
compared to other comparable companies in the industry in which Arsenal operates; (iii) any
Circumstances resulting from or arising out of the announcement of this Agreement, the Emerald
Definitive Agreement or the transactions contemplated hereby or thereby (including any shareholder
or derivative litigation arising from or relating to this Agreement, the Emerald Definitive
Agreement or the transactions contemplated hereby or thereby) or the performance of this Agreement
or the Emerald Definitive Agreement; (iv) any Circumstances relating to the loss in whole or in
part of any business relationship with any customer or client of Arsenal or any of its Subsidiaries
set forth in Section 9.1 of the Parent Disclosure Letter (as defined in the Emerald Definitive
Agreement), other than as a result of the valid termination by a customer or client of any written
Contract (as defined in the Emerald Definitive Agreement) due to the breach by Arsenal or any of
its Subsidiaries of its obligations under any written Contract to license material Parent Owned
Intellectual Property Rights (as defined in the Emerald Definitive Agreement) or perform material
services related to such licenses required to be licensed or performed, respectively, under such
written Contract; (v) any failure by Arsenal to meet any analysts’ revenue or earnings projections
or Arsenal guidance, in and of themselves, or any failure by Arsenal to meet any of Arsenal’s
internal or published revenue or earnings projections or forecasts, in and of themselves, or any
decline in the trading price or trading volume of the Arsenal Shares, in and of themselves (it
being understood that any Circumstance giving rise to any such failure or decline, other than a
Circumstance set forth in clauses (i) through (iv) above or clauses (vi) through (ix) below, may be
deemed to constitute, and may be taken into account in determining whether there has been, or is
reasonably expected to be, an Arsenal Material Adverse Effect); (vi) any effect resulting from
changes in Laws or accounting principles, in each case, after the date of this Agreement; (vii) any
effect resulting from any outbreak or escalation of hostilities, the declaration of a national
emergency or war, or the occurrence of any act of terrorism; (viii) any Circumstance arising or
resulting from any material breach of the Emerald Definitive Agreement by Emerald or its
Affiliates; or (ix) any increase in the cost of or decrease in the availability of financing to
Arsenal or Merger Sub with respect to the Coniston Transaction.
Arsenal Right of First Refusal shall have the meaning ascribed to such term in Section
2.2(b) hereof.
Arsenal Shares shall mean the issued and outstanding shares of common stock of Arsenal, par value
$0.01 per share.
Arsenal Stockholder Approval shall mean the approval of the Emerald Transaction by the affirmative
vote of the holders of a majority in voting power of Arsenal Shares present in person or
represented by proxy at a meeting held for such purpose.
Arsenal Written Consent shall have the meaning ascribed to such term in Section 1.1(a)
hereof.
Audit Closing Evidence shall have the meaning ascribed to such term in Section 10.10(a)
hereof.
business day shall mean any day except Saturday, Sunday or any day on which banks or stock
exchanges are generally not open for business in the City of New York, New York or the City of
London, England.
Circular shall have the meaning ascribed to such term in Section 6.3 hereof.
Claimed Defect shall have the meaning ascribed to such term in Section 10.2(h) hereof.
Claim Notice shall have the meaning ascribed to such term in Section 9.5 hereof.
Code shall mean the United States Internal Revenue Code of 1986, as amended.
52
Commitment Letter shall have the meaning ascribed to such term in Section 5.6(a) hereof.
Company Group shall mean any “affiliated group” (as defined in Section 1504(a) of the Code without
regard to the limitations contained in Section 1504(b) of the Code) that, any time on or before the
Coniston Closing Date, includes or has included Newco or any predecessor of or successor to Newco
(or another such predecessor or successor), or any other group of corporations that, at any time on
or before the Coniston Closing Date, files or has filed Tax Returns on a combined, consolidated or
unitary basis with Newco or any predecessor of or successor to Newco (or another such predecessor
or successor), but in no event shall include any such group that also includes Arsenal.
Coniston Closing shall have the meaning ascribed to such term in Section 2.3 hereof.
Coniston Closing Date shall have the meaning ascribed to such term in Section 2.3 hereof.
Coniston Condition shall mean the condition set forth in Section 6.1(f) of the Emerald Definitive
Agreement.
Coniston Transaction shall have the meaning ascribed to such term in the Recitals hereof.
Contingent Repurchase shall have the meaning ascribed to such term in Section 3.1 hereof.
Contingent Repurchase Closing shall have the meaning ascribed to such term in Section 3.2
hereof.
Contingent Repurchase Closing Date shall have the meaning ascribed to such term in Section
3.2 hereof.
Contingent Repurchase Consideration shall mean $101,600,000.
Contingent Repurchase Election Notice shall have the meaning ascribed to such term in Section
3.1 hereof.
Contingent Repurchase Shares shall mean the number of Arsenal Shares held by Manchester or its
Affiliates that can be purchased for the Contingent Repurchase Consideration at a price per Arsenal
Share equal to $19.12.
Contract shall mean any written or oral contract, agreement, lease, plan, instrument or other
document, commitment, arrangement, undertaking, practice or authorization that is or may be binding
on any Person or its property under applicable Law.
Control (including, with its correlative meanings, Controlled by and under common Control with)
shall mean, with respect to any Person, any of the following: (a) ownership, directly or
indirectly, by such Person of equity securities entitling it to exercise in the aggregate more than
fifty percent (50%) of the voting power of the entity in question or (b) the possession by such
Person of the power, directly or indirectly, to elect a majority of the board of directors (or
equivalent governing body) of the entity in question.
Core Rulings shall mean those rulings identified as such in Schedule 10.2.
Dismissed Objection Notice shall have the meaning ascribed to such term in Section 10.2(k)
hereof.
DGP shall mean Misys US DGP, a Delaware general partnership and a Subsidiary of Manchester.
Emerald shall mean Emerald Corporation, a Delaware corporation.
Emerald Closing shall have the meaning ascribed to such term in the Recitals hereof.
53
Emerald Definitive Agreement shall mean the Agreement and Plan of Merger to be dated as of the date
hereof between Arsenal, Merger Sub and Emerald a final form of which is attached as Exhibit
4.
Emerald Stockholder Approval shall mean the approval of the Emerald Transaction by the affirmative
vote of a majority of outstanding shares of Emerald common stock entitled to vote thereon.
Emerald Transaction shall have the meaning ascribed to such term in the Recitals hereof.
Excess shall have the meaning ascribed to such term in Section 10.10(b) hereof.
Excess Deduction Amount shall have the meaning ascribed to such term in Section 10.10(b)
hereof.
Excess Historic Guarantee Notice shall have the meaning ascribed to such term in Section
10.10(b) hereof.
Excess Historic Unreleased Amount shall have the meaning ascribed to such term in Section
10.10(b) hereof.
Excess PLR Guarantee Notice shall have the meaning ascribed to such term in Section
10.10(a) hereof.
Excess PLR Unreleased Amount shall have the meaning ascribed to such term in Section
10.10(a) hereof.
Exchange Act shall mean the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
Exchange Shares shall have the meaning ascribed to such term in the Recitals hereof.
Exchange Sub shall have the meaning ascribed to such term in Section 1.1(c) hereof.
Family Member shall mean, with respect to any Person, a spouse, parent, child or sibling of such
Person.
Financing shall have the meaning ascribed to such term in Section 5.6(a) hereof.
Financing Source shall have the meaning ascribed to such term in Section 5.6(a) hereof.
Fixed Release Date shall mean, with respect to the relevant provision of Section 10.10, the
fixed date set forth in subclause (y) of Section 10.10(a) (or the date set forth in
Section 10.10(a)(i) in lieu thereof) and each of the fixed dates set forth in the last
subclause of each of Sections 10.10(b)(i) through (iv), as may be modified pursuant
to this Agreement.
Floor Price shall have the meaning ascribed to such term in Section 2.2(a) hereof.
Governmental Authority shall mean any federation, nation, state, sovereign or government, any
federal, supranational, regional, state or local political subdivision, any governmental or
administrative body, instrumentality, department or agency or any court, administrative hearing
body, commission or other similar dispute resolving panel or body, and any other entity exercising
executive, legislative, judicial, regulatory or administrative functions of a government.
Governmental Authorization shall mean any permit, consent, approval, authorization, waiver, grant,
concession, license, exemption or order of, registration, certificate, declaration or filing with,
or report or notice to, any Governmental Authority.
Greenshoe shall have the meaning ascribed to such term in Section 2.2(a) hereof.
54
Greenshoe Closing shall have the meaning ascribed to such term in Section 2.2(m) hereof.
Historic Bank Guarantee shall have the meaning ascribed to such term in Section 10.10(b)
hereof.
Historic Bank Guarantor shall have the meaning ascribed to such term in Section 10.10(b)
hereof.
Historic Tax Conditions shall have the meaning ascribed to such term in Section 10.10(c)
hereof.
HP Mercury Licence shall mean the suite of licence agreements entered into between Manchester
International Banking Systems Inc. and Hewlett Packard, further details of which are contained in
Schedule B to the Transitional Services Agreement.
HSR Act shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended.
Indemnified Party shall have the meaning ascribed to such term in Section 9.5(a) hereof.
Indemnitor shall have the meaning ascribed to such term in Section 9.5(a) hereof.
Independent Arbitrator shall mean an individual who (i) is or was a partner specializing in private
letter ruling submissions to the IRS and is or was experienced in advising clients with respect to
tax aspects of complex corporate transactions, in each case at a nationally recognized accounting
firm, (ii) is not, and has not been, a director, executive officer or employee of Arsenal,
Manchester or Emerald, (iii) is not an individual having a relationship which, in the reasonable
judgment of each of the Parties, would interfere with the exercise of independent judgment in
carrying out the responsibilities of an independent arbitrator, (iv) has not accepted, and does not
have a Family Member who has accepted, any compensation from Arsenal, Manchester or Emerald within
three years preceding the date of this Agreement, (v) is not a Family Member of an individual who
is, or at any time during the three years preceding the date of this Agreement was, employed by
Arsenal, Manchester or Emerald, (vi) is not, or does not have a Family Member who is, a partner in,
or a controlling shareholder or an executive officer of, any organization to which Arsenal,
Manchester or Emerald has made, or from which Arsenal, Emerald or Manchester has received, payments
for property or services in the current or any of the past three fiscal years that exceed 5% of the
recipient’s consolidated gross revenues for that year, or $200,000, whichever is less, (vii) is
not, or does not have a Family Member who is, employed as an executive officer of another entity
where at any time during the past three years any of the executive officers of Arsenal, Manchester
or Emerald serve on the compensation committee of such other entity or (viii) is not employed by
the outside auditor of any of Arsenal, Emerald or Manchester, or is not or does not have a Family
Member who is a current partner of the outside auditor of any of Arsenal, Emerald or Manchester, or
was not a partner or employee of any such outside auditor who worked on the audit of Arsenal,
Emerald or Manchester at any time during any of the past three years.
India Lease shall mean the lease agreement with respect to the building known as the Xxxxxxx
Infotech Center in Bangalore, India entered into between Manchester Software Solutions (India)
Private Limited and G. Xxxxxxx Xxxxx, dated February 12, 2010.
India Migration Plan shall have the meaning ascribed to such term in Section 6.13(a)
hereof.
IRS shall mean the United States Internal Revenue Service.
IRS Private Letter Ruling shall mean a letter ruling from the IRS addressed to Newco (or DGP, its
predecessor) and/or Arsenal issued pursuant to the IRS Private Letter Ruling Request.
55
IRS Private Letter Ruling Request shall mean the formal written submission delivered to the IRS
requesting the IRS Private Letter Ruling pursuant to Section 10.2.
Kapiti shall mean Kapiti Limited, a limited company formed under the Laws of England and Wales and
a Subsidiary of Manchester.
Knowledge shall mean, with respect to Arsenal, the actual knowledge of Xxxx Xxxxxxx, Xxx Xxxxxxx,
Xxxx Xxxxx, Xxxxx Xxxxxxxxxx or Xxxx Xxxxxxx and, with respect to Manchester, the actual knowledge
of Xxxxxxx Xxxxxx, Xxxx Xxxxxx, Xxx Xxxxxx or Xxx Xxxxx.
Launch Date shall have the meaning ascribed to such term in Section 2.2(c) hereof.
Launch Demand shall have the meaning ascribed to such term in Section 2.2(e) hereof.
Launch Notice shall have the meaning ascribed to such term in Section 2.2(c) hereof.
Law shall mean all applicable provisions of all (a) constitutions, treaties, statutes, laws
(including common law), rules, regulations, ordinances or codes of any Governmental Authority, and
(b) orders, decisions, injunctions, judgments, awards, decrees and Governmental Authorizations of
any Governmental Authority.
Lead Underwriters shall have the meaning ascribed to such term in Section 2.2(c) hereof.
Lien shall mean, with respect to any property or asset, any mortgage, lien, pledge, charge,
security interest, encumbrance, title defect, easement, tenancy, right-of-way, license, use
restriction, claim, hypothecation, assignment, preemptive right, option, right of first refusal,
right of first offer, right of consent, restrictive covenant or other right, title or interest of
any third party, in any such case relating to such property or asset.
Losses shall mean any and all claims, losses, liabilities, damages (including fines, penalties, and
criminal or civil judgments and settlements), costs (including court costs and environmental and
other investigation and removal costs) and expenses (including reasonable attorneys’, environmental
consultants’ and accountants’ fees).
Manchester shall mean
Misys plc, a public limited company formed under the Laws of England and Wales.
Manchester Arbitration Candidates shall have the meaning ascribed to such term in Exhibit 10.
Manchester Bank Account shall mean:
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Bank Name: |
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National Westminster Bank PLC |
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Branch: |
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City of London |
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SWIFT: |
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XXXXXX0X |
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Account Name: |
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Misys plc — Treasury Account |
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Account Number: |
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00000000 |
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Currency: |
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USD |
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Correspondent Bank: |
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XX Xxxxxx Chase Bank, New York (ABA Routing No. 000000000) |
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SWIFT: XXXXXX00 |
Manchester Greenshoe Limit shall have the meaning ascribed to such term in Section 2.2(b)
hereof.
Manchester Group Member shall mean (i) Manchester and its Affiliates, (ii) the directors and
officers of each of Manchester and its Affiliates and (iii) the respective successors and assigns
of each of the foregoing.
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Manchester India Employees shall mean those employees of Manchester (or its Affiliates) located in
Bangalore, India who have been assigned to work exclusively on Arsenal software development matters
and who are to be identified in further detail within the India Migration Plan.
Manchester Shareholder Approval shall have the meaning ascribed to such term in Section 6.3
hereof.
Manchester Shareholders Meeting shall have the meaning ascribed to such term in Section 6.3
hereof.
Market Disruption shall mean any period in which (i) trading generally, or trading in Arsenal
Shares, shall have been suspended or materially limited on, or by, as the case may be, the Nasdaq
National Market or the New York Stock Exchange, (ii) a material disruption in securities
settlement, payment or clearance services in the United States shall have occurred, (iii) any
moratorium on commercial banking activities shall have been declared by Federal or New York State
authorities or (iv) there shall have occurred any outbreak or escalation of hostilities, or any
change in financial markets, currency exchange rates or controls or any calamity or crisis, which,
in the case of any of clauses (ii), (iii) or (iv) above makes it impracticable, in the reasonable
good faith judgment of the board of directors of Manchester after receipt of advice from the Lead
Underwriters, for the Minimum Secondary Offering Shares to be sold to the public by the
Underwriters at a price of not less than the Floor Price.
Market Holiday shall mean August 16, 2010 through September 6, 2010 inclusive.
Merger Sub shall have the meaning ascribed to such term in the Emerald Definitive Agreement.
Minimum Secondary Offering Shares shall have the meaning ascribed to such term in Section
2.2(a) hereof.
MPL shall mean Misys Patriot Limited, a limited company formed under the Laws of England and Wales
and a Subsidiary of Manchester.
MPUSH shall mean Misys Patriot US Holdings LLC, a Delaware limited liability company and a
Subsidiary of Manchester.
Newco shall mean [US Newco], a Delaware corporation and a Subsidiary of Manchester.
Newco Shares shall have the meaning ascribed to such term in the Recitals hereof.
Non-Core Rulings shall mean those rulings identified as such in Schedule 10.2.
Objection Notice shall have the meaning ascribed to such term in Section 10.2(e) hereof.
Offering Conditions shall have the meaning ascribed to such term in Section 2.2(j) hereof.
Order shall mean any award, decision, injunction, judgment, order, ruling, subpoena or verdict
entered, issued, made or rendered by any court, administrative agency or other Governmental
Authority or any arbitrator.
Outside Date shall have the meaning ascribed to such term in Section 8.1(a)(ii) hereof.
Parties shall mean Manchester and Arsenal, with each being a Party.
Person shall mean any natural person, business trust, corporation, partnership, limited liability
company, joint stock company, proprietorship, association, trust, joint venture, unincorporated
association or any other legal
57
entity of whatever nature organized under any applicable Law, an unincorporated organization or any
Governmental Authority.
PLR Bank Guarantee shall have the meaning ascribed to such term in Section 10.10(a) hereof.
PLR Bank Guarantor shall have the meaning ascribed to such term in Section 10.10(a) hereof.
Post-Closing Franchise Taxes shall have the meaning ascribed to such term in Section 10.7
hereof.
Post-Closing Franchise Tax Conditions shall have the meaning ascribed to such term in Section
10.10(c) hereof.
Post-Closing Tax Period shall mean any Tax period beginning after the Coniston Closing Date or,
with respect to a Tax period that begins before the Coniston Closing Date and ends thereafter, the
portion of such Tax period beginning immediately after the Coniston Closing Date.
Pre-Closing Tax Period shall mean any Tax period ending at or before the Coniston Closing Date or,
with respect to a Tax period that begins before the Coniston Closing Date and ends thereafter, the
portion of such Tax period that ends as of the Coniston Closing Date.
Proceeding shall mean any action, litigation, suit, proceeding or formal investigation or review of
any nature, civil, criminal, regulatory or otherwise, before any Governmental Authority.
Reduction Notice shall have the meaning ascribed to such term in Section 10.10(b) hereof.
Registration Rights Agreement shall mean the Registration Rights Agreement entered into between the
Parties concurrently with this Agreement in the form attached as Exhibit 13.
Rejection Notice shall have the meaning ascribed to such term in Section 10.2(j) hereof.
Relationship Agreement shall mean the Relationship Agreement between the Parties dated as of March
17, 2008, as amended by the First Amendment to the Relationship Agreement, dated as of August 14,
2008, and the Second Amendment to the Relationship Agreement, dated as of January 5, 2009.
Relevant Provisions shall have the meaning ascribed to such term in Section 2.2(j) hereof.
Repurchase Consideration shall have the meaning ascribed to such term in Section 2.1
hereof.
Repurchase Shares shall have the meaning ascribed to such term in Section 2.1 hereof.
Restructuring Slides shall mean the document attached as Schedule 10.1.
SEC shall mean the U.S. Securities and Exchange Commission.
Secondary Offering shall have the meaning ascribed to such term in Section 2.2(a) hereof.
Secondary Offering Proceeds shall mean the aggregate proceeds of the Secondary Offering (including
the Greenshoe) after the underwriting discount.
Secondary Offering Registration Statement shall have the meaning ascribed to such term in
Section 2.2(j) hereof.
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Secondary Offering Shares shall have the meaning ascribed to such term in the Recitals hereof.
Securities Act shall mean the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
Solvent when used with respect to any Person shall mean that, as of any date of determination, (i)
the assets of such Person at a “fair valuation” will as of such date, exceed the amount of all of
its “liabilities of such Person, contingent or otherwise”, as such quoted terms are generally
determined in accordance with applicable federal laws governing determinations of the insolvency of
debtors; (ii) the “present fair saleable value” of the assets of such Person will, as of such date,
be greater than “the amount that will be required to pay the probable liability of such Person on
its existing debts as such debts become absolute and matured”, as such quoted terms are generally
determined in accordance with applicable federal laws governing determinations of the insolvency of
debtors; (iii) the remaining assets of such Person as of such date, will not be “unreasonably
small” nor constitute an “unreasonably small capital” in relation to the business or transaction(s)
in which it is engaged or is about to engage, as such quoted terms are generally determined in
accordance with applicable federal laws governing determinations of the insolvency of debtors; and
(iv) such Person will be able to pay its debts as they become due. For purposes of this
definition, (a) “debt” means liability on a “claim” and (b) “claim” means any (1) right to payment,
whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (2) right to an
equitable remedy for breach of performance if such breach gives rise to a right to payment, whether
or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured or
unmatured, disputed, undisputed, secured or unsecured.
Solvency Letter shall mean a letter delivered by a nationally recognized valuation firm mutually
acceptable to Arsenal and Manchester, in a form reasonably acceptable to Arsenal and Manchester and
addressed to the Board of Directors of Arsenal and, if requested by Arsenal, the Financing Source
providing the Financing, indicating that, immediately after the Coniston Closing and after giving
effect to the transactions contemplated hereby, including the Financing and any alternative
financing permitted by this Agreement and the payment of the Repurchase Consideration and all
related fees and expenses, Arsenal will be Solvent.
Special Offering Conditions shall have the meaning ascribed to such term in Section 2.2(e)
hereof.
Straddle Period shall mean any taxable year or period beginning on or before and ending after the
Coniston Closing Date.
Subsidiary shall mean, with respect to any Person, another Person that, at the time of
determination, directly or indirectly, through one or more intermediaries, is Controlled by such
first Person.
Takeover Laws shall mean any “moratorium,” “control share acquisition,” “fair price,”
“supermajority,” “affiliate transactions” or “business combination statute or regulation” or other
similar state antitakeover Laws or regulations.
Tax or Taxes shall mean (i) any federal, state, local or foreign net income, gross income, gross
receipts, windfall profit, severance, property, production, sales, use, license, excise, franchise,
employment, payroll, withholding, alternative or add-on minimum, ad valorem, value-added, transfer,
stamp, or environmental tax (including taxes under Code Section 59A), escheat payments or any other
tax, custom, duty, governmental fee or other like assessment or charge of any kind whatsoever,
together with any interest or penalty, addition to tax or additional amount imposed by any
Governmental Authority and (ii) any liability for the payment of amounts determined by reference to
amounts described in clause (i) as a result of any obligation under any Tax sharing arrangement,
tax indemnification obligation or as transferee or successor.
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Tax Claim shall have the meaning ascribed to such term in Section 10.8 hereof.
Tax Return shall mean any return, report or similar statement required to be filed with respect to
any Tax (including any attached schedules), including any information return, claim for refund,
amended return or declaration of estimated Tax.
Taxing Authority shall mean any Governmental Authority responsible for the imposition of any Tax.
Termination Launch Demand shall have the meaning ascribed to such term in Section 2.2(g)
hereof.
Third Person Claim shall have the meaning ascribed to such term in Section 9.5(b) hereof.
Tranche shall have the meaning ascribed to such term in Section 10.10(b) hereof.
Tranche Amount shall have the meaning ascribed to such term in Section 10.10(b) hereof.
Transaction Documents shall mean the Voting Agreement, the Registration Rights Agreement, the
Transitional Services Agreement and the Amended and Restated Relationship Agreement.
Transaction Tax Conditions shall have the meaning ascribed to such term in Section 10.10(c)
hereof.
Transaction Taxes shall mean Taxes imposed on Newco, or for which Newco would otherwise be liable,
in each case that would not have been so imposed, or for which Newco would not have otherwise been
so liable, but for the Transactions.
Transactions shall mean (i) all transactions contemplated by this Agreement, (ii) the transactions
contemplated by the Restructuring Slides and (iii) all transactions described in the IRS Private
Letter Ruling, the IRS Private Letter Ruling Request or any supplement thereto, in each case
including all related transactions (including the transactions contemplated by the US
Reorganization) and excluding in all cases (a) the Emerald Transaction and (b) any disposal of
Arsenal Shares by Newco (or any successor) after the Coniston Closing Date other than as
contemplated by this Agreement, the Restructuring Slides, the IRS Private Letter Ruling, the IRS
Private Letter Ruling Request or any supplement thereto.
Transfer Taxes shall mean all transfer, documentary, sales, use, stamp registration and other
similar Taxes.
Transitional Services Agreement shall mean the Transitional Services Agreement to be entered into
between the Parties on the Coniston Closing Date substantially in the form attached as Exhibit
14.
UCC shall mean the Uniform Commercial Code of the State of Delaware.
Underwriters shall have the meaning ascribed to such term in Section 2.2(a) hereof.
Underwriting Agreement shall mean the Underwriting Agreement to be entered into among Manchester,
Arsenal and the lead Underwriters of the Secondary Offering.
US Reorganization shall have the meaning ascribed to such term in the Recitals hereof.
Valid Objection Notice shall have the meaning ascribed to such term in Section 10.2(k)
hereof.
Voting Agreement shall mean the Voting Agreement entered into among the Parties, Emerald, MPUSH and
MPL concurrently with this Agreement in the form attached as Exhibit 6.
60
Written Consents shall have the meaning ascribed to such term in Section 1.1(a) hereof.
61
Exhibit 1
Form
of Amendment to Arsenal Second Amended and Restated Certificate of
Incorporation
62
THIRD AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
ALLSCRIPTS-MISYS HEALTHCARE SOLUTIONS, INC.
ALLSCRIPTS-MISYS HEALTHCARE SOLUTIONS, INC., a corporation organized and existing under the
laws of the State of Delaware, hereby certifies as follows:
1. The name of the Corporation is Allscripts-Misys Healthcare Solutions, Inc. (the
“Corporation”).
2. The Corporation was originally incorporated under the name Allscripts Holding, Inc. by the
filing of a Certificate of Incorporation with the Secretary of State of the State of Delaware on
July 11, 2000. An Amended and Restated Certificate of Incorporation changing the name of the
Corporation from Allscripts Holding, Inc., to Allscripts Healthcare Solutions, Inc., was filed with
the Secretary of State of the State of Delaware on November 28, 2000. A Second Amended and
Restated Certificate of Incorporation changing the name of the Corporation from Allscripts
Healthcare Solutions, Inc. to Allscripts-Misys Healthcare Solutions, Inc., was filed with the
Secretary of State of the State of Delaware on October 10, 2008.
3. The Corporation’s Second Amended and Restated Certificate of Incorporation is hereby
amended and restated pursuant to Sections 228, 242 and 245 of the General Corporation Law of the
State of Delaware, so as to read in its entirety in the form attached hereto as Exhibit A and
incorporated herein by reference (Exhibit A and this Certificate collectively constituting the
Corporation’s Third Amended and Restated Certificate of Incorporation).
4. This amendment and restatement of the Second Amended and Restated Certificate of
Incorporation of the Corporation has been duly adopted in accordance with the provisions of
Sections 228, 242 and 245 of the General Corporation Law of the State of Delaware, the Board of
Directors of the Corporation having adopted resolutions setting forth such amendment and
restatement, declaring its advisability, and directing that it be submitted to the stockholders of
the Corporation for their approval, and the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to authorize or take such action at a meeting at
which all shares entitled to vote thereon were present and voted having consented to the adoption
of such amendment and restatement.
IN WITNESS WHEREOF, the undersigned officer of the Corporation has executed this Third Amended
and Restated Certificate of Incorporation of the Corporation on the [ ] day of [ ],
2010.
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ALLSCRIPTS-MISYS HEALTHCARE
SOLUTIONS, INC.
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Exhibit A
THIRD AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
ALLSCRIPTS-MISYS HEALTHCARE SOLUTIONS, INC.
(the “Certificate of Incorporation”)
FIRST. The name of the corporation is ALLSCRIPTS-MISYS HEALTHCARE SOLUTIONS, INC.
(the “Corporation”).
SECOND. The address of the Corporation’s registered office in the State of Delaware
is 0000 Xxxxxx Xxxxxx, in the City of Wilmington, County of New Castle. The name of the
Corporation’s registered agent at such address is The Corporation Trust Company.
THIRD. The nature of the business and the objects and purposes to be conducted or
promoted by the Corporation are to engage in any lawful act or activity for which corporations may
be organized under the General Corporation Law of the State of Delaware,
provided that the
Corporation shall not have the power to issue shares of capital stock in the Corporation, or any
bonds, notes, debentures or other obligations or securities convertible or exchangeable into or
exercisable for any such shares, in violation of Section 9 of the Relationship Agreement, dated as
of March 17, 2008 (as may be amended from time to time, the “Relationship Agreement”), between the
Corporation and
Misys plc (“Misys”) for so long as such Section 9 of the Relationship Agreement is
in effect.
FOURTH.
1. Authorized Shares. The total number of shares of stock of all classes which the
Corporation shall have authority to issue is three hundred fifty million (350,000,000), of which
one million (1,000,000) shall be shares of Preferred Stock with a par value of $0.01 per share
(“Preferred Stock”), and three hundred forty-nine million (349,000,000) shall be shares of Common
Stock with a par value of $0.01 per share (“Common Stock”).
2. Preferred Stock.
(a) The Preferred Stock shall be issuable in series, and in connection with the
issuance of any series of Preferred Stock and to the extent now or hereafter permitted by
the laws of the State of Delaware, the designation of each series, the stated value of the
shares of each series, the dividend rate or rates of each series (which rate or rates may
be expressed in terms of a formula or other method by which such rate or rates shall be
calculated from time to time) and the date or dates and other provisions respecting the
payment of dividends, the provisions, if
any, for a sinking fund for the shares of each series, the preferences of the shares
of each series in the event of the liquidation or dissolution of the Corporation, the
provisions, if any, respecting the redemption of the shares of each series and, subject to
requirements of the laws of the State of Delaware, the voting rights
(except that such shares shall not have more than one vote per
share), the terms, if any, upon which the shares of each series shall be convertible into or exchangeable for any other shares of
stock of the Corporation and any other relative, participating, optional or other special
rights, preferences, powers, and qualifications, limitations or restrictions thereof, of
the shares of each series, shall, in each case, be fixed by resolution of the Board of
Directors.
(b) Preferred Stock of any series redeemed, converted, exchanged, purchased, or
otherwise acquired by the Corporation shall constitute authorized but unissued Preferred
Stock.
(c) All shares of any series of Preferred Stock, as between themselves, shall rank
equally and be identical (except that such shares may have different dividend provisions);
and all series of Preferred Stock, as between themselves, shall rank equally and be
identical except as set forth in the resolutions authorizing the issuance of such series.
3. Common Stock.
(a) After dividends to which the holders of Preferred Stock may then be entitled under
the resolutions creating any series thereof have been declared and after the Corporation
shall have set apart the amounts required pursuant to such resolutions for the purchase or
redemption of any series of Preferred Stock, the holders of Common Stock shall be entitled
to have dividends declared in cash, property, or other securities of the Corporation out of
any profits or assets of the Corporation legally available therefor, if, as and when such
dividends are declared by the Corporation’s Board of Directors upon an affirmative vote of
a majority of the entire Board of Directors.
(b) In the event of the liquidation or dissolution of the Corporation’s business and
after the holders of Preferred Stock shall have received amounts to which they are entitled
under the resolutions creating such series, the holders of Common Stock shall be entitled
to receive ratably the balance of the Corporation’s assets available for distribution to
stockholders.
(c) Each share of Common Stock shall be entitled to one vote upon all matters upon
which stockholders have the right to vote, but shall not be entitled to vote for the
election of any directors who may be elected by vote of the Preferred
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Stock voting as a class if so provided in the resolution creating such Preferred Stock
pursuant to Article FOURTH, Section 2(a) hereof.
4. Preemptive Rights. Except as expressly agreed in writing by the Corporation,
including, without limitation, the Relationship Agreement, no stockholder of any shares of the
Corporation by reason of such stockholder holding shares of any class or series of capital stock of
the Corporation shall have any preemptive right to subscribe for or to acquire any additional
shares of the Corporation of the same or of any other class whether now or hereafter authorized or
any options or warrants giving the right to purchase any such shares, or any bonds, notes,
debentures or other obligations convertible into any such shares.
FIFTH. The Corporation is to have perpetual existence.
SIXTH: The private property of the stockholders shall not be subject to the payment
of corporate debts to any extent whatever.
SEVENTH:
1. Except as may otherwise be fixed by resolution pursuant to the provisions of Article FOURTH
hereof relating to the rights of the holders of Preferred Stock to elect directors as a class, the
number of directors of the Corporation shall be fixed at ten (10). At each annual meeting of the
stockholders of the Corporation, directors shall be elected to hold office for a term expiring at
the annual meeting of stockholders held in the immediately following year.
2. Advance notice of stockholder nominations for the election of directors shall be given in
the manner provided in the By-Laws of the Corporation.
3. Except as may otherwise be fixed by resolution pursuant to the provisions of Article FOURTH
hereof relating to the rights of the holders of Preferred Stock to elect directors as a class, in
accordance with Section 141(a) of the General Corporation Law of the State of Delaware, and except
as otherwise set forth above, the full and exclusive power and authority otherwise conferred on the
Board of Directors to evaluate director candidates and nominate persons to stand for election to
the Board of Directors or to fill any newly created directorships resulting from any increase in
the number of directors and any vacancies on the Board of Directors resulting from death,
resignation, disqualification, removal or any other cause shall be exercised and performed by the
persons comprising the Independent Nominating Committee or the Nominating and Governance Committee,
as the case may be, and as set forth in Article SEVENTH, Section 7. Any director appointed in
accordance with the preceding sentence shall hold office for a term expiring at the annual meeting
of the stockholders following such director’s appointment.
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4. Subject to any rights of the holders of Preferred Stock to elect directors as a class, a
director may be removed with or without cause by the affirmative vote of the holders of a majority
of the voting power present in person, by remote communication or represented by proxy at a meeting
of stockholders.
5. The Board of Directors, by the affirmative vote of the majority of the entire Board of
Directors, shall elect a director to serve as Chairman of the Board of Directors promptly following
each election of the Board of Directors at each annual meeting of stockholders.
6. In furtherance of the powers conferred by statute, the Board of Directors is expressly
authorized and shall have sole authority, by affirmative vote of the majority of the entire Board
of Directors to approve the annual operating budget and the capital budget, and any material
changes to either.
7. Committees.
(a). The Board of Directors may, pursuant to this Certificate of Incorporation or the By-Laws
or by resolution approved by the majority of the Board of Directors, designate one or more
committees, which, to the extent provided in this Certificate of Incorporation, the By-Laws or by
resolution, to the fullest extent permitted by law, shall have and may exercise the powers of the
Board of Directors in the management of the business and affairs of the Corporation and may
authorize the seal of the Corporation to be affixed to all papers which may require it. These
committees shall include, but are not limited to, an Independent Nominating Committee, an Audit
Committee, a Nominating and Governance Committee, a Compensation Committee and such other
committees as determined by the Board of Directors (collectively, the “Committees”).
(i) Each Committee must consist of two (2) or more of the Directors of the
Corporation, one (1) of which must be a member of the Independent Nominating Committee.
(ii) The Board of Directors, by resolution approved by a majority of the entire Board
of Directors, shall designate members for each Committee in compliance with specific
membership requirements set forth herein and in any resolutions establishing such
Committees.
(iii) The Committees shall have such names as set forth herein or as may be
determined from time to time by resolution approved by a majority of the Board of
Directors.
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(iv) Each Committee shall keep regular minutes of its meetings and report the same to
the Board of Directors when required.
(v) All of the members of a Committee shall constitute a quorum for the transaction
of business at any meeting of such Committee. The Act of the majority of the members of a
Committee at a meeting at which a quorum is present shall be the act of such Committee,
unless otherwise set forth herein or in the charter to such Committee.
(b) The Audit Committee shall consist of three (3) Receiver Directors (as hereinafter
defined), one (1) of which must be a financial expert. The Audit Committee shall have such powers
and responsibilities as set forth herein and as determined in the audit committee charter, to be
approved by the majority of the entire Board of Directors, which include, but are not limited to
the authority to supervise auditors and make decisions regarding accounting matters.
For the purposes of this paragraph (b):
(i) an independent Director will be an individual who, in accordance with Rule 4350
of the National Association of Securities Dealers Automated Quotations (“Nasdaq”), would be
eligible for membership on an Audit Committee of a corporation listed on Nasdaq; and
(ii) a financial expert will be an individual fulfilling the requirements of the
definition set forth by the Securities and Exchange Commission in Item 407 of Regulation
S-K.
(c) The Independent Nominating Committee shall consist of three (3) directors initially
designated as Receiver Directors by the Board of Directors as of October 10, 2008 and each other
person nominated to election or appointment to the Board of Directors pursuant to this paragraph
(c) (the “Receiver Directors”) and shall have such powers and responsibilities as determined in the
independent nominating committee charter, to be approved by the majority of the entire Board of
Directors, which include, but are not limited to:
(i) the sole authority to nominate to the Board of Directors three (3) independent
Directors and the chief executive officer to stand for election by stockholders in
accordance with the Certificate of Incorporation and the By-Laws of the Corporation; and
(ii) the sole authority to appoint to the Board of Directors replacements for
vacancies of Receiver Directors and the directorship held by the chief executive officer,
resulting from death, resignation, disqualification, removal or
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other cause, provided that any such appointment for replacement of the
directorship previously held by a chief executive officer shall be the then-serving chief
executive officer having been designated as set forth in the By-Laws.
(d) The Nominating and Governance Committee shall consist of three (3) directors designated
as members of such committee as of October 10, 2008 and each other person designated as a member of
the Nominating and Governance Committee resulting from any vacancies therein, two (2) of whom shall
be Directors having been nominated by the Nominating and Governance Committee and one (1) of whom
shall either be a Receiver Director or the chief executive officer, and shall have such powers and
responsibilities as determined in the nominating and governance committee charter, to be approved
by the majority of the entire Board of Directors, which include, but are not limited to:
(i) The sole authority to nominate six (6) Directors, other than those Directors
nominated by the Independent Nominating Committee, to stand for election by stockholders in
accordance with this Certificate of Incorporation and the By-Laws;
(ii) the sole authority to appoint replacements for vacancies of Directors previously
nominated by the Nominating and Governance Committee, resulting from death, resignation,
disqualification, removal or other cause; and
(iii) the authority to establish governance principles.
(e) The Compensation Committee shall consist of three (3) members selected by the majority of
the entire Board of Directors, two (2) of whom shall be Receiver Directors and one (1) of whom
shall be the Chairman of the Board of Directors. The Compensation Committee shall have such powers
and responsibilities as determined in the compensation committee charter, which shall be approved
by the majority of the entire Board of Directors. The powers and responsibilities of the
Compensation Committee shall include, but not be limited to, approving all executive officer
compensation matters, including salary levels, bonus levels, grants and issuances of new securities
under existing stock plans, and recommending the adoption of new incentive plans to the Board of
Directors, which shall in each case be subject to the further approval of the majority of the
entire Board of Directors; provided, that, with respect to any award intended to constitute
“performance-based compensation” within the meaning of Section 162(m) of the U.S. Internal Revenue
Code and the regulations promulgated thereunder, the compensation committee charter shall provide
for the delegation of its authority to a subcommittee of the Compensation Committee consisting
solely of two “outside directors” within the meaning of such Section of the U.S. Internal Revenue
Code and the regulations promulgated thereunder.
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(f) The following actions must be approved by the Audit Committee and the majority of the
entire Board of Directors:
(i) Any action intended to result in the de-listing of the common stock of the
Corporation from Nasdaq or any other exchange upon which such stock is listed for trading;
(ii) Any commercial or other transaction including, without limitation, any
squeeze-out of other stockholders effected by merger, reverse stock split or otherwise or
any arrangement involving a management fee payable to Misys or its subsidiaries (other than
the Corporation and its subsidiaries) and agreements between the Corporation or any of its
subsidiaries, on the one hand, and Misys or any of its subsidiaries (other than the
Corporation and its subsidiaries), on the other hand, other than transactions pursuant to
the current terms of agreements entered into on or prior to the date hereof, or replacement
agreements (so long as the terms of such replacement agreements are not less favorable to
the Corporation); and
(iii) Any change or modification to the audit committee charter in effect on October
10, 2008.
8. Subject to any limitation in the By-Laws, the members of the Board of Directors shall be
entitled to reasonable fees, salaries, or other compensation for their services, as determined from
time to time by the Board of Directors, and to reimbursement for their expenses as such members.
Nothing herein contained shall preclude any director from serving the Corporation or its
subsidiaries or affiliates in any other capacity and receiving compensation therefor.
EIGHTH: Both stockholders and directors shall have power, if the By-Laws so provide,
to hold their meetings and to have one or more offices within or without the State of Delaware.
Except as may otherwise be fixed by resolution approved by a majority of the Board of Directors
pursuant to the provisions of Article FOURTH hereof relating to the rights of the holders of
Preferred Stock, any action required or permitted to be taken by the stockholders of the
Corporation may be effected at a duly called annual or special meeting of such stockholders or may
be effected by consent in writing by such stockholders as may be provided in the By-Laws. Except as
otherwise required by law and subject to the rights of the holders of Preferred Stock, special
meetings of stockholders may be called only by the Chairman of the Board of Directors on his own
initiative or by the Board of Directors pursuant to a resolution approved by a majority of the
entire Board of Directors.
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NINTH: The Board of Directors is expressly authorized to adopt, amend or repeal the
By-Laws of the Corporation by the affirmative vote of a majority of the entire Board of Directors;
provided, that Articles III, IV, V and VIII of the By-Laws may only be amended by the Board
of Directors by the vote of both a majority of the entire Board of Directors and a majority of the
members of the Audit Committee.
TENTH:
1. A director of the Corporation, including a member of the Independent Nominating Committee
or the Nominating and Governance Committee, shall not be personally liable to the Corporation or
its stockholders for monetary damages for breach of fiduciary duty as a director, except for
liability (a) for any breach of the director’s duty of loyalty to the Corporation or its
stockholders, (b) for acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (c) under Section 174 of the General Corporation Law of the State of
Delaware or (d) for any transaction from which the director derived an improper personal benefit.
If the General Corporation Law of the State of Delaware, or any other applicable law, is amended to
authorize corporation action further eliminating or limiting the personal liability of directors,
then the liability of a director of the Corporation shall be eliminated or limited to the fullest
extent permitted by the General Corporation Law of the State of Delaware, or any other applicable
law, as so amended. Any repeal or modification of this Article TENTH, Section 1 by the stockholders
of the Corporation shall not adversely affect any right or protection of a director of the
Corporation existing at the time of such repeal or modification.
2. (a) Each person who has been or is made a party or is threatened to be made a party to
or is involved in any action, suit or proceeding, whether civil, criminal, administrative
or investigative (hereinafter a “proceeding”), by reason of the fact that he or she, or a
person of whom he or she is the legal representative, is or was a director or officer of
the Corporation or is or was serving at the request of the Corporation as a director,
officer, employee or agent of another corporation or of a partnership, joint venture, trust
or other enterprise, including service with respect to employee benefit plans (hereinafter
an “Indemnitee”), whether the basis of such proceeding is an alleged action in an official
capacity as a director, officer, employee or agent or in any other capacity while serving
as a director, officer, employee or agent, shall be indemnified and held harmless by the
Corporation to the fullest extent authorized by the General Corporation Law of the State of
Delaware, or any other applicable law, as the same exists or may hereafter be amended (but,
in the case of any such amendment, only to the extent that such amendment permits the
Corporation to provide broader indemnification rights than said law permitted the
Corporation to provide prior to such amendment), against all expenses, liability and loss
(including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts
paid or to be paid
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in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith
and such indemnification shall continue as to an Indemnitee who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of his or her heirs,
executors and administrators; provided, however, that except as provided in
paragraph (b) of this Article TENTH, Section 2 with respect to proceedings seeking to
enforce rights to indemnification, the Corporation shall indemnify any such Indemnitee
seeking indemnification in connection with a proceeding (or part thereof) initiated by such
person only if such proceeding (or part thereof) was authorized by the Board of Directors
of the Corporation. The right to indemnification conferred in this Article TENTH, Section 2
shall be a contract right. In addition to the right of indemnification, an Indemnitee
shall have the right to be paid by the Corporation the expenses incurred in defending any
such proceeding in advance of its final disposition; provided, however,
that if the General Corporation Law of the State of Delaware, or any other applicable law,
requires, the payment of such expenses incurred by an Indemnitee in his or her capacity as
a director or officer (and not in any other capacity in which service was or is rendered by
such person while a director or officer, including, without limitation, service to an
employee benefit plan) in advance of the final disposition of a proceeding shall be made
only upon delivery to the Corporation of an undertaking by or on behalf of such Indemnitee
to repay all amounts so advanced if it shall ultimately be determined that such director or
officer is not entitled to be indemnified under this Article TENTH, Section 2 or otherwise.
(b) If a claim under paragraph (a) of this Article TENTH, Section 2 is not paid in
full by the Corporation within thirty (30) days after a written claim has been received by
the Corporation, the claimant may at any time thereafter bring suit against the Corporation
to recover the unpaid amount of the claim and, if successful in whole or in part, the
claimant shall be entitled to be paid also the expense of prosecuting such claim. It shall
be a defense to any such action (other than an action brought to enforce a claim for
expenses incurred in defending any proceeding in advance of its final disposition where the
required undertaking, if any is required, has been tendered to the Corporation) that the
claimant has not met the standard of conduct which makes it permissible under the General
Corporation Law of the State of Delaware, or any other applicable law, for the Corporation
to indemnify the claimant for the amount claimed, but the burden of proving such defense
shall be on the Corporation. Neither the failure of the Corporation (including its Board of
Directors, stockholders or independent legal counsel) to have made a determination prior to
the commencement of such action that indemnification of the claimant is proper in the
circumstances because he or she has met the applicable standard of conduct set forth in the
General Corporation Law of the State of Delaware, or any other applicable law, nor an
actual determination by the Corporation (including its Board of Directors, stockholders or
independent legal counsel) that the claimant has not met such
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applicable standard of conduct, shall be a defense to the action or create a presumption
that the claimant has not met the applicable standard of conduct.
(c) The right to indemnification and the payment of expenses incurred in defending a
proceeding in advance of its final disposition conferred in paragraph (b) of this Article
TENTH, Section 2 shall not be exclusive of any other right which any person may have or
hereafter acquire under any statute, provision of this Certificate of Incorporation,
By-Laws, agreement, vote of stockholders or disinterested directors or otherwise.
(d) The Corporation may maintain insurance, at its expense, to protect itself and any
director, officer, employee or agent of the Corporation or another corporation,
partnership, joint venture, trust or other enterprise against any expense, liability or
loss, whether or not the Corporation would have the power to indemnify such person against
such expense, liability or loss under the General Corporation Law of the State of Delaware,
or any other applicable law.
(e) The Corporation may, to the extent authorized from time to time by the Board of
Directors, grant rights to indemnification, and rights to be paid by the Corporation the
expenses incurred in defending any proceeding in advance of its final disposition, to any
employee or agent of the Corporation to the fullest extent of the provisions of this
Article TENTH, Section 2 with respect to the indemnification and advancement of expenses of
directors and officers of the Corporation.
(f) Any repeal or modification of this Article TENTH, Section 2 shall not adversely
affect any right or protection of a director, officer, employee or agent of the Corporation
existing at the time of such repeal or modification.
ELEVENTH. As used in this Certificate of Incorporation, the term the “majority of the
entire Board of Directors” means the majority of the total number of directors which the
Corporation would have if there were no vacancies, and the term “majority of the Board of
Directors” means the majority of the directors present and voting.
TWELFTH. The Corporation has elected to not be governed by Section 203 of the General
Corporation Law of the State of Delaware, as permitted under and pursuant to subsection (b)(3) of
Section 203 of the General Corporation Law of the State of Delaware.
THIRTEENTH. Except as otherwise provided in this Certificate of Incorporation or as
set forth in the By-Laws, the Corporation reserves the right to amend, alter, change or repeal any
provision contained in this Certificate of Incorporation in the manner now or hereafter prescribed
by statute; provided, however, that no amendment, alteration,
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modification, waiver or change to Article NINTH, Article TENTH, this Article THIRTEENTH or the
first, third or seventh paragraphs of Article SEVENTH may be made without the affirmative vote of
the members of the Audit Committee and the affirmative vote of a majority of the members of the
entire Board of Directors.
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Exhibit 2
Form
of Amendment to Arsenal Third Amended and Restated Certificate of
Incorporation
63
FOURTH AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
ALLSCRIPTS-MISYS HEALTHCARE SOLUTIONS, INC.
ALLSCRIPTS-MISYS HEALTHCARE SOLUTIONS, INC., a corporation organized and existing under the
laws of the State of Delaware, hereby certifies as follows:
1. The name of the Corporation formerly known as Allscripts-Misys Healthcare Solutions, Inc.
is hereby amended to be ALLSCRIPTS HEALTHCARE SOLUTIONS, INC. (the “Corporation”).
2. The Corporation was originally incorporated under the name Allscripts Holding, Inc. by the
filing of a Certificate of Incorporation with the Secretary of State of the State of Delaware on
July 11, 2000. An Amended and Restated Certificate of Incorporation changing the name of the
Corporation from Allscripts Holding, Inc., to Allscripts Healthcare Solutions, Inc., was filed with
the Secretary of State of the State of Delaware on November 28, 2000. A Second Amended and
Restated Certificate of Incorporation changing the name of the Corporation from Allscripts
Healthcare Solutions, Inc. to Allscripts -Misys Healthcare Solutions, Inc., was filed with the
Secretary of State of the State of Delaware on October 10, 2008. A Third Amended and Restated
Certificate of Incorporation increasing the number of authorized shares was filed with the
Secretary of State of the State of Delaware on [ ], 2010.
3. The Corporation’s Third Amended and Restated Certificate of Incorporation is hereby amended
and restated pursuant to Sections 228, 242 and 245 of the General Corporation Law of the State of
Delaware, so as to read in its entirety in the form attached hereto as Exhibit A and incorporated
herein by reference (Exhibit A and this Certificate collectively constituting the Corporation’s
Fourth Amended and Restated Certificate of Incorporation).
4. This amendment and restatement of the Third Amended and Restated Certificate of
Incorporation of the Corporation has been duly adopted in accordance with the provisions of
Sections 228, 242 and 245 of the General Corporation Law of the State of Delaware, the Board of
Directors of the Corporation having adopted resolutions setting forth such amendment and
restatement, declaring its advisability, and directing that it be submitted to the stockholders of
the Corporation for their approval; and the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to authorize or take such action at a meeting at
which all shares entitled to vote thereon were present and voted having consented to the adoption
of such amendment and restatement.
IN WITNESS WHEREOF, the undersigned officer of the Corporation has executed this Fourth
Amended and Restated Certificate of Incorporation of the Corporation on the [ ] day of
[ ], 2010.
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EXHIBIT A
FOURTH AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
ALLSCRIPTS HEALTHCARE SOLUTIONS, INC.
(the “Certificate of Incorporation”)
FIRST. The name of the corporation is ALLSCRIPTS HEALTHCARE SOLUTIONS, INC. (the
“Corporation”).
SECOND. The address of the Corporation’s registered office in the State of Delaware
is 0000 Xxxxxx Xxxxxx, in the City of Wilmington, County of New Castle. The name of the
Corporation’s registered agent at such address is The Corporation Trust Company.
THIRD. The nature of the business and the objects and purposes to be conducted or
promoted by the Corporation are to engage in any lawful act or activity for which corporations may
be organized under the General Corporation Law of the State of Delaware.
FOURTH.
1. Authorized Shares. The total number of shares of stock of all classes which the
Corporation shall have authority to issue is three hundred fifty million (350,000,000), of which
one million (1,000,000) shall be shares of Preferred Stock with a par value of $0.01 per share
(“Preferred Stock”), and three hundred forty-nine million (349,000,000) shall be shares of Common
Stock with a par value of $0.01 per share (“Common Stock”).
2. Preferred Stock.
(a) The Preferred Stock shall be issuable in series, and in connection with the
issuance of any series of Preferred Stock and to the extent now or hereafter permitted by
the laws of the State of Delaware, the designation of each series,
the stated value of the shares of each series, the dividend rate or rates of each series (which rate or rates may
be expressed in terms of a formula or other method by which such rate or rates shall be
calculated from time to time) and the date or dates and other provisions respecting the
payment of dividends, the provisions, if any, for a sinking fund for the shares of each
series, the preferences of the shares of each series in the event of the liquidation or
dissolution of the Corporation, the provisions, if any, respecting
the redemption of the shares of each series and, subject to requirements of the laws of the State of Delaware,
the voting rights (except that such shares shall not have more than one vote per share),
the terms, if any, upon which the shares of each series shall be convertible into or
exchangeable for any other shares of stock of the Corporation and any other relative,
participating, optional or other special rights, preferences, powers, and qualifications,
limitations or restrictions thereof, of the shares of each series, shall, in each case, be
fixed by resolution of the Board of Directors.
(b) Preferred Stock of any series redeemed, converted, exchanged, purchased, or
otherwise acquired by the Corporation shall constitute authorized but unissued Preferred
Stock.
(c) All shares of any series of Preferred Stock, as between themselves, shall rank
equally and be identical (except that such shares may have different dividend provisions);
and all series of Preferred Stock, as between themselves, shall rank equally and be
identical except as set forth in the resolutions authorizing the issuance of such series.
3. Common Stock.
(a) After dividends to which the holders of Preferred Stock may then be entitled under
the resolutions creating any series thereof have been declared and after the Corporation
shall have set apart the amounts required pursuant to such resolutions for the purchase or
redemption of any series of Preferred Stock, the holders of Common Stock shall be entitled
to have dividends declared in cash, property, or other securities of the Corporation out of
any profits or assets of the Corporation legally available therefor, if, as and when such
dividends are declared by the Corporation’s Board of Directors upon an affirmative vote of
a majority of the entire Board of Directors.
(b) In the event of the liquidation or dissolution of the Corporation’s business and
after the holders of Preferred Stock shall have received amounts to which they are entitled
under the resolutions creating such series, the holders of Common Stock shall be entitled
to receive ratably the balance of the Corporation’s assets available for distribution to
stockholders.
(c) Each share of Common Stock shall be entitled to one vote upon all matters upon
which stockholders have the right to vote, but shall not be entitled to vote for the
election of any directors who may be elected by vote of the Preferred Stock voting as a
class if so provided in the resolution creating such Preferred Stock pursuant to Article
FOURTH, Section 2(a) hereof.
4. Preemptive Rights. Except as expressly agreed in writing by the Corporation, no
holder of any shares of the Corporation by reason of such stockholder holding shares of any class
or series of capital stock of the Corporation shall have any preemptive right to subscribe for or
to acquire any additional shares of the Corporation of
4
the same or of any other class whether now or hereafter authorized or any options or warrants
giving the right to purchase any such shares, or any bonds, notes, debentures or other obligations
convertible into any such shares.
FIFTH. The Corporation is to have perpetual existence.
SIXTH. The private property of the stockholders shall not be subject to the payment
of corporate debts to any extent whatever.
SEVENTH.
1. Except as may otherwise be fixed by resolution pursuant to the provisions of Article FOURTH
hereof relating to the rights of the holders of Preferred Stock to elect directors as a class, the
number of directors of the Corporation shall be fixed from time to time exclusively by the
affirmative vote of a majority of the Board of Directors;
provided,
however, that
for the three-year period commencing on the date on which the transactions contemplated by the
Agreement and Plan of Merger, dated as of June 9, 2010, among the Corporation, Arsenal Merger Corp.
and Eclipsys Corporation (as may be amended from time to time, the “Eclipsys Merger Agreement”) are
consummated (the “Eclipsys Closing”), the number of directors of the Corporation shall be fixed
from time to time during such three-year period solely by the affirmative vote of no less than a
two-thirds majority of the entire Board of Directors (a “Supermajority Vote”);
provided,
further, that, if during such three-year period, the number of Directors that
Misys plc
(“Misys”) shall have the authority to nominate in accordance with Section 3 of the Relationship
Agreement (as defined below) is permanently reduced to one (1) or zero (0), then the number of
directors of the Corporation shall be fixed at nine (9) during such three-year period unless a
different number is approved by the Board of Directors by a Supermajority Vote. Notwithstanding
the foregoing, the Board of Directors shall not fix the number of directors in a manner that would
prevent any of the Misys Nominating Committee, Eclipsys Nominating Committee or Allscripts
Nominating Committee from exercising the authority of each such committee provided for in Article
SEVENTH, Section 6 hereof. At each annual meeting of the stockholders of the Corporation,
directors shall be elected to hold office for a term expiring at the annual meeting of stockholders
held in the immediately following year.
2. Advance notice of stockholder nominations for the election of directors shall be given in
the manner provided in the By-Laws of the Corporation.
3. Except as may otherwise be fixed by resolution pursuant to the provisions of Article FOURTH
hereof relating to the rights of the holders of Preferred Stock and except as set forth in Article
SEVENTH, Section 6 hereof, newly created directorships resulting from any increase in the number of
directors and any vacancies on the Board of Directors resulting from death, resignation,
disqualification, removal or any other cause
5
shall be filled exclusively by the affirmative vote of a majority of the remaining directors then
in office, though less than a quorum, or by a sole remaining director. Any director appointed in
accordance with the preceding sentence or Article SEVENTH, Section 6 hereof shall hold office for a
term expiring at the annual meeting of the stockholders following such director’s appointment.
4. Subject to any rights of the holders of Preferred Stock to elect directors as a class, a
director may be removed with or without cause by the affirmative vote of the holders of a majority
of the voting power present in person, by remote communication or represented by proxy at a meeting
of stockholders.
5. In furtherance of the powers conferred by statute, the Board of Directors is expressly
authorized and shall have sole authority, by affirmative vote of the majority of the entire Board
of Directors to approve the annual operating budget and the capital budget, and any material
changes to either.
6. Committees.
(a) The Board of Directors may, pursuant to this Certificate of Incorporation, or the
By-Laws or by resolution approved by the majority of the Board of Directors, designate one
or more committees, which, to the extent provided in this Certificate of Incorporation, the
By-Laws or by resolution, to the fullest extent permitted by law, shall have and may
exercise the powers of the Board of Directors in the management of the business and affairs
of the Corporation and may authorize the seal of the Corporation to be affixed to all
papers which may require it. These committees shall include, but are not limited to an
Audit Committee, a Nominating and Governance Committee, a Compensation Committee and such
other committees as determined by the Board of Directors.
(b) (i) Upon the closing of the transactions contemplated by the Eclipsys Merger
Agreement, each of the Audit Committee, Compensation Committee and Nominating and
Governance Committee of the Board of Directors of the Corporation shall be comprised of a
majority of Allscripts Directors (as defined below, and, for the avoidance of doubt, a
Misys Director (as defined below) shall not constitute an Allscripts Director) and at least
one Eclipsys Director (as defined below), and (ii) the Nominating and Governance Committee
shall include one (1) Misys Director in accordance with, and to the extent required by, the
Amended and Restated Relationship Agreement, dated as of , 2010 (as may be amended
from time to time, the “Relationship Agreement”), between the Corporation and Misys, which
Misys Director shall meet, with respect to the Corporation, the criteria for independence
established by the Nasdaq National Market; provided, that if no Misys Director meets such
criteria for independence
6
with respect to the Corporation, then the Nominating and Governance Committee shall
not include any Misys Director.
(c) Subject to Article SEVENTH, Section 6(d), the Corporation shall have a Misys
Nominating Committee, which shall consist only of directors that have been nominated by
Misys pursuant to Section 3 of the Relationship Agreement or appointed pursuant to this
Article SEVENTH, Section 6(c) (the “Misys Directors”). The Misys Nominating Committee
shall have the following powers and responsibilities: (i) the sole authority to nominate to
the Board of Directors up to two (2) Directors in accordance with Section 3 of the
Relationship Agreement to stand for election by stockholders in accordance with this
Certificate of Incorporation and the By-Laws of the Corporation; provided,
however, that if the number of Directors that Misys shall have the authority to
nominate in accordance with Section 3 of the Relationship Agreement is permanently reduced
to one (1), then the number of Directors that the Misys Nominating Committee shall have the
authority to nominate shall be permanently reduced to one (1); provided,
further, that if at any time the number of Directors that Misys shall have the
authority to nominate in accordance with Section 3 of the Relationship Agreement is
permanently reduced to zero, then, the Misys Nominating Committee shall permanently cease
to have the authority to nominate any Directors to stand for election by stockholders; and
(ii) for so long as the Misys Nominating Committee has the authority to nominate directors
to be elected by the stockholders pursuant to subclause (i) above, in the event of the
death, resignation, disqualification or removal of a Misys Director, other than the
resignation or removal of such Misys Director pursuant to Section 3 of the Relationship
Agreement, the sole authority to appoint a Director to fill such vacancy on the Board of
Directors. In the event of the death, resignation, disqualification or removal of a Misys
Director, other than the resignation or removal of such Misys Director pursuant to Section
3 of the Relationship Agreement, at a time at which Misys retains the authority to nominate
at least one (1) Director for election by the stockholders in accordance with Section 3 of
the Relationship Agreement and there are no remaining Misys Directors serving on the Misys
Nominating Committee, then Misys shall have the right to recommend to the Nominating and
Governance Committee a person to fill such vacancy and the Nominating and Governance
Committee shall, in accordance with Section 3.2 of the Relationship Agreement and
applicable law, appoint such person to the Board of Directors to fill the vacancy.
(d) In the event that Misys’s right to nominate Directors for election by stockholders
is permanently reduced or eliminated as set forth in Section 3 of the Relationship
Agreement then (i) the term of the appropriate number of Misys Directors shall
automatically terminate and such Misys Directors shall resign or be removed in accordance
with the Relationship Agreement and (ii) the vacancies resulting therefrom shall be filled
by the affirmative vote of a majority of the
7
remaining Directors then in office, though less than a quorum, or by a sole remaining
Director, to serve until the next annual meeting of stockholders. In the event that the
Misys Nominating Committee permanently ceases to have authority to nominate any Directors
for election by stockholders as set forth in Article SEVENTH, Section 6(c)(i) above, the
Misys Nominating Committee shall be dissolved and Article SEVENTH, Sections 6(b)(ii), (c)
and (d) shall no longer be in effect.
(e) Subject to the proviso of this Article SEVENTH, Section 6(e), upon the closing of
the transactions contemplated by the Eclipsys Merger Agreement, the Corporation shall have
an Eclipsys Nominating Committee, which shall initially consist of up to three (3) of the
Eclipsys Directors (as defined below), and shall have the sole authority to (i) nominate to
the Board of Directors up to three (3) Directors to stand for election by stockholders in
accordance with this Certificate of Incorporation and the By-Laws of the Corporation and
(ii) appoint to the Board of Directors replacements for vacancies of Eclipsys Directors
(and vacancies on committees on which such Eclipsys Director served) resulting from the
death, resignation, disqualification, removal or other cause of any Eclipsys Director;
provided, however, that (x) the authority of the Eclipsys Nominating
Committee to nominate to the Board of Directors candidates to stand for election by
stockholders shall terminate after the Eclipsys Nominating Committee nominates candidates
to stand for election at the Corporation’s 2011 annual meeting of stockholders and (y) the
authority of the Eclipsys Nominating Committee to appoint to the Board of Directors
replacements for vacancies of Eclipsys Directors (and vacancies on committees on which such
Eclipsys Director served) resulting from the death, resignation, removal or other cause of
any Eclipsys Director shall terminate upon the date of the Corporation’s 2011 annual
meeting of stockholders. The Eclipsys Nominating Committee shall be dissolved and this
Article SEVENTH, Section 6(e) shall no longer be in effect on the earlier of (i) the date
on which no Eclipsys Directors are serving on the Board of Directors and (ii) the date
immediately following the date that voting on the election of directors occurs as part of
the Corporation’s 2011 annual meeting of stockholders. Any Director serving on the
Eclipsys Nominating Committee shall meet, with respect to the Corporation, the criteria for
independence established by the Nasdaq National Market. “Eclipsys Directors” shall mean the
three (3) directors designated by Eclipsys Corporation in accordance with the Eclipsys
Merger Agreement to serve on the Board of Directors and each other person nominated or
appointed to the Board of Directors pursuant to this Article SEVENTH, Section 6(e).
(f) Subject to the proviso of this Article SEVENTH, Section 6(f), upon the closing of
the transactions contemplated by the Eclipsys Merger Agreement, the Corporation shall have
an Allscripts Nominating Committee, which shall initially
8
consist of up to three (3) of the Allscripts Directors (as defined below), and shall
have the sole authority to (i) nominate to the Board of Directors up to four (4) Directors
to stand for election by stockholders in accordance with this Certificate of Incorporation
and the By-Laws of the Corporation and (ii) appoint to the Board of Directors replacements
for vacancies of Allscripts Directors (and vacancies on committees on which such Allscripts
Director served) resulting from the death, resignation, disqualification, removal or other
cause of any Allscripts Director; provided, however, that (x) the authority
of the Allscripts Nominating Committee to nominate to the Board of Directors candidates to
stand for election by stockholders shall terminate after the Allscripts Nominating
Committee nominates candidates to stand for election at the Corporation’s 2011 annual
meeting of stockholders and (y) the authority of the Allscripts Nominating Committee to
appoint to the Board of Directors replacements for vacancies of Allscripts Directors (and
vacancies on committees on which such Allscripts Director served) resulting from the death,
resignation, removal or other cause of any Allscripts Director shall terminate upon the
date of the Corporation’s 2011 annual meeting of stockholders. The Allscripts Nominating
Committee shall be dissolved and this Article SEVENTH, Section 6(f) shall no longer be in
effect on the earlier of (i) the date on which no Allscripts Directors are serving on the
Board of Directors and (ii) the date immediately following the date that voting on the
election of directors occurs as part of the Corporation’s 2011 annual meeting of
stockholders. Any Director serving on the Allscripts Nominating Committee shall meet, with
respect to the Corporation, the criteria for independence established by the Nasdaq
National Market. “Allscripts Directors” shall mean the four (4) directors designated by
Allscripts in accordance with the Eclipsys Merger Agreement to serve on the Board of
Directors and each other person nominated or appointed to the Board of Directors pursuant
to this Article SEVENTH, Section 6(f).
(g) If, during the three-year period commencing on the date of the Eclipsys Closing, a
vacancy is created on the Board of Directors as a result of (i) the death, resignation,
disqualification, removal or other cause of the Independent Director (as defined in the
Eclipsys Merger Agreement) or (ii) the number of Directors that Misys shall have the
authority to nominate in accordance with Section 3 of the Relationship Agreement is
permanently reduced to zero (0), such vacancy shall be filled by the affirmative vote of a
majority of the members of the Nominating and Governance Committee of the Board of
Directors.
7. Subject to any limitation in the By-Laws, the members of the Board of Directors shall be
entitled to reasonable fees, salaries, or other compensation for their services, as determined from
time to time by the Board of Directors, and to reimbursement for their expenses as such members.
Nothing herein contained shall preclude any director from serving the Corporation or its
subsidiaries or affiliates in any other capacity and receiving compensation therefor.
9
8. Except as otherwise required by law, special meetings of the stockholders may be called
only by the Chairman of the Board of Directors or the Board of Directors in the manner provided in
the By-Laws of the Corporation. Only such business shall be conducted at a special meeting of
stockholders as shall have been brought before the meeting in the manner provided in the By-Laws.
EIGHTH. Both stockholders and directors shall have power, if the By-Laws so provide,
to hold their meetings and to have one or more offices within or without the State of Delaware.
Except as may otherwise be fixed by resolution approved by a majority of the Board of
Directors pursuant to the provisions of Article FOURTH hereof relating to the rights of the holders
of Preferred Stock, any action required or permitted to be taken by the stockholders of the
Corporation may be effected at a duly called annual or special meeting of such stockholders and may
not be effected only by consent in writing by such stockholders.
NINTH. Subject to Article VIII of the By-Laws of the Corporation, the Board of
Directors is expressly authorized to adopt, amend or repeal the By-Laws of the Corporation by the
affirmative vote of a majority of the entire Board of Directors.
TENTH.
1. A director of the Corporation shall not be personally liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director, except for liability
(a) for any breach of the director’s duty of loyalty to the Corporation or its stockholders, (b)
for acts or omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (c) under Section 174 of the General Corporation Law of the State of Delaware or
(d) for any transaction from which the director derived an improper personal benefit. If the
General Corporation Law of the State of Delaware, or any other applicable law, is amended to
authorize corporation action further eliminating or limiting the personal liability of directors,
then the liability of a director of the Corporation shall be eliminated or limited to the fullest
extent permitted by the General Corporation Law of the State of Delaware, or any other applicable
law, as so amended. Any repeal or modification of this Article TENTH, Section 1 by the stockholders
of the Corporation shall not adversely affect any right or protection of a director of the
Corporation existing at the time of such repeal or modification.
2. (a) Each person who has been or is made a party or is threatened to be made a party to
or is involved in any action, suit or proceeding, whether civil, criminal, administrative
or investigative (hereinafter a “proceeding”), by reason of
10
the fact that he or she, or a person of whom he or she is the legal representative, is or
was a director or officer of the Corporation or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation or of a
partnership, joint venture, trust or other enterprise, including service with respect to
employee benefit plans (hereinafter an “Indemnitee”), whether the basis of such proceeding
is an alleged action in an official capacity as a director, officer, employee or agent or
in any other capacity while serving as a director, officer, employee or agent, shall be
indemnified and held harmless by the Corporation to the fullest extent authorized by the
General Corporation Law of the State of Delaware, or any other applicable law, as the same
exists or may hereafter be amended (but, in the case of any such amendment, only to the
extent that such amendment permits the Corporation to provide broader indemnification
rights than said law permitted the Corporation to provide prior to such amendment), against
all expenses, liability and loss (including attorneys’ fees, judgments, fines, ERISA excise
taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or
suffered by such Indemnitee in connection therewith and such indemnification shall continue
as to an Indemnitee who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of his or her heirs, executors and administrators; provided,
however, that except as provided in paragraph (b) of this Article TENTH, Section 2
with respect to proceedings seeking to enforce rights to indemnification, the Corporation
shall indemnify any such Indemnitee seeking indemnification in connection with a proceeding
(or part thereof) initiated by such person only if such proceeding (or part thereof) was
authorized by the Board of Directors of the Corporation. The right to indemnification
conferred in this Article TENTH, Section 2 shall be a contract right. In addition to the
right of indemnification, an Indemnitee shall have the right to be paid by the Corporation
the expenses incurred in defending any such proceeding in advance of its final disposition;
provided, however, that if the General Corporation Law of the State of
Delaware, or any other applicable law, requires, the payment of such expenses incurred by
an Indemnitee in his or her capacity as a director or officer (and not in any other
capacity in which service was or is rendered by such person while a director or officer,
including, without limitation, service to an employee benefit plan) in advance of the final
disposition of a proceeding shall be made only upon delivery to the Corporation of an
undertaking by or on behalf of such Indemnitee to repay all amounts so advanced if it shall
ultimately be determined that such director or officer is not entitled to be indemnified
under this Article TENTH, Section 2 or otherwise.
(b) If a claim under paragraph (a) of this Article TENTH, Section 2 is not paid in
full by the Corporation within thirty (30) days after a written claim has been received by
the Corporation, the claimant may at any time thereafter bring suit against the Corporation
to recover the unpaid amount of the claim and, if successful in whole or in part, the
claimant shall be entitled to be paid also the
11
expense of prosecuting such claim. It shall be a defense to any such action (other than an
action brought to enforce a claim for expenses incurred in defending any proceeding in
advance of its final disposition where the required undertaking, if any is required, has
been tendered to the Corporation) that the claimant has not met the standard of conduct
which makes it permissible under the General Corporation Law of the State of Delaware, or
any other applicable law, for the Corporation to indemnify the claimant for the amount
claimed, but the burden of proving such defense shall be on the Corporation. Neither the
failure of the Corporation (including its Board of Directors, stockholders or independent
legal counsel) to have made a determination prior to the commencement of such action that
indemnification of the claimant is proper in the circumstances because he or she has met
the applicable standard of conduct set forth in the General Corporation Law of the State of
Delaware, or any other applicable law, nor an actual determination by the Corporation
(including its Board of Directors, stockholders or independent legal counsel) that the
claimant has not met such applicable standard of conduct, shall be a defense to the action
or create a presumption that the claimant has not met the applicable standard of conduct.
(c) The right to indemnification and the payment of expenses incurred in defending a
proceeding in advance of its final disposition conferred in paragraph (b) of this Article
TENTH, Section 2 shall not be exclusive of any other right which any person may have or
hereafter acquire under any statute, provision of this Certificate of Incorporation,
By-Laws, agreement, vote of stockholders or disinterested directors or otherwise.
(d) The Corporation may maintain insurance, at its expense, to protect itself and any
director, officer, employee or agent of the Corporation or another corporation,
partnership, joint venture, trust or other enterprise against any expense, liability or
loss, whether or not the Corporation would have the power to indemnify such person against
such expense, liability or loss under the General Corporation Law of the State of Delaware,
or any other applicable law.
(e) The Corporation may, to the extent authorized from time to time by the Board of
Directors, grant rights to indemnification, and rights to be paid by the Corporation the
expenses incurred in defending any proceeding in advance of its final disposition, to any
employee or agent of the Corporation to the fullest extent of the provisions of this
Article TENTH, Section 2 with respect to the indemnification and advancement of expenses of
directors and officers of the Corporation.
(f) Any repeal or modification of this Article TENTH, Section 2 shall not adversely
affect any right or protection of a director, officer, employee or agent of the Corporation
existing at the time of such repeal or modification.
12
ELEVENTH. As used in this Certificate of Incorporation, the term the “majority of the
entire Board of Directors” means the majority of the total number of directors which the
Corporation would have if there were no vacancies, and the term “majority of the Board of
Directors” means the majority of the directors present and voting.
TWELFTH. The Corporation has elected to be governed by Section 203 of the General
Corporation Law of the State of Delaware.
THIRTEENTH. The Corporation reserves the right to amend, alter, change or repeal any
provision contained in this Certificate of Incorporation in the manner now or hereafter prescribed
by statute; provided, however, that for so long as Misys retains the authority to
nominate at least one Director for election by the stockholders in accordance with Section 3 of the
Relationship Agreement and pursuant to Article SEVENTH, Section 6(c) hereof, then Article SEVENTH,
Sections 3, 6(b)(ii), 6(c) and 6(d) and this Article THIRTEENTH with respect to such Sections, in
addition to any other vote required by law or this Certificate of Incorporation, may be amended
only with the affirmative vote of a majority of the entire Board of Directors and the unanimous
vote of the Misys Directors or, so long as Misys retains the authority to nominate at least one (1)
Director for election by the stockholders in accordance with Section 3 of the Relationship
Agreement and pursuant to Article SEVENTH, Section 6(c) hereof and no Misys Director is currently
serving, with the written consent of Misys; provided, further, that, for so long as
the Eclipsys Nominating Committee retains the authority to nominate Directors for election by the
stockholders and appoint replacements of Eclipsys Directors pursuant to Article SEVENTH, Section
6(e) hereof, then Article SEVENTH, Section 6(e) and this Article THIRTEENTH with respect to such
Section, in addition to any other vote required by law or this Certificate of Incorporation, may be
amended only with the affirmative vote of a majority of the members of the Eclipsys Nominating
Committee and the affirmative vote of a majority of the entire Board of Directors;
provided, further, that, for so long as the Allscripts Nominating Committee retains
the authority to nominate Directors for election by the stockholders and appoint replacements of
Allscripts Directors pursuant to Article SEVENTH, Section 6(f) hereof, then Article SEVENTH,
Section 6(f) and this Article THIRTEENTH with respect to such Section, in addition to any other
vote required by law or this Certificate of Incorporation, may be amended only with the affirmative
vote of a majority of the members of the Allscripts Nominating Committee and the affirmative vote
of a majority of the entire Board of Directors; provided, further, that, for the
three-year period commencing on the Eclipsys Closing Date, Article SEVENTH, Section 1, in addition
to any other vote required by law or this Certificate of Incorporation, may be amended only upon
the approval of the Board of Directors by a Supermajority Vote; provided, further,
that, the penultimate sentence of Article SEVENTH, Section 1 may not be amended with respect to any
of the Misys Nominating Committee, Eclipsys Nominating Committee or Allscripts Nominating Committee
so long as such committee retains the authority to nominate Directors for
13
election by the stockholders and appoint replacements of Directors pursuant to Article SEVENTH,
Section 6 hereof; provided, further, that, until the date of the Corporation’s 2011
annual meeting of the stockholders, Article SEVENTH, Section 3, in addition to any other vote
required by law or this Certificate of Incorporation, may be amended only upon the approval of the
Board of Directors by a Supermajority Vote.
14
Exhibit 3
Commitment
Letter
64
EXECUTION VERSION
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X.X. XXXXXX SECURITIES
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BARCLAYS BANK PLC
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UBS SECURITIES LLC |
INC.
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BARCLAYS CAPITAL
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000 Xxxx Xxxxxx |
XXXXXXXX CHASE BANK,
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000 Xxxxxxx Xxxxxx
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Xxx Xxxx, XX 00000 |
N.A.
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Xxx Xxxx, Xxx Xxxx 00000
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UBS LOAN FINANCE LLC |
000 Xxxx Xxxxxx
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000 Xxxxxxxxxx Xxxxxxxxx |
Xxx Xxxx, Xxx Xxxx 00000
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Xxxxxxxx, XX 00000 |
June 9, 2010
Allscripts-Misys Healthcare Solutions, Inc.
000 Xxxxxxxxxxx Xxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, Chief Financial Officer
Allscripts-Misys Healthcare Solutions, Inc.
Senior Secured Credit Facilities
Commitment Letter
Ladies and Gentlemen:
You have advised X.X. Xxxxxx Securities Inc. (“JPMorgan”), JPMorgan Chase Bank, N.A.
(“JPMorgan Chase Bank”), Barclays Bank PLC (“Barclays Bank”), Barclays Capital, the investment
banking division of Barclays Bank (“Barclays Capital”), UBS Securities LLC (“UBSS”) and UBS Loan
Finance LLC (“UBS” and together with JPMorgan, JPMorgan Chase Bank, Barclays Bank, Barclays Capital
and UBSS, the “Commitment Parties”) that Allscripts-Misys Healthcare Solutions, Inc. (the
“Borrower”) intends to enter into the Transactions described in the introductory paragraph of
Exhibit A hereto. Capitalized terms used but not otherwise defined herein shall have the meanings
ascribed thereto in the Summary of Terms and Conditions attached hereto as Exhibit A (the “Term
Sheet”). The sources and uses of funding for the Transactions are described in the Sources and Uses
Table (the “Table”) attached hereto as Schedule I.
JPMorgan, Barclays Capital and UBSS are pleased to advise you that they are willing to act as
joint lead arrangers and joint bookrunners for the Facilities. Furthermore, (i) JPMorgan Chase Bank
is pleased to advise you of its several commitment to provide 55% of the aggregate amount of each
of the Facilities, (ii) Barclays Bank is pleased to advise you of its several commitment to provide
30% of the aggregate amount of each of the Facilities and (iii) UBS is pleased to advise you of its
several commitment to provide 15% of the aggregate amount of each of the Facilities (JPMorgan Chase
Bank,
Barclays Bank and UBS, together, the “Initial Lenders”). This Commitment Letter, the Term Sheet and
the Table (collectively, the “Commitment Letter”) set forth the terms and conditions on and subject
to which the Initial Lenders are willing to make their commitments.
It is agreed that JPMorgan, Barclays Capital and UBSS will act as joint lead arrangers and
joint bookrunners in respect of the Facilities (in such capacities, the “Arrangers”) and that
JPMorgan will have “left” placement in any marketing materials or other documentation used in
connection with the Facilities. It is further agreed that JPMorgan Chase Bank will act as the sole
administrative agent in respect of the Facilities. You agree that, as a condition to the
commitments and agreements hereunder, no other agents, co-agents, bookrunners or arrangers will be
appointed, no other titles will be awarded and no compensation will be paid in connection with the
Facilities (in each case other than that expressly contemplated by the Term Sheet and the Fee
Letter referred to below) unless you and we shall so agree.
You understand that the Facilities will be syndicated and you agree to actively assist the
Arrangers in completing timely syndications reasonably satisfactory to the Arrangers and you. We
intend to commence syndication efforts promptly, and you agree to actively assist us in completing
a syndication reasonably satisfactory to us and you. Such assistance shall include (a) your using
commercially reasonable efforts to ensure that the syndication efforts benefit materially from your
existing banking relationships, (b) direct contact between your senior management and the proposed
Lenders and your using commercially reasonable efforts to ensure direct contact between your
advisors and the proposed Lenders at mutually convenient times and locations, (c) as set forth in
the next paragraph, assistance from you in the preparation of materials to be used in connection
with the syndication (collectively, with the Term Sheet, the “Information Materials”) and (d) the
hosting, with us and your senior management, of one or, if mutually agreed, additional meetings of
prospective Lenders at mutually convenient times and locations.
You will assist us in preparing Information Materials, including Confidential Information
Memoranda, for distribution to prospective Lenders. If requested, you also will assist us in
preparing an additional version of the Information Materials (the “Public-Side Version”) to be used
by prospective Lenders’ public-side employees and representatives (“Public-Xxxxxx”) who do not wish
to receive material non-public information (within the meaning of United States federal securities
laws) with respect to the Borrower, the Target, their respective affiliates and any of their
respective securities (“MNPI”) and who may be engaged in investment and other market related
activities with respect to any such entity’s securities or loans. Before distribution of any
Information Materials, you agree to execute and deliver to us (i) a letter in which you authorize
distribution of the Information Materials to a prospective Lender’s employees willing to receive
MNPI (“Private-Xxxxxx”) and (ii) a separate letter in which you authorize distribution of the
Public-Side Version to Public-Xxxxxx and represent that no MNPI is contained therein. You also
acknowledge that Commitment Party Public-Xxxxxx who are publishing debt analysts may participate in
any meetings held pursuant to clause (d) of the preceding paragraph to the extent that such meeting
is open to any Public-Xxxxxx; provided that such analysts shall not publish any information
obtained from such meetings at any time in violation of any confidentiality agreement between you
and the relevant Commitment Party Public-Sider.
The Borrower agrees that the following documents may be distributed to both
Private-Xxxxxx and Public-Xxxxxx, unless the Borrower advises the Arrangers in writing (including
by email) within a reasonable time prior to their intended distribution that such materials should
be distributed only to Private-Xxxxxx: (a) administrative materials prepared by the Commitment
Parties for prospective Lenders (such as a lender meeting invitation, lender allocation, if any,
and funding and closing memoranda), (b) notification of changes in the terms of the Facilities and
(c) other materials designated by the Borrower for all prospective Lenders after the initial
distribution of Information Materials. If you advise us that any of the foregoing should be
distributed only to Private-Xxxxxx, then Public-Xxxxxx will
2
not receive such materials without further discussions with you. The Borrower hereby authorizes the
Commitment Parties to distribute draft and final definitive documentation with respect to the
Facilities (other than any such documentation identified by the Borrower in writing (including by
email) within a reasonable time prior to the intended distribution for distribution solely to
Private-Xxxxxx) to Private-Xxxxxx and Public-Xxxxxx.
JPMorgan, Barclays Capital and UBSS, in their capacity as Arrangers, will manage, in
consultation with you, all aspects of the syndication, including decisions as to the selection of
institutions to be approached and when they will be approached, when their commitments will be
accepted, which institutions will participate, the allocation of the commitments among the Lenders
and, subject to the terms of the Fee Letter, the amount and distribution of fees among the Lenders.
In their capacity as Arrangers of the Facilities, JPMorgan, Barclays Capital and UBSS will have no
responsibility other than to arrange the syndication as set forth herein and in no event shall be
subject to any fiduciary or other implied duties. Additionally, the Borrower acknowledges and
agrees that, as Arrangers, JPMorgan, Barclays Capital and UBSS are not advising the Borrower as to
any legal, tax, investment, accounting or regulatory matters in any jurisdiction. The Borrower
shall consult with its own advisors concerning such matters and shall be responsible for making its
own independent investigation and appraisal of the transactions contemplated hereby, and the
Arrangers shall have no responsibility or liability to the Borrower with respect thereto.
To assist us in our syndication efforts, you agree promptly to prepare and provide to us all
information with respect to the Borrower and its subsidiaries and the Transactions, including all
financial information and projections (the “Projections”), as we may reasonably request in
connection with the arrangement and syndication of the Facilities. You hereby represent and
covenant that (a) all written information and all oral communication made in Lender meetings and
due diligence sessions held in connection with the syndication of the Facilities (other than the
Projections and information of a general economic or industry-specific nature) (the “Information”)
that has been or will be made available to us by you or any of your representatives is or will be,
taken as a whole, when furnished, complete and correct in all material respects and does not or
will not, taken as a whole, when furnished, contain any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements contained therein not materially
misleading in light of the circumstances under which such statements are made (after giving effect
to all supplements thereto) and (b) the Projections that have been or will be made available to us
by you or any of your representatives have been or will be prepared in good faith based upon
assumptions that you reasonably believe to have been reasonable at the time made and at the time
such Projections are made available to the Arrangers (it being understood that any such Projections
are subject to significant uncertainties and contingencies, many of which are beyond your control,
and that no assurance can be given that such Projections will be realized and that actual results
may differ from such Projections and that such differences may be material). You understand that in
arranging and syndicating the Facilities we may use and rely on the Information and Projections
without independent verification thereof.
If any Initial Lender becomes a Defaulting Lender (as defined below), you may, at your sole
expense and effort, upon notice to such Initial Lender and the Arrangers, require such Initial
Lender to assign and delegate, without recourse, all of its interests, rights and obligations under
this Commitment Letter to an assignee selected by you in consultation with the Arrangers (a
“Replacement Lender”) that shall assume such obligations (which assignee may be another Initial
Lender, if such other Initial Lender accepts such assignment). The Arrangers agree to use their
commercially reasonable efforts to assist you in identifying a Replacement Lender and effecting any
such assignment and delegation (it being understood that such efforts shall not be deemed to
require the Arrangers to cause any of their affiliates to agree to become the Replacement Lender).
It is understood and agreed that any such assignment and delegation shall not reduce or otherwise
affect the commitments in respect of the Facilities of the other
3
Initial Lenders. For purposes of the foregoing, “Defaulting Lender” shall mean shall mean any
Initial Lender that (a) becomes (or is controlled by any person or entity that is) subject to any
bankruptcy, insolvency, receivership, conservatorship or other similar proceeding, (b) has (or is
controlled by any person or entity that has) become a “defaulting” lender generally in credit
agreements to which it is a party (other than actions taken in good faith to exercise or preserve
its rights and remedies as a lender) or (c) refuses to execute (after reasonable written notice to
such Initial Lender) or, in your reasonable judgment following consultation with the applicable
Initial Lender and the Arrangers, materially delays in executing, the definitive credit
documentation with respect to the Facilities that has been fully negotiated between you and the
Commitment Parties in good faith (the “Credit Documentation”). Notwithstanding the foregoing, no
Initial Lender shall be a Defaulting Lender solely by virtue of the ownership or acquisition of any
equity interest in such Initial Lender or a parent company thereof by a governmental authority or
an instrumentality thereof.
As consideration for the commitments and agreements of the Commitment Parties hereunder, you
agree to cause to be paid the nonrefundable fees described in the Fee Letter dated the date hereof
and delivered herewith (the “Fee Letter”).
Each Commitment Party’s commitments and agreements hereunder are subject to (a) since May 31,
2009, there not having occurred any Borrower Material Adverse Effect (as defined below), (b) such
Commitment Party’s reasonable satisfaction that until the earlier of (i) the completion of a
Successful Syndication (as hereinafter defined) and (ii) the date that is 60 days following the
initial funding of the Facilities, there shall be (or with regards to any portion of such period
occurring after the Closing Date shall reasonably be expected to be) no competing offering,
placement or arrangement of any debt securities or bank financing by or on behalf of the Borrower
or any of its subsidiaries (including any new subsidiaries to be formed or acquired in connection
with the Transactions), (c) the Arrangers’ having been afforded a period of not less than 45 days
following the execution and delivery of this Commitment Letter to syndicate the Facilities,
provided that such minimum period shall be extended in case you execute any cure rights pursuant to
clause (ii) of clause (f) of this paragraph by the time period from the date written notice is
given by the Commitment Parties of noncompliance through the date such noncompliance is cured, (d)
the closing of the Facilities on or before December 9, 2010, (e) compliance by you in all material
respects with your agreements in clauses (a), (b), (c) and (d) of the fourth paragraph of this
Commitment Letter, other than to the extent (i) noncompliance therewith has not materially impeded
the syndication of the Facilities or (ii) you shall have cured such noncompliance within 5 business
days of having received written notice from the Commitment Parties of such noncompliance (it being
agreed that the Commitment Parties shall give you prompt written notice of any such noncompliance);
and (f) the other conditions expressly set forth in the Term Sheet. “Borrower Material Adverse
Effect” means any event, occurrence, fact, condition, effect, change or development that,
individually or when taken together with all other events, occurrences, facts, conditions, effects,
changes or developments, is, or is reasonably expected to be, materially adverse to the business,
assets, liabilities (contingent or otherwise), financial condition or results of operations of the
Borrower and its Subsidiaries, taken as a whole; provided, however, that none of the following
shall constitute, and no event, effect, change or development to the extent resulting from any of
the following, shall constitute or be taken into account in determining whether there has been a
“Borrower Material Adverse Effect”: (i) factors affecting the national or world economy or
financial, banking, credit, securities or commodities markets, taken as a whole, except to the
extent the Borrower and its subsidiaries are adversely affected in a disproportionate manner as
compared to other comparable companies in the industry in which the Borrower and its subsidiaries
operate; (ii) conditions generally affecting the industries in which the Borrower or its
subsidiaries operate, except to the extent the Borrower and its subsidiaries are adversely affected
in a disproportionate manner as compared to other comparable companies in the industry in which the
Borrower and its subsidiaries operate; (iii) factors resulting from or arising out of the
announcement of the Merger Agreement, the Misys Agreement or the transactions contemplated thereby
4
(including any shareholder or derivative litigation arising from or relating to the Merger
Agreement, the Misys Agreement or the transactions contemplated thereby) or the performance of the
Merger Agreement or the Misys Agreement; (iv) any circumstances relating to the loss in whole or in
part of any business relationship with any customer or client of the Borrower or any of its
subsidiaries set forth in Section 9.1(A) of the Parent Disclosure Letter, other than as a result of
the valid termination by a customer or client of any written contract due to the breach by the
Borrower or any of its subsidiaries of its obligations under any such written contract to license
material intellectual property rights owned by the Borrower or any of its subsidiaries or perform
material services related to such licenses required to be licensed or performed, respectively,
under such written contract; (v) any failure by the Borrower to meet any analysts’ revenue or
earnings projections or Borrower guidance, in and of themselves, or any failure by the Borrower to
meet any of the Borrower’s internal or published revenue or earnings projections or forecasts, in
and of themselves, or any decline in the trading price or trading volume of the common stock of the
Borrower, in and of themselves (it being understood that any event, occurrence, fact, condition,
effect, change or development giving rise to any such failure or decline, other than an event,
occurrence, fact, condition, effect, change or development set forth in clauses (i) through (iv)
above or clauses (vi) through (viii) below, may be deemed to constitute, and may be taken into
account in determining whether there has been, or is reasonably expected to be, a Borrower Material
Adverse Effect); (vi) any effect resulting from changes in laws or accounting principles, in each
case, after the date hereof; (vii) any effect resulting from any outbreak or escalation of
hostilities, the declaration of a national emergency or war, or the occurrence of any act of
terrorism; or (viii) any increase in the cost of or decrease in the availability of financing to
the Borrower or its subsidiaries with respect to the Share Repurchases. “Successful Syndication”
means that JPMorgan Chase Bank shall hold no more than $60,000,000 of the aggregate commitment
amount under the Facilities, Barclays Bank shall hold no more than $50,000,000 of the aggregate
commitment amount under the Facilities and UBS shall hold no more than $40,000,000 of the aggregate
commitment amount under the Facilities.
You agree (a) to indemnify and hold harmless the Commitment Parties, their affiliates and
their respective directors, employees, advisors, and agents (each, an “indemnified person”) from
and against any and all losses, claims, damages and liabilities to which any such indemnified
person may become subject arising out of or in connection with this Commitment Letter, the Fee
Letter, the Facilities, the use of the proceeds thereof, the Transactions or any related
transaction or any claim, litigation, investigation or proceeding relating to any of the foregoing,
regardless of whether any indemnified person is a party thereto or whether brought by the Company,
the Guarantors (as defined in the Term Sheet), any of their respective affiliates or any other
person or entity, and to reimburse each indemnified person upon demand for any legal or other
expenses incurred in connection with investigating or defending any of the foregoing, provided that
the foregoing indemnity will not, as to any indemnified person, apply to losses, claims, damages,
liabilities or related expenses to the extent they are found by a final, non-appealable judgment of
a court to arise from (i) the willful misconduct or gross negligence of such indemnified person or
any of its affiliates or its or their respective officers, directors, employees or agents or (ii) a
material breach by the relevant indemnified person of the express contractual obligations of such
indemnified person under this Commitment Letter or the Credit Documentation pursuant to a claim
made by the Borrower, and (b) to reimburse each Commitment Party and its affiliates on demand for
all out-of-pocket expenses (including due diligence expenses, syndication expenses, consultant’s
fees and expenses, travel expenses, and reasonable fees, charges and disbursements of counsel)
incurred in connection with the Facilities and any related documentation (including this Commitment
Letter, the Fee Letter and the Credit Documentation) or the administration, amendment, modification
or waiver thereof. No indemnified person shall be liable for any damages arising from the use by
others of Information or other materials obtained through electronic, telecommunications or other
information transmission systems, except to the extent such damages are found by a final,
non-appealable judgment of a court to arise from the gross negligence or willful misconduct of such
indemnified person or any of its affiliates or its or their respective officers, directors,
employees or agents. In addition, no indemnified person shall be liable for
5
any special, indirect, consequential or punitive damages in connection with this Commitment Letter,
the Fee Letter, the Facilities, the use of the proceeds thereof, the Transactions or any related
transaction.
You acknowledge that each Commitment Party and its affiliates (the term “Commitment Party” as
used below in this paragraph being understood to include such affiliates) may be providing debt
financing, equity capital or other services (including financial advisory services) to other
companies in respect of which you may have conflicting interests regarding the transactions
described herein and otherwise. No Commitment Party will use confidential information obtained from
you by virtue of the transactions contemplated hereby or its other relationships with you in
connection with the performance by such Commitment Party of services for other companies, and no
Commitment Party will furnish any such information to other companies. You also acknowledge that no
Commitment Party has any obligation to use in connection with the transactions contemplated hereby,
or to furnish to you, confidential information obtained from other companies. You further
acknowledge that each Arranger is a full service securities firm and each Arranger may from time to
time effect transactions, for its own or its affiliates’ account or the account of customers, and
hold positions in loans, securities or options on loans or securities of the Borrower and its
affiliates and of other companies that may be the subject of the transactions contemplated by this
Commitment Letter. You waive, to the fullest extent permitted by law, any claims you may have
against each Commitment Party for breach of fiduciary duty or alleged breach of fiduciary duty, in
each case, in connection with the syndication of the Facilities, and agree that no Commitment Party
will have any liability (whether direct or indirect) to you in respect of such a fiduciary duty
claim or to any person asserting a fiduciary duty claim on your behalf, including your
stockholders, employees or creditors, in each case, in connection with the syndication of the
Facilities.
Each Commitment Party may employ the services of its affiliates in providing certain services
hereunder and, in connection with the provision of such services, may exchange with such
affiliates, subject to the confidentiality restrictions set forth herein, information concerning
you and the other companies that may be the subject of the transactions contemplated by this
Commitment Letter, and, to the extent so employed, such affiliates shall be entitled to the
benefits afforded such Commitment Party hereunder.
This Commitment Letter shall not be assignable (a) by you without the prior written consent of
each Commitment Party (and prior to the Misys Closing (as defined below), the approval of the Audit
Committee of the Borrower’s Board of Directors) or (b) by any Commitment Party without the prior
written consent of each Arranger and you (which consent, in the case of the Borrower prior to the
Misys Closing, shall be approved by the Audit Committee of the Borrower’s Board of Directors) and
any purported assignment without such consent shall be null and void, is intended to be solely for
the benefit of the parties hereto and is not intended to confer any benefits upon, or create any
rights in favor of, any person other than the parties hereto and the indemnified persons (it being
agreed that (i) each Initial Lender reserves the right in its sole discretion at any time to assign
and delegate all or a portion of its commitments in respect of the Facilities hereunder, and to
allocate all or a portion of its fees payable in connection therewith, to one or more of its
affiliates, provided that no such assignment or delegation shall relieve such Initial Lender of any
of its obligations hereunder or under the Credit Documentation, including of any obligation in
respect of its commitment in respect of the Facilities, in the event such affiliate shall fail to
perform such obligation in accordance with the terms hereof or of the Credit Documentation, as
applicable and (ii) the Initial Lenders have the right to syndicate the Facilities and receive
commitments with respect thereto, provided that, except as contemplated under clause (b) of this
paragraph, (x) no Initial Lender may assign all or any portion of its commitments hereunder prior
to the Closing Date and (y) each Initial Lender shall retain exclusive control over all rights and
obligations with respect to the commitments hereunder until the Closing Date has occurred). This
Commitment Letter may not be amended or waived except by an instrument in writing signed by you and
each Commitment Party; provided that (a) the Borrower shall have the right, upon prior written
notice to the Arrangers, to
6
terminate this Commitment Letter and the commitments hereunder, subject to the provisions of the
second to last paragraph hereof and (b) any waiver or amendment by the Borrower prior to the Misys
Closing shall be approved by the Audit Committee of the Borrower’s Board of Directors.
This Commitment Letter may be executed in any number of counterparts, each of which shall be
an original, and all of which, when taken together, shall constitute one agreement. Delivery of an
executed signature page of this Commitment Letter by email or facsimile transmission shall be
effective as delivery of a manually executed counterpart hereof. This Commitment Letter and the Fee
Letter are the only agreements that have been entered into among us with respect to the Facilities
and set forth the entire understanding of the parties with respect thereto. Those matters that are
not covered by the provisions hereof and of the Term Sheet are subject to the approval and
agreement of the Commitment Parties and the Borrower.
This Commitment Letter shall be governed by, and construed and interpreted in accordance with,
the laws of the State of New York; provided, however, that the interpretation of the definition of
“Borrower Material Adverse Effect” for purposes of this Commitment Letter shall be governed by, and
construed and interpreted in accordance with, the laws of the State of Delaware, regardless of the
laws that might otherwise govern under applicable principles of conflicts of laws. Each party
hereto consents to the exclusive jurisdiction and venue of the state or federal courts located in
the City of New York. Each party hereto irrevocably waives, to the fullest extent permitted by
applicable law, (a) any objection that it may now or hereafter have to the laying of venue of any
such legal proceeding in the state or federal courts located in the City of New York and (b) any
right it may have to a trial by jury in any suit, action, proceeding, claim or counterclaim brought
by or on behalf of any party related to or arising out of this Commitment Letter, the Fee Letter,
the Term Sheet, the transactions contemplated hereby or the performance of services hereunder.
This Commitment Letter is delivered to you on the understanding that neither this Commitment
Letter, the Term Sheet or the Fee Letter nor any of their terms or substance shall be disclosed,
directly or indirectly, to any other person (including, without limitation, other potential
providers or arrangers of financing) except (a) to your officers, directors, agents and advisors
and, on a confidential basis, those of the Target and Misys who are directly involved in the
consideration of this matter (except that the Fee Letter may only be disclosed to the Target or
Misys in a mutually agreed upon redacted form), (b) as may be compelled in a judicial or
administrative proceeding or as otherwise required by law (in which case you agree to inform us
promptly thereof to the extent permitted by applicable law) or (c) with our prior written consent,
provided, that the foregoing restrictions shall cease to apply (except in respect of the Fee Letter
and its terms and substance) after this Commitment Letter has been accepted by you.
Each Commitment Party and its affiliates will use all Confidential Information (as defined
below) solely for purposes that are subject to this Commitment Letter and the transactions
contemplated thereby and shall treat confidentially all such Confidential Information, except that
Confidential Information may be disclosed (a) to its and its affiliates’ partners, directors,
officers, employees and agents, including accountants, legal counsel and other advisors (it being
understood that the persons to whom such disclosure is made will be informed of the confidential
nature of such Confidential Information), (b) to the extent requested or required by any state,
Federal or foreign authority or examiner regulating such Commitment Party, (c) to the extent
required by applicable law, rule or regulation or by any subpoena or similar legal process, (d) in
connection with any litigation or legal proceeding relating to this Commitment Letter or the Fee
Letter or any other documentation in connection therewith or the enforcement of rights hereunder or
thereunder or to which such Commitment Party or any of its affiliates may be a party, (e) to any
prospective Lender (it being understood that the persons to whom such disclosure is made will be
informed of the confidential nature of such Confidential
7
Information and agree to keep such Confidential Information confidential to the same extent as
required of each of the Commitment Parties hereinabove and below or as otherwise reasonably
acceptable to you and each Commitment Party, including as may be agreed in any confidential
information memorandum or other marketing material), (f) with the consent of the Borrower, (g) on a
confidential basis, to any rating agency when required by such rating agency or (h) to the extent
such Confidential Information (i) becomes publicly available other than as a result of a breach of
this paragraph or (ii) becomes available to such Commitment Party on a nonconfidential basis from a
source other than the Borrower or any of its subsidiaries, officers, directors, employees or
advisors. For the purposes of this paragraph, “Confidential Information” means all information
received from the Borrower or any of its subsidiaries, officers, directors, employees or advisors
relating to the Borrower or its businesses, other than any such information that is available to
the Commitment Parties on a nonconfidential basis prior to disclosure by the Borrower. The
obligations of the Commitment Parties under this paragraph shall remain in effect until the earlier
of (i) one year from the date of termination of the commitments and agreements of the Commitment
Parties hereunder and (ii) the date the Credit Documentation becomes effective, at which time any
confidentiality undertaking in the Credit Documentation shall supersede the provisions of this
paragraph.
Each of the Commitment Parties hereby notifies you that, pursuant to the requirements of the
USA Patriot Act, Title III of Pub. L. 107-56 (signed into law on October 26, 2001) (the “Patriot
Act”), it is required to obtain, verify and record information that identifies the Borrower and
each Guarantor (as defined in the Term Sheet), which information includes names and addresses and
other information that will allow such Commitment Party to identify the Borrower and each Guarantor
in accordance with the Patriot Act.
The compensation, reimbursement, indemnification and confidentiality, governing law, consent
to jurisdiction and waiver of jury trial provisions contained herein and in the Fee Letter and any
other provision herein or therein which by its terms expressly survives the termination of this
Commitment Letter shall remain in full force and effect regardless of whether definitive financing
documentation shall be executed and delivered and notwithstanding the termination of this
Commitment Letter or the commitments hereunder; provided that the reimbursement, confidentiality
and indemnification provisions hereunder (other than the confidentiality of the Fee Letter and the
contents thereof) shall be superseded by the reimbursement, confidentiality and indemnification
provisions of the Credit Documentation upon the effectiveness thereof.
Notwithstanding any other provision of this Commitment Letter, the Term Sheet or the Fee
Letter to the contrary, in the event that, prior to the consummation of the Initial Share
Repurchase and the Misys Offering (collectively, the “Misys Closing”) or, if the Misys Closing does
not occur, at any time after the date hereof (i) there is any action or determination to be made by
us hereunder that would require approval of the Borrower’s Board of Directors or any committee
thereof, (ii) there is any action, suit, proceeding, litigation or arbitration between the Borrower
and Misys or (iii) there is any disputed claim or demand (including any claim or demand relating to
enforcing any remedy under this Commitment Letter, the Term Sheet or the Fee Letter) by the
Borrower against Misys, or by Misys against the Borrower, all actions or determinations of the
Borrower prior to the Misys Closing or, if the Misys Closing does not occur, at any time after the
date hereof or any determinations of the Borrower relating to any such action, suit, proceeding,
litigation, arbitration, claim or demand (including all determinations by the Borrower whether to
institute, compromise or settle any such action, suit, proceeding, litigation, arbitration, claim
or demand and all determinations by the Borrower relating to the prosecution or defense thereof),
shall be made and approved by the Audit Committee of the Borrower’s Board of Directors.
8
If the foregoing correctly sets forth our agreement, please indicate your acceptance of the
terms hereof and of the Term Sheet and the Fee Letter by returning to us executed counterparts
hereof and of the Fee Letter not later than 5:00 p.m., New York City time, on June 9, 2010. This
offer will automatically expire at such time if we have not received such executed counterparts in
accordance with the preceding sentence.
9
We are pleased to have been given the opportunity to assist you in connection with this
important financing.
Very truly yours,
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X.X. XXXXXX SECURITIES INC.
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By: |
/s/ Xxxxx XxXxxx
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Name: |
Xxxxx XxXxxx |
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Title: |
Executive Director |
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JPMORGAN CHASE BANK, N.A.
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By: |
/s/ Xxxx Xxxxxxxx
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Name: |
Xxxx Xxxxxxxx |
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Title: |
Vice President |
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[Commitment Letter]
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BARCLAYS BANK PLC
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By: |
/s/ Xxxx Skorbe
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Name: |
Xxxx Skorbe |
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Title: |
Managing Director |
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[Commitment Letter]
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UBS SECURITIES LLC
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By: |
/s/ Xxxxx X. Xxxxx
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Name: |
Xxxxx X. Xxxxx |
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Title: |
Managing Director High Yield Capital Markets |
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By: |
/s/ Xxxxxxx Xxxxxx
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Name: |
Xxxxxxx Xxxxxx |
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Title: |
Director |
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UBS LOAN FINANCE LLC
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By: |
/s/ Xxxxx X. Xxxxx
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Name: |
Xxxxx X. Xxxxx |
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Title: |
Managing Director High Yield Capital Markets |
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By: |
/s/ Xxxxxxx Xxxxxx
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Name: |
Xxxxxxx Xxxxxx |
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Title: |
Director |
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[Commitment Letter]
Accepted and agreed to as of
the date first written above by:
ALLSCRIPTS-MISYS HEALTHCARE
SOLUTIONS, INC.
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By: |
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/s/ Xxxxxxx X. Xxxxx |
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Name:
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Xxxxxxx X. Xxxxx |
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Title:
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Chief Financial Officer |
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[Commitment Letter]
Schedule I
SOURCES AND USES TABLE
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Sources: |
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Term Loans |
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$ |
570,000,000 |
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Revolving Loans1 |
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$ |
0 |
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Cash on Hand |
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$ |
30,300,000 |
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Total Sources |
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$ |
600,300,000 |
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Uses: |
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Initial Share Repurchase |
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$ |
577,400,000 |
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Payment of Fees and Expenses2 |
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$ |
22,900,000 |
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Total Uses |
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$ |
600,300,000 |
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1 |
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$150,000,000 availability. |
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2 |
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Includes estimated OID. |
[Commitment Letter]
Exhibit 4
Form
of Emerald Definitive Agreement
65
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
AMONG
ALLSCRIPTS-MISYS HEALTHCARE SOLUTIONS, INC.,
ARSENAL MERGER CORP.
AND
ECLIPSYS CORPORATION
Dated as of June 9, 2010
AGREEMENT OF PLAN AND MERGER
TABLE OF CONTENTS
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Page |
ARTICLE I THE MERGER |
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2 |
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Section 1.1 The Merger |
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2 |
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Section 1.2 Effective Time |
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2 |
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Section 1.3 Effects of the Merger |
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3 |
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Section 1.4 Charter and Bylaws; Directors and Officers |
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3 |
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Section 1.5 Conversion of Securities |
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3 |
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Section 1.6 Parent to Make Certificates Available |
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4 |
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Section 1.7 Dividends; Transfer Taxes; Withholding |
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5 |
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Section 1.8 No Fractional Securities |
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5 |
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Section 1.9 Return of Exchange Fund |
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6 |
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Section 1.10 Adjustment of Per Share Merger Consideration |
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6 |
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Section 1.11 No Further Ownership Rights in Company Common Stock |
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6 |
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Section 1.12 Closing of Company Transfer Books |
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7 |
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Section 1.13 Lost Certificates |
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7 |
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Section 1.14 Further Assurances |
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7 |
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Section 1.15 Closing; Closing Deliveries |
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7 |
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ARTICLE II REPRESENTATIONS AND WARRANTIES OF PARENT AND
MERGER SUB |
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9 |
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Section 2.1 Organization, Standing and Power |
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9 |
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Section 2.2 Capital Structure |
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9 |
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Section 2.3 Authority |
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11 |
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Section 2.4 Consents and Approvals; No Violation |
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12 |
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Section 2.5 SEC Documents and Other Reports; Internal Controls and
Procedures |
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12 |
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Section 2.6 Registration Statement and Joint Proxy Statement |
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14 |
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Section 2.7 No Undisclosed Liabilities |
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14 |
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Section 2.8 Absence of Certain Changes or Events |
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14 |
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Section 2.9 Permits and Compliance |
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15 |
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Section 2.10 Tax Matters |
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15 |
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Section 2.11 Actions and Proceedings |
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16 |
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Section 2.12 Certain Agreements |
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16 |
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Section 2.13 Employee Benefits |
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18 |
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Section 2.14 Compliance with Worker Safety and Environmental Laws |
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19 |
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Section 2.15 Labor Matters |
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19 |
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Section 2.16 Intellectual Property |
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20 |
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i
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Page |
Section 2.17 Opinion of Financial Advisor |
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21 |
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Section 2.18 State Takeover Statutes |
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21 |
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Section 2.19 Required Vote of Parent Stockholders; Merger Sub Approval |
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22 |
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Section 2.20 Reorganization |
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22 |
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Section 2.21 Brokers |
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22 |
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Section 2.22 Operations of Merger Sub |
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22 |
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Section 2.23 Coniston Transaction |
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22 |
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ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY |
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24 |
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Section 3.1 Organization, Standing and Power |
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24 |
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Section 3.2 Capital Structure |
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25 |
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Section 3.3 Authority |
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26 |
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Section 3.4 Consents and Approvals; No Violation |
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27 |
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Section 3.5 SEC Documents and Other Reports; Internal Controls and
Procedures |
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27 |
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Section 3.6 Registration Statement and Joint Proxy Statement |
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29 |
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Section 3.7 No Undisclosed Liabilities |
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29 |
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Section 3.8 Absence of Certain Changes or Events |
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29 |
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Section 3.9 Permits and Compliance |
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30 |
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Section 3.10 Tax Matters |
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30 |
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Section 3.11 Actions and Proceedings |
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31 |
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Section 3.12 Certain Agreements |
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31 |
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Section 3.13 Employee Benefits |
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33 |
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Section 3.14 Compliance with Worker Safety and Environmental Laws |
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34 |
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Section 3.15 Labor Matters |
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35 |
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Section 3.16 Intellectual Property |
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35 |
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Section 3.17 Opinion of Financial Advisor |
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36 |
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Section 3.18 State Takeover Statutes |
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37 |
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Section 3.19 Required Vote of Company Stockholders |
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37 |
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Section 3.20 Reorganization |
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37 |
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Section 3.21 Brokers |
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37 |
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ARTICLE IV COVENANTS RELATING TO CONDUCT OF BUSINESS |
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37 |
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Section 4.1 Conduct of Business Pending the Merger |
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37 |
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Section 4.2 No Solicitation With Respect to Company |
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44 |
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Section 4.3 No Solicitation With Respect to Parent |
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45 |
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Section 4.4 Third Party Standstill Agreements |
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47 |
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ARTICLE V ADDITIONAL AGREEMENTS |
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47 |
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Section 5.1 Preparation of the Registration Statement and the Joint Proxy
Statement |
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47 |
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Section 5.2 Stockholder Meetings |
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48 |
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Section 5.3 Access to Information |
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51 |
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Section 5.4 Current Nasdaq Quotation |
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51 |
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ii
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Page |
Section 5.5 Fees and Expenses |
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51 |
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Section 5.6 Company Stock Plans and Company Stock Purchase Plan |
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55 |
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Section 5.7 Commercially Reasonable Efforts |
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56 |
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Section 5.8 Public Announcements |
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57 |
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Section 5.9 State Takeover Laws |
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58 |
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Section 5.10 Indemnification; Directors and Officers Insurance |
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58 |
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Section 5.11 Notification of Certain Matters |
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60 |
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Section 5.12 Employee Benefit Plans and Agreements |
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60 |
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Section 5.13 Tax-Free Reorganization Treatment |
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61 |
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Section 5.14 Nasdaq |
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61 |
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Section 5.15 Certain Corporate Governance and Other Matters |
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62 |
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Section 5.16 Section 16 Matters |
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63 |
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Section 5.17 Transaction Litigation |
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63 |
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Section 5.18 Coniston Transaction |
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63 |
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Section 5.19 Control of Operations |
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67 |
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Section 5.20 Debt Retirement |
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67 |
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ARTICLE VI CONDITIONS PRECEDENT TO THE MERGER |
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67 |
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Section 6.1 Conditions to Each Party’s Obligation to Effect the Merger |
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67 |
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Section 6.2 Conditions to Obligation of the Company to Effect the Merger |
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68 |
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Section 6.3 Conditions to Obligations of Parent and Sub to Effect the Merger |
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69 |
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ARTICLE VII TERMINATION, AMENDMENT AND WAIVER |
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70 |
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Section 7.1 Termination |
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70 |
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Section 7.2 Effect of Termination |
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73 |
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Section 7.3 Amendment |
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73 |
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Section 7.4 Waiver |
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73 |
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ARTICLE VIII GENERAL PROVISIONS |
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73 |
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Section 8.1 Non-Survival of Representations and Warranties |
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73 |
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Section 8.2 Notices |
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73 |
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Section 8.3 Interpretation |
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74 |
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Section 8.4 Counterparts |
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75 |
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Section 8.5 Entire Agreement; No Third-Party Beneficiaries |
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75 |
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Section 8.6 Governing Law |
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75 |
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Section 8.7 Specific Performance; Submission To Jurisdiction; Venue |
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75 |
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Section 8.8 Waiver of Jury Trial |
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76 |
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Section 8.9 Assignment |
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77 |
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Section 8.10 Severability |
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77 |
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Section 8.11 Actions and Disputes |
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77 |
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ARTICLE IX DEFINITIONS |
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77 |
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Section 9.1 Definitions |
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77 |
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iii
EXHIBITS AND SCHEDULES
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Exhibit A
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Form of Voting Agreement |
Exhibit B
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Form of Parent Voting Undertaking |
Exhibit C
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Form of Company Voting Undertaking |
Exhibit D
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Form of Amended and Restated Certificate of Incorporation of Parent |
Exhibit E
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Form of Amended and Restated Bylaws of Parent |
Exhibit F
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Certain Corporate Governance and Other Matters |
Exhibit G
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Parent Tax Certificate |
Exhibit H
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Company Tax Certificate |
Schedule A
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List of Signatories to Parent Voting Undertakings |
Schedule B
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List of Signatories to Company Voting Undertakings |
iv
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of June 9, 2010 (this “Agreement”), among
Allscripts-Misys Healthcare Solutions, Inc., a Delaware corporation (“Parent”), Arsenal
Merger Corp., a Delaware corporation and a direct wholly owned subsidiary of Parent (“Merger
Sub”), and Eclipsys Corporation, a Delaware corporation (the “Company”) (Merger Sub and
the Company being hereinafter collectively referred to as the “Constituent Corporations”).
Certain capitalized terms are defined in Article IX and other capitalized terms used in
this Agreement are defined in the Sections of this Agreement where such terms first appear.
W I T N E S S E T H:
WHEREAS, Parent, Merger Sub and the Company intend to effect a merger of Merger Sub with and
into the Company (the “Merger”), upon the terms and subject to the conditions set forth
herein, whereby each issued and outstanding share of common stock, $0.01 par value, of the Company
(“Company Common Stock”), not owned directly or indirectly by Parent or the Company, will
be converted into the right to receive shares of common stock, $0.01 par value, of Parent
(“Parent Common Stock”);
WHEREAS, the Board of Directors of the Company has (i) determined that this Agreement and the
Merger are advisable and fair to, and in the best interest of, the Company and the Company’s
stockholders, (ii) approved and adopted this Agreement, the Merger and the other transactions
contemplated by this Agreement and (iii) recommended that the Company’s stockholders adopt and
approve this Agreement, the Merger and the other transactions contemplated by this Agreement;
WHEREAS, the Board of Directors of Parent, based upon the recommendation of the Audit
Committee of the Board of Directors of Parent, has (i) determined that this Agreement and the
Merger are advisable and fair to, and in the best interest of, Parent and Parent’s stockholders,
(ii) approved and adopted this Agreement, the Merger and the other transactions contemplated by
this Agreement and (iii) recommended that Parent’s stockholders approve the issuance of Parent
Common Stock in the Merger;
WHEREAS, simultaneously with the execution and delivery of this Agreement and as an inducement
to the Company’s willingness to enter into this Agreement,
Misys plc, a public limited company
formed under the Laws of England and Wales (“
Manchester”), is entering into a voting
agreement with the Company, substantially in the form attached hereto as
Exhibit A (the
“
Voting Agreement”);
WHEREAS, simultaneously with the execution and delivery of this Agreement and as an inducement
to the Company’s willingness to enter into this Agreement, the directors of Parent set forth on
Schedule A are entering into voting undertakings in substantially the form attached hereto
as Exhibit B (the “Parent Voting Undertakings”);
WHEREAS, simultaneously with the execution and delivery of this Agreement and as an inducement
to Parent’s willingness to enter into this Agreement, the directors of the
-1-
Company set forth on Schedule B are entering into voting undertakings in substantially
the form attached hereto as Exhibit C (the “Company Voting Undertakings”);
WHEREAS, simultaneously with the execution and delivery of this Agreement, Parent and
Manchester are entering into a
Framework Agreement (as it may be amended from time to time, the
“
Framework Agreement”) pursuant to which Manchester and Parent agreed, among other things
and subject to certain conditions, to (i) a direct or indirect purchase by Parent of certain shares
of Parent Common Stock held indirectly by Manchester through one or more of its subsidiaries and
(ii) a secondary public offering by Manchester or one or more of its subsidiaries of certain
additional shares of Parent Common Stock (the transactions described in
clauses (i) and
(ii), the “
Coniston Transaction”); and
WHEREAS, this Agreement is intended to constitute a “plan of reorganization” with respect to
the Merger for United States federal income tax purposes pursuant to which the Merger is to be
treated as a “reorganization” under Section 368(a) of the Code (the “Intended Tax
Treatment”).
NOW, THEREFORE, in consideration of the premises, representations, warranties and agreements
herein contained, the parties agree as follows:
ARTICLE I
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 Delaware General Corporation Law (the “DGCL”),
Merger Sub shall be merged with and into the Company at the Effective Time. Following the Merger,
the separate corporate existence of Merger Sub shall cease and the Company shall continue as the
surviving corporation (the “Surviving Corporation”) as a wholly owned Subsidiary of Parent
and shall succeed to and assume all the rights and obligations of Merger Sub in accordance with the
DGCL. Notwithstanding anything to the contrary herein, at the election of Parent, which shall be
made in writing and delivered to the Company no fewer than five (5) Business Days prior to the
Closing Date, any direct wholly owned Subsidiary of Parent may be substituted for Merger Sub as a
constituent corporation in the Merger; provided, that such substituted corporation is a
Delaware corporation which is formed solely for the purpose of engaging in the transactions
contemplated by this Agreement; and provided further that such alternative
structure does not (a) impose any material delay on, or condition to, the consummation of the
Merger, (b) cause any condition set forth in Article VI to become incapable of being
satisfied (unless duly waived by the party entitled to the benefits thereof), or (c) adversely
affect the Intended Tax Treatment, any of the parties hereto or any of the parties’ stockholders.
Section 1.2 Effective Time. The Merger shall become effective when a certificate of
merger relating to the Merger (the “Certificate of Merger”), executed in accordance with
the relevant provisions of the DGCL, is filed with the Secretary of State of the State of Delaware;
provided, however, that, upon the mutual written consent of the Company and Merger Sub, the Certificate of Merger may
provide for a later date of effectiveness of the Merger not
-2-
more than 30 days after the date the
Certificate of Merger is filed. The filing of the Certificate of Merger shall be made as soon as
practicable on the Closing Date.
Section 1.3 Effects of the Merger. The Merger shall have the effects set forth in
this Agreement and in Section 259 of the DGCL.
Section 1.4 Charter and Bylaws; Directors and Officers. (a) At the Effective Time,
the certificate of incorporation of Merger Sub, as in effect immediately prior to the Effective
Time, shall be the certificate of incorporation of the Surviving Corporation until thereafter
changed or amended as provided therein or by applicable Law; provided that (i) paragraph 1
of the certificate of incorporation of the Surviving Corporation shall read as follows: “The name
of the corporation (which is hereinafter referred to as the “Corporation”) is Eclipsys
Corporation.” and (ii) appropriate amendments shall be made, as necessary, to comply with the
provisions of Section 5.10(a). At the Effective Time, the bylaws of Merger Sub, as in
effect immediately prior to the Effective Time, shall become the bylaws of the Surviving
Corporation, subject to appropriate revisions thereto, as necessary, to comply with the provisions
of Section 5.10(a), until thereafter changed or amended as provided therein or in the
certificate of incorporation of the Surviving Corporation.
(b) The directors and officers of Merger Sub at the Effective Time shall become, at the
Effective Time, the directors and officers of the Surviving Corporation, until the earlier of their
death, resignation or removal or until their respective successors are duly elected and qualified,
as the case may be.
Section 1.5 Conversion of Securities. At the Effective Time, by virtue of the Merger
and without any action on the part of Parent, Merger Sub, the Company or the holders of any
securities of Merger Sub or the Company:
(a) Each issued and outstanding share of common stock, $0.01 par value, of Merger Sub shall be
converted into one validly issued, fully paid and nonassessable share of common stock of the
Surviving Corporation.
(b) All shares of Company Common Stock that are held in the treasury of the Company or by any
wholly owned Subsidiary of the Company and any shares of Company Common Stock owned by Parent or
any wholly owned Subsidiary of Parent shall be canceled and no capital stock of Parent or other
consideration shall be delivered in exchange therefor.
(c) Subject to the provisions of Sections 1.8 and 1.10 hereof, each share of
Company Common Stock issued and outstanding immediately prior to the Effective Time (other than
shares to be canceled in accordance with Section 1.5(b)) shall be converted into the right
to receive 1.2 (such number being the “Exchange
Ratio”) validly issued, fully paid and nonassessable shares of Parent Common Stock (the “Per Share Merger Consideration”).
All such shares of Company Common Stock, when so converted, shall no longer be outstanding and
shall automatically be canceled and retired, and each holder of a certificate (or evidence of
shares in book-entry form) that immediately prior to the Effective Time represented any such shares
of Company Common Stock (each a “Certificate”) shall cease to have any rights with respect
thereto, except the right to receive, upon the surrender of such Certificate or the delivery of an
-3-
“agent’s message” (in the case of shares held in book-entry form) in accordance with Section
1.6, (i) any dividends and other distributions in accordance with Section 1.7, (ii) the
Per Share Merger Consideration into which such shares of Company Common Stock are converted and
(iii) any cash, without interest, in lieu of fractional shares of Parent Common Stock to be issued
or paid in consideration therefor.
Section 1.6 Parent to Make Certificates Available. (a) Prior to the Effective Time,
Parent shall appoint BNY Mellon (or such other commercial bank or trust company reasonably
acceptable to the Company) to act as exchange agent for the payment of the Per Share Merger
Consideration (the “Exchange Agent”). At or prior to the Effective Time, Parent shall
deposit with the Exchange Agent, for the benefit of the holders of Certificates, for exchange in
accordance with this Section 1.6 through the Exchange Agent, certificates representing the
shares of Parent Common Stock to be issued as the Per Share Merger Consideration pursuant to
Section 1.5(c) and cash, as required, to make payments in lieu of any fractional shares
pursuant to Section 1.8 (such cash and shares of Parent Common Stock, together with any
dividends or distributions with respect thereto, being hereinafter referred to as the “Exchange
Fund”). The Exchange Agent shall deliver out of the Exchange Fund (i) the Per Share Merger
Consideration contemplated to be issued and paid pursuant to Section 1.5(c) and (ii) the
cash, as required, to make payments in lieu of any fractional shares pursuant to Section
1.8.
(b) Parent shall instruct the Exchange Agent, as soon as reasonably practicable after the
Effective Time, to mail to each record holder of a Certificate or Certificates a letter of
transmittal (which shall (i) specify that delivery shall be effected, and risk of loss and title to
the Certificates shall pass, only upon actual delivery of the Certificates to the Exchange Agent,
(ii) contain instructions for use in effecting the surrender of such Certificates in exchange for
certificates representing shares of Parent Common Stock and cash in lieu of fractional shares and
(iii) be in such form and have such other provisions (including customary provisions with respect
to delivery of an “agent’s message” with respect to shares held in book-entry form) as Parent may
specify subject to the Company’s reasonable approval) (the “Transmittal Letter”)). Upon
(x) in the case of shares of Company Common Stock represented by a Certificate, the surrender of
such Certificate for cancellation to the Exchange Agent, or (y) in the case of shares of Company
Common Stock held in book-entry form, the receipt of an “agent’s message” by the Exchange Agent, in
each case together with the Transmittal Letter, duly executed in accordance with the instructions
thereto, the holder of such shares shall be entitled to receive in exchange therefor (i) a
certificate representing that number of whole shares of the Per Share Merger Consideration into
which the shares have been converted at the Effective Time pursuant to Section 1.5(c), (ii)
cash in lieu of any fractional share which the holder has a right to receive pursuant to
Section 1.8 and (iii) certain dividends and other distributions in accordance with
Section 1.7, and any Certificate so surrendered shall forthwith be canceled. If any
portion of the Per Share Merger Consideration is to be paid or registered in the name of a Person other than
the Person in whose name the applicable surrendered Certificate is registered, it shall be a
condition to such payment or registration that the surrendered Certificate be in proper form for
transfer and that the Person requesting such delivery of the Per Share Merger Consideration pay any
transfer or other similar Taxes required as a result of such payment or registration in the name of
a Person other than the registered holder of such Certificate or establish to the satisfaction of
the Exchange Agent that such Tax has been paid or is not payable. Until surrendered as contemplated
by this Section 1.6(b), each Certificate shall be deemed at any time after the
-4-
Effective Time to represent only the right to receive the Per Share Merger Consideration (and any amounts to
be paid pursuant to Sections 1.7 and 1.8) upon such surrender.
Section 1.7 Dividends; Transfer Taxes; Withholding. No dividends or other
distributions that are declared on or after the Effective Time on Parent Common Stock, or are
payable to the holders of record thereof on or after the Effective Time, will be paid to any Person
entitled by reason of the Merger to receive Parent Common Stock, until such Person surrenders the
related Certificate or Certificates (or shares of Company Common Stock held in book-entry form), as
provided in Section 1.6, and no cash payment in lieu of fractional shares will be paid to
any such Person pursuant to Section 1.8 until such Person shall so surrender the related
Certificate or Certificates (or shares of Company Common Stock held in book-entry form). Subject
to the effect of applicable Law, there shall be paid to each record holder of a new certificate
representing such Parent Common Stock: (i) at the time of such surrender or as promptly as
practicable thereafter, the amount of any dividends or other distributions theretofore paid with
respect to the shares of Parent Common Stock represented by such new certificate and having a
record date on or after the Effective Time and a payment date prior to such surrender; (ii) at the
appropriate payment date or as promptly as practicable thereafter, the amount of any dividends or
other distributions payable with respect to such shares of Parent Common Stock and having a record
date on or after the Effective Time but prior to such surrender and a payment date on or subsequent
to such surrender and (iii) at the time of such surrender or as promptly as practicable thereafter,
the amount of any cash payable with respect to a fractional share of Parent Common Stock to which
such holder is entitled pursuant to Section 1.8. In no event shall the Person entitled to
receive such dividends or other distributions or cash in lieu of fractional shares be entitled to
receive interest on such dividends or other distributions or cash in lieu of fractional shares.
Parent or the Exchange Agent shall be entitled to deduct and withhold from the consideration
otherwise payable pursuant to this Agreement to any Person such amounts as Parent or the Exchange
Agent is required to deduct and withhold with respect to the making of any such payment under the
Code or under any provision of state, local or foreign tax Law. To the extent that amounts are so
withheld by Parent or the Exchange Agent, such withheld amounts shall be treated for all purposes
of this Agreement as having been paid to the Person who otherwise would have received the payment
in respect of which such deduction and withholding was made by Parent or the Exchange Agent.
Section 1.8 No Fractional Securities. No certificates or scrip representing fractional
shares of Parent Common Stock shall be issued upon the surrender for exchange of Certificates
pursuant to this Article I; no Parent dividend or other distribution or stock split shall
relate to any fractional share; and no fractional share shall entitle the owner thereof to vote or to any other rights of a securityholder of Parent. In lieu of
any such fractional share, each holder of Company Common Stock who would otherwise have been
entitled to a fraction of a share of Parent Common Stock upon surrender of Certificates for
exchange pursuant to this Article I will be paid an amount in cash (without interest),
rounded down to the nearest cent, determined by multiplying (i) the last reported sale price per
share of Parent Common Stock on The Nasdaq Global Select Market (“Nasdaq”) on the last
complete trading day prior to the date of the Effective Time (or, if the shares of Parent Common
Stock do not trade on Nasdaq on such date, the first date of trading of shares of Parent Common
Stock on Nasdaq after the Effective Time) by (ii) the fractional interest of a share of Parent
Common Stock to which such holder would otherwise be entitled. The parties acknowledge that
payment of cash in lieu of fractional shares
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of Parent Common Stock is solely for the purpose of avoiding the expense and inconvenience to Parent of issuing fractional shares and does not
represent separately bargained-for consideration. As promptly as practicable after the
determination of the amount of cash, if any, to be paid to holders of fractional share interests,
the Exchange Agent shall so notify Parent, and Parent shall deposit such amount with the Exchange
Agent and shall cause the Exchange Agent to forward payments to such holders of fractional share
interests, without interest, subject to and in accordance with the terms of Section 1.7 and
this Section 1.8.
Section 1.9 Return of Exchange Fund. Any portion of the Exchange Fund which remains
undistributed to the former holders of Company Common Stock for six (6) months after the Effective
Time shall be delivered to Parent, upon demand of Parent, and any such former holder of Company
Common Stock who has not theretofore complied with this Article I shall thereafter look
only to Parent for payment of its claim for Per Share Merger Consideration, any cash in lieu of
fractional shares of Parent Common Stock and any dividends or distributions with respect to Parent
Common Stock to which such holder is entitled pursuant to this Article I. If any
Certificate shall not have been surrendered prior to five (5) years after the Effective Time (or
immediately prior to such earlier date on which any shares of Parent Common Stock or any dividends
or other distributions payable to the holder of such Certificate would otherwise escheat to or
become the property of any Governmental Entity), any such shares of Parent Common Stock, dividends
or other distributions in respect of such Certificate shall, to the extent permitted by applicable
Law, become the property of Parent, free and clear of all claims or interest of any Person
previously entitled thereto. Notwithstanding anything in this Agreement to the contrary, none of
the Company, Parent, Merger Sub, the Surviving Corporation, the Exchange Agent or any other Person
shall be liable to any former holder of shares of Company Common Stock for any shares of Parent
Common Stock, cash in lieu of fractional shares of Parent Common Stock or dividends and
distributions which are properly delivered to a public official pursuant to any applicable
abandoned property, escheat or similar Law.
Section 1.10
Adjustment of Per Share Merger Consideration. In the event of any
reclassification, recapitalization, combination, stock split, stock dividend or similar event with
respect to Parent Common Stock or Company Common Stock or any change or conversion of Parent Common
Stock or Company Common Stock into other securities (or if a record date with respect to any of the
foregoing should occur) prior to the Effective Time, appropriate and proportionate adjustments, if
any, shall be made to the Per Share Merger Consideration and the Exchange Ratio to provide to Parent and the holders of Company
Common Stock the same economic effect as contemplated by this Agreement prior to such event and all
references to the Per Share Merger Consideration and the Exchange Ratio shall be deemed to be to
the Per Share Merger Consideration and the Exchange Ratio as so adjusted. The parties understand
and agree that the transactions contemplated by the
Framework Agreement shall not require any
adjustment of the Per Share Merger Consideration and the Exchange Ratio under this
Section
1.10.
Section 1.11 No Further Ownership Rights in Company Common Stock. All shares of
Parent Common Stock issued upon the surrender for exchange of Certificates in accordance with the
terms hereof (including any cash paid pursuant to Section 1.8) shall be deemed to have been
issued and paid in full satisfaction of all rights pertaining to the shares of Company Common Stock
represented by such Certificates.
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Section 1.12 Closing of Company Transfer Books. At the Effective Time, the stock
transfer books of the Company shall be closed, and no transfer of shares of Company Common Stock
shall thereafter be made on the records of the Company. If, after the Effective Time, Certificates
are presented to the Surviving Corporation, the Exchange Agent or Parent, such Certificates shall
be canceled and exchanged as provided in this Article I.
Section 1.13 Lost Certificates. If any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificate to
be lost, stolen or destroyed and, if required by Parent or the Exchange Agent, the posting by such
Person of a bond, in such reasonable amount as Parent or the Exchange Agent may direct as indemnity
against any claim that may be made against Parent, the Surviving Corporation or the Exchange Agent
with respect to such Certificate, the Exchange Agent or Parent will issue and pay or cause to be
issued and paid in exchange for such lost, stolen or destroyed Certificate, the Per Share Merger
Consideration to which the holder thereof is entitled pursuant to Section 1.5(c), any cash
in lieu of fractional shares of Parent Common Stock to which the holder thereof is entitled
pursuant to Section 1.8, and any dividends or other distributions to which the holder
thereof is entitled pursuant to Section 1.7.
Section 1.14 Further Assurances. If at any time after the Effective Time the
Surviving Corporation shall consider or be advised that any deeds, bills of sale, assignments or
assurances or any other acts or things are necessary, desirable or proper (a) to vest, perfect or
confirm, of record or otherwise, in the Surviving Corporation its right, title or interest in, to
or under any of the rights, privileges, powers, franchises, properties or assets of either of the
Constituent Corporations, or (b) otherwise to carry out the purposes of this Agreement, the
Surviving Corporation and its proper officers and directors or their designees shall be authorized
to execute and deliver, in the name and on behalf of either of the Constituent Corporations, all
such deeds, bills of sale, assignments and assurances and to do, in the name and on behalf of
either Constituent Corporation, all such other acts and things as may be necessary, desirable or proper to vest, perfect or confirm the
Surviving Corporation’s right, title or interest in, to or under any of the rights, privileges,
powers, franchises, properties or assets of such Constituent Corporation and otherwise to carry out
the purposes of this Agreement.
Section 1.15 Closing; Closing Deliveries.
(a) The consummation of the transactions contemplated by this Agreement (the
“Closing”) and all actions specified in this Agreement to occur at the Closing shall take
place at the offices of Sidley Austin LLP, Xxx Xxxxx Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx, at 10:00
a.m., local time, no later than the second Business Day following the day on which the last of the
conditions set forth in Article VI (other than conditions which by their nature are to be
satisfied at the Closing but subject to the satisfaction of, or to the extent permitted by
applicable Law, waiver of, those conditions) shall have been fulfilled or waived (if permissible)
or at such other time and place as Parent and the Company shall agree (the “Closing Date”).
(b) Subject to fulfillment or waiver of the conditions set forth in Article VI, at the
Closing Parent shall deliver to the Company all of the following:
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(i) a certificate of good standing of Parent issued by the Secretary of State of the
State of Delaware and dated no more than 30 days prior to the Closing Date; and
(ii) a certificate of the Secretary or an Assistant Secretary of Parent, dated the
Closing Date, in form and substance reasonably satisfactory to the Company, as to (A) the
Certificate of Incorporation of Parent then in effect, (B) the bylaws of Parent then in
effect, (C) the effectiveness of the resolutions of the Board of Directors of Parent
authorizing the execution and performance of this Agreement and the transactions
contemplated herein, (D) the effectiveness of the resolutions of the stockholders of Parent
authorizing the Share Issuance, and (E) the incumbency and signatures of the officers of
Parent executing this Agreement and any other agreement or certificate executed by Parent in
connection with the Closing.
(c) Subject to fulfillment or waiver of the conditions set forth in Article VI, at the
Closing Merger Sub shall deliver to the Company all of the following:
(i) a certificate of good standing of Merger Sub issued by the Secretary of State of
the State of Delaware and dated no more than 30 days prior to the Closing Date; and
(ii) a certificate of the Secretary or an Assistant Secretary of Merger Sub, dated the
Closing Date, in form and substance reasonably satisfactory to the Company, as to (A) no
amendments to the Certificate of Incorporation of Merger Sub since a specified date, (B) the
bylaws of Merger Sub, (C) the effectiveness of the resolutions of the Board of Directors of
Merger Sub authorizing the execution and performance of this Agreement and the transactions
contemplated herein, (D) the effectiveness of the written consent of Parent in its capacity
as sole stockholder of Merger Sub approving and adopting this Agreement in accordance with Section 251 of the DGCL and (E) the incumbency and
signatures of the officers of Merger Sub executing this Agreement and any other agreement or
certificate executed by Merger Sub in connection with the Closing.
(d) Subject to fulfillment or waiver of the conditions set forth in Article VI, at the
Closing the Company shall deliver to Parent all of the following:
(i) a certificate of good standing of the Company issued by the Secretary of State of
the State of Delaware and dated no more than 30 days prior to the Closing Date; and
(ii) a certificate of the Secretary or an Assistant Secretary of the Company, dated the
Closing Date, in form and substance reasonably satisfactory to Parent, as to (A) no
amendments to the Third Amended and Restated Certificate of Incorporation of the Company
(the “Company Charter”) since the date of this Agreement, (B) the bylaws of the
Company (the “Company Bylaws”), (C) the effectiveness of the resolutions of the
Board of Directors of the Company authorizing the execution and performance of this
Agreement and the transactions contemplated herein, (D) the effectiveness of the resolutions
of the stockholders of the Company approving and adopting this Agreement in accordance with
Section 251 of the DGCL and (E) the incumbency and signatures of
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the officers of the Company
executing this Agreement and any other agreement or certificate executed by the Company in
connection with the Closing.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Except (i) as disclosed in the Parent SEC Documents filed or furnished with the SEC since July
29, 2009 but prior to the date of this Agreement (excluding any risk factor disclosures contained
under the heading “Risk Factors,” any disclosure of risks included in any “forward-looking
statements” disclaimer or any other statements that are similarly predictive or forward-looking in
nature); provided, however, that any disclosures in such Parent SEC Documents that
are the subject of this clause (i) shall be deemed to qualify a representation or warranty
only if the relevance of such disclosure to such representation or warranty is reasonably apparent
on the face of such disclosure; provided, further, that the disclosures in the
Parent SEC Documents shall not be deemed to qualify any representations or warranties made in
Section 2.2(a) (this clause (i) being referred to herein as the “Parent SEC
Disclosure”), or (ii) in the disclosure letter delivered by Parent to the Company immediately
prior to the execution of this Agreement (the “Parent Disclosure Letter”), which shall be
arranged in numbered and lettered sections corresponding to the numbered and lettered sections
contained in this Article II, and the disclosure of any item in any section or subsection
of the Parent Disclosure Letter shall be deemed to qualify other sections in this Article
II to the extent (and only to the extent) that it is reasonably apparent from the face of such
disclosure that such disclosure also qualifies or applies to such other sections, Parent and Merger
Sub jointly and severally represent and warrant to the Company as follows:
Section 2.1 Organization, Standing and Power. Each of Parent and Merger Sub is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has the requisite corporate power and
authority to carry on its business as now being conducted. Each Subsidiary of Parent is duly
organized, validly existing and in good standing under the Laws of the jurisdiction in which it is
organized and has the requisite corporate (in the case of a Subsidiary that is a corporation) or
other power and authority to carry on its business as now being conducted, except where the failure
to be so organized, existing or in good standing or to have such power or authority would not,
individually or in the aggregate, have a Parent Material Adverse Effect. Parent and each of its
Subsidiaries are duly qualified to do business, and are in good standing, in each jurisdiction
where the character of their properties owned or held under lease or the nature of their activities
makes such qualification or good standing necessary, except where the failure to be so qualified
and in good standing would not, individually or in the aggregate, have a Parent Material Adverse
Effect.
Section 2.2 Capital Structure.
(a) As of the date of this Agreement, the authorized capital stock of Parent consists of
199,000,000 shares of Parent Common Stock and 1,000,000 shares of Parent Preferred Stock. As of
the close of business on June 7, 2010, (i) 146,517,252 shares of Parent Common Stock were issued
and outstanding, all of which were validly issued, fully paid and nonassessable and free of
preemptive rights; (ii) no shares of Parent Common Stock were held in
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the treasury of Parent or by Subsidiaries of Parent; (iii) 3,114,419 shares of Parent Common Stock were reserved for issuance
pursuant to outstanding Parent Stock Options; (iv) 3,576,341 shares of Parent Common Stock were
reserved for issuance pursuant to outstanding Parent Stock Units; (v) no shares of Parent Preferred
Stock were issued and outstanding; (vi) no shares of Parent Preferred Stock were reserved and
available for issuance pursuant to any Parent Stock Plans; and (vii) a maximum of 194,655 shares of
Parent Common Stock are reserved for issuance under the Parent Stock Purchase Plan. Between June
7, 2010 and the date of this Agreement, except as set forth above in this
Section 2.2(a)
and except for the issuance of shares of Parent Common Stock pursuant to the Parent Stock Plans and
the Parent Stock Purchase Plan, no shares of capital stock or other voting securities of Parent
were issued, reserved for issuance or outstanding. All of the shares of Parent Common Stock
issuable upon conversion of Company Common Stock at the Effective Time in accordance with this
Agreement will be, when so issued, duly authorized, validly issued, fully paid and nonassessable
and free of preemptive rights. Except for awards granted under the Parent Stock Plans and the
Parent Stock Purchase Plan and for the Relationship Agreement, there are no outstanding options to
purchase or rights to otherwise acquire shares of Parent Common Stock. Each share of Parent Common
Stock which may be issued pursuant to the Parent Stock Plans and the Parent Stock Purchase Plan has
been duly authorized and, if and when issued pursuant to the terms thereof, will be validly issued,
fully paid and nonassessable and free of preemptive rights. As of the date of this Agreement,
except for (x) this Agreement and the Relationship Agreement, (y) as contemplated by the
Framework
Agreement and (z) as set forth above in this
Section 2.2(a), there are no outstanding
options, warrants, subscriptions, calls, rights, puts, convertible securities or other similar
Contracts to which Parent or any of its Subsidiaries is a party or by which any of them is bound
obligating Parent or any of its Subsidiaries to (A) issue, transfer, deliver, sell, redeem or otherwise acquire, or cause to be issued, transferred, delivered, sold, redeemed or otherwise
acquired, any additional shares of capital stock (or other voting securities or equity equivalents)
of Parent or any of its Subsidiaries, (B) grant, extend or enter into any such option, warrant,
subscription, call, right, put, convertible security or other similar Contract or (C) provide a
material amount of funds to, or make any material investment (in the form of a loan, capital
contribution or otherwise) in, any Subsidiary. Parent does not have any outstanding bonds,
debentures, notes or other obligations the holders of which have the right to vote (or convertible
into or exercisable for securities having the right to vote) with the stockholders of Parent on any
matter. Except for the Relationship Agreement, the Voting Agreement, the Parent Voting
Undertakings and as contemplated by the
Framework Agreement, there are no Contracts to which
Parent, its Subsidiaries or any of their respective officers or directors is a party concerning the
voting of any capital stock of Parent or any of its Subsidiaries.
(b) Each outstanding share of capital stock (or other voting security or equity equivalent, as
the case may be) of each Subsidiary of Parent is duly authorized, validly issued, fully paid and
nonassessable and, except for director or qualifying shares, each such share (or other voting
security or equity equivalent, as the case may be) is owned by Parent or another Subsidiary of
Parent, free and clear of all security interests, liens, claims, pledges, options, rights of first
refusal, limitations on voting rights, charges and other encumbrances of any nature whatsoever.
Exhibit 21.1 to Parent’s Annual Report on Form 10-K for the year ended May 31, 2009, as filed with
the Securities and Exchange Commission (the “SEC”), constituted a true, accurate and
correct statement in all material respects of all of the information required to be set forth
therein by the regulations of the SEC as of the date thereof.
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(c) Section 2.2(c) of the Parent Disclosure Letter sets forth a list as of the date of
this Agreement of all Subsidiaries and material Joint Ventures of Parent and the jurisdiction in
which such Subsidiary or material Joint Venture is organized. Section 2.2(c) of the Parent
Disclosure Letter also sets forth as of the date of this Agreement the nature and extent of the
ownership and voting interests held by Parent in each such material Joint Venture. As of the date
of this Agreement, Parent has no obligation to make any capital contributions, or otherwise provide
assets or cash, to any material Joint Venture.
Section 2.3
Authority. On or prior to the date of this Agreement, (a) the Boards of
Directors of each of Parent and Merger Sub have (i) determined that this Agreement and the
transactions contemplated hereby, including the Merger, are advisable and fair to and in the best
interest of Parent and Merger Sub, respectively, and their respective stockholders, and (ii)
approved this Agreement and the transactions contemplated hereby, including the Merger, each in
accordance with the DGCL; (b) Parent, as sole stockholder of Merger Sub, has approved this
Agreement and the consummation of the transactions contemplated hereby, including the Merger, each
in accordance with the DGCL; and (c) the Board of Directors of Parent has resolved to recommend the
approval by Parent’s stockholders of the issuance by Parent of the Per Share Merger Consideration
(the “
Share Issuance”) in connection with the Merger (the “
Parent Recommendation”).
Each of Parent and Merger Sub has all requisite corporate power and authority to enter into this
Agreement and, subject to the approval by the stockholders of Parent of the Share Issuance and of
the transactions contemplated by the
Framework Agreement, 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, including the Merger, have been duly authorized by all necessary corporate
action on the part of Parent and Merger Sub, subject to (x) approval by the stockholders of Parent
of the Share Issuance and of the transactions contemplated by the
Framework Agreement and (y) the
filing of the Certificate of Merger as required by the DGCL. This Agreement has been duly executed
and delivered by Parent and Merger Sub and (assuming the valid authorization, execution and
delivery of this Agreement by the Company and the validity and binding effect of this Agreement on
the Company) except to the extent enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar Laws affecting the enforcement of creditors’
rights generally and by the effect of general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at Law), this Agreement constitutes the
valid and binding obligation of Parent and Merger Sub enforceable against each of them in
accordance with its terms. The filing of the Joint Proxy Statement with the SEC, the Share
Issuance and the filing of a registration statement on Form S-4 with the SEC by Parent under the
Securities Act of 1933, as amended (together with the rules and regulations promulgated thereunder,
the “
Securities Act”), for the purpose of registering the shares of Parent Common Stock to
be issued as the Per Share Merger Consideration in the Merger (together with any amendments or
supplements thereto, whether prior to or after the effective date thereof, the “
Registration
Statement”) have been duly authorized by Parent’s Board of Directors. Parent has delivered or
made available to the Company prior to the date of this Agreement true, complete and correct copies
of the Second Amended and Restated Certificate of Incorporation of Parent in effect as of the date
of this Agreement (the “
Parent Charter”), the Amended and Restated Bylaws of Parent in
effect as of the date of this Agreement (the “
Parent Bylaws”), and the certificate of
incorporation and bylaws
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(or comparable organizational documents) of each of its Subsidiaries,
including Merger Sub, each as in effect as of the date of this Agreement.
Section 2.4 Consents and Approvals; No Violation. Assuming that all consents,
approvals, authorizations and other actions described in this Section 2.4 have been
obtained and all filings and obligations described in this Section 2.4 have been made, the
execution and delivery of this Agreement does not, and the consummation of the transactions
contemplated hereby and compliance with the provisions hereof will not, result in any violation of,
or default (with or without notice or lapse of time, or both) under, or give to others a right of
termination, cancellation or acceleration of any obligation or the loss of a material benefit
under, or result in the creation of any Encumbrance upon any of the properties or assets of Parent
or any of its Subsidiaries under, any provision of (i) the Parent Charter or the Parent Bylaws;
(ii) the comparable charter or organizational documents of any of Parent’s Subsidiaries; (iii) any
Parent Contract; or (iv) any Order or Law applicable to Parent or any of its Subsidiaries or any of
their respective properties or assets, other than, in the case of clauses (iii) or
(iv), any such violations, defaults, rights or Encumbrances that would not, individually or
in the aggregate, have a Parent Material Adverse Effect or materially impair the ability of Parent
or Merger Sub to perform their respective obligations hereunder or prevent the consummation of any
of the transactions contemplated hereby by Parent or Merger Sub. No filing or registration with,
or authorization, consent or approval of, any domestic (federal and state), foreign or
supranational court, commission, governmental body, regulatory agency, authority or tribunal (a “Governmental Entity”) 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 Merger Sub or is necessary for the consummation by Parent or Merger Sub of
the Merger and the other transactions contemplated by this Agreement, except for (i) in connection,
or in compliance, with the provisions of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended (together with the rules and regulations promulgated thereunder, the “HSR Act”),
the Securities Act and the Securities Exchange Act of 1934, as amended (together with the rules and
regulations promulgated thereunder, the “Exchange Act”); (ii) the filing of the amendment
and restatement of the Parent Charter as contemplated by the Framework Agreement with the Secretary
of State of the State of Delaware and the filing of the Certificate of Merger with the Secretary of
State of the State of Delaware and appropriate documents with the relevant authorities of other
states in which the Company or any of its Subsidiaries is qualified to do business; (iii) such
filings, authorizations, orders and approvals as may be required by applicable Takeover Laws (the
“State Takeover Approvals”); (iv) applicable requirements, if any, of state securities or
“blue sky” laws (“Blue Sky Laws”) and Nasdaq; (v) applicable requirements, if any, under
foreign or supranational laws relating to antitrust and to competition clearances; and (vi) such
other consents, orders, authorizations, registrations, declarations and filings the failure of
which to be obtained or made would not, individually or in the aggregate, have a Parent Material
Adverse Effect or materially impair the ability of Parent or Merger Sub to perform its obligations
hereunder or prevent the consummation of any of the transactions contemplated hereby.
Section 2.5 SEC Documents and Other Reports; Internal Controls and Procedures.
(a) Parent has timely filed with the SEC all documents required to be filed by it since
January 1, 2008 under the Securities Act or the Exchange Act (the “Parent SEC
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Documents”). As of their respective filing dates, or, if amended, as of the date of the last amendment prior to
the date of this Agreement, the Parent SEC Documents complied in all material respects with the
requirements of the Securities Act or the Exchange Act, as the case may be, and, at the respective
times they were filed, none of the Parent SEC Documents 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. The consolidated financial statements (including, in each case, any notes thereto) of
Parent included in the Parent SEC Documents complied as to form in all material respects with
applicable accounting requirements and the published rules and regulations of the SEC with respect
thereto, were prepared in accordance with generally accepted accounting principles (“GAAP”)
(except, in the case of the unaudited statements, as permitted by Form 10-Q of the SEC) applied on
a consistent basis during the periods involved (except as may be indicated therein or in the notes
thereto) and fairly presented in all material respects the consolidated financial position of
Parent and its consolidated subsidiaries as at the respective dates thereof and the consolidated
results of their operations and their consolidated cash flows for the periods then ended (subject,
in the case of unaudited statements, to normal year-end audit adjustments and to any other
adjustments described therein). Except as required by GAAP, Parent has not, between May 31, 2009
and the date of this Agreement, made or adopted any material change in its accounting methods,
practices or policies in effect on May 31, 2009.
(b) Parent is in compliance in all material respects with (i) the applicable provisions of the
Xxxxxxxx-Xxxxx Act of 2002 and the related rules and regulations promulgated thereunder or under
the Exchange Act (the “Xxxxxxxx-Xxxxx Act”) and (ii) the applicable listing and corporate
governance rules and regulations of Nasdaq.
(c) Parent has made available to the Company true and complete copies of all written comment
letters from the staff of the SEC received since January 1, 2008 through the date of this Agreement
relating to the Parent SEC Documents and all written responses of Parent thereto through the date
of this Agreement other than with respect to requests for confidential treatment. As of the date
of this Agreement, there are no outstanding or unresolved comments in comment letters received from
the SEC staff with respect to any Parent SEC Documents and, to the Knowledge of Parent, none of the
Parent SEC Documents (other than confidential treatment requests) is the subject of ongoing SEC
review. To the Knowledge of Parent, as of the date of this Agreement, there are no SEC inquiries
or investigations, other governmental inquiries or investigations or internal investigations
pending or threatened, in each case regarding any accounting practices of Parent.
(d) Parent has established and maintains disclosure controls and procedures and internal
control over financial reporting (as such terms are defined in paragraphs (e) and (f),
respectively, of Rule 13a-15 and paragraph (e) of Rule 15d-15 under the Exchange Act) as required
by Rules 13a-15 and 15d-15 under the Exchange Act. Parent’s disclosure controls and procedures are
designed to ensure that all information (both financial and non-financial) required to be disclosed
by Parent in the reports that it files or furnishes under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the rules and forms of the SEC, and
that all such information is accumulated and communicated to Parent’s management as appropriate to
allow timely decisions regarding required disclosure and to make the certifications required
pursuant to Sections 302 and 906 of the Xxxxxxxx-Xxxxx Act. Parent’s
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management has completed an assessment of the effectiveness of Parent’s disclosure controls and procedures and, to the extent
required by applicable Law, presented in any applicable Parent SEC Document that is a report on
Form 10-K or Form 10-Q, or any amendment thereto, its conclusions about the effectiveness of the
disclosure controls and procedures as of the end of the period covered by such report or amendment
based on such evaluation. Based on Parent’s management’s most recently completed evaluation of
Parent’s internal control over financial reporting prior to the date of this Agreement, (i) to the
Knowledge of Parent, Parent had no significant deficiencies or material weaknesses in the design or
operation of its internal control over financial reporting that would reasonably be expected to
adversely affect Parent’s ability to record, process, summarize and report financial information
and (ii) Parent does not have knowledge of any fraud, whether or not material, that involves
management or other employees who have a significant role in Parent’s internal control over
financial reporting.
Section 2.6 Registration Statement and Joint Proxy Statement. None of the information
to be supplied by Parent or Merger Sub for inclusion or incorporation by reference in the
Registration Statement or the proxy statement/prospectus included therein relating to the
Stockholder Meetings (together with any amendments or supplements thereto, the “Joint Proxy
Statement”) will (a) in the case of the Registration Statement, at the time it becomes
effective, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make
the statements therein not misleading or (b) in the case of the Joint Proxy Statement, at the time
of the mailing of the Joint Proxy Statement and at the time of each of the Stockholder Meetings,
contain any untrue statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of the circumstances
under which they are made, not misleading. The Registration Statement will comply (with respect to
Parent) as to form in all material respects with the provisions of the Securities Act, and the
Joint Proxy Statement will comply (with respect to Parent) as to form in all material respects with
the provisions of the Exchange Act.
Section 2.7 No Undisclosed Liabilities. Except as reflected or reserved against in
the balance sheet of Parent dated February 28, 2010 included in the Form 10-Q filed by Parent with
the SEC on April 8, 2010 (or described in the notes thereto), neither Parent nor any of its
Subsidiaries has any Liabilities, except (a) Liabilities which, individually or in the aggregate,
would not reasonably be expected to have a Parent Material Adverse Effect, (b) Liabilities incurred
in connection with this Agreement, the Framework Agreement or the transactions contemplated hereby
or thereby, (c) Liabilities incurred in the ordinary course of business consistent with past
practices since February 28, 2010, and (d) Liabilities that are specifically addressed by any other
representation or warranty contained in this Article II.
Section 2.8 Absence of Certain Changes or Events.
(a) Since February 28, 2010 through the date of this Agreement, (i) Parent and its
Subsidiaries have not incurred any liability or obligation (indirect, direct or contingent) or,
entered into any Contract or transaction, in each case, that is not in the ordinary course of
business or that would, individually or in the aggregate, have a Parent Material Adverse
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Effect; (ii) Parent and its Subsidiaries have not sustained any loss or interference with their respective
businesses or properties from fire, flood, windstorm, accident or other calamity (whether or not
covered by insurance) that has, individually or in the aggregate, had a Parent Material Adverse
Effect; (iii) there has not been any split, combination or reclassification of any of Parent’s
capital stock or any issuance or the authorization of any issuance of any other securities in
respect of, in lieu of or in substitution for shares of Parent’s capital stock or dividend or
distribution of any kind declared, set aside, paid or made by Parent on any class of its stock;
(iv) neither Parent nor any of its Subsidiaries has (x) granted any increase in compensation to any
employee of Parent or any of its Subsidiaries whose base salary prior to such increase exceeded
$250,000, except for any such base salary increases made in the ordinary course of business
consistent with prior practice or as was required under such employee’s Parent Employee Agreement
in effect as of the date of such increase, (y) granted to any employee of Parent or any of its
Subsidiaries whose base salary exceeds $250,000 as of the date hereof (1) any right of severance or
change in control benefits or (2) any increase in such benefits to any employee who had a
contractual right to such benefits as of the date of the most recent audited financial statements
included in the Parent SEC Documents, or (z) entered into any Parent Employee Agreement with any
individual whose annual compensation for 2010 is expected to exceed $250,000; and (v) there has been no Parent
Material Adverse Effect.
(b) Section 2.8(b) of the Parent Disclosure Letter sets forth a list for the twelve
months ended February 28, 2010 of the top twenty (20) revenue producing customers (as determined in
accordance with GAAP) of Parent and its Subsidiaries (collectively, the “Key Parent
Customers”). Since March 1, 2009 and through the date hereof, (i) no Key Parent Customer has
terminated or cancelled its business relationship (in whole or in substantial part) with Parent or
any of its Subsidiaries, and (ii) to the Knowledge of Parent, no Key Parent Customer has threatened
in writing to terminate or cancel its business relationship (in whole or in substantial part) with
Parent or any of its Subsidiaries, which threat to terminate or cancel has not been resolved as of
or prior to the date of this Agreement.
Section 2.9 Permits and Compliance. Each of Parent and its Subsidiaries is in
possession of all franchises, grants, authorizations, licenses, permits, charters, easements,
variances, exceptions, consents, certificates, approvals and orders of any Governmental Entity
necessary for Parent or any of its Subsidiaries to own, lease and operate its properties or to
carry on its business as it is now being conducted (collectively, the “Parent Permits”),
except where the failure to have any of the Parent Permits would not, individually or in the
aggregate, have a Parent Material Adverse Effect, and, as of the date of this Agreement, no
suspension or cancellation of any of the Parent Permits is pending or, to the Knowledge of Parent,
threatened, except where the suspension or cancellation of any of the Parent Permits would not,
individually or in the aggregate, have a Parent Material Adverse Effect. Neither Parent nor any of
its Subsidiaries is in violation of its charter, bylaws or other organizational documents. As of
the date of this Agreement, neither Parent nor any of its Subsidiaries is in material violation of
any applicable Law (including Laws relating to HIPAA and other applicable federal and state privacy
and data protection Laws) or any Order and no notice of any such violation or non-compliance has
been received by Parent or any of its Subsidiaries.
Section 2.10 Tax Matters. (a) Parent and each of its Subsidiaries have filed all
federal, and all material state, local and foreign, Tax Returns required to have been filed or
appropriate extensions therefor have been properly obtained, and such Tax Returns are correct and
complete, except to the extent that any failure to so file or any failure to be correct and
complete would not, individually or in the aggregate, have a Parent Material Adverse Effect; (b)
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all Taxes shown to be due on such Tax Returns have been timely paid or extensions for payment have
been properly obtained, except to the extent that any failure to so pay or so obtain such an
extension would not, individually or in the aggregate, have a Parent Material Adverse Effect; (c)
Parent and each of its Subsidiaries have complied with all rules and regulations relating to the
withholding of Taxes except to the extent that any noncompliance with such rules or regulations
would not, individually or in the aggregate, have a Parent Material Adverse Effect; (d) any Tax
Returns referred to in clause (a) relating to federal income Taxes and material state,
local, and foreign income Taxes have been examined by the Internal Revenue Service (the
“IRS”) or other relevant authority or the period for assessment of the Taxes in respect of
which such Tax Returns were required to be filed has expired; (e) no material issues that have been raised in writing by
the relevant taxing authority in connection with the examination of the Tax Returns referred to in
clause (a) are currently pending; (f) no material deficiencies asserted or assessments made
in writing as a result of any examination of such Tax Returns by any taxing authority are currently
pending; (g) during the past three years, neither Parent nor any of its Subsidiaries has been a
distributing or controlled corporation in a transaction intended to qualify for tax-free treatment
under Section 355 of the Code; (h) during the last five years, neither Parent nor any of its
Subsidiaries has been a party to any so-called “listed transaction” (as defined in Treasury
Regulations § 1.6011-4(b)(2)) which, as a result, Parent or any of its Subsidiaries was required to
disclose to the IRS; (i) Parent has not waived in writing any statute of limitations in respect of
any material Taxes; (j) there are no material liens for Taxes upon the assets of Parent or any of
its Subsidiaries, except liens relating to current Taxes not yet due; and (k) none of Parent or any
of its Subsidiaries has been in the past ten (10) years a member of any group of corporations
filing Tax Returns on a consolidated, unitary or similar basis other than each such group of which
it is currently a member.
Section 2.11 Actions and Proceedings. Except as would not, individually or in the
aggregate, reasonably be expected to have a Parent Material Adverse Effect: (a) there is no
investigation or review pending or, to the Knowledge of Parent, threatened, by any Governmental
Entity with respect to Parent or any of its Subsidiaries; (b) there are no Actions pending or, to
the Knowledge of Parent, threatened, against or affecting Parent or any of its Subsidiaries, or any
of their respective properties at Law or in equity; and (c) there are no Orders with respect to
Parent or any its Subsidiaries or any of their respective properties.
Section 2.12 Certain Agreements.
(a) Neither Parent nor any of its Subsidiaries is a party to or bound by (i) any Contract
which is a “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K under
the Exchange Act), excluding those compensatory plans described in Item 601(b)(10)(iii); (ii) any
Contract (A) with any of the top one hundred (100) revenue producing customers of Parent and its
Subsidiaries for the twelve (12) months ended February 28, 2010 (as determined in accordance with
GAAP) (a “Parent Top 100 Customer”) which contains most favored nation pricing or
provisions restricting the solicitation of the employees of such customer, or (B) which purports to
materially limit or restrict the manner or localities in which Parent or any of its Affiliates
(including the Company or any of its Subsidiaries following the Merger) may conduct business,
including by virtue of exclusivity or non-solicitation provisions; (iii) any Contract which
requires any payment by Parent or its Subsidiaries in excess of $2,000,000 in any year and which is
not terminable within one year without penalty, or which
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requires any payment to Parent or its
Subsidiaries (excluding Contracts with customers) in excess of $2,000,000 in any year and which is
not terminable within one year without penalty; (iv) any Contract relating to or guarantying
indebtedness for borrowed money to the extent the aggregate principal amount outstanding thereunder
exceeds $5,000,000; (v) any Contract with a Key Parent Customer; (vi) any sales, distribution,
agency, commission-based or other similar agreement with third parties (A) providing for the sale by Parent or any of its Subsidiaries
of such Person’s products or services or (B) providing for the sale by Third Parties of products of
Parent or its Subsidiaries, in each case involving annual payments in the 2009 fiscal year or
reasonably expected during the 2010 fiscal year to or by Parent or any of its Subsidiaries in
excess of $2,000,000 in the aggregate; (vii) since January 1, 2007, any Contract relating to the
acquisition or disposition of any business (whether by merger, sale of stock, sale of assets,
indemnity insurance or otherwise) which involves an asset value in excess of $5,000,000 or a
purchase price in excess of $5,000,000; (viii) any Contract of indemnification or any guaranty by
Parent or any of its Subsidiaries other than any Contract entered into in connection with the sale
or license by Parent or any of its Subsidiaries of products or services in the ordinary course of
business; (ix) any Contract to provide source code to any Third Party, other than source code
escrow agreements entered into with customers in the ordinary course of the Company’s business, for
any product or technology that is material to Parent and its Subsidiaries, taken as a whole; (x)
any material Contract, other than standard end-user or distributor license and sale Contracts and
related maintenance and support Contracts entered into in the ordinary course of business, to
license any Third Party to use, manufacture or reproduce any Parent product, service or
Intellectual Property Right or any material Contract to sell, distribute or market any Parent
product, service or Intellectual Property Right; (xi) any Contract with respect to the settlement
of any Action, which adversely affects in any material respect the conduct of Parent’s or any of
its Subsidiaries’ business; (xii) any Contract (other than any Contract with a customer of Parent
or any of its Subsidiaries that is not a Parent Top 100 Customer) with a federal Governmental
Entity or any Contract that constitutes a subcontract executed with a prime contractor pursuant to
any Contract with a federal Governmental Entity and that incorporates Federal Acquisition
Regulation clauses as a term or condition of such Contract; or (xiii) any other Contract that is
material to the business, assets, liabilities, financial condition or results of operations of
Parent and its Subsidiaries, taken as a whole. Parent has previously made available to the
Company true, complete and correct copies of each Contract of the type described in this
Section 2.12(a) that was entered into prior to the date hereof. All Contracts of the type
described in this Section 2.12(a) and the first sentence of Section 2.16(f) shall
be referred to as “Parent Contracts” regardless of whether they were entered into before or
after the date hereof. All of the Parent Contracts are valid and in full force and effect (except
those which are cancelled, rescinded or terminated after the date hereof in accordance with their
terms), except where the failure to be in full force and effect would not, individually or in the
aggregate, have a Parent Material Adverse Effect. To the Knowledge of Parent, no Person is
challenging the validity or enforceability of any Parent Contract, except such challenges which
would not, individually or in the aggregate, have a Parent Material Adverse
Effect. Neither Parent
nor any of its Subsidiaries and, to the Knowledge of Parent, none of the other parties thereto, is
in breach of any provision of, or committed or failed to perform any act which (with or without
notice or lapse of time or both) would constitute a default under the provisions of, any Parent
Contract, except for those violations and defaults which would not, individually or in the
aggregate, have a Parent Material Adverse Effect.
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(b) Neither Parent nor any of its Subsidiaries is a party to any Contract or written or
oral plan, including any stock option plan, stock appreciation rights plan, restricted stock plan
or stock purchase plan, any of the benefits of which will be increased, or the vesting of the
benefits of which will be accelerated, by the occurrence of any of the transactions contemplated by
this Agreement or the Framework Agreement (either alone or in connection with any other event) or
the value of any of the benefits of which will be calculated on the basis of any of the
transactions contemplated by this Agreement or the Framework Agreement.
Section 2.13 Employee Benefits.
(a) Each Parent Plan is listed in Section 2.13(a) of the Parent Disclosure Letter.
With respect to each Parent Plan, Parent has delivered or made available to the Company a true and
correct copy of (i) the three (3) most recent annual reports (Form 5500) filed with the IRS; (ii)
each such Parent Plan that has been reduced to writing and all amendments thereto; (iii) each
trust, insurance or administrative Contract relating to each such Parent Plan; (iv) the most recent
summary plan description or, if no summary plan description exists, such other written explanation
of each Parent Plan as provided to participants; (v) a written summary of each material unwritten
Parent Plan; (vi) the most recent determination letter, if any, issued by the IRS with respect to
any Parent Plan intended to be qualified under Section 401(a) of the Code; and (vii) all
correspondence with the IRS, the Department of Labor, the SEC or Pension Benefit Guaranty
Corporation relating to any outstanding Parent Plan controversy or audit. Each Parent Plan
complies in all material respects with its terms, the Employee Income Retirement Security Act of
1974, as amended (“ERISA”), the Code and all other applicable Laws. None of Parent, any of
its Subsidiaries or any of their respective ERISA Affiliates currently maintains, contributes to or
has any liability under or, at any time during the past six (6) years has maintained or contributed
to, any pension plan which is subject to Section 412 of the Code or Section 302 of ERISA or Title
IV of ERISA. None of Parent, any of its Subsidiaries or any of their respective ERISA Affiliates
currently maintains, contributes to or has any liability under or, at any time during the past six
(6) years has maintained or contributed to, any multiemployer plan (as defined in Section
4001(a)(3) of ERISA).
(b) With respect to the Parent Plans, no event or set of circumstances has occurred and there
exists no condition or set of circumstances in connection with which Parent, any of its
Subsidiaries or any of their respective ERISA Affiliates or any Parent Plan fiduciary could be
subject to any liability under the terms of such Parent Plans, ERISA, the Code or any other
applicable Law, which would, individually or in the aggregate, have a Parent Material Adverse
Effect, other than liabilities for benefits payable in the normal course. There is no pending or,
to the Knowledge of Parent, threatened Action relating to any Parent Plan (other than routine
claims for benefits). All Parent Plans that are intended by their terms to be, or are otherwise
treated by Parent as, qualified under Section 401(a) of the Code have been determined by the IRS to
be so qualified, or a timely application for such determination is now pending. Neither Parent nor
any of its Subsidiaries has any liability or obligation under any plan or Contract to provide
welfare benefits after termination of employment to any employee or dependent other than as
required by Section 4980B of the Code or during any severance period. None of Parent, any of its
Subsidiaries or any of their respective ERISA Affiliates has any liability for a failure to comply
with Section 4980B of the Code or Part 6 of Subtitle B of Title I of ERISA which would,
individually or in the aggregate, have a Parent Material Adverse Effect.
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(c) Section 2.13(c) of the Parent Disclosure Letter contains a complete and correct
list, and Parent has heretofore provided or made available to the Company a complete and correct
copy, of each Parent Employee Agreement.
(d) No individual is entitled to any payment or benefit that could result, separately or in
the aggregate, in the payment of (i) any “excess parachute payments” within the meaning of Section
280G of the Code, (ii) any amount that would be nondeductible under Section 162(m) of the Code or
(iii) any amount that would be subject to taxation under Section 409A(a)(1) of the Code. No
individual is entitled to any additional payment from Parent or any of its Subsidiaries on account
of any taxes incurred under Section 4999 or 409A of the Code.
(e) With respect to each Parent Plan not subject to United States law (a “Parent Foreign
Benefit Plan”), (i) the fair market value of the assets of each funded Parent Foreign Benefit
Plan, the liability of each insurer for any Parent Foreign Benefit Plan funded through insurance,
or the reserve shown on the consolidated financial statements of the Parent included in the Parent
SEC Documents for any unfunded Parent Foreign Benefit Plan, together with any accrued
contributions, is sufficient to procure or provide for the projected benefit obligations, as of the
Effective Time, with respect to all current and former participants in such plan based on
reasonable, country-specific actuarial assumptions and valuations, and no transaction contemplated
by this Agreement or the Framework Agreement shall cause such assets or insurance obligations or
book reserve to be less than such projected benefit obligations and (ii) if such Parent Foreign
Benefit Plan is required to be registered, it has been registered and has been maintained in good
standing with the appropriate regulatory authorities.
(f) Parent, with respect to employees outside of the United States, (i) is not under any legal
liability to pay pensions, gratuities, superannuation allowances or the like to any past or present
directors, officers, employees or dependents of employees; (ii) has not made ex-gratia or voluntary
payments by way of superannuation allowance or pension; and/or (iii) does not maintain and has not
contemplated any pension schemes or arrangements for payment of the pensions or death benefits or
similar arrangements.
Section 2.14 Compliance with Worker Safety and Environmental Laws. The properties,
assets and operations of Parent and its Subsidiaries are in compliance with all applicable federal,
state, local and foreign Laws relating to public and worker health and safety (collectively,
“Worker Safety Laws”) and (c) the protection and clean-up of the environment and activities
or conditions related thereto, including those relating to the generation, handling, disposal,
transportation or release of hazardous materials (collectively, “Environmental Laws”),
except, in each case, for any violations that would not, individually or in the aggregate, have a
Parent Material Adverse Effect. With respect to such properties, assets and operations, including
any previously owned, leased or operated properties, assets or operations, there are no events,
conditions, circumstances, activities, practices, incidents, actions or plans of Parent or any of
its Subsidiaries that may interfere with or prevent compliance or continued compliance with
applicable Worker Safety Laws and Environmental Laws, other than any such interference or
prevention as would not, individually or in the aggregate, have a Parent Material Adverse Effect.
Section 2.15 Labor Matters. As of the date of this Agreement, neither Parent nor any
of its Subsidiaries is a party to any collective bargaining Contract or any labor Contract.
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Neither Parent nor any of its Subsidiaries has engaged in any material unfair labor practice
or material violation of state or local labor wage and hour or employment Laws with respect to any
Persons employed by or otherwise performing services primarily for Parent or any of its
Subsidiaries (the “Parent Business Personnel”), and there is no unfair labor practice
complaint or grievance against Parent or any of its Subsidiaries by the National Labor Relations
Board or any comparable state agency pending or threatened in writing with respect to the Parent
Business Personnel, except where such unfair labor practice, complaint or grievance would not,
individually or in the aggregate, have a Parent Material Adverse Effect. There is no labor strike,
dispute, slowdown or stoppage pending or, to the Knowledge of Parent, threatened against or
affecting Parent or any of its Subsidiaries which may interfere with the respective business
activities of Parent or any of its Subsidiaries, except where such dispute, strike or work stoppage
would not, individually or in the aggregate, have a Parent Material Adverse Effect.
Section 2.16 Intellectual Property.
(a) Parent and its Subsidiaries own or have a valid right to use all patents, trademarks,
trade names, service marks, domain names, copyrights and any applications and registrations for any
of the foregoing, trade secrets, know-how, technology, computer software and other tangible and
intangible proprietary information and intellectual property rights (collectively,
“Intellectual Property Rights”) as are necessary to conduct the business of Parent and its
Subsidiaries as currently conducted or planned to be conducted by Parent and its Subsidiaries,
taken as a whole, except where the failure to have such Intellectual Property Rights would not,
individually or in the aggregate, have a Parent Material Adverse Effect. To the Knowledge of
Parent, neither Parent nor any of its Subsidiaries infringes, misappropriates or violates in any
material respect any Intellectual Property Rights of any third party, except where such
infringement, misappropriation or violation would not, individually or in the aggregate, have a
Parent Material Adverse Effect. To the Knowledge of Parent, no third party infringes,
misappropriates or violates any Intellectual Property Rights owned or exclusively licensed by or to
Parent or any of its Subsidiaries, except where such infringement, misappropriation or violation
would not, individually or in the aggregate, have a Parent Material Adverse Effect.
(b) Section 2.16(b) of the Parent Disclosure Letter contains a list as of the date
hereof of (i) all material registered United States, state and foreign trademarks, service marks,
logos, trade dress and trade names and pending applications to register the foregoing; (ii) all
United States and material foreign patents and patent applications; and (iii) all material
registered United States and foreign copyrights and pending applications to register the same, in
each case owned by Parent and its Subsidiaries.
(c) As of the date of this Agreement, there are no actions, suits or claims or administrative
proceedings or investigations pending or, to the Knowledge of Parent, threatened that challenge or
question the validity, enforceability or ownership of the Intellectual Property Rights of Parent or
any of its Subsidiaries.
(d) Parent and its Subsidiaries have taken reasonable steps to protect the confidentiality of
confidential information that is owned, used or held by Parent and its Subsidiaries in the conduct
of the business. To the Knowledge of Parent, confidential information owned by Parent or any of
its Subsidiaries has not been used by or disclosed to any
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third party except pursuant to valid and appropriate non-disclosure or confidentiality
agreements which have not been breached. Subject to Section 2.16(a) and the Parent
Material Adverse Effect qualification contained therein, Parent and its Subsidiaries are free to
make, use, modify, copy, distribute, sell, license, import, export and otherwise exploit all
Intellectual Property Rights owned by them (“Parent Owned Intellectual Property Rights”) on
an exclusive basis except for nonexclusive: (i) use pursuant to end-user licenses granted to
customers; (ii) distribution rights granted to resellers or distributors in the ordinary course of
business; or (iii) nondisclosure or confidentiality agreements pursuant to which any Person has
been granted access to Parent Owned Intellectual Property Rights without any right to exploit such
Parent Owned Intellectual Property Rights, except where the failure to make, use, modify, copy,
distribute, sell, license, import, export and otherwise exploit such Parent Owned Intellectual
Property Rights would not, individually or in the aggregate, have a Parent Material Adverse Effect.
(e) All personnel, including employees, agents, consultants and contractors, who have
contributed to or participated in the conception or development, or both, of the Parent Owned
Intellectual Property Rights (i) have been and are a party to “work-for-hire” arrangements with
Parent or one of its Subsidiaries or (ii) have assigned to Parent or one of its Subsidiaries all
ownership of all tangible and intangible property arising in connection with the conception or
development of such Parent Owned Intellectual Property Rights.
(f) Section 2.16(f) of the Parent Disclosure Letter contains a list of (i) each item
of Third Party computer software that is (A) licensed to and actively marketed by Parent or any of
its Subsidiaries and (B) material to Parent and it Subsidiaries taken as a whole, and (ii) except
as indicated in Section 2.16(f) of the Parent Disclosure Letter, the Contracts pursuant to
which the foregoing Third Party computer software is licensed to Parent or any of its Subsidiaries.
Parent or one of its Subsidiaries owns, as part of the Parent Owned Intellectual Property Rights,
or has acquired, pursuant to a valid license, rights to all Intellectual Property Rights
incorporated into the products of Parent or any of its Subsidiaries or otherwise licensed or
provided to such customers, in sufficient quantities and of sufficient scope to cover all of
Parent’s and its Subsidiaries’ past and current use(s) of such Intellectual Property Rights and
those reasonably anticipated to be needed in the businesses of Parent or any of its Subsidiaries,
except where the failure to own such Intellectual Property Rights would not, individually or in the
aggregate, have a Parent Material Adverse Effect.
Section 2.17 Opinion of Financial Advisor. Parent has received the oral opinion of
UBS Securities LLC to be confirmed in writing (with a copy provided solely for informational
purposes to the Company promptly after Parent receives such written confirmation), to the effect
that, subject to certain assumptions, limitations and qualifications, as of the date the Board of
Directors of Parent approved this Agreement, the Exchange Ratio provided for in the Merger is fair
to Parent from a financial point of view.
Section 2.18 State Takeover Statutes. To the Knowledge of Parent, no Takeover Laws
are applicable to the Coniston Transaction, the Framework Agreement, the Merger, this Agreement, or
any of the transactions contemplated hereby. As used in this Agreement, “Takeover Laws”
means any “moratorium,” “control share acquisition,” “fair price,”
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“supermajority,” “affiliate transactions” or “business combination statute or regulation” or
other similar state antitakeover Laws or regulations.
Section 2.19 Required Vote of Parent Stockholders; Merger Sub Approval. The
affirmative vote of the holders of a majority in voting power present in person or by proxy at the
Parent Stockholder Meeting is the only vote of holders of securities of Parent which is required to
approve the Share Issuance (the “Parent Stockholder Approval”) and, except as set forth in
the Framework Agreement, no other vote of the holders of any class or series of Parent capital
stock is necessary to approve the Share Issuance or to approve this Agreement, the Merger, or any
of the transactions contemplated hereby. The Board of Directors of Merger Sub, by written consent
duly adopted prior to the date hereof, (a) determined that this Agreement and the Merger are
advisable, fair to and in the best interest of Merger Sub and its stockholder, (b) duly approved
and adopted this Agreement, the Merger and the other transactions contemplated hereby, which
adoption has not been rescinded or modified and (c) submitted this Agreement for adoption by
Parent, as the sole stockholder of Merger Sub. Parent, as the sole stockholder of Merger Sub, has
duly approved and adopted this Agreement and the Merger.
Section 2.20 Reorganization. Neither Parent nor any of its Subsidiaries has taken any
action or failed to take any action which action or failure would, to the Knowledge of Parent,
jeopardize the qualification of the Merger as a “reorganization” within the meaning of Section
368(a) of the Code. To the Knowledge of Parent, the representations and warranties set forth in
the Parent Tax Certificate are correct in all material respects as of the date hereof, assuming the
Merger occurred on the date hereof.
Section 2.21 Brokers. No broker, investment banker or other Person, other than as set
forth in Section 2.21 of the Parent Disclosure Letter, the fees and expenses of which will
be paid by Parent, is entitled to any broker’s, finder’s or other similar fee or commission in
connection with or upon consummation of the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Parent.
Section 2.22 Operations of Merger Sub. Merger Sub is a direct, wholly owned
subsidiary of Parent, was formed solely for the purpose of engaging in the transactions
contemplated hereby, has engaged in no other business activities and has conducted its operations
only as contemplated hereby.
Section 2.23 Coniston Transaction.
(a) Section 2.23(a) of the Parent Disclosure Letter sets forth a true, complete and
correct copy of the Framework Agreement. As of the date of this Agreement, (i) the Framework
Agreement has not been amended, supplemented or modified, in any respect and (ii) except to the
extent enforceability may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar Laws affecting the enforcement of creditors’ rights generally and by the
effect of general principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at Law), the Framework Agreement is in full force and effect and is a valid
and binding obligation of Parent and, to the Knowledge of Parent, Manchester and the other parties
thereto. As of the date of this Agreement, the representations and warranties of Parent set forth
in Section 5 of the Framework Agreement are true and correct in all material
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respects. There are no conditions precedent related to the Coniston Transaction, other than
as set forth in the Framework Agreement. No event has occurred which, with or without notice,
lapse of time or both, would constitute a breach or default on the part of Parent or Merger Sub
under any term or condition of the Framework Agreement.
(b) Section 2.23(b) of the Parent Disclosure Letter sets forth true, complete and
correct copies of the executed commitment letter, related term sheet attached thereto, and the
redacted fee letter (collectively, with the fully executed fee letter, the “Debt Financing
Commitments”) from X.X. Xxxxxx Securities Inc., JPMorgan Chase Bank, N.A., Barclays Bank PLC,
UBS Securities LLC and UBS Loan Finance LLC (collectively, the “Lenders”), pursuant to
which the Lenders have agreed, subject only to the terms and conditions set forth therein, to
provide or cause to be provided to Parent debt financing in the amounts set forth therein for
purposes of financing the Coniston Transaction and related fees and expenses and the other purposes
set forth therein (the “Debt Financing”).
(c) As of the date of this Agreement, except as set forth in the Debt Financing Commitments,
there are no conditions precedent to the obligations of the Lenders to provide the Debt Financing
or that would permit the Lenders to cancel or reduce the total amount of the Debt Financing. As of
the date of this Agreement, subject to the terms and conditions of the Debt Financing Commitments,
the Debt Financing, if funded in accordance with the Debt Financing Commitments, together with
available cash, would provide Parent with financing (i) on the Coniston Closing sufficient for
Parent to complete the Coniston Transactions and to pay related fees and expenses incurred by
Parent or for which Parent is responsible and (ii) on the closing of the Contingent Repurchase
sufficient for Parent to complete the Contingent Repurchase and to pay related fees and expenses
incurred by Parent or for which Parent is responsible, in each case on the terms and subject to the
conditions contemplated hereby and thereby. As of the date of this Agreement, the Debt Financing
Commitments, in the form so delivered, are legal, valid and binding obligations of Parent and, to
the Knowledge of Parent, the Lenders, and (assuming that the Debt Financing Commitments constitutes
such obligation of the Lenders) is in full force and effect, except to the extent enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws
affecting the enforcement of creditors’ rights generally and by the effect of general principles of
equity (regardless of whether enforcement is considered in a proceeding in equity or at Law).
(d) Immediately following the Coniston Closing, Parent will be Solvent. Immediately following
the Closing and immediately following the Contingent Repurchase Closing (if Manchester requires
Parent to effect the Contingent Repurchase in accordance with the Framework Agreement), the
Combined Company will be Solvent. For purposes of this Agreement, “Solvent” when used with
respect to Parent or the Combined Company, as applicable, means that, as of any date of
determination: (i) the assets of Parent or the Combined Company, as the case may be, at a “fair
valuation” will as of such date, exceed the amount of all of its “liabilities of Parent or the
Combined Company, as the case may be, contingent or otherwise”, as such quoted terms are generally
determined in accordance with applicable federal laws governing determinations of the insolvency of
debtors; (ii) the “present fair saleable value” of the assets of Parent or the Combined Company, as
the case may be, will, as of such date, be greater than “the amount that will be required to pay
the probable liability of Parent or the Combined Company, as the case may be, on its existing debts
as such debts become absolute and
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matured”, as such quoted terms are generally determined in accordance with applicable federal
laws governing determinations of the insolvency of debtors; (iii) the remaining assets of Parent or
the Combined Company, as the case may be, as of such date, will not be “unreasonably small” nor
constitute an “unreasonably small capital” in relation to the business or transaction(s) in which
it is engaged or is about to engage, as such quoted terms are generally determined in accordance
with applicable federal laws governing determinations of the insolvency of debtors; and (iv) Parent
or the Combined Company, as the case may be, will be able to pay its debts as they become due. For
purposes of this definition, (A) “debt” means liability on a “claim” and (B) “claim” means any (1)
right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured
or (2) right to an equitable remedy for breach of performance if such breach gives rise to a right
to payment, whether or not such right to an equitable remedy is reduced to judgment, fixed,
contingent, matured or unmatured, disputed, undisputed, secured or unsecured.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except (i) as disclosed in the Company SEC Documents filed or furnished with the SEC since
February 24, 2010 but prior to the date of this Agreement (excluding any risk factor disclosures
contained under the heading “Risk Factors,” any disclosure of risks included in any
“forward-looking statements” disclaimer or any other statements that are similarly predictive or
forward-looking in nature); provided, however, that any disclosures in such Company
SEC Documents that are the subject of this clause (i) shall be deemed to qualify a
representation or warranty only if the relevance of such disclosure to such representation or
warranty is reasonably apparent on the face of such disclosure; provided, further,
that the disclosures in the Company SEC Documents shall not be deemed to qualify any
representations or warranties made in Section 3.2(a) (this clause (i) being
referred to herein as the “Company SEC Disclosure”), or (ii) in the disclosure letter
delivered by the Company to Parent immediately prior to the execution of this Agreement (the
“Company Disclosure Letter”), which shall be arranged in numbered and lettered sections
corresponding to the numbered and lettered sections contained in this Article III, and the
disclosure of any item in any section or subsection of the Company Disclosure Letter shall be
deemed to qualify other sections in this Article III to the extent (and only to the extent)
that it is reasonably apparent from the face of such disclosure that such disclosure also qualifies
or applies to such other sections, the Company represents and warrants to Parent and Merger Sub as
follows:
Section 3.1 Organization, Standing and Power. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of Delaware and has
the requisite corporate power and authority to carry on its business as now being conducted. Each
Subsidiary of the Company is duly organized, validly existing and in good standing under the Laws
of the jurisdiction in which it is organized and has the requisite corporate (in the case of a
Subsidiary that is a corporation) or other power and authority to carry on its business as now
being conducted, except where the failure to be so organized, existing or in good standing or to
have such power or authority would not, individually or in the aggregate, have a Company Material
Adverse Effect. The Company and each of its Subsidiaries are duly
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qualified to do business, and are in good standing, in each jurisdiction where the character
of their properties owned or held under lease or the nature of their activities makes such
qualification or good standing necessary, except where the failure to be so qualified and in good
standing would not, individually or in the aggregate, have a Company Material Adverse Effect.
Section 3.2 Capital Structure.
(a) As of the date of this Agreement, the authorized capital stock of the Company consists of
(i) 200,000,000 shares of Company Common Stock (ii) 5,000,000 shares of Company Non-Voting Common
Stock and (iii) 5,000,000 shares of Company Preferred Stock. As of the close of business on June
4, 2010, (i) 57,582,589 shares of Company Common Stock were issued and outstanding, all of which
were validly issued, fully paid and nonassessable and free of preemptive rights; (ii) no shares of
Company Common Stock were held in the treasury of the Company or by Subsidiaries of the Company;
(iii) 5,000,739 shares of Company Common Stock were reserved for issuance pursuant to outstanding
Company Stock Options; (iv) 683,847 shares of Company Common Stock were reserved for issuance
pursuant to outstanding Stock Units; (v) a maximum of 13,657 shares of Company Common Stock are
subject to outstanding rights to purchase shares of Company Common Stock under the Company Stock
Purchase Plan based on participant contributions estimated through June 30, 2010 and the per share
closing price of the Company Common Stock on Nasdaq on June 4, 2010; (vi) no shares of Company
Non-Voting Common Stock or Company Preferred Stock were issued and outstanding; (vii) no shares of
Company Non-Voting Common Stock or Company Preferred Stock were reserved and available for issuance
pursuant to any Company Stock Plans or the Company Stock Purchase Plan; (viii) there are no
outstanding warrants to purchase shares of Company Common Stock; and (ix) 424,426 Unvested Company
Shares are issued and outstanding. Set forth in Section 3.2 of the Company Disclosure
Letter is a schedule of all awards granted under the Company Stock Plans that are outstanding as of
the date of this Agreement, including the type of award, the holder, the grant date, the number of
shares of Company Common Stock subject to such award, the Company Stock Plan under which such award
was granted and the applicable vesting conditions. Between June 4, 2010 and the date of this
Agreement, except as set forth above in this Section 3.2(a) and except for the issuance of
shares of Company Common Stock pursuant to the Company Stock Plans and the Company Stock Purchase
Plan, no shares of capital stock or other voting securities of the Company were issued, reserved
for issuance or outstanding. Except for awards granted under the Company Stock Plans and the
Company Stock Purchase Plan, there are no outstanding options to purchase or rights to otherwise
acquire shares of Company Common Stock. Each share of Company Common Stock which may be issued
pursuant to the Company Stock Plans and the Company Stock Purchase Plan has been duly authorized
and, if and when issued pursuant to the terms thereof, will be validly issued, fully paid and
nonassessable and free of preemptive rights. As of the date of this Agreement, except for (x) this
Agreement and (y) as set forth above in this Section 3.2(a), there are no outstanding
options, warrants, subscriptions, calls, rights, puts, convertible securities or other similar
Contracts to which the Company or any of its Subsidiaries is a party or by which any of them is
bound obligating the Company or any of its Subsidiaries to (A) issue, transfer, deliver, sell,
redeem or otherwise acquire, or cause to be issued, transferred, delivered, sold, redeemed or
otherwise acquired, any additional shares of capital stock (or other voting securities or equity
equivalents) of the Company or any of its Subsidiaries, (B) grant, extend or enter into any such
option, warrant, subscription, call, right, put, convertible security or other similar Contract or
(C) provide a material amount of funds to,
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or make any material investment (in the form of a loan, capital contribution or otherwise) in,
any Subsidiary. The Company does not have any outstanding bonds, debentures, notes or other
obligations the holders of which have the right to vote (or convertible into or exercisable for
securities having the right to vote) with the stockholders of the Company on any matter. Except
for the Company Voting Undertakings, there are no Contracts to which the Company, its Subsidiaries
or any of their respective officers or directors is a party concerning the voting of any capital
stock of the Company or any of its Subsidiaries.
(b) Each outstanding share of capital stock (or other voting security or equity equivalent, as
the case may be) of each Subsidiary of the Company is duly authorized, validly issued, fully paid
and nonassessable, and each such share (or other voting security or equity equivalent, as the case
may be) is owned by the Company or another Subsidiary of the Company, free and clear of all
security interests, liens, claims, pledges, options, rights of first refusal, limitations on voting
rights, charges and other encumbrances of any nature whatsoever. Exhibit 21.1 to the Company’s
Annual Report on Form 10-K for the year ended December 31, 2009, as filed with the SEC, constituted
a true, accurate and correct statement in all material respects of all of the information required
to be set forth therein by the regulations of the SEC as of the date thereof.
(c) Section 3.2(c) of the Company Disclosure Letter sets forth a list as of the date
of this Agreement of all Subsidiaries and material Joint Ventures of the Company and the
jurisdiction in which such Subsidiary or material Joint Venture is organized. Section
3.2(c) of the Company Disclosure Letter also sets forth as of the date of this Agreement the
nature and extent of the ownership and voting interests held by the Company in each such material
Joint Venture. As of the date of this Agreement, the Company has no obligation to make any capital
contributions, or otherwise provide assets or cash, to any material Joint Venture.
Section 3.3 Authority. On or prior to the date of this Agreement, the Board of
Directors of the Company has (a) determined that this Agreement and the transactions contemplated
hereby, including the Merger, are advisable and fair to and in the best interest of the Company and
its stockholders, (b) approved this Agreement and the transactions contemplated hereby, including
the Merger, each in accordance with the DGCL, and (c) resolved to recommend the approval and
adoption of this Agreement and the transactions contemplated hereby, including the Merger, by the
Company’s stockholders and directed that this Agreement be submitted to the Company’s stockholders
for approval and adoption (the “Company Recommendation”). The Company has all requisite
corporate power and authority to enter into this Agreement and, subject to approval and adoption of
this Agreement by the stockholders of the Company, to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement by the Company and the consummation by the
Company of the transactions contemplated hereby, including the Merger, have been duly authorized by
all necessary corporate action on the part of the Company, subject to (x) approval and adoption of
this Agreement by the stockholders of the Company and (y) the filing of the Certificate of Merger
as required by the DGCL. This Agreement has been duly executed and delivered by the Company and
(assuming the valid authorization, execution and delivery of this Agreement by Parent and Merger
Sub and the validity and binding effect of this Agreement on Parent and Merger Sub) except to the
extent enforceability may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar Laws affecting the enforcement of creditors’ rights generally and by the
effect of
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general principles of equity (regardless of whether enforcement is considered in a proceeding
in equity or at Law), this Agreement constitutes the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms. The filing of the Joint Proxy
Statement with the SEC has been duly authorized by the Company’s Board of Directors. The Company
has delivered or made available to Parent prior to the date of this Agreement true, complete and
correct copies of the Company Charter and Company Bylaws and the certificate of incorporation and
bylaws (or comparable organizational documents) of each of its Subsidiaries, each as in effect as
of the date of this Agreement.
Section 3.4 Consents and Approvals; No Violation. Assuming that all consents, approvals,
authorizations and other actions described in this Section 3.4 have been obtained and all
filings and obligations described in this Section 3.4 have been made, the execution and
delivery of this Agreement does not, and the consummation of the transactions contemplated hereby
and compliance with the provisions hereof will not, result in any violation of, or default (with or
without notice or lapse of time, or both) under, or give to others a right of termination,
cancellation or acceleration of any obligation or the loss of a material benefit under, or result
in the creation of any Encumbrance upon any of the properties or assets of the Company or any of
its Subsidiaries under, any provision of (i) the Company Charter or the Company Bylaws; (ii) the
comparable charter or organizational documents of any of the Company’s Subsidiaries; (iii) any
Company Contract; or (iv) any Order or Law applicable to the Company or any of its Subsidiaries or
any of their respective properties or assets, other than, in the case of clauses (iii) or
(iv), any such violations, defaults, rights or Encumbrances that would not, individually or in
the aggregate, have a Company Material Adverse Effect or materially impair the ability of the
Company to perform its obligations hereunder or prevent the consummation of any of the transactions
contemplated hereby by the Company. No filing or registration with, or authorization, consent or
approval of, any Governmental Entity is required by or with respect to the Company or any of its
Subsidiaries in connection with the execution and delivery of this Agreement by the Company or is
necessary for the consummation of the Merger and the other transactions contemplated by this
Agreement, except for (i) in connection, or in compliance, with the provisions of the HSR Act, the
Securities Act and the Exchange Act; (ii) the filing of the Certificate of Merger with the
Secretary of State of the State of Delaware and appropriate documents with the relevant authorities
of other states in which the Company or any of its Subsidiaries is qualified to do business; (iii)
such filings, authorizations, orders and approvals as may be required to obtain the State Takeover
Approvals; (iv) applicable requirements, if any, of Blue Sky Laws and Nasdaq; (v) applicable
requirements, if any, under foreign or supranational laws relating to antitrust and to competition
clearances; and (vi) such other consents, orders, authorizations, registrations, declarations and
filings the failure of which to be obtained or made would not, individually or in the aggregate,
have a Company Material Adverse Effect or materially impair the ability of the Company to perform
its obligations hereunder or prevent the consummation of any of the transactions contemplated
hereby.
Section 3.5 SEC Documents and Other Reports; Internal Controls and Procedures.
(a) The Company has timely filed with the SEC all documents required to be filed by it since
January 1, 2008 under the Securities Act or the Exchange Act (the “Company SEC Documents”).
As of their respective filing dates, or, if amended, as of the date of the last
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amendment prior to the date of this Agreement, the Company SEC Documents complied in all
material respects with the requirements of the Securities Act or the Exchange Act, as the case may
be, and, at the respective times they were filed, none of the Company SEC Documents 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. The consolidated financial statements (including, in each case, any
notes thereto) of the Company included in the Company SEC Documents complied as to form in all
material respects with applicable accounting requirements and the published rules and regulations
of the SEC with respect thereto, were prepared in accordance with GAAP (except, in the case of the
unaudited statements, as permitted by Form 10-Q of the SEC) applied on a consistent basis during
the periods involved (except as may be indicated therein or in the notes thereto) and fairly
presented in all material respects the consolidated financial position of the Company and its
consolidated subsidiaries as at the respective dates thereof and the consolidated results of their
operations and their consolidated cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments and to any other adjustments described
therein). Except as required by GAAP, the Company has not, between December 31, 2009 and the date
of this Agreement, made or adopted any material change in its accounting methods, practices or
policies in effect on December 31, 2009.
(b) The Company is in compliance in all material respects with (i) the applicable provisions
of the Xxxxxxxx-Xxxxx Act and (ii) the applicable listing and corporate governance rules and
regulations of Nasdaq.
(c) The Company has made available to Parent true and complete copies of all written comment
letters from the staff of the SEC received since January 1, 2008 through the date of this Agreement
relating to the Company SEC Documents and all written responses of the Company thereto through the
date of this Agreement other than with respect to requests for confidential treatment. As of the
date of this Agreement, there are no outstanding or unresolved comments in comment letters received
from the SEC staff with respect to any Company SEC Documents and, to the Knowledge of the Company,
none of the Company SEC Documents (other than confidential treatment requests) is the subject of
ongoing SEC review. To the Knowledge of the Company, as of the date of this Agreement, there are
no SEC inquiries or investigations, other governmental inquiries or investigations or internal
investigations pending or threatened, in each case regarding any accounting practices of the
Company.
(d) The Company has established and maintains disclosure controls and procedures and internal
control over financial reporting (as such terms are defined in paragraphs (e) and (f),
respectively, of Rule 13a-15 and paragraph (e) of Rule 15d-15 under the Exchange Act) as required
by Rules 13a-15 and 15d-15 under the Exchange Act. The Company’s disclosure controls and
procedures are designed to ensure that all information (both financial and non-financial) required
to be disclosed by the Company in the reports that it files or furnishes under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified in the rules and
forms of the SEC, and that all such information is accumulated and communicated to the Company’s
management as appropriate to allow timely decisions regarding required disclosure and to make the
certifications required pursuant to Sections 302 and 906 of the Xxxxxxxx-Xxxxx Act. The Company’s
management has completed an assessment of the effectiveness of the Company’s disclosure controls
and procedures and, to the extent required by
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applicable Law, presented in any applicable Company SEC Document that is a report on Form 10-K
or Form 10-Q, or any amendment thereto, its conclusions about the effectiveness of the disclosure
controls and procedures as of the end of the period covered by such report or amendment based on
such evaluation. Based on the Company’s management’s most recently completed evaluation of the
Company’s internal control over financial reporting prior to the date of this Agreement, (i) to the
Knowledge of the Company, the Company had no significant deficiencies or material weaknesses in the
design or operation of its internal control over financial reporting that would reasonably be
expected to adversely affect the Company’s ability to record, process, summarize and report
financial information and (ii) the Company does not have knowledge of any fraud, whether or not
material, that involves management or other employees who have a significant role in the Company’s
internal control over financial reporting.
Section 3.6 Registration Statement and Joint Proxy Statement. None of the information
to be supplied by the Company for inclusion or incorporation by reference in the Registration
Statement or the Joint Proxy Statement will (a) in the case of the Registration Statement, at the
time it becomes effective, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the statements therein
not misleading or (b) in the case of the Joint Proxy Statement, at the time of the mailing of the
Joint Proxy Statement and at the time of each of the Stockholder Meetings, contain any untrue
statement of a material fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances under which they
are made, not misleading. The Registration Statement will comply (with respect to the Company) as
to form in all material respects with the provisions of the Securities Act, and the Joint Proxy
Statement will comply (with respect to the Company) as to form in all material respects with the
provisions of the Exchange Act.
Section 3.7 No Undisclosed Liabilities. Except as reflected or reserved against in
the balance sheet of the Company dated March 31, 2010 included in the Form 10-Q filed by the
Company with the SEC on May 5, 2010 (or described in the notes thereto), neither the Company nor
any of its Subsidiaries has any Liabilities, except (a) Liabilities which, individually or in the
aggregate, would not reasonably be expected to have a Company Material Adverse Effect, (b)
Liabilities incurred in connection with this Agreement or the transactions contemplated hereby, (c)
Liabilities incurred in the ordinary course of business consistent with past practices since March
31, 2010, and (d) Liabilities that are specifically addressed by any other representation or
warranty contained in this Article III.
Section 3.8 Absence of Certain Changes or Events.
(a) Since March 31, 2010 through the date of this Agreement, (i) the Company and its
Subsidiaries have not incurred any liability or obligation (indirect, direct or contingent) or
entered into any Contract or transaction, in each case, that is not in the ordinary course of
business or that would, individually or in the aggregate, have a Company Material Adverse Effect;
(ii) the Company and its Subsidiaries have not sustained any loss or interference with their
respective businesses or properties from fire, flood, windstorm, accident or other calamity
(whether or not covered by insurance) that has, individually or in the aggregate, had a Company
Material Adverse Effect; (iii) there has not been any split, combination or reclassification of any
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of the Company’s capital stock or any issuance or the authorization of any issuance of any
other securities in respect of, in lieu of or in substitution for shares of the Company’s capital
stock or dividend or distribution of any kind declared, set aside, paid or made by the Company on
any class of its stock; (iv) neither the Company nor any of its Subsidiaries has (x) granted any
increase in compensation to any employee of the Company or any of its Subsidiaries whose annual
base salary prior to such increase exceeded $250,000, except for any such base salary increases
made in the ordinary course of business consistent with prior practice or as was required under
such employee’s Company Employee Agreement in effect as of the date of such increase, (y) granted
to any employee of the Company or any of its Subsidiaries whose base salary exceeds $250,000 as of
the date hereof (1) any right of severance or change in control benefits or (2) any increase in
such benefits to any employee who had a contractual right to such benefits as of the date of the
most recent audited financial statements included in the Company SEC Documents, or (z) entered into
any Company Employee Agreement with any individual whose base salary for 2010 is expected to exceed
$250,000; and (v) there has been no Company Material Adverse Effect.
(b) Section 3.8(b) of the Company Disclosure Letter sets forth a list for the twelve
months ended December 31, 2009 of the top twenty (20) revenue producing customers (as determined in
accordance with GAAP) of the Company and its Subsidiaries (collectively, the “Key Company
Customers”). Since January 1, 2009 and through the date hereof, no Key Company Customer has
terminated or cancelled its business relationship (in whole or in substantial part) with the
Company or any of its Subsidiaries, and, to the Knowledge of the Company, no Key Company Customer
has threatened in writing to terminate or cancel its business relationship (in whole or in
substantial part) with the Company or any of its Subsidiaries, which threat to terminate or cancel
has not been resolved as of or prior to the date of this Agreement.
Section 3.9 Permits and Compliance. Each of the Company and its Subsidiaries is in
possession of all franchises, grants, authorizations, licenses, permits, charters, easements,
variances, exceptions, consents, certificates, approvals and orders of any Governmental Entity
necessary for the Company or any of its Subsidiaries to own, lease and operate its properties or to
carry on its business as it is now being conducted (collectively, the “Company Permits”),
except where the failure to have any of the Company Permits would not, individually or in the
aggregate, have a Company Material Adverse Effect, and, as of the date of this Agreement, no
suspension or cancellation of any of the Company Permits is pending or, to the Knowledge of the
Company, threatened, except where the suspension or cancellation of any of the Company Permits
would not, individually or in the aggregate, have a Company Material Adverse Effect. Neither the
Company nor any of its Subsidiaries is in violation of its charter, bylaws or other organizational
documents. As of the date of this Agreement, neither the Company nor any of its Subsidiaries is in
material violation of any applicable Law (including Laws relating to HIPAA and other applicable
federal and state privacy and data protection Laws) or any Order and no notice of any such
violation or non-compliance has been received by the Company or any of its Subsidiaries.
Section 3.10 Tax Matters. (a) The Company and each of its Subsidiaries have filed all
federal, and all material state, local and foreign Tax Returns required to have been filed or
appropriate extensions therefor have been properly obtained, and such Tax Returns are correct
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and complete, except to the extent that any failure to so file or any failure to be correct
and complete would not, individually or in the aggregate, have a Company Material Adverse Effect;
(b) all Taxes shown to be due on such Tax Returns have been timely paid or extensions for payment
have been properly obtained, except to the extent that any failure to so pay or so obtain such an
extension would not, individually or in the aggregate, have a Company Material Adverse Effect; (c)
the Company and each of its Subsidiaries have complied with all rules and regulations relating to
the withholding of Taxes, except to the extent that any noncompliance with such rules or
regulations would not, individually or in the aggregate, have a Company Material Adverse Effect;
(d) any Tax Returns referred to in clause (a) relating to federal income Taxes and material
state, local, and foreign income Taxes have been examined by the IRS or other relevant authority or
the period for assessment of the Taxes in respect of which such Tax Returns were required to be
filed has expired; (e) no material issues that have been raised in writing by the relevant taxing
authority in connection with the examination of the Tax Returns referred to in clause (a)
are currently pending; (f) no material deficiencies asserted or assessments made in writing as a
result of any examination of such Tax Returns by any taxing authority are currently pending; (g)
during the past three years, neither the Company nor any of its Subsidiaries has been a
distributing or controlled corporation in a transaction intended to qualify for tax-free treatment
under Section 355 of the Code; (h) during the last five years, neither the Company nor any of its
Subsidiaries has been a party to any so-called “listed transaction” (as defined in Treasury
Regulations § 1.6011-4(b)(2)) which, as a result, the Company or any of its Subsidiaries was
required to disclose to the IRS; (i) the Company has not waived in writing any statute of
limitations in respect of any material Taxes; (j) there are no material liens for Taxes upon the
assets of the Company or any of its Subsidiaries except liens relating to current Taxes not yet
due; and (k) none of the Company or any of its Subsidiaries has been in the past ten (10) years a
member of any group of corporations filing Tax Returns on a consolidated, unitary or similar basis
other than each such group of which it is currently a member.
Section 3.11 Actions and Proceedings. Except as would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect: (a) there is no
investigation or review pending or, to the Knowledge of the Company, threatened, by any
Governmental Entity with respect to the Company or any of its Subsidiaries; (b) there are no
Actions pending or, to the Knowledge of the Company, threatened, against or affecting the Company
or any of its Subsidiaries, or any of their respective properties at Law or in equity; and (c)
there are no Orders with respect to the Company or any its Subsidiaries or any of their respective
properties.
Section 3.12 Certain Agreements.
(a) Neither the Company nor any of its Subsidiaries is a party to or bound by (i) any Contract
which is a “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K under
the Exchange Act), excluding those compensatory plans described in Item 601(b)(10)(iii); (ii) any
Contract (A) with any of the top one hundred (100) revenue producing customers of the Company and
its Subsidiaries for the twelve (12) months ended March 31, 2010 (as determined in accordance with
GAAP) (a “Company Top 100 Customer”) which contains most favored nation pricing or
provisions restricting the solicitation of the employees of such customer, or (B) which purports to
materially limit or restrict the manner or localities in which the Company or any of its Affiliates
(including Parent or any of its Subsidiaries following the
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Merger) may conduct business, including by virtue of exclusivity or non-solicitation
provisions; (iii) any Contract which requires any payment by the Company or its Subsidiaries in
excess of $2,000,000 in any year and which is not terminable within one year without penalty, or
which requires any payment to the Company or its Subsidiaries (excluding Contracts with customers)
in excess of $2,000,000 in any year and which is not terminable within one year without penalty;
(iv) any Contract with a Key Company Customer; (v) any Contract relating to or guarantying
indebtedness for borrowed money to the extent the aggregate principal amount outstanding thereunder
exceeds $5,000,000; (vi) any sales, distribution, agency, commission-based or other similar
agreement with third parties (A) providing for the sale by the Company or any of its Subsidiaries
of such Person’s products or services or (B) providing for the sale by Third Parties of products of
the Company or its Subsidiaries, in each case involving annual payments in the 2009 fiscal year or
reasonably expected during the 2010 fiscal year to or by the Company or any of its Subsidiaries in
excess of $2,000,000 in the aggregate; (vii) since January 1, 2007, any Contract relating to the
acquisition or disposition of any business (whether by merger, sale of stock, sale of assets,
indemnity insurance or otherwise) which involves an asset value in excess of $5,000,000 or a
purchase price in excess of $5,000,000; (viii) any Contract of indemnification or any guaranty by
the Company or any of its Subsidiaries other than any Contract entered into in connection with the
sale or license by the Company or any of its Subsidiaries of products or services in the ordinary
course of business, (ix) any Contract to provide source code to any Third Party, other than source
code escrow agreements entered into with customers in the ordinary course of the Company’s
business, for any product or technology that is material to the Company and its Subsidiaries, taken
as a whole; (x) any material Contract, other than standard end-user or distributor license and sale
Contracts and related maintenance and support Contracts entered into in the ordinary course of
business, to license any Third Party to use, manufacture or reproduce any Company product, service
or Intellectual Property Right or any material Contract to sell, distribute or market any Company
product, service or Intellectual Property Right; (xi) any Contract with respect to the settlement
of any Action, which adversely affects in any material respect the conduct of the Company’s or any
of its Subsidiaries’ business; (xii) any Contract (other than any Contract with a customer of the
Company or any of its Subsidiaries that is not a Company Top 100 Customer) with a federal
Governmental Entity or any Contract that constitutes a subcontract executed with a prime contractor
pursuant to any Contract with a federal Governmental Entity and that incorporates Federal
Acquisition Regulation clauses as a term or condition of such Contract; or (xiii) any other
Contract that is material to the business, assets, liabilities, financial condition or results of
operations of the Company and its Subsidiaries, taken as a whole. The Company has previously made
available to Parent true, complete and correct copies of each Contract of the type described in
this Section 3.12(a) that was entered into prior to the date hereof. All Contracts of the
type described in this Section 3.12(a) and the first sentence of Section 3.16(f)
shall be referred to as “Company Contracts” regardless of whether they were entered into
before or after the date hereof. All of the Company Contracts are valid and in full force and
effect (except those which are cancelled, rescinded or terminated after the date hereof in
accordance with their terms), except where the
failure to be in full force and effect would not,
individually or in the aggregate, have a Company Material Adverse Effect. To the Knowledge of the
Company, no Person is challenging the validity or enforceability of any Company Contract, except
such challenges which would not, individually or in the aggregate, have a Company Material Adverse
Effect. Neither the Company nor any of its Subsidiaries and, to the Knowledge of the Company, none
of the other parties thereto, is in breach of any provision
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of, or committed or failed to perform any act which (with or without notice or lapse of time
or both) would constitute a default under the provisions of, any Company Contract, except for those
violations and defaults which would not, individually or in the aggregate, have a Company Material
Adverse Effect.
(b) Neither the Company nor any of its Subsidiaries is a party to any Contract or written or
oral plan, including any stock option plan, stock appreciation rights plan, restricted stock plan
or stock purchase plan, any of the benefits of which will be increased, or the vesting of the
benefits of which will be accelerated, by the occurrence of any of the transactions contemplated by
this Agreement (either alone or in connection with any other event) or the value of any of the
benefits of which will be calculated on the basis of any of the transactions contemplated by this
Agreement. No holder of any (i) Company Stock Option, (ii) Unvested Company Shares or (iii) shares
of Company Stock granted in connection with the performance of services for the Company or its
Subsidiaries, is or will be entitled to receive cash from the Company or any Subsidiary in lieu of
or in exchange for such options, rights or shares under this Agreement.
Section 3.13 Employee Benefits.
(a) Each Company Plan is listed in Section 3.13(a) of the Company Disclosure Letter.
With respect to each Company Plan, the Company has delivered or made available to Parent a true and
correct copy of (i) the three (3) most recent annual reports (Form 5500) filed with the IRS; (ii)
each such Company Plan that has been reduced to writing and all amendments thereto; (iii) each
trust, insurance or administrative Contract relating to each such Company Plan; (iv) the most
recent summary plan description or, if no summary plan description exists, such other written
explanation of each Company Plan as provided to participants; (v) a written summary of each
material unwritten Company Plan; (vi) the most recent determination letter, if any, issued by the
IRS with respect to any Company Plan intended to be qualified under Section 401(a) of the Code; and
(vii) all correspondence with the IRS, the Department of Labor, the SEC or Pension Benefit Guaranty
Corporation relating to any outstanding Company Plan controversy or audit. Each Company Plan
complies in all material respects with its terms, ERISA, the Code and all other applicable Laws.
None of the Company, any of its Subsidiaries or any of their respective ERISA Affiliates currently
maintains, contributes to or has any liability under or, at any time during the past six (6) years
has maintained or contributed to, any pension plan which is subject to Section 412 of the Code or
Section 302 of ERISA or Title IV of ERISA. None of the Company, any of its Subsidiaries or any of
their respective ERISA Affiliates currently maintains, contributes to or has any liability under
or, at any time during the past six (6) years has maintained or contributed to, any multiemployer
plan (as defined in Section 4001(a)(3) of ERISA).
(b) With respect to the Company Plans, no event or set of circumstances has occurred and there
exists no condition or set of circumstances in connection with which the Company, any of its
Subsidiaries or any of their respective ERISA Affiliates or any Company Plan fiduciary could be
subject to any liability under the terms of such Company Plans, ERISA, the Code or any other
applicable Law, which would, individually or in the aggregate, have a Company Material Adverse
Effect, other than liabilities for benefits payable in the normal course. There is no pending or,
to the Knowledge of the Company, threatened Action relating to
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any Company Plan (other than routine claims for benefits). All Company Plans that are
intended by their terms to be, or are otherwise treated by the Company as, qualified under Section
401(a) of the Code have been determined by the IRS to be so qualified, or a timely application for
such determination is now pending. Neither the Company nor any of its Subsidiaries has any
liability or obligation under any plan or Contract to provide welfare benefits after termination of
employment to any employee or dependent other than as required by Section 4980B of the Code or
during any severance period. None of the Company, any of its Subsidiaries or any of their
respective ERISA Affiliates has any liability for a failure to comply with Section 4980B of the
Code or Part 6 of Subtitle B of Title I of ERISA which would, individually or in the aggregate,
have a Company Material Adverse Effect.
(c) Section 3.13(c) of the Company Disclosure Letter contains a complete and correct
list, and the Company has heretofore provided or made available to Parent a complete and correct
copy, of each Company Employee Agreement.
(d) No individual is entitled to any payment or benefit that could result, separately or in
the aggregate, in the payment of (i) any “excess parachute payments” within the meaning of Section
280G of the Code, (ii) any amount that would be nondeductible under Section 162(m) of the Code or
(iii) any amount that would be subject to taxation under Section 409A(a)(1) of the Code. No
individual is entitled to any additional payment from the Company or any of its Subsidiaries on
account of any taxes incurred under Section 4999 or 409A of the Code.
(e) With respect to each Company Plan not subject to United States law (a “Company Foreign
Benefit Plan”), (i) the fair market value of the assets of each funded Company Foreign Benefit
Plan, the liability of each insurer for any Company Foreign Benefit Plan funded through insurance,
or the reserve shown on the consolidated financial statements of the Company included in the
Company SEC Documents for any unfunded Company Foreign Benefit Plan, together with any accrued
contributions, is sufficient to procure or provide for the projected benefit obligations, as of the
Effective Time, with respect to all current and former participants in such plan based on
reasonable, country-specific actuarial assumptions and valuations, and no transaction contemplated
by this Agreement shall cause such assets or insurance obligations or book reserve to be less than
such projected benefit obligations and (ii) if such Company Foreign Benefit Plan is required to be
registered, it has been registered and has been maintained in good standing with the applicable
regulatory authorities.
(f) The Company, with respect to employees outside of the United States, (i) is not under any
legal liability to pay pensions, gratuities, superannuation allowances or the like to any past or
present directors, officers, employees or dependents of employees; (ii) has not made ex-gratia or
voluntary payments by way of superannuation allowance or pension; and/or (iii) does not maintain
and has not contemplated any pension schemes or arrangements for payment of the pensions or death
benefits or similar arrangements.
Section 3.14 Compliance with Worker Safety and Environmental Laws. The properties, assets
and operations of the Company and its Subsidiaries are in compliance with all applicable Worker
Safety Laws and Environmental Laws, except, in each case, for any violations that would not,
individually or in the aggregate, have a Company Material Adverse Effect. With respect to such
properties, assets and operations, including any previously owned, leased or
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operated properties, assets or operations, there are no events, conditions, circumstances,
activities, practices, incidents, actions or plans of the Company or any of its Subsidiaries that
may interfere with or prevent compliance or continued compliance with applicable Worker Safety Laws
and Environmental Laws, other than any such interference or prevention as would not, individually
or in the aggregate, have a Company Material Adverse Effect.
Section 3.15 Labor Matters. As of the date of this Agreement, neither the Company nor any
of its Subsidiaries is a party to any collective bargaining Contract or any labor Contract.
Neither the Company nor any of its Subsidiaries has engaged in any material unfair labor practice
or material violation of state or local labor wage and hour or employment Laws with respect to any
Persons employed by or otherwise performing services primarily for the Company or any of its
Subsidiaries (the “Company Business Personnel”), and there is no unfair labor practice
complaint or grievance against the Company or any of its Subsidiaries by the National Labor
Relations Board or any comparable state agency pending or threatened in writing with respect to the
Company Business Personnel, except where such unfair labor practice, complaint or grievance would
not, individually or in the aggregate, have a Company Material Adverse Effect. There is no labor
strike, dispute, slowdown or stoppage pending or, to the Knowledge of the Company, threatened
against or affecting the Company or any of its Subsidiaries which may interfere with the respective
business activities of the Company or any of its Subsidiaries, except where such dispute, strike or
work stoppage would not, individually or in the aggregate, have a Company Material Adverse Effect.
Section 3.16 Intellectual Property.
(a) The Company and its Subsidiaries own or have a valid right to use all Intellectual
Property Rights as are necessary to conduct the business of the Company and its Subsidiaries as
currently conducted or planned to be conducted by the Company and its Subsidiaries, taken as a
whole, except where the failure to have such Intellectual Property Rights would not, individually
or in the aggregate, have a Company Material Adverse Effect. To the Knowledge of the Company,
neither the Company nor any of its Subsidiaries infringes, misappropriates or violates in any
material respect any Intellectual Property Rights of any third party, except where such
infringement, misappropriation or violation would not, individually or in the aggregate, have a
Company Material Adverse Effect. To the Knowledge of the Company, no third party infringes,
misappropriates or violates any Intellectual Property Rights owned or exclusively licensed by or to
the Company or any of its Subsidiaries, except where such infringement, misappropriation or
violation would not, individually or in the aggregate, have a Company Material Adverse Effect.
(b) Section 3.16(b) of the Company Disclosure Letter contains a list as of the date
hereof of (i) all material registered United States, state and foreign trademarks, service marks,
logos, trade dress and trade names and pending applications to register the foregoing; (ii) all
United States and material foreign patents and patent applications; and (iii) all material
registered United States and foreign copyrights and pending applications to register the same, in
each case owned by the Company and its Subsidiaries.
(c) (i) As of the date of this Agreement, there are no actions, suits or claims or
administrative proceedings or investigations pending or, to the Knowledge of the Company,
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threatened that challenge or question the validity, enforceability or ownership of
Intellectual Property Rights of the Company or any of its Subsidiaries.
(d) The Company and its Subsidiaries have taken reasonable steps to protect the
confidentiality of confidential information that is owned, used or held by the Company and its
Subsidiaries in the conduct of the business. To the Knowledge of the Company, confidential
information owned by Company or any of its Subsidiaries has not been used by or disclosed to any
third party except pursuant to valid and appropriate non-disclosure or confidentiality agreements
which have not been breached. Subject to Section 3.16(a) and the Company Material Adverse
Effect qualification contained therein, the Company and its Subsidiaries are free to make, use,
modify, copy, distribute, sell, license, import, export and otherwise exploit all Intellectual
Property Rights owned by them (“Company Owned Intellectual Property Rights”) on an
exclusive basis except for nonexclusive: (i) use pursuant to end-user licenses granted to
customers; (ii) distribution rights granted to resellers or distributors in the ordinary course of
business; or (iii) nondisclosure or confidentiality agreements pursuant to which any Person has
been granted access to Company Owned Intellectual Property Rights without any right to exploit such
Company Owned Intellectual Property Rights, except where the failure to make, use, modify, copy,
distribute, sell, license, import, export and otherwise exploit such Company Owned Intellectual
Property Rights would not, individually or in the aggregate, have a Company Material Adverse
Effect.
(e) All personnel, including employees, agents, consultants and contractors, who have
contributed to or participated in the conception or development, or both, of the Company Owned
Intellectual Property Rights (i) have been and are a party to “work-for-hire” arrangements with
Company or one of its Subsidiaries or (ii) have assigned to Company or one of its Subsidiaries all
ownership of all tangible and intangible property arising in connection with the conception or
development of such Company Owned Intellectual Property Rights.
(f) Section 3.16(f) of the Company Disclosure Letter contains a list of (i) each item
of Third Party computer software that is (A) licensed to and actively marketed by the Company or
any of its Subsidiaries and (B) material to the Company and it Subsidiaries taken as a whole, and
(ii) except as indicated in Section 3.16(f) of the Company Disclosure Letter, the Contracts
pursuant to which the foregoing Third Party computer software is licensed to the Company or any of
its Subsidiaries. The Company or one of its Subsidiaries owns, as part of the Company Owned
Intellectual Property Rights, or has acquired, pursuant to a valid license, rights to all
Intellectual Property Rights incorporated into the products of the Company or any of its
Subsidiaries or otherwise licensed or provided to such customers, in sufficient quantities and of
sufficient scope to cover all of the Company’s and its Subsidiaries’ past and current use(s) of
such Intellectual Property Rights and those reasonably anticipated to be needed in the businesses
of the Company or any of its Subsidiaries, except where the failure to own such Intellectual
Property Rights would not, individually or in the aggregate, have a Company Material Adverse
Effect.
Section 3.17 Opinion of Financial Advisor. The Company has received the oral opinion
of Xxxxxxx Xxxxxxxx Partners LP, to be confirmed in writing (with a copy provided solely for
informational purposes to Parent promptly after the Company receives such written confirmation), to
the effect that, subject to certain assumptions, limitations and qualifications, as
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of the date the Board of Directors of the Company approved this Agreement, the Exchange Ratio
provided in this Agreement is fair, from a financial point of view, to the holders of the Company
Common Stock (other than Parent of any Affiliate of Parent).
Section 3.18 State Takeover Statutes. The Board of Directors of the Company has, to
the extent such statutes are applicable, taken all action (including appropriate approvals of the
Board of Directors of the Company) necessary to exempt Parent, its Subsidiaries and Affiliates, the
Merger, this Agreement and the transactions contemplated hereby from Section 203 of the DGCL. To
the Knowledge of the Company, no other Takeover Laws are applicable to the Merger, this Agreement,
or any of the transactions contemplated hereby.
Section 3.19 Required Vote of Company Stockholders. The affirmative vote of the
holders of a majority of the outstanding shares of Company Common Stock entitled to vote on this
Agreement and the Merger is the only vote of holders of securities of the Company which is required
to approve and adopt this Agreement and the Merger (the “Company Stockholder Approval”).
No other vote of the securityholders of the Company is required by Law, the Company Charter, the
Company Bylaws or otherwise in order for the Company to consummate the Merger and the transactions
contemplated hereby.
Section 3.20 Reorganization. Neither the Company nor any of its Subsidiaries has
taken any action or failed to take any action which action or failure would, to the Knowledge of
the Company, jeopardize the qualification of the Merger as a “reorganization” within the meaning of
Section 368(a) of the Code. To the Knowledge of the Company, the representations and warranties
set forth in the Company Tax Certificate are correct in all material respects as of the date
hereof, assuming the Merger occurred on the date hereof.
Section 3.21 Brokers. No broker, investment banker or other Person, other than
Xxxxxxx Xxxxxxxx Partners LP, the fees and expenses of which will be paid by the Company, is
entitled to any broker’s, finder’s or other similar fee or commission in connection with or upon
the consummation of the transactions contemplated by this Agreement based upon arrangements made by
or on behalf of the Company.
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
Section 4.1 Conduct of Business Pending the Merger. (a) Conduct of Business by
the Company. From and after the date hereof and prior to the Effective Time or the date, if
any, on which this Agreement is earlier terminated in accordance with Section 7.1 (the
“Termination Date”), except (w) as may be required by applicable Law, (x) as may be
contemplated, permitted or required by this Agreement, (y) as may be consented to in writing in
advance by Parent (which consent shall not be unreasonably withheld, conditioned or delayed) or
(z) as set forth in Section 4.1 of the Company Disclosure Letter, the Company shall, and
shall cause each of its Subsidiaries to, conduct its business in all material respects in the
ordinary course consistent with past practice and, to the extent consistent therewith, use
commercially reasonable efforts to preserve intact its current business organization, keep
available the services of its current officers and employees and preserve its relationships with
customers, suppliers and
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others having dealings with it, in each case in all material respects, to the end that its
goodwill and ongoing business shall be unimpaired at the Effective Time; provided,
however, that no action by the Company or any of its Subsidiaries with respect to actions
taken in accordance with clauses (i) through (xvi) of this Section 4.1(a)
shall be deemed to be a breach of this sentence unless such action would constitute a breach of
such other provision. Without limiting the generality of the foregoing, and except (x) as may be
contemplated, permitted or required by this Agreement, (y) as may be consented to in writing in
advance by Parent (which consent shall not be unreasonably withheld, conditioned or delayed) or
(z) as set forth in Section 4.1 of the Company Disclosure Letter (with specific reference
to the applicable subsection below), from and after the date hereof and prior to the Effective Time
or the Termination Date, the Company shall not, and shall not permit any of its Subsidiaries to:
(i) (A) declare, set aside or pay any dividends on, or make any other actual,
constructive or deemed distributions in respect of, any of its capital stock, or otherwise
make any payments to its stockholders in their capacity as such, other than dividends or
distributions from wholly owned Subsidiaries of the Company to the Company or other wholly
owned Subsidiary of the Company, (B) split, combine or reclassify any of its capital stock
or issue or authorize the issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock or (C) purchase, redeem or otherwise acquire,
or modify or amend any shares of capital stock of the Company or any Subsidiary or any other
securities thereof or any rights, warrants or options to acquire, any such shares or other
securities;
(ii) (A) authorize for issuance, issue, deliver, sell, pledge, dispose of, grant,
transfer or otherwise encumber or agree or commit to issue, deliver, sell, pledge, dispose
of, grant, transfer or encumber, any shares of its capital stock, any other voting
securities or equity equivalent or any securities convertible into or exchangeable for, or
any rights, warrants or options of any kind to acquire, any such shares, voting securities,
equity equivalent or convertible or exchangeable securities, other than (1) the grant of
Company Stock Options or Unvested Company Shares to employees who are not executive officers
or the grant of Stock Units to directors of the Company, in each case in accordance with
Section 4.1(a)(ii) of the Company Disclosure Letter and in the ordinary course of
business consistent with past practice, or (2) the issuance of shares of Company Common
Stock upon the exercise of Company Stock Options, upon the settlement of any Stock Units and
upon the vesting of any Unvested Company Shares or other awards under the Company Stock
Plans, and pursuant to the Company Stock Purchase Plan, in each case, in accordance with
their terms, (B) enter into any amendment of any term of any of its outstanding securities
or (C) accelerate the vesting of any options, restricted stock, warrants or other shares of
capital stock or rights of any kind to acquire any shares of capital stock to the extent
that such acceleration of vesting does not occur automatically under the terms of any such
interests, plans or agreements governing such interests, as in effect prior to the date of
this Agreement;
(iii) (A) amend the Company Charter or the Company Bylaws or (B) amend in any material
respect the charter, bylaws or other comparable organizational documents of any Subsidiary
of the Company, except, in the case of each of the foregoing clauses (A) and
(B), as may be required by Law or the rules and regulations of the SEC or Nasdaq;
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(iv) (A) acquire or agree to acquire by merging or consolidating with, by purchasing a
substantial portion of the assets of, or equity in, or by any other manner, any business or
any corporation, limited liability company, partnership, Joint Venture, association or other
business organization or division thereof, in each case for consideration in excess of
$2,000,000 individually or $5,000,000 in the aggregate, or (B) otherwise acquire or agree to
acquire any assets, other than assets acquired in the ordinary course of business consistent
with past practice, that have a fair market value at the time of acquisition in excess of
$2,000,000 individually or $5,000,000 in the aggregate;
(v) sell, transfer, lease, license (as licensor of Intellectual Property Rights of the
Company), mortgage, pledge, encumber or otherwise dispose of any of its properties or
assets, other than sales, leases or licenses of products or services in the ordinary course
of business consistent with past practice, that have a fair market value at the time of
acquisition in excess of $5,000,000 individually or $10,000,000 in the aggregate;
(vi) (A) incur, assume or modify any indebtedness for borrowed money, guarantee,
endorse or otherwise become liable or responsible for (whether directly, contingently or
otherwise), any such indebtedness or other obligations of another Person, except for (1)
such indebtedness or other obligations incurred pursuant to the Company’s existing revolving
credit facility and prepayable at any time without premium or penalty, in each case in the
ordinary course of business consistent with past practice, which at any time shall not
exceed $15,000,000, or (2) indebtedness in replacement of (and of the same principal amount
as) the Company’s existing indebtedness, which matures by its terms prior to the Closing
Date;
(vii) adopt a plan of complete or partial liquidation, dissolution, consolidation,
restructuring, recapitalization or any other reorganization, other than the Merger;
(viii) enter into, adopt or amend any severance plan, retention or change of control
plan, program, policy or Contract; Company Plan; Company Employee Agreement; consulting
Contract; or Company Stock Plan, except (A) as required by applicable Law, (B) for entry
into any severance Contract with (x) any newly-hired employee in connection with the hiring
of such employee or (y) any current employee who is not an executive officer as of the date
hereof in connection with the termination of employment of such employee, in each case, in
the ordinary course of business consistent with past practices, or (C) in the case of any
consulting Contract or temporary employee arrangement, as would not result in a material
cost to the Company or any of its Subsidiaries;
(ix) (A) increase the compensation or benefits payable or to become payable to its
directors, officers or employees, except for increases in accordance with the Company’s
fiscal 2010 budget and capital expenditure plan made available to Parent prior to the date
of this Agreement (the “Company 2010 Plan”) in the ordinary course of business
consistent with past practice in cash compensation of employees of the Company or any of its
Subsidiaries who are not executive officers of the Company, or (B) establish, adopt, enter
into or, except as may be required to comply with applicable
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Law, amend or otherwise take action to enhance or accelerate any rights or benefits
under, any labor, bonus, profit sharing, incentive, compensation, stock option, restricted
stock, pension, retirement, deferred compensation, employment, termination, severance or
other compensation or benefit plan, Contract, trust, fund, policy or arrangement for the
benefit of any current or former director, officer or employee, except in the ordinary
course of business consistent with past practice, as may be required to comply with
applicable Law or as required under such plan, Contract, trust, fund, policy or arrangement;
(x) make or adopt any material change to its accounting methods, practices or policies
(other than actions required to be taken by GAAP or the SEC);
(xi) (A) prepare or file any Tax Return inconsistent with past practice or, on any such
Tax Return, take any position, make or change any election or adopt any method that is
inconsistent with positions taken, elections made or methods used in preparing or filing
similar Tax Returns in prior periods or (B) settle or compromise any material Action or
audit related to Taxes;
(xii) (A) modify, amend, cancel, terminate, extend or request any material change in,
or agree to any material change in, any Company Contract (other than ordinary course credits
or discounts given to customers which are not material to the Company and its Subsidiaries
taken as a whole), in each case, which is materially adverse to the Company and its
Subsidiaries taken as a whole, or (B) waive, release or assign, in any respect, any rights
under any Company Contract, which waiver, release or assignment would be materially adverse
to the Company and its Subsidiaries taken as a whole;
(xiii) enter into any Contract that is material to the Company and its Subsidiaries
taken as a whole with any Third Party (A) that would, after the Effective Time, materially
limit or restrict the manner or localities in which Parent and its Subsidiaries may conduct
business; or (B) that contains most favored nation pricing or exclusivity provisions or
non-solicitation provisions with respect to the employees of such Third Party;
(xiv) make or agree to make any loans, advances or capital contributions to, or other
investments in, any other Person or capital expenditures, with a value in excess of
$7,500,000 in the aggregate, except (A) as contemplated by the Company 2010 Plan, (B) as
made in connection with any transaction solely between the Company and any of its
Subsidiaries or between Subsidiaries of the Company, (C) for commitments made to customers
or clients of the Company in the ordinary course of business consistent with past practice,
or (D) letters of credit, bonds or similar instruments provided to landlords, customers or
other persons in the ordinary course of business consistent with past practice;
(xv) waive, release, assign, settle or compromise any Action against the Company or any
of its Subsidiaries, other than (A) waivers, releases, assignments, settlements or
compromises that involve only the payment of monetary damages by the Company or any of its
Subsidiaries (x) equal to or lesser than the amounts reserved with
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respect to such specific matter in the Company SEC Documents filed prior to the date of
this Agreement or (y) that do not exceed $5,000,000 in the aggregate, (B) in accordance with
Section 5.17 or (C) as permitted under clause (A) of Section
4.1(a)(xii); or
(xvi) authorize, recommend, propose or announce an intention to do any of the foregoing
or enter into any Contract to do any of the foregoing.
(b) Conduct of Business by Parent. From and after the date hereof and prior to the
Effective Time or the Termination Date, except (w) as may be required by applicable Law, (x) as may
be contemplated, permitted or required by this Agreement or the Framework Agreement, (y) as may be
consented to in writing in advance by the Company (which consent shall not be unreasonably
withheld, conditioned or delayed) or (z) as set forth in Section 4.1 of the Parent
Disclosure Letter, Parent shall, and shall cause each of its Subsidiaries to, conduct its business
in all material respects in the ordinary course consistent with past practice and, to the extent
consistent therewith, use commercially reasonable efforts to preserve intact its current business
organization, and preserve its relationships with customers, suppliers and others having dealings
with it, in each case in all material respects, to the end that its goodwill and ongoing business
shall be unimpaired at the Effective Time; provided, however, that no action by
Parent or any of its Subsidiaries with respect to actions taken in accordance with clauses
(i) through (xv) of this Section 4.1(b) shall be deemed to be a breach of this
sentence unless such action would constitute a breach of such other provision. Without limiting
the generality of the foregoing, and except (w) as may be required by applicable Law, (x) as may be
contemplated, permitted or required by this Agreement or the Framework Agreement, (y) as may be
consented to in writing in advance by the Company (which consent shall not be unreasonably
withheld, conditioned or delayed) or (z) as set forth in Section 4.1 of the Parent
Disclosure Letter (with specific reference to the applicable subsection below), from and after the
date hereof and prior to the Effective Time or the Termination Date, Parent shall not, and shall
not permit any of its Subsidiaries to:
(i) (A) declare, set aside or pay any dividends on, or make any other actual,
constructive or deemed distributions in respect of, any of its capital stock, or otherwise
make any payments to its stockholders in their capacity as such, other than dividends or
distributions from wholly owned Subsidiaries of Parent to Parent or other wholly owned
Subsidiary of Parent, (B) split, combine or reclassify any of its capital stock or issue or
authorize the issuance of any other securities in respect of, in lieu of or in substitution
for shares of its capital stock or (C) purchase, redeem or otherwise acquire, or modify or
amend any shares of capital stock of Parent or any Subsidiary or any other securities
thereof or any rights, warrants or options to acquire, any such shares or other securities;
(ii) (A) authorize for issuance, issue, deliver, sell, pledge, dispose of, grant,
transfer or otherwise encumber or agree or commit to issue, deliver, sell, pledge, dispose
of, grant, transfer or encumber, any shares of its capital stock, any other voting
securities or equity equivalent or any securities convertible into or exchangeable for, or
any rights, warrants or options of any kind to acquire, any such shares, voting securities,
equity equivalent or convertible or exchangeable securities, other than (1) the grant of
Unvested Parent Shares to employees who are not executive officers in the ordinary course of
business consistent with past practice, or (2) the issuance of shares of Parent Common Stock
upon the exercise of Parent Stock Options, and upon the vesting of any Unvested
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Parent Shares or other awards under Parent Stock Plans, and pursuant to the Parent
Stock Purchase Plan, in each case, in accordance with their terms, (B) enter into any
amendment of any term of any of its outstanding securities or (C) accelerate the vesting of
any options, restricted stock, warrants or other shares of capital stock or rights of any
kind to acquire any shares of capital stock to the extent that such acceleration of vesting
does not occur automatically under the terms of any such interests, plans or agreements
governing such interests, as in effect prior to the date of this Agreement;
(iii) (A) amend the Parent Charter or the Parent Bylaws or (B) amend in any material
respect the charter, bylaws or other comparable organizational documents of any Subsidiary
of Parent, except, in the case of each of the foregoing clauses (A) and (B),
as may be required by Law or the rules and regulations of the SEC or Nasdaq;
(iv) (A) acquire or agree to acquire by merging or consolidating with, by purchasing a
substantial portion of the assets of, or equity in, or by any other manner, any business or
any corporation, limited liability company, partnership, Joint Venture, association or other
business organization or division thereof, in each case for aggregate consideration in
excess of $2,000,000 individually or $5,000,000 in the aggregate, or (B) otherwise acquire
or agree to acquire any assets, other than assets acquired in the ordinary course of
business consistent with past practice, that have a fair market value at the time of
acquisition in excess of $2,000,000 individually or $5,000,000 in the aggregate;
(v) sell, transfer, lease, license (as licensor of Intellectual Property Rights of
Parent), mortgage, pledge, encumber or otherwise dispose of any of its properties or assets,
other than sales, leases or licenses of products or services in the ordinary course of
business consistent with past practice, that have a fair market value at the time of
acquisition in excess of $5,000,000 individually or $10,000,000 in the aggregate;
(vi) (A) incur, assume or modify any indebtedness for borrowed money, guarantee,
endorse or otherwise become liable or responsible for (whether directly, contingently or
otherwise), any such indebtedness or other obligations of another Person, except for (1)
such indebtedness or other obligations incurred pursuant to Parent’s existing revolving
credit facility and prepayable at any time without premium or penalty, in each case in the
ordinary course of business consistent with past practice, which at any time shall not
exceed $15,000,000, (2) indebtedness in replacement of (and of the same principal amount as)
Parent’s existing indebtedness, which matures by its terms prior to the Closing Date or (3)
the Debt Financing or any Alternative Financing;
(vii) adopt a plan of complete or partial liquidation, dissolution, consolidation,
restructuring, recapitalization or any other reorganization, other than the Merger;
(viii) enter into, adopt or amend any severance plan, retention or change of control
plan, program, policy or Contract; Parent Plan; Parent Employee Agreement; consulting
Contract; or Parent Stock Plan, except (A) as required by applicable Law, (B) for entry into
any severance Contract with (x) any newly-hired employee in connection with the hiring of
such employee or (y) any current employee who is not an
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executive officer as of the date hereof in connection with the termination of
employment of such employee, in each case, in the ordinary course of business consistent
with past practices, or (C) in the case of any consulting Contract or temporary employee
arrangement, as would not result in a material cost to Parent or any of its Subsidiaries;
(ix) make or adopt any material change to its accounting methods, practices or policies
(other than actions required to be taken by GAAP or the SEC);
(x) (A) prepare or file any Tax Return inconsistent with past practice or, on any such
Tax Return, take any position, make or change any election or adopt any method that is
inconsistent with positions taken, elections made or methods used in preparing or filing
similar Tax Returns in prior periods or (B) settle or compromise any material Action or
audit related to Taxes;
(xi) (A) modify, amend, cancel, terminate, extend or request any material change in, or
agree to any material change in, any Parent Contract (other than ordinary course credits or
discounts given to customers which are not material to Parent and its Subsidiaries taken as
a whole), in each case, which is materially adverse to Parent and its Subsidiaries taken as
a whole, or (B) waive, release or assign, in any respect, any rights under any Parent
Contract, which waiver, release or assignment would be materially adverse to Parent and its
Subsidiaries taken as a whole;
(xii) make or agree to make any loans, advances or capital contributions to, or other
investments in, any other Person or capital expenditures, with a value in excess of
$7,500,000 in the aggregate, except (A) as contemplated by Parent’s fiscal 2010 budget and
capital expenditure plan and Parent’s fiscal 2011 budget and capital expenditure plan, in
each case made available to the Company prior to the date of this Agreement, (B) as made in
connection with any transaction solely between Parent and any of its Subsidiaries or between
Subsidiaries of Parent, (C) for commitments made to customers or clients of Parent in the
ordinary course of business consistent with past practice, or (D) letters of credit, bonds
or similar instruments provided to landlords, customers or other persons in the ordinary
course of business consistent with past practice;
(xiii) waive, release, assign, settle or compromise any Action against Parent or any of
its Subsidiaries, other than (A) waivers, releases, assignments, settlements or compromises
that involve only the payment of monetary damages by Parent or any of its Subsidiaries (x)
equal to or lesser than the amounts reserved with respect to such specific matter in the
Parent SEC Documents filed prior to the date of this Agreement or (y) that do not exceed
$5,000,000 in the aggregate, (B) in accordance with Section 5.17, or (c) as
permitted under clause (A) of Section 4.1(b)(xi);
(xiv) (A) solicit or initiate, participate in any discussions or negotiations with
respect to, or provide any information to any Third Party in connection with, any
Acquisition Candidate Proposal or (B) enter into any letter of intent or agreement in
principle or any Contract providing for any Acquisition Candidate Proposal, that in each
case of the immediately foregoing clauses (A) and (B) would reasonably be
expected to (x) adversely impact or delay Parent in obtaining the Parent Stockholder
Approval or the
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Debt Financing or (y) otherwise materially impair, delay or prevent the consummation of
the Merger, the Coniston Transaction, or any of the other transactions contemplated by this
Agreement or the Framework Agreement; or
(xv) authorize, recommend, propose or announce an intention to do any of the foregoing
or enter into any Contract to do any of the foregoing.
Section 4.2 No Solicitation With Respect to Company. (a) From the date of this Agreement
until the earlier of the Effective Time or the Termination Date, the Company shall not, nor shall
it permit any of its Subsidiaries to, nor shall it authorize or permit any officer, director or
employee of (in each case solely in their respective capacities as an officer, director and/or
employee of the Company or any of its Subsidiaries), or any financial advisor, attorney, accountant
or other advisor or representative (“Representatives”) of, the Company or any of its
Subsidiaries to, directly or indirectly, (i) solicit, initiate or knowingly facilitate, induce or
encourage the submission of, any Company Takeover Proposal (as hereinafter defined); (ii) enter
into any letter of intent or agreement in principle or any Contract providing for, relating to or
in connection with, any Company Takeover Proposal or any proposal that could reasonably be expected
to lead to a Company Takeover Proposal; (iii) approve, endorse or recommend any Company Takeover
Proposal; (iv) enter into, continue or otherwise participate in any discussions or negotiations
with any Third Party with respect to any Company Takeover Proposal; or (v) furnish to any Third
Party any non-public information regarding the Company or any of its Subsidiaries to, or afford
access to the properties, books and records of the Company to, any Third Party in connection with
or in response to any Company Takeover Proposal; provided, however, that nothing
contained in this Agreement shall prohibit (A) the Company or its Board of Directors from complying
with Rules 14d-9 and 14e-2 promulgated under the Exchange Act with regard to any Company Takeover
Proposal or publicly disclosing the existence of any Company Takeover Proposal to the extent
required by applicable Law; provided, however, that (x) compliance with such rules
shall in no way limit or modify the effect that any such action pursuant to such rules has under
this Agreement and (y) in no event shall the Company or its Board of Directors, or any committee
thereof, take, or agree or resolve to take, any action prohibited by Section 5.2(e), or (B)
the Company or its Board of Directors, directly or indirectly through any of its officers,
directors, employees or Representatives, prior to obtaining the Company Stockholder Approval, from
taking any of the actions described in clauses (iv) and (v) above in this
Section 4.2(a) in response to any unsolicited bona fide written Company Takeover Proposal
that the Board of Directors of the Company concludes in good faith, after consultation with its
outside financial advisors, constitutes or is reasonably expected to result in, a Superior Proposal
if (1) the Board of Directors of the Company concludes in good faith, after consultation with its
outside legal counsel, that the failure to take such action with respect to such Company Takeover
Proposal would be inconsistent with the exercise by the Board of Directors of its fiduciary duties
under applicable Law, (2) such Company Takeover Proposal was not solicited in violation of this
Section 4.2, and (3) prior to furnishing any non-public information to, or entering into
discussions or negotiations with, such Third Party (x) the Company receives from such Third Party
an executed confidentiality agreement with provisions not less favorable to the Company than those
contained in the Confidentiality Agreement, and (y) the Company provides to Parent in accordance
with Section 4.2(b) the information required under Section 4.2(b) to be delivered
by the Company to Parent. The Company agrees that it and its Subsidiaries shall not enter into any
confidentiality agreement with any Person subsequent to the date of this
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Agreement that prohibits the Company from providing information to Parent that is required to be
provided to Parent under this Section 4.2.
(b) The Company shall promptly, and in any event no later than twenty-four (24) hours after it
receives any Company Takeover Proposal, or any written request for nonpublic information regarding
the Company or any of its Subsidiaries in connection with a Company Takeover Proposal or any
inquiry with respect to or which could reasonably be expected to lead to any Company Takeover
Proposal, advise Parent orally and in writing of such Company Takeover Proposal or request,
including providing the identity of the Third Party making or submitting such Company Takeover or
request, and, (i) if it is in writing, a copy of such Company Takeover Proposal and any related
draft agreements and other written material setting forth the material terms and conditions of such
Company Takeover Proposal and (ii) if oral, a reasonably detailed summary thereof that is made or
submitted by any Third Party during the period between the date hereof and the Closing. The
Company shall keep Parent informed in all material respects on a prompt basis of the status and
details of any such Company Takeover Proposal or with respect to any change to the material terms
of any such Company Takeover Proposal. The Company agrees that, subject to restrictions under Laws
applicable to the Company and its Subsidiaries, it shall promptly provide to Parent any non-public
information concerning the Company and its Subsidiaries that the Company provides to any Third
Party in connection with any Company Takeover Proposal which was not previously provided to Parent.
(c) Immediately following the execution of this Agreement, the Company shall, and shall cause
its Subsidiaries and its and their respective officers, directors and employees, and shall cause
its and their respective Representatives to, immediately cease and terminate any activities,
discussions or negotiations existing as of the date of this Agreement between the Company or any of
its Subsidiaries or any of their respective officers, directors, employees or Representatives, on
the one hand, and any Third Party, on the other hand, with respect to any Company Takeover
Proposal.
Section 4.3 No Solicitation With Respect to Parent. (a) From the date of this
Agreement until the earlier of the Effective Time or the Termination Date, Parent shall not, nor
shall it permit any of its Subsidiaries to, nor shall it authorize or permit any officer, director
or employee of (in each case solely in their respective capacities as an officer, director and/or
employee of Parent or any of its Subsidiaries), or any Representative of, Parent or any of its
Subsidiaries to, directly or indirectly, (i) solicit, initiate or knowingly facilitate, induce or
encourage the submission of, any Parent Takeover Proposal (as hereinafter defined); (ii) enter into
any letter of intent or agreement in principle or any Contract providing for, relating to or in
connection with, any Parent Takeover Proposal or any proposal that could reasonably be expected to
lead to a Parent Takeover Proposal; (iii) approve, endorse or recommend any Parent Takeover
Proposal; (iv) enter into, continue or otherwise participate in any discussions or negotiations
with any Third Party with respect to any Parent Takeover Proposal; or (v) furnish to any Third
Party any non-public information regarding Parent or any of its Subsidiaries to, or afford access
to the properties, books and records of Parent to, any Third Party in connection with or in
response to any Parent Takeover Proposal; provided, however, that nothing contained
in this Agreement shall prohibit (A) Parent or its Board of Directors from complying with Rules
14d-9 and 14e-2 promulgated under the Exchange Act with regard to any Parent Takeover Proposal or
publicly disclosing the existence of any Parent Takeover Proposal to the extent
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required by applicable Law; provided, however, that (x) compliance with such
rules shall in no way limit or modify the effect that any such action pursuant to such rules has
under this Agreement and (y) in no event shall Parent or its Board of Directors, or any committee
thereof, take, or agree or resolve to take, any action prohibited by Section 5.2(b), or (B)
Parent or its Board of Directors, directly or indirectly through any of its officers, directors,
employees or Representatives, prior to obtaining the Parent Stockholder Approval, from taking any
of the actions described in clauses (iv) and (v) above in this Section
4.3(a) in response to any unsolicited bona fide written Parent Takeover Proposal that the Board
of Directors of Parent concludes in good faith, after consultation with its outside financial
advisors, constitutes or is reasonably expected to result in, a Superior Proposal if (1) the Board
of Directors of Parent concludes in good faith, after consultation with its outside legal counsel,
that the failure to take such action with respect to such Parent Takeover Proposal would be
inconsistent with the exercise by the Board of Directors of its fiduciary duties under applicable
Law, (2) such Parent Takeover Proposal was not solicited in violation of this Section 4.3,
and (3) prior to furnishing any non-public information to, or entering into discussions or
negotiations with, such Third Party (x) Parent receives from such Third Party an executed
confidentiality agreement with provisions not less favorable to Parent than those contained in the
Confidentiality Agreement, and (y) Parent provides to the Company in accordance with Section
4.3(b) the information required under Section 4.3(b) to be delivered by Parent to the
Company. Parent agrees that it and its Subsidiaries shall not enter into any confidentiality
agreement with any Person subsequent to the date of this Agreement that prohibits Parent from
providing information to the Company that is required to be provided to the Company under this
Section 4.3.
(b) Parent shall promptly, and in any event no later than twenty-four (24) hours after it
receives any Parent Takeover Proposal, or any written request for nonpublic information regarding
Parent or any of its Subsidiaries in connection with a Parent Takeover Proposal, advise the Company
orally and in writing of such Parent Takeover Proposal or request, including providing the identity
of the Third Party making or submitting such Parent Takeover or request, and, (i) if it is in
writing, a copy of such Parent Takeover Proposal and any related draft agreements and other written
material setting forth the material terms and conditions of such Parent Takeover Proposal and (ii)
if oral, a reasonably detailed summary thereof that is made or submitted by any Third Party during
the period between the date hereof and the Closing. Parent shall keep the Company informed in all
material respects on a prompt basis of the status and details of any such Parent Takeover Proposal
or with respect to any change to the material terms of any such Parent Takeover Proposal. Parent
agrees that, subject to restrictions under Laws applicable to Parent and its Subsidiaries, it shall
promptly provide to the Company any non-public information concerning Parent and its Subsidiaries
that Parent provides to any Third Party in connection with any Parent Takeover Proposal which was
not previously provided to the Company.
(c) Immediately following the execution of this Agreement, Parent shall, and shall cause its
Subsidiaries and its and their respective officers, directors and employees, and shall cause its
and their respective Representatives to, immediately cease and terminate any activities,
discussions or negotiations existing as of the date of this Agreement between Parent or any of its
Subsidiaries or any of their respective officers, directors, employees or Representatives, one the
one hand, and any Third Party, on the other hand, with respect to any Parent Takeover Proposal.
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Section 4.4 Third Party Standstill Agreements. (a) During the period from the date
of this Agreement through the earlier of the Effective Time and the Termination Date, the Company
shall not terminate, amend, modify or waive any provision of any confidentiality agreement relating
to a Company Takeover Proposal or standstill agreement to which the Company or any of its
Subsidiaries is a party (other than any involving Parent). During such period, the Company agrees
to enforce, to the fullest extent permitted under applicable Law, the provisions of any such
agreements, including obtaining injunctions to prevent any breaches of such agreements and to
enforce specifically the terms and provisions thereof in any court of the United States or any
state thereof having jurisdiction.
(b) During the period from the date of this Agreement through the earlier of the Effective
Time and the Termination Date, Parent shall not terminate, amend, modify or waive any provision of
any confidentiality agreement relating to a Parent Takeover Proposal or standstill agreement to
which Parent or any of its Subsidiaries is a party (other than any involving the Company). During
such period, Parent agrees to enforce, to the fullest extent permitted under applicable Law, the
provisions of any such agreements, including obtaining injunctions to prevent any breaches of such
agreements and to enforce specifically the terms and provisions thereof in any court of the United
States or any state thereof having jurisdiction.
ARTICLE V
ADDITIONAL AGREEMENTS
Section 5.1 Preparation of the Registration Statement and the Joint Proxy Statement.
As promptly as practicable following the date of this Agreement, Parent and the Company shall
prepare, and Parent shall file with the SEC, the Registration Statement, in which the Joint Proxy
Statement will be included as a prospectus. Each of Parent and the Company shall cooperate in the
preparation and filing of the Registration Statement and Joint Proxy Statement. Each of Parent and
the Company shall use its commercially reasonable efforts to cause the Registration Statement and
the Joint Proxy Statement to comply with the rules and regulations promulgated by the SEC, to have
the Registration Statement declared effective under the Securities Act as promptly as practicable
after such filing and to keep the Registration Statement effective as long as is necessary to
consummate the Merger and the other transactions contemplated hereby. The Company and Parent shall
provide the other with the opportunity to review and comment on such documents prior to their
filing with the SEC. No filing of, or amendment or supplement to, the Registration Statement or
the Joint Proxy Statement will be made by Parent or the Company, as applicable, without the other’s
prior consent (which shall not be unreasonably withheld, delayed or conditioned) and without
providing the other the opportunity to review and comment thereon. Each of Parent and the Company
shall use commercially reasonable efforts to cause to be delivered to the other a “comfort letter”
of its independent auditors, dated the date that is two (2) Business Days prior to the date on
which the Registration Statement becomes effective. Parent or the Company, as applicable, will
advise the other promptly after it receives oral or written notice of the time when the
Registration Statement has become effective or any supplement or amendment has been filed, the
issuance of any stop order, the suspension of the qualification of the Parent Common Stock issuable
as the Per Share Merger Consideration in connection with the Merger for offering or sale in any
jurisdiction, or any oral or written request by the SEC for amendment of the Registration Statement
or the Joint
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Proxy Statement or comments thereon and responses thereto or requests by the SEC for
additional information, and will promptly provide the other with copies of any written
communication from the SEC or any state securities commission. If at any time prior to the
Effective Time any information relating to Parent or the Company, or any of their respective
Affiliates, officers or directors, should be discovered by Parent or the Company which should be
set forth in an amendment or supplement to any of the Registration Statement or the Joint Proxy
Statement, so that any of such documents would not include any misstatement of a material fact or
omit to state any material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, the party which discovers such
information shall promptly notify the other parties and Parent and the Company shall cooperate as
appropriate to prepare and promptly file with the SEC an appropriate amendment or supplement
describing such information shall be promptly filed with the SEC, after the other party has had a
reasonable opportunity to review and comment thereon, and, to the extent required by applicable
Law, disseminated to the respective stockholders of the Company. As promptly as practicable after
the Registration Statement shall have become effective, the Company shall distribute the Joint
Proxy Statement to its stockholders.
Section 5.2 Stockholder Meetings. (a) Each of the Company and Parent shall take all
action necessary in accordance with applicable Laws and (i) the Company Charter and the Company
Bylaws, in the case of the Company, and (ii) the Parent Charter and the Parent Bylaws, in the case
of Parent, to duly give notice of, convene and hold a meeting of its stockholders, respectively, to
be held as promptly as practicable after the Registration Statement is declared effective under the
Securities Act, to consider (x) in the case of Parent, the Share Issuance (the “Parent
Stockholder Meeting”) and (y) in the case of the Company, the adoption of this Agreement and
the approval of the transactions contemplated hereby, including the Merger (the “Company
Stockholder Meeting” and together with the Parent Stockholder Meeting, the “Stockholder
Meetings”). The Company and Parent shall coordinate and cooperate with respect to the timing
of such meetings and shall use their commercially reasonable efforts to hold such meetings on the
same day.
(b) Parent shall, through its Board of Directors, recommend that its stockholders approve the
Share Issuance, shall use commercially reasonable efforts to (i) solicit from its stockholders
proxies in favor of the Share Issuance and (ii) take all other action necessary or advisable to
secure the Parent Stockholder Approval. Except as otherwise provided in Section 5.2(c) or
Section 5.2(d), neither the Board of Directors of Parent nor any committee thereof shall
(A) withhold, withdraw, modify or qualify, or propose publicly to withhold, withdraw, modify or
qualify the Parent Recommendation in a manner adverse to the Company or (B) recommend, adopt or
approve, or publicly propose to recommend, adopt or approve, any Parent Takeover Proposal (any
action described in clause (A) or (B) being referred to as a “Parent Adverse
Recommendation Change”).
(c) Notwithstanding anything in this Agreement to the contrary, with respect to a Parent
Takeover Proposal, the Board of Directors of Parent may, at any time prior to receipt of the Parent
Stockholder Approval, effect a Parent Adverse Recommendation Change, if (and only if): (i) a
written Parent Takeover Proposal that was not solicited in violation of Section 4.3(a) is
made to Parent by a Third Party and such Parent Takeover Proposal is not withdrawn; (ii) the Board
of Directors of Parent determines in good faith after consultation with its financial
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advisors that such Parent Takeover Proposal constitutes a Superior Proposal; (iii) following
consultation with its outside legal counsel, the Board of Directors of Parent determines that the
failure to make a Parent Adverse Recommendation Change would be inconsistent with the exercise of
its fiduciary duties to the stockholders of Parent under applicable Laws; (iv) Parent provides the
Company five (5) Business Days’ prior written notice of its intention to take such action, which
notice shall include the information with respect to such Superior Proposal that is specified in
Section 4.3(b); (v) during such five Business Day period, Parent and its Representatives
have negotiated in good faith with the Company regarding any revisions to the terms of the
transactions contemplated by this Agreement proposed by the Company in response to such Superior
Proposal; and (vi) at the end of the five (5) Business Day period described in the immediately
foregoing clause (v), the Board of Directors of Parent again makes the determination in
good faith after consultation with its outside legal counsel and financial advisors (and taking
into account any adjustment or modification of the terms of this Agreement proposed by the Company)
that the Parent Takeover Proposal continues to be a Superior Proposal and that the failure to make
a Parent Adverse Recommendation Change would be inconsistent with the exercise by the Board of
Directors of Parent of its fiduciary duties to the stockholders of Parent under applicable Laws.
(d) Nothing in this Agreement shall prohibit or restrict the Board of Directors of Parent, in
circumstances not involving or relating to a Parent Takeover Proposal, from effecting a Parent
Adverse Recommendation Change in response to the occurrence of a Parent Intervening Event if (and
only if): (i) the Board of Directors of Parent determines in good faith (after consultation with
its outside legal counsel) that failure to take such action would be inconsistent with the exercise
by the Board of Directors of Parent of its fiduciary duties to the stockholders of Parent under
applicable Laws; (ii) Parent has provided to the Company at least five (5) Business Days’ prior
written notice describing the Parent Intervening Event and advising the Company that Board of
Directors of Parent intends to take such action and specifying the reasons therefor in reasonable
detail; (iii) during such five (5) Business Day period, Parent and its Representatives have
negotiated in good faith with the Company regarding any revisions to the terms of the transaction
contemplated by this Agreement proposed by the Company in response to such Parent Intervening
Event; and (iv) at the end of the five (5) Business Day period described in the immediately
foregoing clause (iii), the Board of Directors of Parent again makes the determination in
good faith after consultation with its outside legal counsel (and taking into account any
adjustment or modification of the terms of this Agreement proposed by the Company) that a Parent
Intervening Event continues to exist and that the failure to make a Parent Adverse Recommendation
Change would be inconsistent with the exercise by the Board of Directors of Parent of its fiduciary
duties to the stockholders of Parent under applicable Laws. Parent agrees to submit the Share
Issuance to its stockholders for approval whether or not the Board of Directors of Parent
determines to make a Parent Adverse Recommendation Change.
(e) The Company shall, through its Board of Directors, recommend that its stockholders adopt
and approve this Agreement and the transactions contemplated hereby, including the Merger, shall
use commercially reasonable efforts to (i) solicit from its stockholders proxies in favor of the
approval and adoption of this Agreement and the transactions contemplated hereby, including the
Merger, and (ii) take all other action necessary or advisable to secure the Company Stockholder
Approval. Except as otherwise provided in Section 5.2(f) or Section 5.2(g),
neither the Board of Directors of the Company nor any
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committee thereof shall (A) withhold, withdraw, modify or qualify, or propose publicly to
withhold, withdraw, modify or qualify the Company Recommendation in a manner adverse to Parent or
(B) recommend, adopt or approve, or publicly propose to recommend, adopt or approve, any Company
Takeover Proposal (any action described in clause (A) or (B) being referred to as a
“Company Adverse Recommendation Change”).
(f) Notwithstanding anything in this Agreement to the contrary, with respect to a Company
Takeover Proposal, the Board of Directors of the Company may at any time prior to receipt of the
Company Stockholder Approval, effect a Company Adverse Recommendation Change, if (and only if): (i)
a written Company Takeover Proposal that was not solicited in violation of Section 4.2(a)
is made to the Company by a Third Party and such Company Takeover Proposal is not withdrawn; (ii)
the Board of Directors of the Company determines in good faith after consultation with its
financial advisors that such Company Takeover Proposal constitutes a Superior Proposal; (iii)
following consultation with its outside legal counsel, the Board of Directors of the Company
determines that the failure to make a Company Adverse Recommendation Change would be inconsistent
with the exercise of its fiduciary duties to the stockholders of the Company under applicable Laws;
(iv) the Company provides Parent five (5) Business Days’ prior written notice of its intention to
take such action, which notice shall include the information with respect to such Superior Proposal
that is specified in Section 4.2(b); (v) during such five (5) Business Day period, the
Company and its Representatives have negotiated in good faith with Parent regarding any revisions
to the terms of the transactions contemplated by this Agreement proposed by Parent in response to
such Superior Proposal; and (vi) at the end of the five (5) Business Day period described in the
foregoing clause (v), the Board of Directors of the Company again makes the determination
in good faith after consultation with its outside legal counsel and financial advisors (and taking
into account any adjustment or modification of the terms of this Agreement proposed by Parent) that
the Company Takeover Proposal continues to be a Superior Proposal and that the failure to make a
Company Adverse Recommendation Change would be inconsistent with the exercise by the Board of
Directors of the Company of its fiduciary duties to the stockholders of the Company under
applicable Laws.
(g) Nothing in this Agreement shall prohibit or restrict the Board of Directors of the
Company, in circumstances not involving or relating to a Company Takeover Proposal, from effecting
a Company Adverse Recommendation Change in response to the occurrence a Company Intervening Event
if (and only if): (i) the Board of Directors of the Company determines in good faith (after
consultation with its outside legal counsel) that failure to take such action would be inconsistent
with the exercise by the Board of Directors of the Company of its fiduciary duties to the
stockholders of the Company under applicable Laws; (ii) the Company has provided Parent at least
five (5) Business Days’ prior written notice describing the Company Intervening Event and advising
Parent that the Board of Directors of the Company intends to take such action and specifying the
reasons therefor in reasonable detail; (iii) during such five (5) Business Day period, the Company
and its Representatives have negotiated in good faith with Parent regarding any revisions to the
terms of the transaction contemplated by this Agreement proposed by Parent in response to such
Company Intervening Event; and (iv) at the end of the five (5) Business Day period described in the
foregoing clause (iii), the Board of Directors of the Company again makes the determination
in good faith after consultation with its outside legal counsel (and taking into account any
adjustment or modification of the terms of this Agreement proposed by Parent) that a Company
Intervening Event continues to exist and that the failure to
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make a Company Adverse Recommendation Change would be inconsistent with the exercise by the
Board of Directors of the Company of its fiduciary duties to the stockholders of the Company under
applicable Laws. The Company agrees to submit this Agreement to its stockholders for approval and
adoption whether or not the Board of Directors of the Company determines to make a Company Adverse
Recommendation Change.
Section 5.3 Access to Information. Subject to currently existing contractual
restrictions and restrictions under Laws applicable to Parent or to the Company or any of their
respective Subsidiaries, as the case may be, each of Parent and the Company shall afford to the
other party and to the officers, employees and Representatives of such other party, reasonable
access during normal business hours during the period from the date of this Agreement through the
earlier of the Effective Time and the Termination Date, to its and its Subsidiaries’ employees,
properties, books, contracts, commitments and records (including the work papers of independent
accountants, if available and subject to the consent of such independent accountants), and such
other information concerning its business, properties and personnel as the other may reasonably
request. No investigation pursuant to this Section 5.3 shall affect any representation or
warranty in this Agreement of any party hereto or any condition to the obligations of the parties
hereto. Notwithstanding the foregoing, neither the Company nor Parent shall be required to afford
such access if it would cause a risk of a loss of privilege to such party or any of its
Subsidiaries or would constitute a violation of any applicable Law (it being agreed that the
parties shall use their commercially reasonable efforts to cause such information to be provided in
a manner that does not cause such violation). All information obtained pursuant to this
Section 5.3 shall be kept confidential in accordance with the Confidentiality Agreement,
dated November 12, 2009, between Parent, Manchester and the Company, as amended (the
“Confidentiality Agreement”).
Section 5.4 Current Nasdaq Quotation. Each of Parent and the Company shall use its
commercially reasonable efforts to continue the quotation of the Parent Common Stock and the
Company Common Stock, respectively, on Nasdaq during the term of this Agreement.
Section 5.5 Fees and Expenses. (a) Except as provided in this Section 5.5 and
Section 5.10, whether or not the Merger is consummated, all costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby, including the fees and
disbursements of counsel, financial advisors and accountants, shall be paid by the party incurring
such costs and expenses; provided, however, that all HSR Act filing fees and all
costs and expenses incurred in connection with the printing, filing and mailing of the Joint Proxy
Statement and the Registration Statement (including the applicable SEC filing fees) shall be
divided equally between Parent and the Company.
(b) Notwithstanding any provision in this Agreement to the contrary, if this Agreement is
terminated by the Company or Parent pursuant to Section 7.1(d)(i) or by Parent pursuant to
Section 7.1(b) and, in each case, a Company Takeover Proposal existed between the date
hereof and the Termination Date and, in the case of a termination pursuant to Section
7.1(d)(i), the Company Stockholder Approval has not been obtained at least five (5) Business
Days prior to the Outside Date, then the Company shall (without prejudice to any other rights
Parent may have against the Company for breach of this Agreement) reimburse Parent within two (2)
Business Days after the Termination Date by wire transfer of immediately available
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funds to an account specified in writing by Parent for all Transaction Expenses of Parent;
provided, however, that in the case of a termination by Parent pursuant to
Section 7.1(b), the Company shall not be required to reimburse Parent such Transaction
Expenses if Parent or Merger Sub is then in breach of any of its agreements, representations and
warranties contained in this Agreement in a manner that would result in Section 6.2(a) not
being satisfied.
(c) Notwithstanding any provision in this Agreement to the contrary, if this Agreement is
terminated by the Company or Parent pursuant to Section 7.1(d)(i) or by the Company
pursuant to Section 7.1(c) and, in each case, a Parent Takeover Proposal existed between
the date hereof and the Termination Date and, in the case of a termination pursuant to Section
7.1(d)(i), the Parent Stockholder Approval has not been obtained at least five (5) Business
Days prior to the Outside Date, then Parent shall (without prejudice to any other rights the
Company may have against Parent for breach of this Agreement) reimburse the Company within two (2)
Business Days after the Termination Date by wire transfer of immediately available funds to an
account specified in writing by the Company for all Transaction Expenses of the Company;
provided, however, that in the case of a termination by the Company pursuant to
Section 7.1(c), Parent shall not be required to reimburse the Company such Transaction
Expenses if the Company is then in breach of any of its agreements, representations and warranties
contained in this Agreement in a manner that would result in Section 6.3(a) not being
satisfied.
(d) Notwithstanding any provision in this Agreement to the contrary, if (i) this Agreement is
terminated by the Company or Parent pursuant to Section 7.1(d)(i) or by Parent pursuant to
Section 7.1(b) and, in each case, a Company Takeover Proposal existed between the date
hereof and the Termination Date and, in the case of a termination pursuant to Section
7.1(d)(i), the Company Stockholder Approval has not been obtained at least five (5) Business
Days prior to the Outside Date, and, concurrently with, or within twelve months after, any such
Termination Date, a Company Acquisition Transaction is consummated or the Company or any of its
Subsidiaries enters into any letter of intent, agreement in principle, acquisition agreement or
other similar agreement with respect to a Company Acquisition Transaction or (ii) this Agreement is
terminated by the Company or Parent pursuant to Section 7.1(e) or by Parent pursuant to
Section 7.1(g), then, in each of the cases of the immediately foregoing clauses (i)
and (ii), the Company shall pay to Parent the Termination Fee by wire transfer of
immediately available funds to an account specified in writing by Parent, such payment to be made
promptly, but in any event no later than, in the case of clause (i), the earlier to occur
of (A) the date on which such Company Acquisition Transaction is consummated and (B) the date on
which the Company enters into such letter of intent, agreement in principle, acquisition agreement
or similar agreement with respect to a Company Acquisition Transaction or, in the case of
clause (ii), two (2) Business Day after such termination; provided,
however, that if this Agreement is terminated as described in clause (i) or
(ii) of this Section 5.5(d) prior to the Coniston Closing, then the Company shall
pay the Termination Fee to Parent only if the Company has received an Acceptance Notice from
Parent; provided, further, that if this Agreement is terminated by the Company or
Parent pursuant to Section 7.1(e) and a Company Takeover Proposal existed between the date
hereof and the Termination Date and the Termination Date occurs after the date of the Coniston
Closing and, concurrently with, or within twelve months after any such Termination Date, a Company
Acquisition Transaction is consummated or the Company or any of its Subsidiaries shall enter into
any letter of intent,
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agreement in principle, acquisition agreement or other similar agreement with respect to a
Company Acquisition Transaction, then the Company shall pay to Parent $40,000,000 less the amount
of the Termination Fee previously paid by the Company pursuant to this Section 5.5(d)by
wire transfer of immediately available funds to an account specified in writing by Parent, such
payment to be made no later than the earlier to occur of (A) the date on which such Company
Acquisition Transaction is consummated and (B) the date on which the Company enters into such
letter of intent, agreement in principle, acquisition agreement or similar agreement with respect
to a Company Acquisition Transaction.
(e) Notwithstanding any provision in this Agreement to the contrary, if (i) this Agreement is
terminated by the Company or Parent pursuant to Section 7.1(d)(i) or by the Company
pursuant to Section 7.1(c) and, in each case, a Parent Takeover Proposal existed between
the date hereof and the Termination Date and, in the case of a termination pursuant to Section
7.1(d)(i), the Parent Stockholder Approval has not been obtained at least five (5) Business
Days prior to the Outside Date, and, concurrently with, or within twelve months after any such
Termination Date, a Parent Acquisition Transaction is consummated or Parent or any of its
Subsidiaries shall enter into any letter of intent, agreement in principle, acquisition agreement
or other similar agreement with respect to a Parent Acquisition Transaction or (ii) this Agreement
is terminated by the Company or Parent pursuant to Section 7.1(f) or by the Company
pursuant to Section 7.1(h), then, in each of the cases of the immediately foregoing
clauses (i) and (ii), Parent shall pay to the Company the Termination Fee by wire
transfer of immediately available funds to an account specified in writing by the Company, such
payment to be made promptly, but in any event no later than, in the case of clause (i), the
earlier to occur of (A) the date on which such Parent Acquisition Transaction is consummated and
(B) the date on which Parent enters into such letter of intent, agreement in principle, acquisition
agreement or similar agreement with respect to a Parent Acquisition Transaction or, in the case of
clause (ii), two (2) Business Day after such termination; provided,
however, that if this Agreement is terminated as described in clause (i) or
(ii) of this Section 5.5(e) prior to the Coniston Closing, then Parent shall pay
the Termination Fee to the Company only if Parent has received an Acceptance Notice from the
Company; provided, further, that if this Agreement is terminated by the Company or
Parent pursuant to Section 7.1(f) and a Parent Takeover Proposal existed between the date
hereof and the Termination Date and the Termination Date occurs after the date of the Coniston
Closing and, concurrently with, or within twelve months after any such Termination Date, a Parent
Acquisition Transaction is consummated or Parent or any of its Subsidiaries shall enter into any
letter of intent, agreement in principle, acquisition agreement or other similar agreement with
respect to a Parent Acquisition Transaction, then Parent shall pay to the Company $40,000,000 less
the amount of the Termination Fee previously paid by Parent pursuant to this Section 5.5(e)
by wire transfer of immediately available funds to an account specified in writing by the
Company, such payment to be made no later than the earlier to occur of (A) the date on which such
Parent Acquisition Transaction is consummated and (B) the date on which Parent enters into such
letter of intent, agreement in principle, acquisition agreement or similar agreement with respect
to a Parent Acquisition Transaction.
(f) Notwithstanding any provision in this Agreement to the contrary, if (i) this Agreement is
terminated by Parent or the Company pursuant to Section 7.1(k) or (ii) this Agreement is
terminated by Parent or the Company pursuant to Section 7.1(d)(i) at a time, in the case of
this clause (ii), when (x) the conditions contained in Sections 6.1(c),
6.1(e), and 6.3(c)
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have been satisfied (other than, in the case of Section 6.1(c)(ii) or Section
6.1(e), the failure to satisfy such condition as a result of the Coniston Transaction), (y) the
failure of the Company to comply in all material respects with Section 5.18(e) has not been
the primary cause of the failure of the Coniston Closing to occur, and (z) the Company is not in
breach of any of its agreements, representations or warranties contained in this Agreement in a
manner as would result in Section 6.3(a) not being satisfied, then, in each of the cases of
the immediately foregoing clauses (i) and (ii), Parent shall pay to the Company
within two (2) Business Days after the Termination Date the Termination Fee by wire transfer of
immediately available funds to an account specified in writing by the Company; provided
that if this Agreement is terminated as described in clauses (i) or (ii) of this
Section 5.5(f) prior to the Coniston Closing, then Parent shall pay the Termination Fee to
the Company only if Parent has received an Acceptance Notice from the Company.
(g) For purposes of this Section 5.5, each of the parties hereto acknowledges and
agrees that (i) this Agreement may be deemed to be terminated by a party hereto only pursuant to a
single subsection of Section 7.1, (ii) in no event shall more than one Termination Fee be
payable by a party, and (iii) in the event of any termination of this Agreement by Parent or the
Company prior to the Coniston Closing under circumstances where either Parent or the Company (a
“Receiving Party”) is entitled to the Termination Fee pursuant to Section 5.5(d),
5.5(e) or 5.5(f), notwithstanding any provision in this Agreement to the contrary,
the Receiving Party shall have a period of twenty (20) Business Days commencing on the Termination
Date (the “Termination Fee Period”) to determine whether to accept or reject such
Termination Fee from the party required under Section 5.5(d), 5.5(e) or
5.5(f) to pay such Termination Fee (the “Paying Party”) by either (A) delivering an
Acceptance Notice to the Paying Party prior to the expiration of the Termination Fee Period, in
which case the Receiving Party will be deemed to have accepted such Termination Fee and the Paying
Party shall pay such Termination Fee to the Receiving Party within two (2) Business Days after
receipt of such Acceptance Notice or (B) not delivering to the Paying Party an Acceptance Notice
prior to the expiration of the Termination Fee Period or delivering to the Paying Party prior to
the expiration of the Termination Fee Period a written notice of the Receiving Party’s rejection of
such Termination Fee, which in either case, the Receiving Party shall (x) be deemed to have
rejected the payment of such Termination Fee and waived any and all rights to a Termination Fee
under this Agreement and (y) be entitled to seek any remedy for a breach of this Agreement at Law,
in equity or otherwise; provided, however, that upon payment in full and acceptance
by the Receiving Party of such Termination Fee in accordance with the terms of this Agreement, in
the event this Agreement is terminated prior to the Coniston Closing, such payment shall be the
sole and exclusive remedy (other than for injunctive relief or specific performance as provided in
Section 8.7 and other than as provided in the last sentence of Section 5.18(e)) of
the Receiving Party and its Affiliates arising out of or relating to this Agreement or any
Transaction Document (or with respect to any claims or disputes arising out of or related to this
Agreement or any Transaction Document or the transactions contemplated hereby or thereby or to the
inducement of any party to enter into this Agreement or any Transaction Document, whether for
breach of contract, tortious conduct or otherwise and whether predicated on common law, statute or
otherwise), and the Receiving Party and its Affiliates shall be precluded from any other remedy (or
seeking any other remedy) against the Paying Party or its Affiliates for monetary damages arising
out of or relating to this Agreement or any Transaction Document (or with respect to any claims or
disputes arising out of or related to this Agreement or any Transaction Document or the
transactions contemplated hereby or thereby or to the inducement of any party to enter into this
Agreement or any
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Transaction Document, whether for breach of contract, tortious conduct or otherwise and
whether predicated on common law, statute or otherwise) other than the last sentence of Section
5.18(e). Each of the Company and Parent acknowledges that the agreements contained in
Sections 5.5(b), 5.5(c), 5.5(d) 5.5(e), 5.5(f) and this
Section 5.5(g) are an integral part of the transactions contemplated by this Agreement, and
that, without these agreements neither Parent nor the Company would have entered into this
Agreement. Accordingly, if the Company fails to promptly pay the amounts due pursuant to
Sections 5.5(b) or 5.5(d) or Parent fails to promptly pay the amounts due pursuant
to Sections 5.5(c), 5.5(e) or 5.5(f) and, in order to obtain such payment
Parent or the Company, as the case may be, commences a suit which results in a judgment against the
Company or Parent, as applicable, for any of the amounts set forth in Sections 5.5(b),
5.5(c), 5.5(d), 5.5(e) or 5.5(f), as applicable, the Company shall
pay to the Parent or Parent shall pay to the Company, as the case may be, its costs and expenses
(including attorneys’ fees) in connection with such suit, together with interest on the amounts due
pursuant to Sections 5.5(b), 5.5(c), 5.5(d) 5.5(e)and
5.5(f) at the prime rate of XX Xxxxxx Xxxxx Bank, N.A. in effect on the date such payment
was required to be made.
(h) For purposes of this Section 5.5, “Company Acquisition Transaction” shall have the
meaning ascribed thereto in Article IX, except that references in such definition to “20%”
and “80%” shall be replaced by “50%” (including with respect to the definition of “Company Takeover
Proposal” for purposes of this Section 5.5) and “Parent Acquisition Transaction” shall have
the meaning ascribed thereto in Article IX, except that references in such definition to
“20%,” “35%” and “80%” shall be replaced by “50%” (including with respect to the definition of
“Parent Takeover Proposal” for purposes of this Section 5.5).
Section 5.6 Company Stock Plans and Company Stock Purchase Plan.
(a) As of the Effective Time, each Company Stock Option which is outstanding immediately prior
to the Effective Time pursuant to the Company Stock Plans shall become and represent an option to
purchase the number of shares of Parent Common Stock (a “Substitute Option”) (decreased to
the nearest full share) determined by multiplying (i) the number of shares of Company Common Stock
subject to such Company Stock Option immediately prior to the Effective Time by (ii) the Exchange
Ratio, at an exercise price per share of Parent Common Stock (rounded up to the nearest cent) equal
to the exercise price per share of Company Common Stock under such Company Stock Option immediately
prior to the Effective Time divided by the Exchange Ratio. After the Effective Time, except as
provided above in this Section 5.6, each Substitute Option shall be exercisable upon the
same terms and conditions as were applicable under the Company Stock Option immediately prior to or
at the Effective Time, subject to any acceleration, lapse or other vesting occurring by operation
of the Merger (either alone or in connection with any other event). Parent and the Company shall
take all necessary action to implement and make effective the provisions of this Section
5.6.
(b) As of the Effective Time, all Unvested Share Restrictions, including all repurchase and
forfeiture rights held by the Company, with respect to each Unvested Company Share shall be and
hereby are assigned to Parent, and the shares of Parent Common Stock issued upon the conversion of
the Unvested Company Shares in the Merger shall continue to be unvested and subject to the same
Unvested Share Restrictions which applied to such Unvested Company Shares immediately prior to the
Effective Time, subject to any acceleration, lapse or
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other vesting occurring by operation of the Merger (either alone or in connection with any
other event). The certificates representing such shares of Parent Common Stock shall accordingly
be marked with appropriate legends noting such Unvested Share Restrictions. Parent and the Company
shall take all actions necessary to ensure that, from and after the Effective Time, Parent (or its
assignee) shall be entitled to exercise the rights held by the Company immediately prior to the
Effective Time with respect to all Unvested Share Restrictions.
(c) As of the Effective Time, each Stock Unit shall be adjusted and be converted into a right
to receive a number of shares of Parent Common Stock determined by multiplying (i) the number of
shares of Company Common Stock subject to such Stock Unit, by (ii) the Exchange Ratio. After the
Effective Time, except as provided above in this Section 5.6(c), each Stock Unit shall be
subject to the Stock Unit Terms effective immediately prior to the Effective Time, subject to any
payment, calculation, acceleration, lapse, vesting or other impact occurring by operation of the
Merger (either alone or in connection with any other event). Parent and the Company shall take all
necessary action to implement and make effective the provisions of this Section 5.6(c).
(d) The Company shall cause, and shall amend the Company Stock Purchase Plan as may be
necessary to permit: (i) no new Plan Period (as defined in the Company Stock Purchase Plan) to
commence after the date of this Agreement; (ii) all options under the Company Stock Purchase Plan
outstanding as of the date of this Agreement to be exercised, to the extent of any accumulated
payroll deductions as of the exercise date, on the last Business Day of the Plan Period pending as
of the date of this Agreement; and (iii) the Company Stock Purchase Plan to be terminated
effectively immediately prior to the Effective Time.
Section 5.7 Commercially Reasonable Efforts. (a) Upon the terms and subject to the
conditions set forth in this Agreement, each of Parent and the Company agrees to use its
commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to
be done, and to assist and cooperate with the other parties in doing, all things necessary, proper
or advisable to consummate and make effective, in the most expeditious manner practicable, the
Merger, the Coniston Transaction (in the case of Parent) and the other transactions contemplated by
this Agreement and, in the case of Parent, the Framework Agreement, including using commercially
reasonable efforts to accomplish the following: (i) the taking of all commercially reasonable acts
necessary to cause (A) the conditions precedent set forth in Article VI to be satisfied,
and (B) in the case of Parent, the conditions precedent applicable to Parent set forth in the
Framework Agreement to be satisfied; (ii) the obtaining of all necessary actions or nonactions,
waivers, consents, approvals, orders and authorizations from Governmental Entities and from Persons
other than Governmental Entities and the making of all necessary registrations, declarations and
filings (including registrations, declarations and filings with Governmental Entities, if any) and
the taking of all commercially reasonable steps as may be necessary to avoid any suit, claim,
action, investigation or proceeding by any Governmental Entity; (iii) the defending of any suits,
claims, actions, investigations or proceedings, whether judicial or administrative, challenging
this Agreement or the consummation of the transactions contemplated hereby, including seeking to
have any stay or temporary restraining order entered by any court or other Governmental Entity
vacated or reversed; and (iv) the execution or delivery of any additional instruments reasonably
necessary to consummate the transactions contemplated by, and to fully carry out the purposes of,
this Agreement.
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(b) Subject to the terms and conditions herein provided, and without limiting the foregoing,
the Company and Parent shall (i) as promptly as practicable after the date hereof make their
respective filings and thereafter make any other required submissions under the HSR Act, (ii) use
commercially reasonable efforts to cooperate with the other in (A) determining whether any filings
are required to be made with, or consents, permits, authorizations, waivers or approvals are
required to be obtained from, any Third Party or other Governmental Entities in connection with the
execution and delivery of this Agreement and the consummation of the transactions contemplated
hereby and (B) timely making all such filings and timely seeking all such consents, permits,
authorizations or approvals, (iii) use commercially reasonable efforts to take, or cause to be
taken, all other actions and do, or cause to be done, all other things advisable to consummate and
make effective the transactions contemplated hereby, and (iv) notify the other promptly upon the
receipt of (A) any comments from any officials of any Governmental Entity in connection with any
filings made pursuant hereto and (B) any request by any officials of any Governmental Entity for
amendments or supplements to any filings made pursuant to, or information provided to comply in all
material respects with, any Law. Whenever any event occurs that is required to be set forth in an
amendment or supplement to any filing made with any Governmental Entity pursuant hereto, Parent or
the Company, as the case may be, will promptly inform the other of such occurrence and cooperate in
filing with the applicable Governmental Entity such amendment or supplement. The Company and
Parent shall permit counsel for the other party a reasonable opportunity to review in advance, and
consider in good faith the view of the other party in connection with, any proposed written
communication to any Governmental Entity. Each of the Company and Parent agrees not to participate
in any meeting or discussion, either in person or by telephone, with any Governmental Entity in
connection with the transactions proposed hereunder unless it consults with the other party in
advance and, to the extent not prohibited by such Governmental Entity, gives the other party the
opportunity to attend and participate.
(c) Except as otherwise contemplated in this Agreement, each party shall use all commercially
reasonable efforts to not take any action, or enter into any transaction, which would cause any of
its representations or warranties contained in this Agreement to be untrue or result in a breach of
any covenant made by it in this Agreement.
(d) To the extent necessary in order to accomplish the objectives described in clause
(ii) of Section 5.7(a), Parent and the Company shall use their respective commercially
reasonable efforts to jointly negotiate, commit to and effect, by consent decree, hold separate
order or otherwise, the sale, divestiture or disposition of, or prohibition or limitation on the
ownership or operation by Parent, the Company or any of their respective Subsidiaries of any
portion of the business, properties or assets of Parent, the Company or any of their respective
Subsidiaries; provided; however, that neither Parent nor the Company, nor any of
their respective Subsidiaries, shall offer, take, commit to or accept any action, restrictions or
limitations of or on Parent, the Company or any of their respective Subsidiaries without the prior
written consent of the other party if such action, restriction or limitation, individually or in
the aggregate would, or would reasonably be expected to, result in a Substantial Detriment.
Section 5.8 Public Announcements. Parent and the Company will not issue any press
release with respect to the transactions contemplated by this Agreement or otherwise issue any
written public statements with respect to such transactions without prior consultation
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with the other party, except as may be required by applicable Law or by obligations pursuant
to any listing agreement with any national securities exchange or the rules of Nasdaq.
Section 5.9 State Takeover Laws. If any Takeover Laws shall become applicable to the
transactions contemplated hereby, Parent and the Company and their respective Boards of Directors
shall use their commercially reasonable efforts to 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
Takeover Laws on the transactions contemplated hereby.
Section 5.10 Indemnification; Directors and Officers Insurance. (a) Parent and Merger
Sub agree that all rights to exculpation, indemnification and advancement of expenses now existing
in favor of the current or former directors, officers or employees, as the case may be, of the
Company or its Subsidiaries as provided in their respective certificates of incorporation or
by-laws or other organizational documents or in any Contract to which the Company or any of its
Subsidiaries is a party, shall survive the Merger and shall continue in full force and effect. For
a period of no less than six (6) years from the Effective Time, Parent and the Surviving
Corporation shall maintain in effect the exculpation, indemnification and advancement of expenses
provisions of the Company’s and any of its Subsidiary’s certificate of incorporation and by-laws or
similar organization documents in effect as of the date of this Agreement or in any indemnification
agreements of the Company or its Subsidiaries with any of their respective directors, officers or
employees in effect as of the date of this Agreement, and shall not amend, repeal or otherwise
modify any such provisions in any manner that would adversely affect the rights thereunder of any
individuals who immediately before the Effective Time were current or former directors, officers or
employees of the Company or any of its Subsidiaries; provided, however, that all
rights to indemnification in respect of any Action pending or asserted or any claim made within
such period shall continue until the final disposition of such Action. From and after the Effective
Time, Parent shall assume, be jointly and severally liable for, and honor, guaranty and stand
surety for, and shall cause the Surviving Corporation and its Subsidiaries to honor and perform, in
accordance with their respective terms, each of the covenants contained in this
Section 5.10.
(b) Each of Parent and the Surviving Corporation shall, to the fullest extent permitted under
applicable Law, indemnify and hold harmless (and advance funds in respect of each of the foregoing
and costs of defense to) each current and former director or officer of the Company or any of its
Subsidiaries (each, together with such individual’s heirs, executors or administrators, an
“Indemnified Party”), in each case against any Losses (including advancing attorneys’ fees
and expenses in advance of the final disposition of any Action to each Indemnified Party to the
fullest extent permitted by applicable Law; provided, however, that the Indemnified
Party to whom expenses are advanced provides an undertaking, if and only to the extent required by
applicable Law, to repay such advances if it is ultimately determined that such Indemnified Party
is not entitled to indemnification) in connection with any actual or threatened Action, whether
civil, criminal, administrative or investigative, arising out of, relating to or in connection with
the fact that such Indemnified Party is or was an officer, director or fiduciary of the Company or
any of its Subsidiaries at or prior to the Effective Time. No Indemnified Party shall settle,
compromise or consent to the entry of any judgment in any threatened or actual Action for which
indemnification could be sought by an Indemnified Party hereunder unless
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Parent consents in writing to such settlement, compromise or consent (which consent shall not
be unreasonably withheld, conditioned or delayed).
(c) Parent shall cause the Surviving Corporation to either (i) cause to be obtained a “tail”
insurance policy with respect to the Company’s and its Subsidiaries’ directors’ and officers’
liability insurance and fiduciary liability insurance as in effect as of the Effective Time (a
“D&O Tail Policy”), which D&O Tail Policy (A) shall have a claims period of at least six
(6) years from the Effective Time with respect to claims arising from acts or omissions occurring
prior to the Effective Time with respect to the Indemnified Parties covered by the Company’s and
its Subsidiaries’ directors’ and officers’ liability insurance and fiduciary liability insurance as
of the Effective Time and (B) shall contain terms with respect to scope of coverage and amount no
less favorable, in the aggregate, than those in the Company’s and its Subsidiaries’ existing
directors’ and officers’ liability insurance and fiduciary liability insurance policies as of the
Effective Time, or (ii) maintain the existing officers’ and directors’ liability insurance and
fiduciary liability insurance policies maintained by the Company (provided that Parent may cause
the Surviving Corporation to substitute therefor policies of at least the same scope of coverage
and amount and containing terms and conditions that are not less favorable, in the aggregate, to
the Indemnified Parties) for a period of six (6) years after the Effective Time so long as the
annual premium therefor is not in excess of 300% of the last annual premium paid prior to the date
hereof; provided, however, that if the existing officers’ and directors’ liability
and fiduciary liability insurance policies expire, are terminated or cancelled during such six
(6)-year period or require an annual premium in excess of 300% of the current premium paid by the
Company for such insurance (the “Company’s Current Premium”), then Parent shall cause the
Surviving Corporation to obtain during each year of such six year period as much coverage as can be
obtained for the remainder of such period for a premium not in excess of 300% (on an annualized
basis) of the Company’s Current Premium. In lieu of the foregoing, the Company may purchase, prior
to, on or after the Effective Time, a six-year prepaid D&O Tail Policy in respect of acts or
omissions occurring prior to the Effective Time covering each of the Indemnified Parties.
Section 5.10(c) of the Company Disclosure Letter sets forth the Company’s Current Premium.
(d) Parent shall pay all reasonable expenses, including reasonable attorneys’ fees, that may
be incurred by any Indemnified Party in seeking in good faith to enforce the indemnity and other
obligations provided in this Section 5.10 (subject to reimbursement if a court of competent
jurisdiction subsequently determines pursuant to a non-appealable order that such Indemnified Party
is not entitled to indemnification under this Section 5.10).
(e) The rights of each Indemnified Party hereunder shall be in addition to, and not in
limitation of, any other rights such Indemnified Party may have under the certificate of
incorporation or by-laws or other organization documents of the Company or any of its Subsidiaries
or the Surviving Corporation, any other indemnification arrangement, the DGCL or otherwise. The
provisions of this Section 5.10 shall survive the consummation of the Merger and expressly
are intended to benefit, and are enforceable by, each of the Indemnified Parties.
(f) In the event Parent, the Surviving Corporation or any of their respective successors or
assigns (i) consolidates with or merges into any other person and shall not be the continuing or
surviving corporation or entity in such consolidation or merger or (ii) transfers all
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or substantially all of its properties and assets to any person, then, and in either such
case, proper provision shall be made so that the successors and assigns of Parent or the Surviving
Corporation, as the case may be, shall assume the obligations set forth in this Section
5.10.
Section 5.11 Notification of Certain Matters. Parent shall use its commercially
reasonable efforts to give prompt notice to the Company, and the Company shall use its commercially
reasonable efforts to give prompt notice to Parent, of: (i) the occurrence, or non-occurrence, of
any event the occurrence, or non-occurrence, of which it is aware and which would be reasonably
likely to cause (x) any representation or warranty of the notifying party contained in this
Agreement (or the Framework Agreement in the case of Parent) to be untrue or inaccurate in any
material respect or (y) any covenant, condition or agreement of the notifying party contained in
this Agreement (or the Framework Agreement in the case of Parent) not to be complied with or
satisfied in all material respects, (ii) any failure of the notifying party to comply in a timely
manner with or satisfy any covenant, condition or agreement to be complied with or satisfied by it
hereunder (or under the Framework Agreement in the case of Parent) or (iii) any Circumstances which
would be reasonably likely to, individually or in the aggregate, have a Company Material Adverse
Effect or a Parent Material Adverse Effect, as the case may be, on the notifying party;
provided, however, that the delivery of any notice pursuant to this Section
5.11 shall not limit or otherwise affect the remedies available hereunder to the party
receiving such notice.
Section 5.12 Employee Benefit Plans and Agreements. Parent agrees that it will cause
the Surviving Corporation from and after the Effective Time to assume and honor all Company Plans
and Company Employee Agreements entered into by the Company prior to the date hereof and all
Company Stock Plans. Parent further agrees that all employees of the Company who remain in the
active employment of the Surviving Corporation (the “Continuing Employees”) shall continue
in their existing Company Plans following the Effective Time until such time as, in Parent’s sole
discretion, an orderly transition can be accomplished to other employee benefit plans and programs
maintained by Parent or Surviving Corporation for employees; provided that, in any event, for a
period of at least twelve (12) months from the Closing Date, the Continuing Employees shall receive
employee benefits at least substantially equivalent in the aggregate to either (i) the employee
benefits provided to similarly situated employees of Parent or (ii) the employee benefits provided
by the Company immediately prior to the Effective Time; provided, that in either case
equity-based compensation shall be granted pursuant to the Parent Stock Plans and in accordance
with Parent’s policies and procedures. Such employee benefits shall be provided without any
preexisting conditions limitations or exclusions to the extent no such limitations or exclusions
applied as of the Closing to the Continuing Employees under the plans of the Company in which such
employees participate immediately prior to the Closing Date and with credit for all annual
deductibles and co-payments made under Company employee benefit plans for the covered expenses
already incurred by the Continuing Employees for the year in which the Closing occurs. Parent and
the Surviving Corporation shall provide the Continuing Employees with credit for all service with
the Company under all applicable employee benefit plans, programs and policies, including for
purposes of eligibility, waiting periods and vesting (but not benefit accruals other than for
vacation and severance) to the same extent such service would have been recognized by the Company
under comparable plans immediately prior to the Closing Date, except to the extent such treatment
would result in duplicative benefits. Subject to the foregoing provisions of this
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Section 5.12, nothing in this Agreement shall be interpreted as limiting the power of
Parent or the Surviving Corporation to amend or terminate any specific Company Plan or Company
Stock Plan or any other individual employee benefit plan, program, Contract or policy or as
requiring Parent or the Surviving Corporation to offer to continue (other than as required by its
terms) any Company Employee Agreement, except that Parent and the Surviving Corporation shall not
terminate the 2010 Corporate Incentive Compensation Plan for Eligible Company Employees or the 2007
Incentive Compensation Plan for Specified Officers (together, the “Company Bonus Plans”)
prior to payment of bonuses earned thereunder for 2010; provided, however, that the
parties hereto acknowledge and agree that, (x) the Company Bonus Plans will be modified to take
into account costs and other consequences of the transactions contemplated by this Agreement and
potential loss, if any, of an income tax deduction under 162(m) of the Code resulting from any such
modification, and (y) the Company and Parent will cooperate in good faith to develop prior to the
Closing Date appropriate revisions to performance goals and/or performance levels and/or measures
under the Company Bonus Plans for 2010 that reflect a commercially reasonable approach in providing
the incentive compensation awards intended under the Company Bonus Plans. Nothing in this
Agreement shall be interpreted as an amendment or other modification of any Company Plan or any
Parent Plan or any other employee benefit plan, program or arrangement or the establishment of any
employee benefit plan, program or arrangement. Nothing herein shall be deemed to be a guarantee of
employment for any Continuing Employee or any other employee of the Surviving Corporation or any of
its Subsidiaries, or to restrict the right of the Surviving Corporation, Parent or any of their
respective Subsidiaries to terminate or cause to be terminated the employment of any employee at
any time for any or no reason with or without notice. Parent and the Company acknowledge and agree
that all provisions contained in this Section 5.12 are included for the sole benefit of
Parent, Merger Sub, the Company, the Surviving Corporation and their respective Subsidiaries, and
that nothing in this Section 5.12, whether express or implied, shall create any third party
beneficiary or other rights (A) in any other Person, including any employees, former employees, any
participant in any employee benefit plan, program or arrangement (or any dependent or beneficiary
thereof) of Parent, the Company or the Surviving Corporation or any of their respective
Subsidiaries or (B) to continued employment with Parent, the Company, the Surviving Corporation, or
any of their respective Subsidiaries or continued participation in any employee benefit plan,
program or arrangement.
Section 5.13 Tax-Free Reorganization Treatment. During the period from the date of
this Agreement until the earlier of the Effective Time or the Termination Date, unless the other
party shall otherwise agree in writing, neither Parent nor the Company shall, and each of Parent
and the Company shall cause their respective Subsidiaries not to, take or fail to take any action
which action or failure would be contrary to the representations in the Parent Tax Certificate or
the Company Tax Certificate, as the case may be, or to take any action or fail to take any action
which would, to its knowledge, jeopardize the Intended Tax Treatment.
Section 5.14 Nasdaq. Parent shall use its commercially reasonable efforts to cause
the shares of Parent Common Stock to be issued in the Merger to be approved for quotation on
Nasdaq, subject to official notice of issuance, prior to the Effective Time. The Surviving
Corporation shall use its commercially reasonable efforts to cause its shares of common stock to no
longer be quoted on Nasdaq and to be de-registered under the Exchange Act as soon as practicable
following the Effective Time.
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Section 5.15 Certain Corporate Governance and Other Matters. (a) On or prior to the
Effective Time, Parent shall take all action necessary to cause (i) the Parent Charter to be
amended and restated in the form attached hereto as Exhibit D and (ii) the Parent Bylaws to
be amended and restated in the form attached hereto as Exhibit E.
(b) Prior to the Effective Time, Parent shall take all actions as may be necessary to cause at
the Effective Time (i) the number of directors constituting the Board of Directors of Parent as of
the Effective Time to be nine (9) (if, at the Effective Time, Manchester has the right to nominate
one (1) director of Parent pursuant to Section 3.1 of the Relationship Agreement) or ten (10) (if,
at the Effective Time, Manchester has the right to nominate two (2) directors of Parent pursuant to
Section 3.1 of the Relationship Agreement) and (ii) the Board of Directors of Parent as of the
Effective Time to be composed as follows: (A) four (4) directors designated by Parent prior to the
Effective Time (one of whom shall be the Chief Executive Officer of Parent immediately prior to the
Effective Time and three (3) of whom shall meet the independence standards of Nasdaq with respect
to Parent); (B) three (3) directors designated by the Company immediately prior to the Effective
Time (one of whom shall be the President and Chief Executive Officer of the Company immediately
prior to the Effective Time and two (2) of whom shall meet the independence standards of Nasdaq
with respect to Parent); (C) such number of directors designated by Manchester in accordance with
the Relationship Agreement; and (D) one (1) director who meets the independence standards of Nasdaq
with respect to Parent designated in accordance with Exhibit F (the “Independent
Director”).
(c) Parent shall take all actions as may be necessary to cause at the Effective Time each of
the Audit, Compensation, and Nominating and Governance Committees of the Board of Directors of
Parent as of the Effective Time to be composed of a majority of Parent-designated directors (and,
for the avoidance of doubt, a Manchester-designated director shall not constitute a
Parent-designated director) and at least one (1) Company-designated director.
(d) Prior to the Effective Time, Parent shall take all corporate actions as may be necessary
to cause, effective as of the Effective Time: (i) the President and Chief Executive Officer of the
Company as of immediately prior the Effective Time to (A) serve as the Chairman of Parent for a
period of three (3) years following the Effective Time (subject to being elected as a director by
the stockholders of Parent on an annual basis), (B) operate as a member of the senior management
team of the Combined Company during the term of the Chairman Agreement, and (C) have such duties
and responsibilities as shall be determined by the Board of Directors of the Combined Company in
accordance with the Bylaws of the Combined Company and the Chairman Agreement; and (ii) the Chief
Executive Officer of Parent as of immediately prior to the Effective Time to (A) remain as the
Chief Executive Officer of Parent; and (B) serve as a director of Parent for a period of three (3)
years following the Effective Time (subject to being elected as a director of Parent by the
stockholders of Parent on an annual basis). Parent shall use its commercially reasonable efforts
to cause the President and Chief Executive Officer of the Company and the Chief Executive Officer
of Parent as of immediately prior to the Effective Time to be elected as a director of Parent at
each of the next three annual meetings of the stockholders of Parent occurring after the Effective
Time.
(e) Prior to the Effective Time, Parent and the Company shall discuss in good faith and agree
upon an appropriate rebranding strategy for the Combined Company.
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Section 5.16 Section 16 Matters. The Board of Directors of the Company and the Board
of Directors of Parent shall each, prior to the Effective Time, to the extent permitted by law,
take all such actions as may be necessary or appropriate pursuant to Rule 16b-3(d) and Rule
16b-3(e) to exempt the acquisition of Parent Common Stock and the right to receive Parent Common
Stock (including pursuant to substitute awards granted pursuant to Section 5.6) pursuant to
the terms of this Agreement by officers and directors of the Company subject to the reporting
requirements of Section 16(a) of the Exchange Act or by employees or directors of the Company who
may become an officer or director of Parent subject to the reporting requirements of Section 16(a)
of the Exchange Act. Parent and the Company shall provide to counsel to the other party copies of
the resolutions to be adopted by the respective Boards of Directors to implement the foregoing.
Section 5.17 Transaction Litigation. Parent and the Company shall promptly advise
each other orally and in writing of any Action commenced after the date of this Agreement against
Parent or the Company, as the case may be, or any of their respective directors by any stockholder,
relating to this Agreement, the Framework Agreement, the Merger, the Coniston Transaction or any of
the other transactions contemplated this Agreement or the Framework Agreement, and shall keep each
other reasonably informed regarding any such Action. The Company shall give Parent the opportunity
to participate in the defense or settlement of any shareholder litigation against the Company
and/or its directors relating to the Merger and the other transactions contemplated by this
Agreement, and no such settlement shall be agreed to (i) without the prior consultation with Parent
and (ii) in the event such settlement would reasonably be expected to have a Company Material
Adverse Effect, without the prior written consent of Parent. Parent shall give the Company the
opportunity to participate in the defense or settlement of any shareholder litigation against
Parent and/or its directors relating to this Agreement, the Framework Agreement, the Merger, the
Coniston Transaction or any of the other transactions contemplated by this Agreement, and no such
settlement shall be agreed to (i) without prior consultation with the Company and (ii) in the event
such settlement would reasonably be expected to have a Parent Material Adverse Effect, without
prior written consent of the Company. Without limiting in any way the parties’ obligations under
this Section 5.17, each of Parent and the Company shall cooperate, shall cause its
respective Subsidiaries, as applicable, to cooperate, and shall use its commercially reasonable
efforts to cause its directors, officers, employees and Representatives to cooperate in the defense
of such litigation.
Section 5.18 Coniston Transaction. (a) Parent shall deliver the Launch Demand in
accordance with, and subject to the terms of, Section 2.2(e) of the Framework Agreement as promptly
as practicable after Parent is entitled to do so. Parent shall not permit any amendment or
modification to be made to, or any waiver of, any provision or remedy under any of the Transaction
Documents, without the prior written consent of the Company (such consent not to be unreasonably
withheld, conditioned or delayed), other than any waiver provided to avoid termination of this
Agreement by the Company pursuant to Section 7.1(k)(iii). Parent shall keep the Company
informed in all material respects on a prompt basis of the status of the Coniston Transaction,
including by delivering to the Company copies of any written notices Parent receives from
Manchester pursuant to the Framework Agreement and the transactions contemplated thereby promptly
after Parent receives such written notices. Prior to (x) exercising any right of termination under
the Framework Agreement or (y) entering into any agreement with Manchester to terminate the
Framework Agreement, Parent shall provide the Company with
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written notice thereof, including a reasonably detailed description of the reason for such
termination, and shall make available to the Company, for a period of five (5) Business Days prior
to any such termination, the executive officers of Parent to discuss the reason for such
termination. Parent shall not terminate the Framework Agreement pursuant to Section 8.1(a)(vi) of
the Framework Agreement without the prior written consent of the Company. Parent shall provide the
Company with the opportunity to review and comment on the Information Statement to be filed
pursuant to Section 14(c) of the Exchange Act with respect to the approval of certain transactions
contemplated by the Framework Agreement by the stockholders of Parent (the “Information
Statement”) prior to filing the Information Statement with the SEC. The parties understand and
agree that the Information Statement may be a part of the Registration Statement and the Joint
Proxy Statement. Without limiting the foregoing, Parent shall notify the Company promptly upon the
receipt of any comments from Governmental Entity and of any request by any Governmental Entity for
amendments or supplements to the form of Circular or the Information Statement. Parent shall
supply the Company with copies of all correspondence Parent receives between Manchester or any of
its Representatives, on the one hand, and any Governmental Entity, on the other hand, related to
Parent, any of the Transaction Documents or the transactions contemplated thereby or that discloses
information that would reasonably be expected to materially affect the timing or the ability to
consummate such transactions. Prior to responding to any such comments or requests or the filing
or transmission of the form of Circular or the Information Statement, Parent shall use its
commercially reasonable efforts to provide the Company with a reasonable opportunity to review and
comment on any drafts of the Circular and shall provide the Company with a reasonable opportunity
to review and comment on any drafts of the Information Statement, as the case may be, and all
related correspondence Parent receives between Manchester or any of its Representatives, on the one
hand, and any Governmental Entity, on the other hand, in each case related to Parent, any of the
Transaction Documents or the transactions contemplated thereby or that discloses information that
would reasonably be expected to materially affect the timing or the ability to consummate such
transactions, and shall give reasonable consideration to all comments proposed by the Company with
respect to such sections.
(b) During the period from the date of the Framework Agreement to the earlier of (i) the date
of the Coniston Closing and (ii) the date on which the Framework Agreement is terminated, (A)
Parent shall pay, or cause to be paid, the commitment fees specified in the Debt Financing
Commitments as and when due and shall use commercially reasonable efforts to comply with its
obligations and enforce its rights under the Debt Financing Commitments in a timely manner
including if necessary taking legal action in connection therewith to the extent commercially
reasonable, (B) without the consent of the Company (which consent shall not be unreasonably
withheld, conditioned or delayed), Parent shall not agree to any material amendment or modification
to the Debt Financing Commitments, or any waiver of any provision or remedy thereunder, if such
amendment, modification, waiver or remedy adds new (or adversely modifies existing) conditions to
the consummation of the financings contemplated by the Debt Financing Commitments or reduces the
aggregate amount of such financing in any material respect (without a corresponding increase in
another portion of such financing); provided that Parent may amend or modify the Debt
Financing Commitments (1) to add lenders, lead arrangers, book runners, syndication agents or
similar entities that had not executed the Debt Financing Commitments as of the date hereof or (2)
otherwise so long as the terms would not, taken as a whole, adversely impact the ability of Parent
to consummate the transactions
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contemplated by the Framework Agreement, (C) if any portion of the financing under the Debt
Financing Commitments becomes unavailable on the terms and conditions contemplated in the Debt
Financing Commitments, Parent shall use its commercially reasonable efforts to arrange for the
unavailable portion of such financing to be provided from alternative sources as promptly as
practicable in an amount sufficient to consummate the Coniston Transactions and the Contingent
Repurchase (the “Alternative Financing”); provided that Parent shall not be
required to enter into any financing arrangements on terms that, taken as a whole, are less
favorable to Parent in any material respect than those contemplated by the Debt Financing
Commitments and (D) Parent shall keep the Company reasonably and promptly informed with respect to
all material activity concerning the status of the financing contemplated by the Debt Financing
Commitments and shall give prompt notice to the Company of any material adverse change with respect
to such financing of which Parent becomes aware. Without limiting the foregoing, Parent shall
notify the Company promptly, and in any event within two (2) Business Days, if at any time (x) the
Debt Financing Commitments shall expire or be terminated for any reason, (y) the Lenders notify
Parent that they no longer intend to provide part or all of the financing contemplated by the Debt
Financing Commitments to Parent on the terms set forth therein or (z) for any reason Parent no
longer believes in good faith that it will be able to obtain all or any portion of the financing
contemplated by the Debt Financing Commitments on the terms described therein. Except for the
transactions contemplated by this Agreement and the Transaction Documents, Parent shall not, and
shall not permit any of its Affiliates to, without the prior written consent of the Company (which
consent shall not be unreasonably withheld), enter into any transaction, including any merger,
acquisition, Joint Venture, disposition, lease, Contract or debt or equity financing, which
transaction at the time of such transaction is reasonably expected to materially impair, delay or
prevent consummation of the financing contemplated by the Debt Financing Commitments.
(c) In the event of clause (y) of Section 5.18(b), until the Effective Time or
the earlier termination of this Agreement in accordance with Section 7.1, (i) Parent shall
notify the Company promptly and (ii) Parent and Merger Sub shall use their respective commercially
reasonable efforts to obtain any such portion from alternative sources as promptly as practicable
following the occurrence of such event, on terms that (A) are no less favorable in any material
respect to Parent and Merger Sub taken as a whole than those contemplated by the Debt Financing
Commitments, (B) do not impose, in any material respect, or adversely change, any conditions other
than those contemplated by the Debt Financing Commitments, and (C) would not reasonably be expected
to prevent, materially delay or materially impair the ability of Parent or Merger Sub to consummate
the Coniston Transaction or the transactions contemplated by this Agreement on or before the
Outside Date. Parent and Merger Sub shall use their respective commercially reasonable efforts to
take, or cause to be taken, all actions and things necessary, proper or advisable to arrange
promptly and consummate the Debt Financing on the terms and conditions described in the Debt
Financing Commitments or any Alternative Financing commitments, as promptly as practicable but in
any event on or before the Outside Date, including using commercially reasonable efforts to (i)
negotiate definitive agreements with respect to the Debt Financing (the “Debt Financing
Agreements”) (A) on the terms and conditions contained in the Debt Financing Commitments or any
Alternative Financing commitments or (B) on other terms and conditions that (1) are no less
favorable in any material respect to Parent and Merger Sub taken as a whole than those contemplated
by the Debt Financing Commitments, (2) do not impose any new or additional conditions or adversely
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change any existing conditions to the receipt of the Debt Financing as set forth in the Debt
Financing Commitments and (3) would not reasonably be expected to prevent, materially delay or
materially impair the ability of Parent or Merger Sub to consummate the Coniston Transaction or the
transactions contemplated by this Agreement on or before the Outside Date and (ii) satisfy on a
timely basis all conditions applicable to Parent and Merger Sub in Debt Financing Agreements that
are within their control.
(d) Parent and Merger Sub shall, and shall use their commercially reasonable efforts to cause
their Representatives to, comply in all material respects with the terms of the Debt Financing
Commitments, any Alternative Financing commitment, the Debt Financing Agreements and any related
fee and engagement letters. Parent shall (i) furnish to the Company true, complete, correct and
executed copies of the Debt Financing Agreements (other than the fee letter, which shall be
provided in redacted form) promptly upon their execution and (ii) otherwise keep the Company
reasonably informed of the status of Parent’s efforts to arrange the Debt Financing or any
alternative financing, as applicable.
(e) The Company shall provide to Parent, and shall cause its Subsidiaries to, and shall use
its commercially reasonable efforts to cause the respective officers, employees, representatives
and advisors, including legal and accounting, of the Company and its Subsidiaries to, provide to
Parent all cooperation reasonably requested by Parent that is necessary, proper or advisable in
connection with the Secondary Offering, the Debt Financing or any Alternative Financing, including
using commercially reasonable efforts to (i) cause appropriate executive officers and employees of
the Company (A) to provide reasonable participation in a reasonable number of meetings,
presentations, road shows and due diligence sessions with rating agencies and prospective
investors, (B) to provide reasonable and customary management and legal representations to auditors
and (C) to provide reasonable and timely assistance with the preparation of business projections
and similar materials, (ii) otherwise reasonably cooperate with the marketing efforts of the
underwriters for the Secondary Offering or any informational undertakings with respect to the Debt
Financing or any Alternative Financing, (iii) furnish Parent promptly with all reasonable and
customary financial information regarding the Company and its Subsidiaries as shall exist (or if
not existing, using commercially reasonable efforts to prepare such reasonable and customary
financial information) and as may be reasonably requested by Parent, (iv) obtain customary comfort
letters from the auditors of the Company and consent from such auditors for use of any of their
audit reports (including by including such reports in any offering or information documents for the
Secondary Offering) and SAS 100 reviews, and (v) obtain customary legal opinions or other
certificates or documents as may reasonably be requested by Parent, in each case as promptly as
reasonably practicable and to the greatest extent practicable to permit the Secondary Offering to
be launched. If this Agreement is terminated prior to the Effective Time, Parent shall (x) upon
request by the Company, promptly reimburse the Company for all reasonable out-of-pocket costs
incurred by the Company and its Subsidiaries in connection with the cooperation provided pursuant
to this Section 5.18(e); provided that the Company shall use its commercially
reasonable efforts to furnish Parent with notice prior to incurring costs in excess of $150,000 in
the aggregate and (y) indemnify, defend and hold harmless the Company and its Subsidiaries and
their respective directors, officers, employees and Representatives from and against any and all
Losses suffered or incurred by them in connection with Third Party claims arising out of such
cooperation,
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except with respect to information provided by the Company or contained in the Company SEC
Documents.
(f) Nothing contained in this Section 5.18 or otherwise shall require the Company to
be an issuer or other obligor with respect to the Debt Financing or any Alternative Financing prior
to the Effective Time. Nothing contained in this Section 5.18 shall require the Company to
pay any Transaction Expenses related to the Debt Financing, any Alternative Financing or the
Secondary Offering.
Section 5.19 Control of Operations. Without in any way limiting any party’s rights or
obligations under this Agreement, the parties understand and agree that (a) nothing contained in
this Agreement shall give Parent or the Company, directly or indirectly, the right to control or
direct the other party’s operations prior to the Effective Time and (b) prior to the Effective
Time, each of the Company and Parent shall exercise, consistent with the terms and conditions of
this Agreement, complete control and supervision over its operations.
Section 5.20 Debt Retirement. At or prior to the Closing, the Company shall repay and
discharge, or cause to be repaid and discharged, all indebtedness outstanding under, and terminate,
the Company Credit Agreement.
ARTICLE VI
CONDITIONS PRECEDENT TO THE MERGER
Section 6.1 Conditions to Each Party’s Obligation to Effect the Merger. The
respective obligations of each party to effect the Merger shall be subject to the fulfillment or
waiver (other than the conditions set forth in Section 6.1(a)(ii) and Section
6.1(f) which may not be waived) by Parent and the Company at or prior to the Effective Time of
the following conditions:
(a) Stockholder Approval. (i) The Company Stockholder Approval shall have been
obtained in accordance with applicable Law and the Company Charter and the Company Bylaws and (ii)
the Parent Stockholder Approval shall have been obtained in accordance with applicable rules of
Nasdaq, applicable Law and the Parent Charter and the Parent Bylaws.
(b) Quotation of Stock. The Parent Common Stock issuable in the Merger shall have
been authorized for quotation on Nasdaq, subject to official notice of issuance.
(c) Certain Approvals. (i) The waiting period (and any extension thereof) applicable
to the consummation of the Merger under the HSR Act shall have expired or been terminated.
(ii) All other authorizations, consents, orders, declarations or approvals of or
filings with, or terminations or expirations of waiting periods imposed by, any Governmental
Entity, which the failure to obtain, make or occur would have the effect of making the
Merger or any of the transactions contemplated hereby illegal or would, individually or in
the aggregate, have a Parent Material Adverse Effect (assuming the
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Merger had taken place), shall have been obtained, shall have been made or shall have
occurred.
(d) Registration Statement. The Registration Statement shall have become effective in
accordance with the provisions of the Securities Act. No stop order suspending the effectiveness
of the Registration Statement shall have been issued by the SEC, and no proceedings for that
purpose shall have been initiated or, to the Knowledge of Parent or the Company, threatened by the
SEC.
(e) No Order. No court or other Governmental Entity having jurisdiction over the
Company or Parent, or any of their respective Subsidiaries, shall have enacted, issued,
promulgated, enforced or entered any Law or Order which is then in effect prohibiting or having the
effect of making illegal the consummation of the Merger and no Governmental Entity shall have
instituted any proceeding that is pending seeking such an Order.
(f) Coniston Transaction. The Coniston Closing shall have occurred.
Section 6.2 Conditions to Obligation of the Company to Effect the Merger. The
obligation of the Company to effect the Merger shall be subject to the fulfillment or waiver by the
Company at or prior to the Effective Time of the following additional conditions:
(a) Performance of Obligations; Representations and Warranties. (i) Each of Parent
and Merger Sub shall have performed in all material respects each of its agreements contained in
this Agreement required to be performed on or prior to the Closing Date; (ii) the representations
and warranties of Parent and Merger Sub contained in Section 2.8(a)(v) shall be true and
correct in all respects as of the date of this Agreement and on and as of the Closing Date as if
made on and as of such date; (iii) each of the representations and warranties of Parent and Merger
Sub contained in Section 2.2(a) (Capital Structure), Section 2.3 (Authority),
Section 2.6 (Registration Statement and Joint Proxy Statement) and Section 2.18
(State Takeover Statutes) shall be true and correct in all material respects as of the date of this
Agreement and on and as of the Closing Date as if made on and as of such date (other than, in each
case, representations and warranties which address matters only as of a certain date which shall be
true and correct in all material respects as of such certain date); and (iv) each of the
representations and warranties of Parent and Merger Sub contained in this Agreement (other than
those contained in the preceding clauses (ii) and (iii)), when read without any
exception or qualification as to materiality or Parent Material Adverse Effect, shall be true and
correct as of the date of this Agreement and on and as of the Closing Date as if made on and as of
such date (other than, in each case, representations and warranties which address matters only as
of a certain date which shall be true and correct as of such certain date), except where the
failure to be so true and correct would not, individually or in the aggregate with respect to all
such failures, have a Parent Material Adverse Effect or reasonably be likely to materially
adversely affect the ability of Parent and Merger Sub to effect the Merger in accordance with this
Agreement.
(b) Tax Opinion. The Company shall have received an opinion of King & Spalding LLP,
in form and substance reasonably satisfactory to the Company, dated the Effective Time,
substantially to the effect that on the basis of facts, representations and assumptions set forth
in such opinion which are consistent with the state of facts existing as of
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the Effective Time, for federal income tax purposes: (i) the Merger will constitute a
“reorganization” within the meaning of Section 368(a) of the Code, and (ii) the Company and Parent
will each be a party to that reorganization within the meaning of Section 368(b) of the Code. In
rendering such opinion, King & Spalding LLP may rely upon the representations contained herein and
may receive and rely upon representations from Parent, the Company, and others, including
representations in the Parent Tax Certificate and representations in the Company Tax Certificate.
(c) Parent Material Adverse Effect. Except as set forth in Section 6.2(c) of
the Parent Disclosure Letter or in the Parent SEC Disclosure, since the date of this Agreement,
there shall not have been any Circumstances that, individually or in the aggregate, have had or
would reasonably be expected to have a Parent Material Adverse Effect.
(d) Officer’s Certificate. The Company shall have received a certificate signed on
behalf of Parent by its Chief Executive Officer and its Chief Financial Officer as to the
satisfaction of the conditions set forth in Sections 6.2(a) and 6.2(c).
Section 6.3 Conditions to Obligations of Parent and Sub to Effect the Merger. The
obligations of Parent and Merger Sub to effect the Merger shall be subject to the fulfillment or
waiver by Parent at or prior to the Effective Time of the following additional conditions:
(a) Performance of Obligations; Representations and Warranties. (i) The Company shall
have performed in all material respects each of its agreements contained in this Agreement required
to be performed on or prior to the Closing Date; (ii) the representations and warranties of the
Company contained in Section 3.8(a)(v) shall be true and correct in all respects as of the
date of this Agreement and on and as of the Closing Date as if made on and as of such date; (iii)
each of the representations and warranties of the Company contained in Section 3.2(a)
(Capital Structure), Section 3.3 (Authority), Section 3.6 (Registration Statement
and Joint Proxy Statement) and Section 3.18 (State Takeover Statutes) shall be true and
correct in all material respects as of the date of this Agreement and on and as of the Closing Date
as if made on and as of such date (other than, in each case, representations and warranties which
address matters only as of a certain date which shall be true and correct in all material respects
as of such certain date); and (iv) each of the representations and warranties of the Company
contained in this Agreement (other than those contained in the preceding clauses (ii) and
(iii)), when read without any exception or qualification as to materiality or Company
Material Adverse Effect, shall be true and correct as of the date of this Agreement and on and as
of the Closing Date as if made on and as of such date (other than, in each case, representations
and warranties which address matters only as of a certain date which shall be true and correct as
of such certain date), except where the failure to be so true and correct would not, individually
or in the aggregate with respect to all such failures, have a Company Material Adverse Effect or
reasonably be likely to materially adversely affect the ability of the Company to effect the Merger
in accordance with this Agreement.
(b) Tax Opinion. Parent shall have received an opinion of Sidley Austin LLP, in form
and substance reasonably satisfactory to Parent, dated the Effective Time, substantially to the
effect that on the basis of facts, representations and assumptions set forth in such opinion which
are consistent with the state of facts existing as of the Effective Time, for federal income
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tax purposes: (i) the Merger will constitute a “reorganization” within the meaning of Section
368(a) of the Code, and (ii) the Company and Parent will each be a party to that reorganization
within the meaning of Section 368(b) of the Code. In rendering such opinion, Sidley Austin LLP may
rely upon representations contained herein and may receive and rely upon representations from
Parent, the Company and others, including representations in the Parent Tax Certificate and
representations in the Company Tax Certificate.
(c) Company Material Adverse Effect. Except as set forth in Section 6.3(c) of
the Company Disclosure Letter or in the Company SEC Disclosure, since the date of this Agreement,
there shall not have been any Circumstances that, individually or in the aggregate, have had or
would reasonably be expected to have a Company Material Adverse Effect.
(d) Officer’s Certificate. Parent shall have received a certificate signed on behalf
of the Company by its Chief Executive Officer and its Chief Financial Officer as to the
satisfaction of the conditions set forth in Sections 6.3(a) and 6.3(c).
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
Section 7.1 Termination. This Agreement may be terminated at any time prior to the
Effective Time, whether before or after any approval of the matters presented in connection with
the Merger by the stockholders of the Company or the stockholders of Parent:
(a) by mutual written consent of Parent and the Company;
(b) by Parent if there has been a breach of any representation, warranty, covenant or other
agreement made by the Company in this Agreement, or any such representation and warranty shall have
become untrue or inaccurate after the date of this Agreement, in each case which breach, untruth or
inaccuracy (i) would result in Section 6.3(a) not being satisfied (a “Terminating
Company Breach”) and (ii) shall not have been cured within thirty (30) days after written
notice from Parent of such Terminating Company Breach is received by the Company (such notice to
describe such Terminating Company Breach in reasonable detail);
(c) by the Company if there has been a breach of any representation, warranty, covenant or
other agreement made by Parent or Merger Sub in this Agreement, or any such representation and
warranty shall have become untrue or inaccurate after the date of this Agreement, in each case
which breach, untruth or inaccuracy (i) would result in Section 6.2(a) not being satisfied
(a “Terminating Parent Breach”) and (ii) shall not have been cured within thirty (30) days
after written notice from the Company of such Terminating Parent Breach is received by Parent (such
notice to describe such Terminating Parent Breach in reasonable detail);
(d) by either Parent or the Company if: (i) the Merger has not been effected on or prior to
the close of business on December 16, 2010 (the “Outside Date”); provided,
however, that the right to terminate this Agreement pursuant to this Section
7.1(d)(i) shall not be available to any party whose failure to fulfill any of its obligations
contained in this Agreement has been the cause of, or resulted in, the failure of the Merger to
have occurred on or prior to the Outside Date; or (ii) any court or other Governmental Entity
having jurisdiction over a party hereto shall
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have issued an Order or taken any other action permanently enjoining, restraining or otherwise
prohibiting or having the effect of making illegal the consummation of the Merger and such Order or
other action shall have become final and non-appealable; provided, however, that
the right to terminate this Agreement under this Section 7.1(d)(ii) shall not be available
to any party (A) whose failure to fulfill any obligation under this Agreement has been the cause
of, or resulted in, any such Order or other action to have been enacted, issued, promulgated,
enforced or entered or (B) that did not use commercially reasonable efforts to have such Order or
other action vacated prior to its becoming final and non-appealable;
(e) by either Parent or the Company if the Company Stockholder Approval is not obtained at the
Company Stockholder Meeting or at any adjournment or postponement thereof; provided,
however, that the Company may not terminate this Agreement pursuant to this
Section 7.1(e) if the Company has not complied with its obligations under Sections
4.2, 5.1 and 5.2 or has otherwise breached in any material respect any of its
obligations under this Agreement in any manner that could reasonably have caused the failure to
obtain the Company Stockholder Approval at the Company Stockholder Meeting or at any adjournment or
postponement thereof;
(f) by Parent or the Company if the Parent Stockholder Approval is not obtained at the Parent
Stockholder Meeting or at any adjournment or postponement thereof; provided,
however, that Parent may not terminate this Agreement pursuant to this Section
7.1(f) if Parent has not complied with its obligations under Sections 4.3, 5.1
and 5.2 or has otherwise breached in any material respect any of its obligations under this
Agreement in any manner that could reasonably have caused the failure to obtain the Parent
Stockholder Approval at the Parent Stockholder Meeting or at any adjournment or postponement
thereof;
(g) by Parent if: (i) the Board of Directors of the Company or any committee thereof shall
have effected a Company Adverse Recommendation Change; (ii) the Board of Directors of the Company
or any committee thereof shall have taken any position contemplated by Rule 14e-2(a) of the
Exchange Act with respect to any Company Takeover Proposal other than recommending rejection of
such Company Takeover Proposal; (iii) the Board of Directors of the Company or any committee
thereof shall have failed to include the Company Recommendation in the Joint Proxy Statement
distributed to stockholders; or (iv) the Board of Directors of the Company or any committee
thereof shall have refused to affirm publicly its recommendation of this Agreement and the Merger
following any written request by Parent to provide such reaffirmation following a Company Takeover
Proposal (which request may only be made once with respect to such Company Takeover Proposal absent
further material changes in such Company Takeover Proposal) prior to the earlier of (x) ten (10)
days following such request and (y) five (5) Business Days prior to the Company Stockholder
Meeting, unless, in the case of this clause (y), it would be inconsistent with the
fiduciary duties of the Board of Directors of the Company to comply with such request within such
time period, in which case the Company shall comply with such request as promptly as practicable
consistent with the fiduciary duties of the Board of Directors of the Company;
(h) by the Company if: (i) the Board of Directors of Parent or any committee thereof shall
have effected a Parent Adverse Recommendation Change; (ii) the Board of Directors of Parent or any
committee thereof shall have taken any position contemplated by Rule 14e-2(a) of the Exchange Act
with respect to any Parent Takeover Proposal other than
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recommending rejection of such Parent Takeover Proposal; (iii) the Board of Directors of
Parent or any committee thereof shall have failed to include the Parent Recommendation in the Joint
Proxy Statement distributed to stockholders; (iv) the Board of Directors of Parent or any committee
thereof shall have refused to affirm publicly its recommendation of the Share Issuance following
any written request by the Company to provide such reaffirmation following a Parent Takeover
Proposal (which request may only be made once with respect to such Parent Takeover Proposal absent
further material changes in such Parent Takeover Proposal) prior to the earlier of (x) ten (10)
days following such request and (y) five (5) Business Days prior to the Parent Stockholder Meeting,
unless, in the case of this clause (y), it would be inconsistent with the fiduciary duties
of the Board of Directors of Parent to comply with such request within such time period, in which
case Parent shall comply with such request as promptly as practicable consistent with the fiduciary
duties of the Board of Directors of Parent; or (v) the Board of Directors of Manchester or any
committee thereof shall have refused to affirm publicly its recommendation of the Coniston
Transaction or the Contingent Repurchase following any written request by the Company to provide
such reaffirmation following a Parent Takeover Proposal (which request may only be made once with
respect to such Parent Takeover Proposal absent further material changes in such Parent Takeover
Proposal) prior to the earlier of (x) ten (10) days following such request and (y) five (5)
Business Days prior to the date of the meeting of Manchester’s shareholders to consider the
Coniston Transaction and the Contingent Repurchase, unless, in the case of this clause
(y), it would be inconsistent with the fiduciary duties of the Board of Directors of Manchester
to comply with such request within such time period, in which case Manchester shall comply with
such request as promptly as practicable consistent with the fiduciary duties of the Board of
Directors of Manchester;
(i) by the Company if since the date of this Agreement there shall have been a Parent Material
Adverse Effect (except to the extent disclosed in Section 6.2(c) of the Parent Disclosure
Letter or the Parent SEC Disclosure) and such Parent Material Adverse Effect is not curable or, if
curable, is not cured within thirty (30) days after written notice thereof is given by the Company
to Parent;
(j) by Parent if since the date of this Agreement there shall have been a Company Material
Adverse Effect (except to the extent disclosed in Section 6.3(c) of the Company Disclosure
Letter or the Company SEC Disclosure) and such Company Material Adverse Effect is not curable or,
if curable, is not cured within thirty (30) days after written notice thereof is given by Parent to
the Company; or
(k) (i) by Parent or the Company if the Framework Agreement shall have been terminated in
accordance with its terms; (ii) by the Company if (A) the Board of Directors of Manchester (or a
duly appointed committee thereof) (x) does not recommend that Manchester’s shareholders approve the
Coniston Transaction and the Contingent Repurchase or statements of such recommendation are not
included in the Circular or (y) shall have effected a Shareholder Adverse Recommendation Change (as
defined in the Voting Agreement) or (B) the Manchester Shareholder Approval shall not have been
obtained at the Manchester Shareholder Meeting (as defined in the Framework Agreement), or any
adjournment or postponement thereof at which the final vote thereon was taken; or (iii) by the
Company with ten (10) days prior written notice to Parent at any time after the expiration of fifty
(50) days after the date on which Manchester or Parent shall have the right under the Framework
Agreement to provide written notice to the other
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stating its intention to terminate the Framework Agreement pursuant to Section
8.1(a)(iii) or Section 8.1(a)(iv), as applicable, of the Framework Agreement unless
prior to the expiration of such ten (10) day period the basis for such notice of termination has
been cured or irrevocably waived in writing.
The right of any party hereto to terminate this Agreement pursuant to this Section 7.1
shall remain operative and in full force and effect regardless of any investigation made by or on
behalf of any party hereto, any Person controlling any such party or any of their respective
officers or directors, whether prior to or after the execution of this Agreement.
Section 7.2 Effect of Termination. In the event of termination of this Agreement by
either Parent or the Company, as provided in Section 7.1, this Agreement shall forthwith
become void, and there shall be no liability hereunder on the part of the Company, Parent, Merger
Sub or their respective officers or directors (except for the last sentence of Section 5.3,
the entirety of Section 5.5, the last sentence of Section 5.18(e) and the entirety
of Article VIII, which shall survive the termination); provided, however,
that nothing contained in this Section 7.2 shall relieve any party hereto from any
liability for any willful breach of a representation or warranty contained in this Agreement or the
willful breach of any covenant contained in this Agreement.
Section 7.3 Amendment. This Agreement may be amended by the parties hereto, by or
pursuant to action taken by their respective Boards of Directors, subject to Section 8.11,
at any time before or after approval of the matters presented in connection with the Merger by the
stockholders of the Company, but, after any such approval, no amendment shall be made which by Law
requires further approval by such stockholders without such further approval. This Agreement may
not be amended except by an instrument in writing signed on behalf of each of the parties hereto.
Section 7.4 Waiver. At any time prior to the Effective Time, the parties hereto may,
subject to Section 8.11, (i) extend the time for the performance of any of the obligations
or other acts of the other parties hereto, (ii) waive any inaccuracies in the representations and
warranties contained herein or in any document delivered pursuant hereto and/or (iii) waive
compliance with any of the covenants, agreements or conditions contained herein which may legally
be waived (other than the conditions set forth in Section 6.1(a)(ii) and Section
6.1(f) which may not be waived). Any agreement on the part of a party hereto to any such
extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf
of such party.
ARTICLE VIII
GENERAL PROVISIONS
Section 8.1 Non-Survival of Representations and Warranties. The representations and
warranties in this Agreement or in any instrument delivered pursuant to this Agreement shall
terminate at the Effective Time.
Section 8.2 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given when delivered personally, one day after being delivered to
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a nationally recognized overnight courier or on the Business Day received (or the next
Business Day if received after 5 p.m. local time or on a weekend or day on which banks are closed)
when sent via facsimile (with a confirmatory copy sent by overnight courier) to the parties at the
following addresses (or at such other address for a party as shall be specified by like notice):
(a) if to Parent or Merger Sub, to
Allscripts-Misys Healthcare Solutions, Inc.
000 Xxxxxxxxxxx Xxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: General Counsel
Facsimile No.: (000) 000-0000
with a copy to:
Sidley Austin LLP
Xxx Xxxxx Xxxxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxxx X. Xxxxxxxx
Xxxx X. Xxxxxxxx
Facsimile No.: (000) 000-0000
(b) if to the Company, to
Eclipsys Corporation
Xxxxx Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: General Counsel
Chief Financial Officer
Facsimile No.: (000) 000-0000
with a copy to:
King & Spalding LLP
0000 Xxxxxxxxx Xxxxxx, XX
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxx, Xx.
C. Xxxxxxx Xxxxxx
Facsimile No.: (000) 000-0000
Section 8.3 Interpretation. When a reference is made in this Agreement to a Section,
such reference shall be to a Section of this Agreement unless otherwise indicated. The table of
contents, table of defined terms and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of this Agreement.
Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be
deemed to be followed by the words “without limitation.” The words “hereof,” “herein” and
“hereunder” and words of similar import when used in this Agreement shall refer to this Agreement
as a whole and not to any particular provision of this Agreement.
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All terms defined in this Agreement shall have the defined meanings when used in any
certificate or other document made or delivered pursuant thereto unless otherwise defined therein.
The definitions contained in this Agreement are applicable to the singular as well as the plural
forms of such terms and to the masculine as well as to the feminine and neuter genders of such
term. Any agreement, instrument or statute defined or referred to herein or in any agreement or
instrument that is referred to herein means such agreement, instrument or statute as from time to
time amended, modified or supplemented, including (in the case of agreements or instruments) by
waiver or consent and (in the case of statutes) by succession of comparable successor statutes and
references to all attachments thereto and instruments incorporated therein. Each of the parties
has participated in the drafting and negotiation of this Agreement. If an ambiguity or question of
intent or interpretation arises, this Agreement must be construed as if it is drafted by all the
parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of authorship of any of the provisions of this Agreement.
Section 8.4 Counterparts. This Agreement may be executed in multiple counterparts
(including by means of telecopied or e-mailed signature pages), any one of which need not contain
the signatures of more than one party, but all of which shall be considered one and the same
agreement, and shall become effective when one or more counterparts have been signed by each of the
parties and delivered to the other parties.
Section 8.5 Entire Agreement; No Third-Party Beneficiaries. This Agreement and the
Confidentiality Agreement constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the subject matter of this
Agreement. This Agreement, except for the provisions of Section 5.10 (which upon the
Effective Time are intended to benefit the parties indemnified thereunder), is not intended to
confer upon any Person other than the parties hereto any rights or remedies hereunder.
Section 8.6 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without giving effect to any choice or conflict
of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the State of Delaware.
Section 8.7 Specific Performance; Submission To Jurisdiction; Venue. The parties
agree that irreparable damage would occur if any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It is accordingly
agreed that each of the parties shall be entitled (in addition to any other remedy that may be
available to it, including monetary damages) to seek an injunction or injunctions to prevent
breaches of this Agreement and to seek to enforce specifically the terms and provisions of this
Agreement exclusively in the Delaware Court of Chancery and any state appellate court therefrom
within the State of Delaware (or, if the Delaware Court of Chancery declines to accept jurisdiction
over a particular matter, any state and federal courts located within the State of Delaware). The
parties further agree that no party to this Agreement shall be required to obtain, furnish or post
any bond or similar instrument in connection with or as a condition to obtaining any remedy
referred to in this Section 8.7 and each party waives any objection to the imposition of
such relief or any right it may have to require the obtaining, furnishing or posting of any such
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bond or similar instrument. In addition, each of the parties irrevocably agrees that any
legal action or proceeding with respect to this Agreement and the rights and obligations arising
hereunder, or for recognition and enforcement of any judgment in respect of this Agreement and the
rights and obligations arising hereunder brought by the other party hereto or its successors or
assigns, shall be brought and determined exclusively in the Delaware Court of Chancery and any
state appellate court therefrom within the State of Delaware (or, if the Delaware Court of Chancery
declines to accept jurisdiction over a particular matter, any state and federal courts located
within the State of Delaware). Each of the parties hereby irrevocably submits with regard to any
such action or proceeding for itself and in respect of its property, generally and unconditionally,
to the personal jurisdiction of the aforesaid courts and agrees that it will not bring any action
relating to this Agreement or any of the transactions contemplated by this Agreement in any court
other than the aforesaid courts. Each of the parties hereby irrevocably waives, and agrees not to
assert, by way of motion, as a defense, counterclaim or otherwise, in any action or proceeding with
respect to this Agreement, (a) any claim that it is not personally subject to the jurisdiction of
the above named courts for any reason other than the failure to serve in accordance with this
Section 8.7, (b) any claim that it or its property is exempt or immune from jurisdiction of
any such court or from any legal process commenced in such courts (whether through service of
notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of
judgment or otherwise) and (c) to the fullest extent permitted by the applicable Law, any claim
that (i) the suit, action or proceeding in such court is brought in an inconvenient forum, (ii) the
venue of such suit, action or proceeding is improper or (iii) this Agreement, or the subject matter
of this Agreement, may not be enforced in or by such courts. Parent and the Company hereby consent
to service being made through the notice procedures set forth in Section 8.2 and agree that
service of any process, summons, notice or document by registered mail (return receipt requested
and first-class postage prepaid) to the respective addresses set forth in Section 8.2 shall
be effective service of process for any suit or proceeding in connection with this Agreement or the
transactions contemplated by this Agreement. Notwithstanding the foregoing, each of the parties
agrees that it will not bring or support any action, cause of action, claim, cross-claim or
third-party claim of any kind or description, whether in law or in equity, whether in contract or
in tort or otherwise, against the Lenders in any way relating to this Agreement or any of the
transactions contemplated hereby, including any dispute arising out of or relating in any way to
the Debt Financing Commitments or the performance thereof, in any forum other than the Supreme
Court of the State of New York, County of New York, or, if under applicable Law exclusive
jurisdiction is vested in the Federal courts, the United States District Court for the Southern
District of New York (and appellate courts thereof).
Section 8.8 Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY
CONTROVERSY WHICH MAY ARISE UNDER 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, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY
CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
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LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH PARTY UNDERSTANDS AND HAS
CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND
(iv) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.8.
Section 8.9 Assignment. Subject to Section 1.1, neither this Agreement nor
any of the rights, interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written consent of the other
parties.
Section 8.10 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of Law or public policy, all other
terms, conditions and provisions of this Agreement shall nevertheless remain in full force and
effect so long as the economic and legal substance of the transactions contemplated hereby are not
affected in any manner materially adverse to any party. Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the parties shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the parties as closely
as possible in a mutually acceptable manner in order that the transactions contemplated by this
Agreement may be consummated as originally contemplated to the fullest extent possible.
Section 8.11 Actions and Disputes. Notwithstanding any other provision of this
Agreement, at any time after the date hereof and prior to the Coniston Closing, in the event that
there is any (a) action or determination to be made by Parent hereunder, (b) Action between Parent
or Merger Sub, on the one hand, and the Company, on the other hand, or (c) disputed claim or demand
(including any claim or demand relating to enforcing any remedy under this Agreement) by Parent or
Merger Sub against the Company, or by the Company against Parent or Merger Sub, and in each of the
cases of the foregoing clauses (a), (b) and (c), the approval of the Board
of Directors of Parent or any committee thereof would be required, all actions or determinations of
Parent relating to any such Action or demand (including all determinations by Parent whether to
institute, compromise or settle any such Action or demand and all determinations by Parent relating
to the prosecution or defense thereof), shall be made and approved by the Audit Committee of the
Board of Directors of Parent.
ARTICLE IX
DEFINITIONS
Section 9.1 Definitions. (a) In this Agreement, the following terms have the meanings
specified or referred to in this Section 9.1 and shall be equally applicable to both the
singular and plural forms.
“Acceptance Notice” means a written notice delivered to the Paying Party by the
Receiving Party during the Termination Fee Period accepting payment of the Termination Fee and
which shall be deemed irrevocable upon delivery by the Receiving Party.
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“Action” means any claim, action, suit, proceeding, arbitration, mediation or
investigation.
“Acquisition Candidate Proposal” means any transaction or series of related
transactions other than the Merger or as contemplated by the Framework Agreement involving: (i) any
acquisition or purchase from Parent, Manchester or both of Parent and Manchester by any Third Party
of more than 20% but less than 35% of the total outstanding voting securities of Parent or any of
its Subsidiaries; or (ii) any tender offer or exchange offer that if consummated would result in
any Third Party beneficially owning more than 20% but less than 35% of the total outstanding voting
securities of Parent or any of its Subsidiaries.
“Affiliate” means, with respect to any Person, any other Person which directly or
indirectly controls, is controlled by or is under common control with such Person.
“Business Day” means any day other than a Saturday, Sunday or a day on which the banks
in New York are authorized by Law or executive order to be closed.
“Chairman Agreement” means the Employment Agreement, dated as of the date hereof, by
and between Parent and Xxxxxx X. Xxxx.
“Circular” has the meaning given to such term in the Framework Agreement.
“Code” means the Internal Revenue Code of 1986, as amended.
“Combined Company” means Parent, Parent’s Subsidiaries, the Company and the Company’s
Subsidiaries, taken as a whole, combined in the manner intended by the parties pursuant to this
Agreement.
“Company Acquisition Transaction” means any transaction or series of related
transactions other than the Merger involving: (i) any acquisition or purchase from the Company by
any Third Party of more than 20% of the total outstanding voting securities of the Company or any
of its Subsidiaries; (ii) any tender offer or exchange offer that if consummated would result in
any Third Party beneficially owning more than 20% of the total outstanding voting securities of the
Company or any of its Subsidiaries; (iii) any merger, consolidation, business combination,
recapitalization or similar transaction involving the Company pursuant to which the stockholders of
the Company immediately preceding such transaction hold less than 80% of the equity interests in
the surviving or resulting entity of such transaction; (iv) any direct or indirect acquisition of
any business or businesses or of assets (including equity interests in any Subsidiary) that
constitute or account for 20% or more of the consolidated net revenues, net income or assets (based
on the fair market value thereof) of the Company and its Subsidiaries, taken as a whole; or (v) any
liquidation or dissolution of the Company or any of its Subsidiaries.
“Company Credit Agreement” means the Credit Agreement, dated August 26, 2008, by and
among the Company, certain lenders and Wachovia Bank, National Association, as Administrative
Agent, as it may be amended from time to time (subject to Section 4.1(a)).
“Company Employee Agreement” means each management, employment, severance, change of
control, retention, or material consulting Contract between the Company, or
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any ERISA Affiliate, and any current employee, director, officer or consultant of the Company
or any ERISA Affiliate other than standard offer letters used in the Company’s ordinary course of
business that do not provide for severance or other payments after termination of employment,
acceleration of any equity award or for benefits other than those provided under the Company Plans.
“Company Intervening Event” means an event or circumstance material to the Company and
its Subsidiaries, taken as a whole (other than an increase in the market price of the Company
Common Stock, or any event or circumstance resulting from a breach of this Agreement by the Company
or its Subsidiaries), occurring or arising after the date hereof that was neither known to the
Board of Directors of the Company at such time nor reasonably foreseeable as of the date hereof,
which event or circumstance becomes known to the Board of Directors of the Company prior to the
Company obtaining the Company Stockholder Approval; provided, however, that (i) in
no event shall the receipt, existence or terms of a Company Takeover Proposal, or any inquiry or
matter relating thereto or consequence thereof constitute a Company Intervening Event, (ii) in no
event shall any action taken by either party pursuant to and in compliance with the terms of this
Agreement constitute a Company Intervening Event, and (iii) in no event shall any event,
occurrence, fact, condition, effect, change or development that has an adverse effect on the
business, assets, liabilities (contingent or otherwise), financial condition or results of
operations of Parent or any of its Subsidiaries, or the market price of Parent Common Stock (in and
of itself), constitute a Company Intervening Event, unless such event, occurrence, fact, condition,
effect, change or development has had a Parent Material Adverse Effect.
“Company Material Adverse Effect” means any event, occurrence, fact, condition,
effect, change or development (any one or more of which is referred to in this definition as a
“Circumstance” and collectively as “Circumstances”) that, individually or when
taken together with all other Circumstances, is, or is reasonably expected to be materially adverse
to the business, assets, liabilities (contingent or otherwise), financial condition or results of
operations of the Company and its Subsidiaries, taken as a whole; provided,
however, that none of the following shall constitute, and no event, effect, change or
development to the extent resulting from any of the following, shall constitute, or be taken into
account in determining whether there has been, a “Company Material Adverse Effect”:
(i) any Circumstances affecting the national or world economy or financial, banking, credit,
securities or commodities markets, taken as a whole, except to the extent the Company is adversely
affected in a disproportionate manner as compared to other comparable companies in the industry in
which the Company operates; (ii) any Circumstances generally affecting the industries in which the
Company or its Subsidiaries operate, except to the extent the Company is adversely affected in a
disproportionate manner as compared to other comparable companies in the industry in which the
Company operates; (iii) any Circumstances resulting from or arising out of the announcement of this
Agreement, the Framework Agreement or the transactions contemplated hereby or thereby (including
any shareholder or derivative litigation arising from or relating to this Agreement, the Framework
Agreement or the transactions contemplated hereby or thereby) or the performance of this Agreement
or the Framework Agreement; (iv) any Circumstances relating to the loss in whole or in part of any
business relationship with any customer or client of the Company or any of its Subsidiaries set
forth in Section 9.1 of the Company Disclosure Letter, other than as a result of the valid
termination by a customer or client of any written Contract due to the breach
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by the Company or any of its Subsidiaries of its obligations under any written Contract to
license material Company Owned Intellectual Property Rights or perform material services related to
such licenses required to be licensed or performed, respectively, under such written Contract; (v)
any failure by the Company to meet any analysts’ revenue or earnings projections or Company
guidance, in and of themselves, or any failure by the Company to meet any of the Company’s internal
or published revenue or earnings projections or forecasts, in and of themselves, or any decline in
the trading price or trading volume of the Company Common Stock, in and of themselves (it being
understood that any Circumstance giving rise to any such failure or decline, other than a
Circumstance set forth in clauses (i) through (iv) above or clauses (vi)
through (ix) below, may be deemed to constitute, and may be taken into account in
determining whether there has been, or is reasonably expected to be, a Company Material Adverse
Effect); (vi) any effect resulting from changes in Laws or accounting principles, in each case,
after the date of this Agreement; (vii) any effect resulting from any outbreak or escalation of
hostilities, the declaration of a national emergency or war, or the occurrence of any act of
terrorism; (viii) any Circumstance arising or resulting from any material breach of this Agreement
by Parent or its Affiliates; or (ix) any increase in the cost of or decrease in the availability of
financing to Parent or Merger Sub with respect to the Coniston Transaction.
“Company Non-Voting Common Stock” means the shares of non-voting stock of the Company,
par value $0.01 per share.
“Company Plan” means a “pension plan” (as defined in Section 3(2) of ERISA), a
“welfare plan” (as defined in Section 3(1) of ERISA) or any bonus, profit sharing, deferred
compensation, incentive compensation, stock ownership, stock purchase, stock option, phantom stock,
holiday pay, vacation, severance, death benefit, sick leave, material fringe benefit, insurance or
other compensation or benefit plan, arrangement, program, policy or understanding, in each case
established or maintained by the Company, any of its Subsidiaries or any of their respective ERISA
Affiliates or as to which the Company, any of its Subsidiaries or any of their respective ERISA
Affiliates has contributed or otherwise may have any liability.
“Company Preferred Stock” means the shares of preferred stock of the Company, par
value $0.01 per share.
“Company Stock Option” means an option to purchase shares of the Company Common Stock,
other than pursuant to the Company Stock Purchase Plan.
“Company Stock Plan” means (i) the Amended and Restated 1999 Stock Incentive Plan of
the Company, (ii) the Amended and Restated 2000 Stock Incentive Plan of the Company, (iii) the 2005
Stock Incentive Plan of the Company, (iv) the Amended and Restated 2005 Inducement Grant Stock
Incentive Plan of the Company, (v) the 2008 Omnibus Incentive Plan of the Company and (vi) the
Inducement Grant Omnibus Incentive Plan.
“Company Stock Purchase Plan” means the 2005 Employee Stock Purchase Plan of the
Company.
“Company Takeover Proposal” means any inquiry, offer or proposal by a Third Party
relating to any Company Acquisition Transaction.
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“Company Tax Certificate” means the certificate in the form attached hereto as
Exhibit H to be delivered by the Company pursuant to Sections 6.2(b) and
6.3(b).
“Coniston Closing” has the meaning given to such term in the Framework Agreement.
“Contingent Repurchase” has the meaning given to such term in the Framework Agreement.
“Contingent Repurchase Closing” has the meaning given to such term in the Framework
Agreement.
“Contract” means any contract, agreement, instrument, guarantee, indenture, note,
bond, mortgage, permit, franchise, concession, commitment, lease, license, arrangement, obligation
or understanding, whether written or oral.
“Effective Time” means the date and time at which the Certificate of Merger is
accepted for recording or such later time established by the Certificate of Merger.
“Encumbrance” means, with respect to any asset, any mortgage, deed of trust, lien,
pledge, charge, security interest, title retention device, collateral assignment, adverse claim,
restriction or other encumbrance of any kind in respect of such asset (including any restriction on
the voting of any security, any restriction on the transfer of any security or other asset, any
restriction on the receipt of any income derived from any asset, any restriction on the use of any
asset and any restriction on the possession, exercise or transfer of any other attribute of
ownership of any asset).
“ERISA Affiliate” means, with respect to any Person, any trade or business (whether or
not incorporated) which is under common control or would be considered a single employer with such
Person pursuant to Section 414(b), (c), (m) or (o) of the Code and the rules and regulations
promulgated under those sections or pursuant to Section 4001(b) of ERISA and the rules and
regulations promulgated thereunder.
“HIPAA” means the Health Insurance Portability and Accountability Act.
“Joint Venture” means, with respect to a party, any corporation, limited liability
company, partnership, joint venture, trust or other entity which is not a Subsidiary of such party
and in which (i) such party, directly or indirectly, owns or controls any shares of any class of
the outstanding voting securities or other equity interests (other than the ownership of securities
primarily for investment purposes as part of routine cash management or investments of 1% or less
in publicly traded companies) or (ii) such party or a Subsidiary of such party is a general
partner.
“Knowledge of the Company” means the actual knowledge of the individuals identified in
Schedule A of the Company Disclosure Letter.
“Knowledge of Parent” means the actual knowledge of the individuals identified in
Schedule A of the Parent Disclosure Letter.
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“Launch Demand” has the meaning given to such term in the Framework Agreement.
“Law” means any applicable foreign, federal, state, local or municipal laws, statutes,
ordinances, regulations and rules of any Governmental Entity, including all Orders.
“Liabilities” means debts, liabilities, commitments and obligations, whether accrued
or fixed, absolute or contingent, matured or unmatured, determined or determinable, known or
unknown, asserted or unasserted.
“Losses” means all losses, liabilities, damages, obligations, fines, penalties,
judgments, equitable relief granted, settlements, awards, offsets and reasonable expenses incurred
in connection with defending any third-party indemnification claim, action, suit or proceeding to
the extent arising out of any matter indemnified against herein, including court filing fees, court
costs, arbitrations fees or costs, witness fees and reasonable fees and disbursements of counsel,
expert witnesses, accountants and other professionals; provided, however, that in
the case of clause (y) of Section 5.18(e), “Losses” shall not include any internal
administrative or overhead costs and expenses.
“Order” means any judgment, order, award, preliminary or permanent injunction or
decree of any Governmental Entity.
“Parent Acquisition Transaction” means any transaction or series of related
transactions other than the Merger or as contemplated by the Framework Agreement involving: (i) any
acquisition or purchase from Parent, Manchester or both of Parent and Manchester by any Third Party
of 35% or more of the total outstanding voting securities of Parent or any of its Subsidiaries;
(ii) any tender offer or exchange offer that if consummated would result in any Third Party
beneficially owning 35% or more of the total outstanding voting securities of Parent or any of its
Subsidiaries; (iii) any merger, consolidation, business combination, recapitalization or similar
transaction involving Parent pursuant to which the stockholders of Parent immediately preceding
such transaction hold less than 80% of the equity interests in the surviving or resulting entity of
such transaction; (iv) any direct or indirect acquisition of any business or businesses or of
assets (including equity interests in any Subsidiary) that constitute or account for 20% or more of
the consolidated net revenues, net income or assets (based on the fair market value thereof) of
Parent and its Subsidiaries, taken as a whole; or (v) any liquidation or dissolution of Parent or
any of its Subsidiaries.
“Parent Employee Agreement” means each management, employment, severance, change of
control, retention, or material consulting Contract between Parent, or any ERISA Affiliate, and any
current employee, director, officer or consultant of Parent or any ERISA Affiliate other than
standard offer letters used in Parent’s ordinary course of business that do not provide for
severance or other payments after termination of employment, acceleration of any equity award or
for benefits other than those provided under the Parent Plans.
“Parent Intervening Event” means an event or circumstance material to Parent and its
Subsidiaries, taken as a whole (other than an increase in the market price of the Parent Common
Stock, or any event or circumstance resulting from a breach of this Agreement by
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Parent or its Subsidiaries), occurring or arising after the date hereof that was neither known
to the Board of Directors of Parent at such time nor reasonably foreseeable as of the date hereof,
which event or circumstance becomes known to the Board of Directors of Parent prior to Parent
obtaining the Parent Stockholder Approval; provided, however, that (i) in no event
shall the receipt, existence or terms of a Parent Takeover Proposal, or any inquiry or matter
relating thereto or consequence thereof constitute a Parent Intervening Event, (ii) in no event
shall any action taken by either party pursuant to and in compliance with the terms of this
Agreement constitute a Parent Intervening Event, and (iii) in no event shall any event, occurrence,
fact, condition, effect, change or development that has an adverse effect on the business, assets,
liabilities (contingent or otherwise), financial condition or results of operations of the Company
or any of its Subsidiaries, or the market price of Company Common Stock (in and of itself),
constitute a Parent Intervening Event, unless such event, occurrence, fact, condition, effect,
change or development has had a Company Material Adverse Effect.
“Parent Material Adverse Effect” means any Circumstance that, individually or when
taken together with all other Circumstances, is, or is reasonably expected to be, materially
adverse to the business, assets, liabilities (contingent or otherwise), financial condition or
results of operations of Parent and its Subsidiaries, taken as a whole; provided,
however, that none of the following shall constitute, and no event, effect, change or
development to the extent resulting from any of the following, shall constitute, or be taken into
account in determining whether there has been, a “Parent Material Adverse Effect”: (i) any
Circumstances affecting the national or world economy or financial, banking, credit, securities or
commodities markets, taken as a whole, except to the extent Parent is adversely affected in a
disproportionate manner as compared to other comparable companies in the industry in which Parent
operates; (ii) any Circumstances generally affecting the industries in which Parent or its
Subsidiaries operate, except to the extent Parent is adversely affected in a disproportionate
manner as compared to other comparable companies in the industry in which Parent operates; (iii)
any Circumstances resulting from or arising out of the announcement of this Agreement, the
Framework Agreement or the transactions contemplated hereby or thereby (including any shareholder
or derivative litigation arising from or relating to this Agreement, the Framework Agreement or the
transactions contemplated hereby or thereby) or the performance of this Agreement or the Framework
Agreement; (iv) any Circumstances relating to the loss in whole or in part of any business
relationship with any customer or client of Parent or any of its Subsidiaries set forth in
Section 9.1 of the Parent Disclosure Letter, other than as a result of the valid
termination by a customer or client of any written Contract due to the breach by Parent or any of
its Subsidiaries of its obligations under any written Contract to license material Parent Owned
Intellectual Property Rights or perform material services related to such licenses required to be
licensed or performed, respectively, under such written Contract; (v) any failure by Parent to meet
any analysts’ revenue or earnings projections or Parent guidance, in and of themselves, or any
failure by Parent to meet any of Parent’s internal or published revenue or earnings projections or
forecasts, in and of themselves, or any decline in the trading price or trading volume of the
Parent Common Stock, in and of themselves (it being understood that any Circumstance giving rise to
any such failure or decline, other than a Circumstance set forth in clauses (i) through
(iv) above or clauses (vi) through (ix) below, may be deemed to constitute,
and may be taken into account in determining whether there has been, or is reasonably expected to
be, a Parent Material Adverse Effect); (vi) any effect resulting from changes in Laws or accounting
principles, in each case, after the date of this Agreement; (vii) any effect resulting from any
outbreak or escalation
-83-
of hostilities, the declaration of a national emergency or war, or the occurrence of any act
of terrorism; (viii) any Circumstance arising or resulting from any material breach of this
Agreement by the Company or its Affiliates; or (ix) any increase in the cost of or decrease in the
availability of financing to Parent or Merger Sub with respect to the Coniston Transaction.
“Parent Plan” means a “pension plan” (as defined in Section 3(2) of ERISA), a “welfare
plan” (as defined in Section 3(1) of ERISA) or any bonus, profit sharing, deferred compensation,
incentive compensation, stock ownership, stock purchase, stock option, phantom stock, holiday pay,
vacation, severance, death benefit, sick leave, material fringe benefit, insurance or other
compensation or benefit plan, arrangement, program, policy or understanding, in each case
established or maintained by Parent or any of its ERISA Affiliates or as to which Parent or any of
its ERISA Affiliates has contributed or otherwise may have any liability.
“Parent Preferred Stock” means the preferred stock of Parent, par value $0.01 per
share.
“Parent Stock Option” means an option to purchase shares of Parent Common Stock.
“Parent Stock Plan” means the Allscripts Healthcare Solutions, Inc. 1993 Stock
Incentive Plan and the Allscripts Healthcare Solutions, Inc. 2001 Non-Statutory Stock Option Plan.
“Parent Stock Purchase Plan” means the Allscripts-Misys Healthcare Solutions, Inc.
Employee Stock Purchase Plan.
“Parent Stock Unit” means a restricted or deferred stock unit awarded by Parent under
a Parent Stock Plan.
“Parent Takeover Proposal” means any inquiry, offer or proposal by a Third Party
relating to any Parent Acquisition Transaction.
“Parent Tax Certificate” means the certificate in the form attached hereto as
Exhibit G to be delivered by the Company pursuant to Sections 6.2(b) and
6.3(b).
“Person” means any individual, corporation, partnership, limited liability company,
joint venture, association, joint-stock company, estate, Governmental Entity (as hereinafter
defined), trust or unincorporated organization.
“Relationship Agreement” means the Relationship Agreement between Manchester and the
Company dated as of March 17, 2008, as amended by the First Amendment to the Relationship
Agreement, dated as of August 14, 2008, and the Second Amendment to the Relationship Agreement,
dated as of January 5, 2009, as such agreement may be amended from time to time.
“Secondary Offering” has the meaning given to such term in the Framework Agreement.
-84-
“Stock Unit” means a restricted, deferred or performance stock unit awarded by the
Company under a Company Stock Plan.
“Stock Unit Terms” means the terms and conditions applicable to Stock Units under the
applicable Company Stock Plan.
“Subsidiary” means any corporation, partnership, limited liability company, joint
venture, trust, association or other entity of which Parent or the Company, as the case may be
(either alone or through or together with any other Subsidiary), owns, directly or indirectly,
(i) 50% or more of the stock or other equity interests the holders of which are generally entitled
to elect at least a majority of the Board of Directors or other governing body of such corporation,
partnership, limited liability company, joint venture, trust, association or other entity or (ii)
if there are no such voting interests, 50% or more of the equity interests in such corporation,
partnership, limited liability company, joint venture, trust, association or other entity.
“Substantial Detriment” means any effect on any division, Subsidiary, interest,
business, product line, asset, property or results of operations of Parent, the Company and/or the
Combined Company if such effect (after giving effect to the loss of any reasonably expected
synergies or other benefits of the Merger and other transactions contemplated hereby and to the
receipt of any reasonably expected proceeds of any divestiture or sale of assets) on Parent and its
Subsidiaries, taken as a whole (including, for purposes of this determination, any effect of any
division, Subsidiaries, interest, business, product line, asset, property or result of operations
of the Company and/or the Combined Company as if it were applied to a comparable amount of
interest, business, properties, financial condition or results of operations of Parent) would or
would reasonably be expected to result in a material adverse effect on the business, properties,
financial condition or results of operations of Parent and its Subsidiaries, taken as a whole.
“Superior Proposal” means, with respect to Parent or the Company, as the case may be,
an unsolicited, bona fide written Parent Takeover Proposal or Company Takeover Proposal, as
applicable, to acquire at least (a) 50% of the outstanding voting securities of Parent or the
Company, as applicable, or (b) 50% of the assets of Parent and its Subsidiaries, taken as a whole,
or the Company and its Subsidiaries, taken as a whole, as applicable, in each case on terms that,
in the reasonable good faith judgment of the Board of Directors of Parent or the Board of Directors
of the Company, as applicable, after consultation with its outside financial advisors and its
outside legal counsel, is more favorable to the stockholders of Parent or the stockholders of the
Company, as applicable, than the Merger and the other transactions contemplated by this Agreement,
taking into account any proposal by Parent or the Company, as applicable, to amend or modify the
terms of this Agreement which are committed to in writing, after taking into account such factors,
including terms, conditions, timing, likelihood of consummation, legal, financial, regulatory and
other aspects of such proposal, and the Person making such proposal, deemed relevant by the Board
of Directors of Parent or the Board of Directors of the Company, as applicable.
“Taxes” means any federal, state, local or foreign income, gross receipts, property,
sales, use, license, excise, franchise, employment, payroll, withholding, alternative or added
minimum, ad valorem, value-added, transfer or excise tax, or other tax, custom, duty,
-85-
governmental fee or other like assessment or charge of any kind whatsoever, together with any
interest or penalty imposed by any Governmental Entity.
“Tax Return” means any return, report or similar statement (including the attached
schedules) required to be filed, or actually filed, with respect to any Tax, including, without
limitation, any information return, claim for refund, amended return or declaration of estimated
Tax.
“Termination Fee” means $17,675,000; provided, however, that, if the
Termination Date occurs after the date of the Coniston Closing, then, unless this Agreement is
terminated pursuant to Section 7.1(e) or Section 7.1(f), the Termination Fee shall
mean $40,000,000; provided, further, that the amount of any Transaction Expenses,
if any, previously paid pursuant to Section 5.5(b) or Section 5.5(c), as the case
may be, shall be deducted from the amount of the Termination Fee by the party required to pay the
Termination Fee.
“Third Party” means any Person or group (as defined under Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder) other than, in the case of the
Company, Parent and its Affiliates, and, in the case of Parent, the Company and is Affiliates.
“Transaction Documents” has the meaning given to such term in the Framework Agreement.
“Transaction Expenses” means all documented fees and expenses incurred or paid by or
on behalf of Parent or any Subsidiary of Parent or the Company or any Subsidiary of the Company, as
the case may be, in connection with the Merger or the other transactions contemplated by this
Agreement or related to the authorization, preparation, negotiation, execution and performance of
this Agreement, in each case including all fees and expenses of counsel, investment banking firms,
financing sources, accountants, experts and consultants; provided, however, that,
in the case of Parent, the term “Transaction Expenses” shall not include any fees or expenses
incurred or paid by Parent or any Subsidiary of Parent to the extent related to the Framework
Agreement or any of the agreements (other than this Agreement) or transactions (other than the
Merger) contemplated by the Framework Agreement (including the Coniston Transaction); and
provided, further, the amount required under Section 5.5 to be reimbursed
in respect of Transaction Expenses by Parent or the Company shall not exceed, in either case,
$5,000,000 in the aggregate.
“Unvested Company Share” means each outstanding share of Company Common Stock issued
under a Company Stock Plan or otherwise which is subject to any Unvested Share Restrictions.
“Unvested Parent Share” means each outstanding share of Parent Common Stock issued
under a Parent Stock Plan or otherwise which is subject to any Unvested Share Restrictions.
“Unvested Share Restrictions” means all repurchase, cancellation, forfeiture, vesting
and other conditions or restrictions applicable to an Unvested Company Share or an Unvested Parent
Share.
-86-
(b) Each of the following terms is defined in the section set forth opposite such term:
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Defined Term |
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Section |
Agreement |
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Introduction |
Alternative Financing |
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5.18(b) |
Blue Sky Laws |
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2.4 |
Certificate of Merger |
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1.2 |
Certificates |
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1.5(c) |
Closing |
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1.15(a) |
Closing Date |
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1.15(a) |
Company |
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Introduction |
Company 2010 Plan |
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4.1(a)(ix) |
Company Adverse Recommendation Change |
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5.2(e) |
Company Bonus Plans |
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5.12(e) |
Company Business Personnel |
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3.15 |
Company Bylaws |
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1.15(d)(ii) |
Company Charter |
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1.15(d)(ii) |
Company Common Stock |
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Recitals |
Company Contract |
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3.12 |
Company Disclosure Letter |
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Article III |
Company Foreign Benefit Plan |
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3.13(e) |
Company Owned Intellectual Property Rights |
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3.16(d) |
Company Permits |
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3.9 |
Company Recommendation |
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3.3 |
Company SEC Disclosure |
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Article III |
Company SEC Documents |
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3.5(a) |
Company Stockholder Approval |
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3.19 |
Company Stockholder Meeting |
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5.2(a) |
Company Top 100 Customer |
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3.12(a) |
Company Voting Undertakings |
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Recitals |
Company’s Current Premium |
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5.10(d) |
Confidentiality Agreement |
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5.3 |
Coniston Transaction |
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Recitals |
Constituent Corporations |
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Introduction |
Continuing Employees |
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5.12 |
D&O Tail Policy |
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5.10(c) |
Debt Financing |
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2.23(b) |
Debt Financing Agreements |
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5.18(c) |
Debt Financing Commitments |
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2.23(b) |
Debt Financing Conditions |
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5.18(c) |
DGCL |
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1.1 |
Environmental Laws |
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2.14 |
ERISA |
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2.13(a) |
Exchange Act |
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2.4 |
Exchange Agent |
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1.6(a) |
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Defined Term |
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Section |
Exchange Fund |
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1.6(a) |
Exchange Ratio |
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1.5(c) |
Framework Agreement |
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Recitals |
GAAP |
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2.5(a) |
Governmental Entity |
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2.4 |
HSR Act |
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2.4 |
Indemnified Party |
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5.10(b) |
Independent Director |
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5.15(b) |
Information Statement |
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5.18(a) |
Intellectual Property Rights |
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2.16(a) |
Intended Tax Treatment |
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Recitals |
IRS |
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2.10 |
Joint Proxy Statement |
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2.6 |
Key Company Customers |
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3.8(b) |
Key Parent Customers |
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2.8(b) |
Lenders |
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2.23(b) |
Manchester |
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Recitals |
Merger |
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Recitals |
Merger Sub |
|
Introduction |
Nasdaq |
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1.8 |
Outside Date |
|
7.1(d) |
Parent |
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Introduction |
Parent Adverse Recommendation Change |
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5.2(b) |
Parent Business Personnel |
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2.15 |
Parent Bylaws |
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2.3 |
Parent Charter |
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2.3 |
Parent Common Stock |
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Recitals |
Parent Contracts |
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2.12(a) |
Parent Disclosure Letter |
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Article II |
Parent Foreign Benefit Plan |
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2.13(e) |
Parent Owned Intellectual Property Rights |
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2.16(d) |
Parent Permits |
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2.9 |
Parent Recommendation |
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2.3 |
Parent SEC Disclosure |
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Article II |
Parent SEC Documents |
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2.5(a) |
Parent Stockholder Approval |
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2.19 |
Parent Stockholder Meeting |
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5.2(a) |
Parent Top 100 Customer |
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2.12(a) |
Parent Voting Undertakings |
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Recitals |
Paying Party |
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5.5(g) |
Per Share Merger Consideration |
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1.5(c) |
Receiving Party |
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5.5(g) |
Registration Statement |
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2.3 |
Representatives |
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4.2(a) |
Xxxxxxxx-Xxxxx Act |
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2.5(b) |
SEC |
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2.2(b) |
-88-
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Defined Term |
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Section |
Securities Act |
|
2.3 |
Share Issuance |
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2.3 |
State Takeover Approvals |
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2.4 |
Stockholder Meetings |
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5.2(a) |
Substitute Option |
|
5.6(a) |
Surviving Corporation |
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1.1 |
Takeover Laws |
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2.18 |
Terminating Company Breach |
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7.1(b) |
Terminating Parent Breach |
|
7.1(c) |
Termination Date |
|
4.1 |
Termination Fee Period |
|
5.5(g) |
Transmittal Letter |
|
1.6(b) |
Voting Agreement |
|
Recitals |
Worker Safety Laws |
|
2.14 |
* * * * *
-89-
IN WITNESS WHEREOF, Parent, Merger Sub and the Company have caused this Agreement to be signed
by their respective officers thereunto duly authorized all as of the date first written above.
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ALLSCRIPTS-MISYS HEALTHCARE
SOLUTIONS, INC.
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By: |
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Name: |
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Its: |
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ARSENAL MERGER CORP.
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By: |
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Name: |
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Its: |
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ECLIPSYS CORPORATION
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By: |
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Name: |
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Its: |
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-90-
EXHIBIT A
Form of Voting Agreement
EXHIBIT B
Form of Parent Voting Undertaking
EXHIBIT C
Form of Company Voting Undertaking
EXHIBIT D
Form of Amended and Restated Certificate of Incorporation of Parent
EXHIBIT E
Form of Amended and Restated Bylaws of Parent
EXHIBIT F
Certain Corporate Governance and Other Matters
Selection of Independent Director
Parent’s Nominating and Governance Committee, as constituted by the Board of Directors of
Parent immediately after the Coniston Closing (the “Post-Coniston Parent Nominating
Committee”) and currently contemplated to be X.X. Xxxxxxx, Xxxxxxx Xxxxxx and, if Manchester is
entitled to have a member on the Nominating and Governance Committee of Parent in accordance with
the Relationship Agreement, currently contemplated to be Xxxx Xxxx, shall consult with the
individuals that the Company nominates pursuant to Section 5.15(b) of this Agreement to
serve as independent members of the Board of Directors of Parent as of the Effective Time (the
“Company Independent Directors”) and currently contemplated to be Xxxxxx X. Xxxx and Xxxxxx
X. Xxxxxx, regarding the nomination process for the Independent Director. The CEOs of Parent and
the Company shall be included in these discussions. This nomination process shall begin after the
date of this Agreement and shall include candidates proposed from time to time by Parent, the
Company and Manchester (the “Recommended Candidates”), with the Post-Coniston Parent
Nominating Committee and the Company Independent Directors mutually agreeing on the timetable for
the nomination process. Each of the Post-Coniston Parent Nominating Committee, the Company
Independent Directors and the CEOs of Parent and the Company shall have an opportunity to meet with
and interview the Recommended Candidates. Prior to the Effective Time, the Post-Coniston Parent
Nominating Committee shall propose to the Company Independent Directors a nominee for the
Independent Director who shall be selected from the Recommended Candidates (such proposed nominee,
the “Initial Nominee”). The Company Independent Directors shall be entitled to reject the
Initial Nominee for the Independent Director proposed by the Post-Coniston Parent Nominating
Committee for any reason. If the Company Independent Directors reject the Initial Nominee, then
the Post-Coniston Parent Nominating Committee shall propose to the Company Independent Directors
two (2) new nominees for the Independent Director (the “Final Nominees”), each of whom
shall be selected from the Recommended Candidates and shall not be the Initial Nominee, and shall
consult with the Company Independent Directors in making this determination. The Company
Independent Directors shall then select the nominee for the Independent Director from the Final
Nominees (such nominee or, if the Company Independent Directors accept the Initial Nominee, such
Initial Nominee, the “Nominated Independent Director”). The Post-Coniston Parent
Nominating Committee and the Company Independent Directors shall use their respective commercially
reasonable efforts to cause the Nominated Independent Director to be selected in accordance with
this Exhibit F. Parent shall take all actions as may be necessary to cause, at the
Effective Time, the Nominated Independent Director to be appointed as a member of the Board of
Directors of Parent.
EXHIBIT G
Parent Tax Certificate
EXHIBIT H
Company Tax Certificate
Schedule A
List of Signatories to Parent Voting Undertakings
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1. |
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Xxxx X. Xxxxxx |
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2. |
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Xxxxxxx Xxxxxx |
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3. |
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Sir Xxxxxxx Cadbury |
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4. |
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Xxxxxx X. Xxxxxxx |
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5. |
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Xxxxxx X. Xxxxx |
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6. |
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Xxxx X. Xxxx |
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7. |
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Xxxxxxx X. Xxxxxx |
Schedule B
List of Signatories to Company Voting Undertakings
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1. |
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Xxxxxx X. Xxxx |
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2. |
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Xxxxxx X. Xxxx |
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3. |
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Xxxxxx X. Xxxxxx |
Exhibit 5
Form
of Amendment to Arsenal By-laws
66
BY-LAWS
OF
ALLSCRIPTS HEALTHCARE SOLUTIONS, INC.
(the “By-Laws”)
As amended and restated on [ ], 2010
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of Allscripts Healthcare
Solutions, Inc. (the “Corporation”) shall be in Wilmington, New Castle County, Delaware.
Section 2. Principal Office. The Corporation shall have its principal office at 000
Xxxxxxxxxxx Xxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx, and it may also have offices at such other
places as the board of directors of the Corporation (the “Board of Directors”) may from time to
time determine.
ARTICLE II
STOCKHOLDERS
Section 1. Annual Meeting. The annual meeting of stockholders for the election of the
members of the Board of Directors (the “Directors” and each a “Director”) and for the transaction
of such other business as may properly come before the meeting shall be held each year at such
place and on such date and at such time as may be fixed from time to time by resolution approved by
a majority of the Board of Directors.
(a) At an annual meeting of stockholders, only such business shall be conducted as
shall have been properly brought before the meeting. To be properly brought before an
annual meeting, business must be (1) specified in the notice of meeting, or any supplement
thereto, given by or at the direction of the Board of Directors, (2) otherwise properly
brought before the meeting by or at the direction of the Board of Directors (or any duly
authorized committee thereof) or (3) otherwise properly brought before the meeting by a
stockholder of the Corporation (i) who is a stockholder of record on the date of the giving
of the notice provided for in this Section 1 and on the record date for the determination
of stockholders entitled to vote at such annual meeting and (ii) who complies with the
notice procedures set forth in this Section 1 of Article II.
(b) In addition to any other applicable requirements, for business to be properly
brought before an annual meeting by a stockholder, such stockholder must have given timely
notice thereof in writing to the secretary of the
Corporation not less than one hundred and twenty (120) days prior to the anniversary date
of the immediately preceding annual meeting nor more than one hundred and fifty (150) days
prior to the anniversary date of the immediately preceding annual meeting.
(c) To be in proper written form, a stockholder’s notice to the secretary of the
Corporation must set forth as to each matter such stockholder proposes to bring before the
annual meeting (i) a brief description of the business desired to be brought before the
annual meeting and the reasons for conducting such business at the annual meeting, (ii) the
name and record address of such stockholder and any Stockholder Associated Person (as
defined below) if any, on whose behalf the proposal is made, (iii) the class or series and
number of shares of capital stock of the Corporation which are owned beneficially or of
record by such stockholder or such Stockholder Associated Person, (iv) whether and the
extent to which any hedging or other transaction or series of transactions has been entered
into by or on behalf of, or any other agreement, arrangement or understanding (including
any short position or any borrowing or lending of shares) has been made, the effect or
intent of which is to mitigate loss to or manage risk or benefit of share price changes
for, or to increase or decrease the voting power of, such stockholder or Stockholder
Associated Person with respect to any share of stock of the Corporation (which information
shall be updated by such stockholder and Stockholder Associated Person, if any, as of the
record date for voting at the meeting not later than ten days after the record date for
voting at the meeting), (v) a description of all arrangements or understandings between
such stockholder or such Stockholder Associated Person and any other person or persons
(including their names) in connection with the proposal of such business by such
stockholder and any material interest of such stockholder or such Stockholder Associated
Person in such business and (vi) a representation that such stockholder or such Stockholder
Associated Person intends to appear in person or by proxy at the annual meeting to bring
such business before the meeting. “Stockholder Associated Person” shall mean, with respect
to any stockholder: (i) any person controlling, directly or indirectly, or acting in
concert with, such stockholder; (ii) any beneficial owner of shares of stock of the
corporation owned of record or beneficially by such stockholder; and (iii) any person
controlling, controlled by or under common control with such Stockholder Associated Person
that is acting in concert with such Stockholder Associated Person.
(d) Irrespective of anything in these By-Laws to the contrary, no business shall be
conducted at an annual meeting except in accordance with the procedures set forth in this
Section 1 of Article II. The presiding officer of an annual meeting shall, if the facts
warrant, determine and declare to the meeting that business was not properly brought before
the meeting in accordance with the provisions of this Section 1 of Article II, and if it is
so determined, shall so declare to the meeting
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and any such business not properly brought before the meeting shall not be transacted.
Section 2. Special Meetings. Special meetings of the stockholders may be called only
by the Chairman of the Board of Directors (the “Chairman”) or the Board of Directors pursuant to a
resolution approved by a majority of the Board of Directors. Only such business shall be conducted
at a special meeting of stockholders as shall have been brought before the meeting pursuant to the
Corporation’s notice of meeting in accordance with the provisions of Section 5 of Article II of
these By-Laws.
Section 3. Stockholder Action; How Taken. Any action required or permitted to be
taken by the stockholders of the Corporation must be effected at a duly called annual or special
meeting of the stockholders and may not be effected by any consent in writing by the stockholders.
Section 4. Place of Meeting; Participation in Meetings by Remote Communication.
(a) The Board of Directors may designate any place, either within or without Delaware,
as the place of meeting for any annual or special meeting. In the absence of any such
designation, the place of meeting shall be the principal office of the Corporation
designated in Section 2 of Article I of these By-Laws.
(b) The Board of Directors, acting in its sole discretion, may establish guidelines
and procedures in accordance with applicable provisions of the General Corporation Law of
the State of Delaware and any other applicable law for the participation by stockholders
and proxyholders in a meeting of stockholders by means of remote communications, and may
determine that any meeting of stockholders will not be held at any place but will be held
solely by means of remote communication. Stockholders and proxyholders complying with such
procedures and guidelines and otherwise entitled to vote at a meeting of stockholders shall
be deemed present and entitled to vote at a meeting of stockholders, whether such meeting
is to be held at a designated place or solely by means of remote communication.
Section 5. Notice of Meetings. Notice stating the place, if any, day and hour of the
meeting, the means of remote communication, if any, by which proxyholders and stockholders may be
deemed to be present and vote at such meeting and, in case of a special meeting, the purpose or
purposes for which the meeting is called, shall be given not less than ten (10) nor more than sixty
(60) days before the date of the meeting, or in the case of a merger or consolidation, if required
by applicable law, not less than twenty (20) nor more than sixty (60) days before the date of the
meeting, by or at the direction of a majority of the Board of Directors, to each stockholder
entitled to vote at such meeting as of the record date for determining the stockholders entitled to
notice of the meeting. If mailed, such notice shall be deemed to be given when deposited in the
United States
3
mails in a sealed envelope addressed to the stockholder at his address as it appears on the records
of the Corporation with postage thereon prepaid.
Section 6. Record Date. For the purpose of determining (a) stockholders entitled to
notice of or to vote at any meeting of stockholders, or (b) stockholders entitled to receive
payment of any dividend or (c) stockholders for any other purpose, the Board of Directors may fix
in advance a date as the record date for any such determination of stockholders, such date, in the
case of clauses (a) and (c): (i) to be not more than sixty (60) days and not less than ten (10)
days; or (ii) in the case of a merger or consolidation not less than twenty (20) days, prior to the
date on which the particular action requiring such determination of stockholders is to be taken.
Section 7. Quorum. The holders of not less than one-third in voting power of the
stock issued and outstanding and entitled to vote thereat, present in person, by remote
communication or represented by proxy, shall be requisite and shall constitute a quorum at all
meetings of the stockholders for the transaction of business except as otherwise provided by
statute, by the Certificate of Incorporation of the Corporation (as amended from time to time, the
“Certificate of Incorporation”) or by these By-Laws. If, however, such quorum shall not be present
or represented at any meeting of the stockholders, the chairman of the meeting shall have the power
to adjourn the meeting from time to time, without notice other than announcement at the meeting,
until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall
be present or represented, any business may be transacted which might have been transacted at the
meeting as originally notified.
When a quorum is present at any meeting, the affirmative vote of the holders of a majority in
voting power present in person, by remote communication or represented by proxy and entitled to
vote on the subject matter shall be required to approve any question brought before such meeting,
unless the question is one upon which by express provision of the General Corporation Law of the
State of Delaware or of the Certificate of Incorporation or of these By-Laws a different vote is
required, in which case such express provision shall govern and control the decision of such
question.
Section 8. Procedure. The order of business and all other matters of procedure at
every meeting of stockholders shall be determined by the chairman of the meeting. The Board of
Directors shall appoint one or more inspectors of election to serve at every meeting of
stockholders at which Directors are to be elected.
ARTICLE III
DIRECTORS
Section 1. Number, Election and Terms. The number of Directors shall be fixed from
time to time as provided in Article SEVENTH, Section 1 of the Certificate of
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Incorporation. At each annual meeting of stockholders of the Corporation, Directors shall be
elected to hold office for a term expiring at the annual meeting of stockholders held in the
immediately following year.
As used in these By-Laws, the term the “majority of the entire Board of Directors” means the
majority of the total number of Directors which the Corporation would have if there were no
vacancies, and the term “majority of the Board of Directors” means the majority of the Directors
present and voting.
Subject to the rights of holders of any class or series of stock having a preference over the
common stock as to dividends or upon liquidation, nominations for the election of Directors may be
made by the Nominating and Governance Committee, subject to the provisions of Article SEVENTH,
Section 6 of the Certificate of Incorporation, or by any stockholder entitled to vote in the
election of Directors generally.
Any stockholder entitled to vote in the election of Directors generally may nominate one or
more persons for election as Directors at a meeting only if (i) such stockholder is a stockholder
of record on the date of the giving of the notice provided for in this Section 1 of Article III and
on the record date for the determination of stockholders entitled to vote at such annual meeting
and (ii) such stockholder complies with the notice procedures set forth in this Section 1 of
Article III. In addition to any other applicable requirements, for a nomination to be made by a
stockholder, such stockholder must have given timely notice thereof in proper written form to the
secretary of the Corporation.
To be timely, written notice of such stockholder’s intent to make such nomination or
nominations must be given, either by personal delivery or by United States mail, postage prepaid,
to the secretary of the Corporation not later than (a) with respect to an election to be held at an
annual meeting of stockholders, one hundred twenty (120) days nor earlier than one hundred fifty
(150) days prior to the anniversary date of the immediately preceding annual meeting, and (b) with
respect to an election to be held at a special meeting of stockholders called for the purpose of
electing Directors, the close of business on the tenth (10th) day following the date on which
notice of such meeting is first given to stockholders.
To be in proper written form, a stockholder’s notice to the secretary of the Corporation must
set forth (a) as to each person whom the stockholder proposes to nominate for election as a
director (i) the name, age, business address and residence address of the person, (ii) the
principal occupation or employment of the person, (iii) the class or series and number of shares of
capital stock of the Corporation which are owned beneficially or of record by the person and
(iv) any other information relating to the person that would be required to be disclosed in a proxy
statement or other filings required to be made in connection with solicitations of proxies for
election of directors pursuant to the proxy rules of the Securities and Exchange Commission; and
(b) as to the stockholder giving the notice (i) the name and record address of such stockholder and
any
5
Stockholder Associated Person on whose behalf the nomination is made, (ii) the class or series
and number of shares of capital stock of the Corporation which are owned beneficially or of record
by such stockholder or such Stockholder Associated Person, (iii) whether and the extent to which
any hedging or other transaction or series of transactions has been entered into by or on behalf
of, or any other agreement, arrangement or understanding (including any short position or any
borrowing or lending of shares) has been made, the effect or intent of which is to mitigate loss to
or manage risk or benefit of share price changes for, or to increase or decrease the voting power
of, such stockholder or Stockholder Associated Person with respect to any share of stock of the
Corporation (which information shall be updated by such stockholder and Stockholder Associated
Person, if any, as of the record date of the meeting not later than 10 days after the record date
for the meeting), (iv) a description of all arrangements or understandings between such stockholder
or such Stockholder Associated Person and each proposed nominee and any other person or persons
(including their names) pursuant to which the nomination(s) are to be made by such stockholder,
(v) a representation that such stockholder is a holder of record of stock of the Corporation
entitled to vote at such meeting and intends to appear in person or by proxy at the annual meeting
to nominate the persons named in its notice and (vi) any other information relating to such
stockholder or such Stockholder Associated Person that would be required to be disclosed in a proxy
statement or other filings required to be made in connection with solicitations of proxies for
election of directors pursuant to the proxy rules of the Securities and Exchange Commission. Such
notice must be accompanied by a written consent of each proposed nominee to being named as a
nominee and to serve as a Director if elected. No person shall be eligible for election as a
Director unless nominated in accordance with the procedures set forth in this Section 1 of Article
III. The Corporation may require any proposed nominee to furnish such other information as it may
reasonably require to determine the eligibility of such proposed nominee to serve as a Director.
The chairman of the meeting may refuse to acknowledge the nomination of any person not made in
compliance with the foregoing procedure.
Section 2. Newly Created Directorships and Vacancies. Except as may otherwise be
fixed by resolution approved by a majority of the Board of Directors pursuant to the provisions of
Article IV hereof relating to the rights of the holders of Preferred Stock and except as set forth
in Article SEVENTH, Section 6 of the Certificate of Incorporation, newly created directorships
resulting from any increase in the number of Directors and any vacancies on the Board of Directors
resulting from death, resignation, disqualification, removal or any other cause shall be filled by
the affirmative vote of a majority of the remaining Directors then in office, though less than a
quorum, or by a sole remaining Director. Any Director appointed in accordance with the preceding
sentence or Article SEVENTH, Section 6 of the Certificate of Incorporation shall hold office for a
term expiring at the annual meeting of the stockholders following such Director’s appointment.
Section 3. Removal. Subject to the provisions in these By-Laws (and Article SEVENTH,
Section 6 of the Certificate of Incorporation) and the rights of any class or
6
series of stock having a preference over the common stock as to dividends or upon liquidation to
elect Directors under specified circumstances, any Director may be removed from office with or
without cause by the affirmative vote of the holders of a majority of the voting power present in
person, by remote communication or represented by proxy; provided that for a period of
three (3) years from the date on which the transactions contemplated by the Agreement and Plan of
Merger (as may be amended from time to time, the “Eclipsys Merger Agreement”) among the
Corporation, Arsenal Merger Corp. and Eclipsys Corporation, dated as of June 9, 2010 are
consummated (the “Eclipsys Closing”), the Chairman may be removed as the Chairman with or without
cause only upon the approval of the Board of Directors by the affirmative vote of no less than a
two-thirds majority of the entire Board of Directors (a “Supermajority Vote”).
Section 4.
Chairman. Prior to the Eclipsys Closing, the Chairman shall be designated
in accordance with Section 4 of the Amended and Restated Relationship Agreement, dated as of
, 2010,
between the Corporation and
Misys plc. Upon the Eclipsys Closing, the Chief
Executive Officer and President of Eclipsys Corporation immediately prior to the Eclipsys Closing
(the “Eclipsys CEO”) shall serve as a member of the Board of Directors and as the Chairman, but in
no event shall the Chairman be the chief executive officer of the Corporation (the “CEO”). Subject
to his annual election to the Board of Directors, the Eclipsys CEO shall serve as Chairman for a
term of three (3) years from the date of the Eclipsys Closing in accordance with the terms of the
Eclipsys Merger Agreement, the Employment Agreement, dated as of June 9, 2010, between the
Corporation and the Eclipsys CEO (the “Employment Agreement”), and these By-Laws, or until the
earlier of his death, resignation or removal. The Chairman shall preside at all meetings of the
stockholders of the Corporation and the Board of Directors and in general shall perform all other
duties incident to the office of Chairman. The Chairman shall also be a full-time employee of the
Corporation and shall have such other duties and responsibilities as set forth in the Employment
Agreement or as shall be assigned to the Chairman by the Board of Directors. The Chairman shall
have access to such resources of the Corporation to carry out such duties and responsibilities as
shall be assigned to him by the Board of Directors by a Supermajority Vote. The Chairman shall
work at the direction of the Board of Directors consistent with these provisions and shall report
to the Board of Directors.
Section 5. Regular Meetings. Regular meetings of the Board of Directors shall be held
at such times and places as the Board of Directors may from time to time determine.
Section 6. Special Meetings. Special meetings of the Board of Directors may be called
by or at the request of the Chairman or the CEO or by an officer of the Corporation upon the
request of the majority of the entire Board of Directors. The person or persons authorized to call
special meetings of the Board of Directors may fix any place, either within or without Delaware, as
the place for holding any special meeting of the Board of Directors called by them.
7
Section 7. Action by Telephonic Communications. Members of the Board of Directors
shall be entitled to participate in any meeting of the Board of Directors by means of conference
telephone or similar communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting pursuant to this provision shall
constitute presence in person at such meeting.
Section 8. Notice; Time of Meeting. Notice of every regular and every special
meeting of the Board of Directors shall be given at least seventy-two (72) hours before the meeting
by telephone, by personal delivery, by commercial courier, by mail, by facsimile transmission or
other means of electronic transmission. Notice shall be given to each Director at his usual place
of business, or at such other address as shall have been furnished by him for the purpose. Such
notice need not include a statement of the business to be transacted at, or the purpose of, any
such meeting.
Section 9. Quorum. A majority of the entire Board of Directors shall constitute a
quorum for the transaction of business at any meeting of the Board of Directors; provided,
that if less than a majority of the entire Board of Directors are present at said meeting, a
majority of the Directors present may adjourn the meeting from time to time until a quorum is
obtained without further notice. The act of the majority of the Board of Directors at a meeting at
which a quorum is present shall be the act of the Board of Directors unless the act of a greater
number is required by the Certificate of Incorporation or the By-Laws of the Corporation.
Section 10. Compensation. Directors who are also full time employees of the
Corporation or an affiliate thereof shall not receive any compensation for their services as
Directors but they may be reimbursed for reasonable expenses of attendance. By resolution approved
by a majority of the Board of Directors, all other Directors may receive either an annual fee or a
fee for each meeting attended, or both, and expenses of attendance, if any, at each regular or
special meeting of the Board of Directors or of a committee of the Board of Directors;
provided, that nothing herein contained shall be construed to preclude any Director from
serving the Corporation in any other capacity and receiving compensation therefor.
ARTICLE IV
OFFICERS
Section 1. Number. The officers of the Corporation shall be a CEO, a president, a
chief operating officer, a chief financial officer, an executive vice president (if elected by the
Board of Directors), one or more vice presidents (the number thereof to be determined by the Board
of Directors), a treasurer, a secretary and such other officers as may be elected in accordance
with the provisions of this Article IV.
Section 2. Election and Term of Office. The other officers of the Corporation shall
be designated annually by resolution approved by the Board of Directors at the first
8
meeting of the Board of Directors held after each annual meeting of stockholders. If the election
of officers shall not be held at such meeting, such election shall be held as soon thereafter as
convenient. Vacancies may be filled or new offices created and filled at any meeting of the Board
of Directors. Each officer shall hold office until his successor shall have been duly elected and
shall have qualified or until his death or until he shall resign or shall have been removed in the
manner hereinafter provided.
Section 3. Removal. Any officer or agent elected or appointed by resolution approved
by a majority of the entire Board of Directors may be removed and replaced by resolution approved
by a majority of the entire Board of Directors whenever in its judgment the best interests of the
Corporation would be served thereby, but such removal shall be without prejudice to the contract
rights, if any, of the person so removed; provided, that for a period of three (3) years
from the date of the Eclipsys Closing, the CEO at the time of the Eclipsys Closing may be removed
as the CEO with or without cause only upon the approval of the Board of Directors by a
Supermajority Vote.
Section 4. Vacancies. A vacancy in any office because of death, resignation,
removal, disqualification or otherwise, may be filled by resolution approved by the Board of
Directors for the unexpired portion of the term.
Section 5. Chief Executive Officer. The CEO of the Corporation shall be determined
by the Board of Directors and shall report to the Board of Directors. Subject to his annual
election to the Board of Directors, the CEO shall serve as a Director for a term of three (3) years
from the date of the Eclipsys Closing in accordance with the terms of the Eclipsys Merger Agreement
and these By-Laws, or until the earlier of his death, resignation or removal. The CEO shall
provide overall direction and administration of the business of the Corporation, establish basic
policies within which the various corporate activities are carried out, guide and develop long
range planning and evaluate activities in terms of objectives. He may sign with the secretary or
any other proper officer of the Corporation thereunto authorized by the Board of Directors, if such
additional signature is necessary under the terms of the instrument document being executed or
under applicable law, stock certificates of the Corporation, any deeds, mortgages, bonds,
contracts, or other instruments except in cases where the signing and execution thereof shall be
required by law to be otherwise signed or executed, and he may execute proxies on behalf of the
Corporation with respect to the voting of any shares of stock owned by the Corporation. The CEO
shall have the power to:
(a) designate management committees of employees deemed essential in the operations of
the Corporation, its divisions or subsidiaries, and appoint members thereof, subject to the
approval of a majority of the Board of Directors;
(b) appoint certain employees of the Corporation as vice presidents of one or several
divisions or operations of the Corporation, subject to the approval of a majority of the
Board of Directors; provided, however, that any vice president so appointed
shall not be an officer of the Corporation for any other purpose; and
9
(c) appoint such other agents and employees as in his judgment may be necessary or
proper for the transaction of the business of the Corporation and in general shall perform
all duties incident to the office of chief executive.
Section 6. President. The president shall assist in establishing basic policies
within which the various corporate activities are carried out, guiding and developing long range
planning and evaluating activities in terms of objectives. He may sign with the secretary or any
other proper officer of the Corporation thereunto authorized by the Board of Directors, if such
additional signature is necessary under the terms of the instrument document being executed or
under applicable law, stock certificates of the Corporation, any deeds, mortgages, bonds,
contracts, or other instruments except in cases where the signing and execution thereof shall be
required by law to be otherwise signed or executed, and he may execute proxies on behalf of the
Corporation with respect to the voting of any shares of stock owned by the Corporation. The
president shall perform such other duties as may be prescribed by the CEO.
Section 7. Chief Operating Officer. The chief operating officer shall in general be
in charge of all operations of the Corporation and shall direct and administer the activities of
the Corporation in accordance with the policies, goals and objectives established by the Chairman,
the CEO, the president and the Board of Directors. The chief operating officer shall perform such
other duties as may be prescribed by the CEO.
Section 7. Chief Financial Officer. Except as otherwise determined by the Board of
Directors, the chief financial officer shall be the chief financial officer of the Corporation.
The chief financial officer shall have the power to:
(a) charge, supervise and be responsible for the moneys, securities, receipts and
disbursements of the Corporation, and shall keep or cause to be kept full and accurate
records of all receipts of the Corporation;
(b) render to the Board of Directors, whenever requested, a statement of the
financial condition of the Corporation and of all his transactions as chief financial
officer, and render a full financial report at the annual meeting of the stockholders, if
called upon to do so;
(c) require from all officers or agents of the Corporation reports or statements
giving such information as he may desire with respect to any and all financial transactions
of the Corporation; and
(d) perform, in general, all duties incident to the office of chief financial officer
and such other duties as may be specified in these By-Laws or as may be assigned to him
from time to time by the Board of Directors or the Chairman or as may be prescribed by the
CEO.
10
Section 8. Executive Vice President. The Board of Directors may elect one or several
executive vice presidents. Each executive vice president shall report to either the CEO or the
president as determined in the corporate organization plan established by the Board of Directors.
The executive vice president shall direct and coordinate such major activities as shall be
delegated to him by his superior officer in accordance with policies established and instructions
issued by his superior officer or the CEO.
Section 9. Vice President. The Board of Directors may elect one or several vice
presidents. Each vice president shall report to either the CEO, the president or the executive vice
president as determined in the corporate organization plan established by the Board of Directors.
Each vice president shall perform such duties as may be delegated to him by his superior officers
and in accordance with the policies established and instructions issued by his superior officer or
the CEO. The Board of Directors may designate any vice president as a senior vice president and a
senior vice president shall be senior to all other vice presidents and junior to the executive vice
president. In the event there is more than one senior vice president, then seniority shall be
determined by and be the same as the annual order in which their names are presented to and acted
on by the Board of Directors.
Section 10. The Treasurer. The treasurer shall: (a) have charge and custody of and be
responsible for all funds and securities of the Corporation; (b) receive and give receipts for
moneys due and payable to the Corporation from any source whatsoever, and deposit all such moneys
in the name of the Corporation in such banks, trust companies or other depositories as shall be
selected by the Corporation; and (c) in general perform all the duties incident to the office of
treasurer and such other duties as from time to time may be assigned to him by the CEO, president
or by the Board of Directors. If required by the Board of Directors, the treasurer shall give a
bond for the faithful discharge of his duties in such sum and with such surety or sureties as the
Board of Directors shall determine.
Section 11. The Assistant Treasurer. The assistant treasurer (or, if more than one,
the assistant treasurers) shall, in the absence or disability of the treasurer, perform the duties
and exercise the powers of the treasurer and shall perform such other duties and have such other
powers as the Board of Directors may from time to time prescribe.
Section 12. The Secretary. The secretary shall: (a) keep the minutes of the
stockholders’ and the Board of Directors’ meetings in one or more books provided for that purpose;
(b) see that all notices are duly given in accordance with the provisions of these By-Laws or as
required by law; (c) be custodian of the corporate records and of the seal of the Corporation and
see that the seal of the Corporation is affixed to all stock certificates prior to the issue
thereof and to all documents, the execution of which on behalf of the Corporation under its seal is
duly authorized in accordance with the provisions of these By-Laws or as required by law; (d) keep
a register of the post office address of each stockholder which shall be furnished to the secretary
by such stockholder; (e) sign with the Chairman, president, or a vice president, stock certificates
11
of the Corporation, the issue of which shall have been authorized by resolution approved by the
majority of the Board of Directors; (f) have general charge of the stock transfer books of the
Corporation; and (g) in general perform all duties incident to the office of secretary and such
other duties as from time to time may be assigned to him by the CEO, president or by the Board of
Directors.
Section 13. The Assistant Secretary. The assistant secretary (or, if more than one,
the assistant secretaries) shall in the absence or disability of the secretary, perform the duties
and exercise the powers of the secretary and shall perform such other duties and have such other
powers as the Board of Directors may from time to time prescribe.
ARTICLE V
COMMITTEES
Section 1. The Committees. The Board of Directors may, pursuant to these By-Laws or
by resolution approved by the majority of the Board of Directors, designate one or more committees,
which, to the extent provided in these By-Laws or by resolution, to the fullest extent permitted by
law, shall have and may exercise the powers of the Board of Directors in the management of the
business and affairs of the Corporation and may authorize the seal of the Corporation to be affixed
to all papers which may require it. These committees shall include, but are not limited to, an
Audit Committee, a Nominating and Governance Committee, a Compensation Committee and such other
committees as determined by the Board of Directors, and, subject to Article SEVENTH, Section 6 of
the Certificate of Incorporation of the Corporation, a Misys Nominating Committee, an Eclipsys
Nominating Committee and an Allscripts Nominating Committee.
ARTICLE VI
SEAL
The Board of Directors shall provide a corporate seal which shall be in the form of a circle
and shall have inscribed thereon the name of the Corporation and the words “Corporate Seal,
Delaware”.
ARTICLE VII
WAIVER OF NOTICE
12
Whenever any notice whatsoever is required to be given under the provisions of these By-Laws
or under the provisions of the Certificate of Incorporation or under the provisions of the laws of
the State of Delaware, waiver thereof, given by the person or persons entitled to such notice,
whether before or after the time stated therein, shall be deemed equivalent to the giving of such
notice.
ARTICLE VIII
AMENDMENTS
Subject to the provisions of the Certificate of Incorporation and the By-Laws, these By-Laws
may be altered, amended or repealed with the affirmative vote of the majority of the entire Board
of Directors; provided, that until the three-year anniversary of the date of the Eclipsys
Closing, each of the first paragraph of Article III, Section 1, Article III, Section 4 and Article
IV, Section 5 of these By-Laws and the proviso set forth in Article IV, Section 3 of these By-Laws,
may be amended by the Board of Directors, or waivers therefrom granted by the Board of Directors,
in the manner prescribed by statute, only upon the approval of the Board of Directors by a
Supermajority Vote.
13
Exhibit 6
Voting Agreement
Incorporated by reference to Exhibit 99.13 attached to this Schedule 13D.
67
Exhibit 7
Form
of Manchester Announcement of Coniston Transaction
68
9 June 2010
MISYS plc
Misys takes decisive steps to realise shareholder value
Sale of majority of controlling interest in Allscripts
Return of over $1 billion (£0.7 billion) to shareholders
Allscripts merger with Eclipsys
Misys plc (LSE: MSY), the global application software and services company, announces it has agreed
to sell the majority of its 54.6% interest in its Allscripts subsidiary (NASDAQ: MDRX), and that
Misys intends to return substantially all of the proceeds to Misys shareholders. The sale of
shares by Misys will provide Allscripts the flexibility to proceed on its proposed merger with
Eclipsys (NASDAQ: ECLP).
Transaction highlights
• |
|
Misys will realise significant value for shareholders through the sale, in a
placing of shares and through buybacks by Allscripts. Based on illustrative placing and
buyback assumptions, the sale of approximately 68 million of its Allscripts shares would raise
over $1.3 billion (£0.9 billion) and would leave a remaining Misys holding of approximately 12
million Allscripts shares. |
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• |
|
Allscripts will merge with Eclipsys, creating what the Allscripts management
believe will be the clear leader in healthcare information technology, with the most
comprehensive solution offering for healthcare organisations of every size and setting. The
merger will be accretive to earnings per share in Calendar 2011. Eclipsys shareholders will
receive $1.3 billion in Allscripts shares, representing 1.2 Allscripts shares for each share
of Eclipsys that they own. Misys expects to retain a maximum of 10% of Allscripts-Eclipsys
shares, following the merger of the two companies. |
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• |
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The proceeds from the sale of Allscripts shares, after transaction fees and debt
paydown, will be returned to Misys shareholders in due course, intended to be through a
Proposed Tender Offer for their shares. |
|
• |
|
Significant enhancement to Misys earnings per share upon completion of Proposed
Sale and Proposed Tender Offer. |
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• |
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Greater visibility of the inherent value in Misys’ Banking and Treasury & Capital
Markets divisions. |
Xxxx Xxxxxx, Chief Executive, Misys plc, comments
‘The strategy and execution of the merger of Allscripts and Misys Healthcare has been
extraordinarily successful. This has been reflected in the rise in the Allscripts-Misys share price
since the completion of the merger in October 2008. The success of the merger has created an
opportunity for Allscripts to continue its leadership role by merging Allscripts and Eclipsys to
create a leader in end to end solutions for US hospitals & physicians. To enable Allscripts to
exploit this opportunity, and to allow Misys shareholders to benefit from the rise in the
Allscripts share price since the merger, we are reducing our holding in Allscripts.
Misys shareholders will receive an unprecedented return of capital from the company, over $1
billion, and will see immediate, significant earnings per share accretion.
Following separation, we will continue to focus on leadership in our financial services markets,
through taking to market innovative software solutions, notably our BankFusion suite, and providing
high quality implementation and customer services.
The sale creates a clear, compelling, pure play investment proposition in financial services, while
we also retain a stake in the future success of the newly created Allscripts-Eclipsys.’
Xxxx Xxxxxxx, Chief Executive, Allscripts, comments
‘The Allscripts-Misys Healthcare merger created a leader in ambulatory healthcare IT in the US,
focused on the physician practice market. Now, the merger with Eclipsys will create a leader in
healthcare IT connecting hospitals, physicians and post-acute organizations.
The merger represents a significant strategic opportunity for Allscripts and Eclipsys to combine
their strengths, particularly in Electronic Health Records, resulting in a significantly expanded
market presence.
By combining Allscripts’ Electronic Health Record portfolio in the physician market paired with,
our leadership in the post-acute care market, and Eclipsys’ market-leading hospital enterprise
solutions, we will create the one company uniquely positioned to help our clients benefit from $30
billion in government funding for Electronic Health Records.
The US healthcare system is rapidly moving towards collaboration between providers across all
healthcare settings, with the objective of a single patient record connecting providers across
entire communities. Allscripts and Eclipsys’ leading positions in the physician practice market,
post-acute settings and in hospitals will enable us to deliver a complete portfolio of clinical,
financial, and information solutions, creating a seamless patient experience and improved care at
lower cost.’
Throughout this announcement, an exchange rate of 1.44 $/£ is assumed.
Conference Call
A conference call will be held for UK analysts and investors at 10.00am BST (5.00am EDT) today. To
access dial x00 (0) 00 0000 0000 and enter code 787292#. The presentation slides will be available
by webcast on xxx.xxxxx.xxx. A replay facility will be available from 2.00pm BST (9.00am EDT) at
xxx.xxxxx.xxx or by calling x00 (0) 000 000 0000 using code 269042#.
A presentation will be made by webcast for US analysts and investors at 8.00am EDT (1.00pm BST).
Access is through xxx.xxxxxxxxxx.xxx. The audio facility will be available on x0 000 000 0000 and
entering conference code 78781403#.
A commentary by Xxxx Xxxxxx, Chief Executive of Misys and Executive Chairman of Allscripts-Misys
will be available from 07.00am BST on xxx.xxxxx.xxx
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Analyst / investor inquiries |
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Media inquiries |
Xxxx Xxxxxxxx
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Xxxx Xxxxxx |
T: x00 (0) 000 000 0000
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T: x00 (0) 000 000 0000 |
M: x00 (0) 000 000 0000
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M: x00 (0) 000 000 0000 |
Email: xxxx.xxxxxxxx@xxxxx.xxx
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Email: xxxx.xxxxxx@xxxxx.xxx |
Advisors
Credit Suisse are acting as financial adviser to Misys. JPMorgan Cazenove will act as financial
adviser to Misys on the tender offer.
About Misys
Misys plc (FTSE: MSY.L), provides integrated, comprehensive solutions that deliver significant
results to organisations in the financial services and healthcare industries. We maximise value
for our customers by combining our deep knowledge of their business with our commitment to their
success. In banking and treasury & capital markets, Misys is a market leader, with over 1,200
customers, including all of the world’s top 50 banks. In healthcare, Misys owns a controlling stake
in NASDAQ listed Allscripts, a clear leader in the provision of healthcare information technology,
serving more than 160,000 physicians, 800 hospitals and nearly 8,000 post-acute and homecare
organisations.
Misys employs 6,000 people who serve customers in more than 120 countries. We aspire to be the
world’s best application software and services company, delivering results for the most important
industries in the world. To learn more, visit xxx.xxxxx.xxx.
About Allscripts
Allscripts (NASDAQ: MDRX) uses innovation technology to bring health to healthcare. More than
160,000 physicians, 800 hospitals and nearly 8,000 post-acute and homecare organizations utilize
Allscripts to improve the health of their patients and their bottom line. The company’s
award-winning solutions include electronic health records, electronic prescribing, revenue cycle
management, practice management, document management, care management, emergency department
information systems and homecare automation. Allscripts is the trade name of Allscripts-Misys
Healthcare Solutions, Inc. To learn more, visit xxx.xxxxxxxxxx.xxx.
Transaction summary
1. The Proposed Sale consists of a disposal of between approximately 60 million and approximately
70 million of the 79.8 million Allscripts shares currently held by Misys, by the following three
methods:
|
(i) |
|
The Placing. Market placing of between 36 million and approximately 40 million
Allscripts shares held by Misys, with the actual price and offering size to be determined
at the time of the placing. |
|
|
(ii) |
|
The Buyback. Share buyback by Allscripts of 24.4 million Allscripts shares from
Misys for an aggregate consideration of US$577 million, at a price per Allscripts share of
US$23.62 which includes a US$117 million premium in recognition of Misys relinquishing
control. |
|
|
(iii) |
|
The Additional Buyback. Upon successful completion of the Allscripts-Eclipsys
Merger, Misys will have an option to sell to Allscripts an additional 5.3 million of its
Allscripts shares for a consideration of US$102 million. |
Allscripts has committed credit facilities in place to finance the Buyback, and would finance the
Additional Buyback through Allscripts-Eclipsys cash balances.
The Proposed Sale is conditional upon being able to achieve through the Placing a minimum price of
US$16.50 per share, and upon approval by Misys shareholders. It is not conditional upon the
Allscripts-Eclipsys merger.
2. The Allscripts-Eclipsys Merger. Allscripts has entered into a conditional agreement to acquire
the entire issued and outstanding share capital of Eclipsys, a NASDAQ-listed healthcare IT systems
provider, for a consideration of US$1.3 billion, to be satisfied wholly by new Allscripts shares
issued to Eclipsys shareholders in the ratio of 1.2 Allscripts shares per Eclipsys share. This
consideration represents a premium of 19% to the Eclipsys share price, based on the closing prices
on 8 June 2010, for Allscripts of US$18.42 and for Eclipsys of US$18.51. The completion of the
merger is conditional, among other things, on
|
(i) |
|
successful completion of the Placing and Buyback by Misys |
|
|
(ii) |
|
necessary approvals from Allscripts’ and Eclipsys’ shareholders |
|
|
(iii) |
|
relevant Securities and Exchange Commission and anti-trust approvals |
In advance of the Proposed Sale completing, a break fee of approximately $18 million will be
payable by Allscripts to Eclipsys if the merger does not proceed for certain specified reasons,
including Misys shareholders voting against the Proposed Sale.
More details of the Allscripts-Eclipsys Merger have been provided in an announcement released today
by Allscripts.
3. Misys’ remaining Allscripts shares. The minimum number of Allscripts shares retained by Misys,
which would result from the maximum number sold in the Placing, Allscripts’ agreed Buyback, and the
Additional Buyback option being exercised, would be 10.2 million (5% of Allscripts-Eclipsys
shares). The maximum number of Allscripts shares retained by Misys, which would result from the
minimum number sold in the Placing, Allscripts’ agreed Buyback, and the Additional Buyback option
not being exercised, would be approximately 19 million (10% of Allscripts—Eclipsys shares).
4. The Proposed Tender Offer. The Misys Board proposes to return to Misys shareholders, in due
course, the net proceeds of the Proposed Sale, after transaction fees and debt paydown. It is the
current intention to effect this via the Proposed Tender Offer.
Illustrative proceeds after placing fees and before legal, tax accounting and transaction fees,
assuming an illustrative 38 million Allscripts shares are placed at a price of $18.42 per share,
and with the Buyback and Additional Buyback taking place as outlined above, would be over $1.3
billion (£0.9 billion).
Actual Placing proceeds will be determined during the Placing, expected to take place in September
or October 2010. From the proceeds, £75 million ($108 million) will be used to pay down Misys’
debt, and the rest, over $1.2 billion (£0.8 billion) based on the illustrative assumptions outlined
above, will be returned to shareholders.
The Proposed Tender Offer is intended to be launched after Misys receives, as it expects to,
clearance from the US Internal Revenue Service that there will be no material tax liability
resulting from a re-organisation of its US corporate structure to facilitate the Proposed Sale. If
clearance is not obtained, approximately $170 million of the proceeds of the Proposed Sale, based
on the proceeds illustration above, would be retained to meet the potential tax liability.
5. Misys will continue to own 100% of its Banking and Treasury & Capital Markets divisions and will
continue to be listed on the London Stock Exchange.
Misys Shareholder approvals
The Proposed Sale and Proposed Tender Offer are each conditional, amongst other things, upon
approval by Misys shareholders and the successful completion of the Placing.
Misys intends to post a circular to Misys’ shareholders in August, giving full details of the
Proposed Sale and outline terms for the Proposed Tender Offer, including notice of a General
Meeting, currently expected to be held in September 2010. Full details of the Proposed Tender Offer
will be sent to shareholders following the General Meeting. ValueAct Capital, a holder of 25.7% of
Misys’ issued shares, has committed irrevocably to vote in favour of the Proposed Sale and Proposed
Tender Offer.
Subject to the conditions being met, the Proposed Sale is expected to complete in September or
October 2010, and the Proposed Tender Offer is expected to be launched in November 2010.
Since Allscripts’ acquisition of Eclipsys is conditional upon Allscripts no longer being a
subsidiary of Misys, Misys’ shareholders are not being asked to approve the Eclipsys acquisition.
Transaction rationales
The combination of Allscripts and Eclipsys represents a significant strategic opportunity in US
healthcare IT. The merger will create an extended market position, particularly in Electronic
Health Records, the adoption of which is being funded by unprecedented US government incentives.
Eclipsys’ solutions for hospitals will be added to Allscripts physician practice offerings,
creating new sales opportunities and cross-selling opportunities within the existing installed
base. Allscripts management believe that combined Allscripts-Eclipsys solutions will connect
hospitals, physicians and post-acute organisations, creating a seamless patient experience and
improved care at lower cost.’
To enable the stock for stock acquisition of Eclipsys, Misys has agreed to exit its control
position in Allscripts, though retaining a material stake in the future success of
Allscripts-Eclipsys.
The Proposed Sale also represents an exceptional opportunity to crystallise the value created since
the merger of Misys Healthcare with Allscripts on 10 October 2008 (the Merger). Allscripts’ share
price has since increased 110% from US$8.77 per share to US$18.42 per share as at 8
June 2010, representing a significant outperformance of the NASDAQ Composite Index, which rose 32%
over the same period. In addition, Misys’ consideration for the Buyback includes a premium of
US$117 million in recognition of Misys relinquishing control.
Through the Proposed Tender Offer, Misys’ shareholders will receive substantially all of the net
proceeds from the Proposed Sale in cash and therefore directly benefit from the rise in the value
of Allscripts shares since the Merger. The Proposed Sale and Proposed Tender Offer together are,
upon completion, expected to be significantly enhancing to Misys earnings per share.
After the Proposed Sale, Misys’ Banking, Treasury and Capital Markets and Open Source businesses
will continue to apply their previously stated strategies, specific to their respective
marketplaces. Key financial metrics for Misys, after the Proposed Sale, are as follows:
|
|
|
|
|
£m, pro-forma, adjusted1 |
|
Year ended 31 May 2009 |
|
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Revenue |
|
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344 |
|
Adjusted Operating Profit before Depreciation &
Amortisation |
|
|
63 |
|
Adjusted Operating Profit |
|
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52 |
|
Adjusted Operating Profit Margin |
|
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15 |
% |
Adjusted Pre-Tax Profit |
|
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40 |
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Adjusted After-Tax Profit |
|
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31 |
|
|
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1 |
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Before exceptional items, gains and losses on embedded derivatives,
amortisation of acquired intangible assets and translation exchange differences
recycled from reserves. |
Results for the year ended 31 May 2010 will be announced during July 2010. Management’s
medium-term targets for Misys after the Proposed Sale, for the two years to 31 May 2012, are
revenue growth (at constant currency) of 5 to 8% and adjusted operating margins between 17% and
20%.
The Banking business will continue the roll-out of BankFusion and other new solutions for Mobile
Banking, Business Intelligence, Payments and Trade Services, with the objective of making Misys the
technology of choice for solutions across the financial services industry. The Treasury and Capital
Markets business will continue to focus on growing its market share by attracting significant
numbers of new customers in its core securities trading and corporate lending markets and by
retaining existing customers through high quality customer service. Existing solutions will
continue to be enhanced, and new products introduced, to improve management and processing of
securities trading and risk management.
Transaction timetable
The illustrative timetable of events is as follows
|
|
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June to
July 2010
|
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Filings to UK Listing Authority and the US Securities and Exchange
Commission, followed by review and approval.
Other regulatory approvals sought for Allscripts-Eclipsys Merger |
|
|
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August 2010
|
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Circulars to Misys, Allscripts and Eclipsys shareholders |
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September to
October 2010
|
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Misys, Allscripts and Eclipsys shareholder meetings
Placing of Misys-owned Allscripts shares and Buyback by Allscripts
Closing of Allscripts-Eclipsys Merger
Misys Additional Buyback option exercisable within 10 business days
of the Allscripts-Eclipsys Merger closing |
|
|
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November to
December 2010
|
|
Return of net proceeds to Misys shareholders via Proposed Tender Offer |
Next Steps
Misys intends to make an announcement upon sending a circular to shareholders containing further
details of the proposed transactions and the date and agenda of the proposed General Meeting at
which approval for the transactions will be sought. Subsequent to that it is intended that a
separate document will be sent to shareholders, which would set out the detailed terms of the
Proposed Tender Offer to shareholders.
Important information for investors and shareholders
THIS COMMUNICATION DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY
ANY SECURITIES, NOR SHALL THERE BE ANY SALE OF SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER,
SOLICITATION OR SALE IS UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH JURISDICTION.
In connection with the proposed business combination transaction between Allscripts and Eclipsys
described in the above communications, Allscripts has filed, or will file, a registration statement
/ proxy statement on Form S-4, a registration statement on Form S-3 and certain other materials
with the SEC.
INVESTORS IN ALLSCRIPTS AND ECLIPSYS ARE ENCOURAGED TO READ THE REGISTRATION STATEMENTS / PROXY
STATEMENT AND OTHER RELEVANT MATERIALS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE PROPOSED BUSINESS COMBINATION TRANSACTION BETWEEN ALLSCRIPTS AND
ECLIPSYS.
You may obtain free copies of these documents (when they are available) and other documents filed
by Allscripts with the SEC at the SEC’s web site at xxx.xxx.xxx.
This communication contains forward looking statements regarding future events, developments, the
future performance of Misys plc (“Misys”) and Allscripts, Inc. (“Allscripts”), as well as
management’s expectations, beliefs, intentions, plans, estimates, views or projections relating to
the future, including with regard to the proposed exit by Misys of its controlling interest in
Allscripts and the subsequent proposed merger of Allscripts with Eclipsys Corporation (“Eclipsys”).
Those forward looking statements include all statements other than those made, solely with respect
to historical facts. Forward looking statements may be identified by words such as transaction
rationale, strategy, believes, plans, expects, anticipates, estimates, projects, intends, will,
should, seeks, future, continue, or the negative of such terms, or other comparable terminology, or
by express or implied discussions regarding potential future sales or earnings of Misys or
Allscripts; or by discussions of strategy, plans, expectations or intentions or potential
synergies, strategic benefits or opportunities that may result from the proposed transactions
described in the communications on the following web site.
Such forward looking statements reflect the current expectations, beliefs, intentions, plans,
estimates, views or projections of Misys and Allscripts, but are subject to numerous risks,
uncertainties, assumptions and other factors that are difficult to predict, and could cause actual
results to vary, materially, from any future results, performance or achievements expressed or
implied by such statements. In particular, there can be no guarantee that the proposed transactions
described in the communications will be completed in the expected form or within the expected time
frame or at all. Nor can there be any guarantee that Misys or Allscripts, or any of their divisions
or business units, will achieve any particular future financial results or future growth rates or
that Misys or Allscripts will be able to realize any of the potential synergies, strategic benefits
or opportunities as a result of the proposed transactions. Factors that could cause actual results
to differ materially include but are not limited to legislative, regulatory, political and economic
developments, changes in competitive and market forces, further exchange and interest rates,
changes in tax rates, and future business combinations, or disposals.
Some of the central risks faced by Misys are set out in Misys’s most recent annual report and the
central risks faced by Allscripts are set out in Allscripts most recent annual report on Form 10-K
and other materials filed by Allscripts with the U.S. Securities and Exchange Commission (“SEC”).
Neither Misys nor Allscripts undertake any obligation to revise or update any forward looking
statement or to make any other forward looking statement, whether as a result of new information,
future events or otherwise. Neither Misys nor Allscripts are responsible for updating the
information contained in the following communications beyond the published date, or changes made to these communications by wire
services or internet service providers.
Exhibit 8
Form of Joint Announcement of Emerald Transaction
Not included in this Schedule 13D Exhibit 99.10 filing.
69
Exhibit 9
Form of Section 16 Resolutions
Not included in this Schedule 13D Exhibit 99.10 filing.
70
Exhibit 10
Arbitration Procedures
(a) |
|
If Arsenal shall have delivered to Manchester an Objection Notice or a Rejection Notice
(each, an Arbitration Notice), the Parties shall select an Independent Arbitrator and resolve
the issue or issues in controversy described in such Arbitration Notice pursuant to mandatory
and binding arbitration in accordance with this Exhibit 10. |
|
(b) |
|
Any Arbitration Notice shall include three names of individuals (Arsenal Arbitration
Candidates) who meet the qualifications to be the Independent Arbitrator and are acceptable to
Arsenal. If Manchester accepts any of the Arsenal Arbitration Candidates, Manchester shall so
notify Arsenal within three (3) business days of receipt of the Arbitration Notice identifying
the Arsenal Arbitration Candidate acceptable to Manchester, who shall thereupon be the
Independent Arbitrator. If Manchester does not accept any of the Arsenal Arbitration
Candidates, then Manchester shall within three (3) business days of receipt of the Arbitration
Notice propose three individuals who meet the qualifications to be the Independent Arbitrator
and are acceptable to Manchester (Manchester Arbitration Candidates). If Arsenal accepts any
of the Manchester Arbitration Candidates, Arsenal shall so notify Manchester within three (3)
business days of receipt of the names of the Manchester Arbitration Candidates identifying the
Manchester Arbitration Candidate acceptable to Arsenal, who shall thereupon be the Independent
Arbitrator. If Arsenal does not accept any of the Manchester Arbitration Candidates, Arsenal
shall so notify Manchester within three (3) business days of the receipt of the names of the
Manchester Arbitration Candidates whereupon within one (1) business day one of the Arsenal
Arbitration Candidates and one of the Manchester Arbitration Candidates, in each case selected
by the other Party, shall be instructed to agree within two (2) business days upon the
identity of an individual who meets the qualifications to be the Independent Arbitrator.
Notwithstanding anything to the contrary contained herein, in the event the Parties have
previously submitted a dispute to arbitration in accordance with this Exhibit 10 or
selected an Independent Arbitrator pursuant to Section 10.2(g), the Independent
Arbitrator from such previous arbitration proceeding or selected pursuant to Section
10.2(g) shall be the Independent Arbitrator for all subsequent arbitration proceedings
relating to any Objection Notice or Rejection Notice unless either Arsenal or Manchester
objects to the use of such Independent Arbitrator in any such subsequent arbitration
proceeding, in which case the Parties shall select a new Independent Arbitrator in accordance
with this paragraph (b). |
|
(c) |
|
The Independent Arbitrator shall be instructed by Arsenal and Manchester to use its best
efforts to make a reasoned final written determination within fifteen (15) business days after
such selection, binding on the Parties, as to the issue or issues in controversy described in
the relevant Arbitration Notice. The Independent Arbitrator shall review written submissions
of the Parties with respect to the matters at issue and shall be entitled to seek
clarifications or back-up information related thereto from the Parties, as well as in-person
joint meetings with the Parties, but shall not undertake an independent investigation. Each
Party shall be entitled to a single brief to be submitted within five (5) business days of the
selection of the Independent Arbitrator and a single written rebuttal to be submitted within
three (3) business days of submission of briefs. Notwithstanding anything to the contrary
contained herein, neither Arsenal nor Manchester (nor any of their respective Affiliates or
representatives) shall have any ex parte communications or meetings with the Independent
Arbitrator without the prior consent of the other Party. |
71
(d) |
|
If Manchester shall have delivered to Arsenal a Reduction Notice, an Excess PLR Guarantee
Notice or an Excess Historic Guarantee Notice, the Parties shall negotiate in good faith to
select as promptly as reasonably practicable a qualified arbitrator (who for the avoidance of
doubt need not be an Independent Arbitrator) reasonably acceptable to each of the Parties and
resolve the issue or issues in controversy described in such Reduction Notice, Excess PLR
Guarantee Notice or Excess Historic Guarantee Notice pursuant to mandatory and binding
arbitration in accordance with this Exhibit 10. |
|
(e) |
|
Any determination reached by the Independent Arbitrator or the arbitrator selected pursuant
to paragraph (d), as the case may be, will be final, conclusive and binding upon the Parties
and any judgment thereon may be entered and enforced in any court of competent jurisdiction.
The Party that is unsuccessful in the arbitration shall pay all fees, costs and expenses of
the Independent Arbitrator or the arbitrator selected pursuant to paragraph (d), as the case
may be, and all reasonable out-of-pocket fees, costs and expenses of the other Party,
including fees payable to attorneys, experts and witnesses for the other Party. In addition,
in connection with any Proceeding to compel arbitration pursuant to this Agreement or to
confirm, vacate or enforce any award rendered by the Independent Arbitrator or the arbitrator
selected pursuant to paragraph (d), as the case may be, the prevailing Party in such a
Proceeding will be entitled to recover reasonable fees, costs and expenses incurred in
connection with such Proceeding, in addition to any other relief to which it may be entitled.
Without limiting the foregoing, Manchester’s costs in connection with this paragraph (d) shall
include all out-of-pocket fees, costs and expenses incurred to financial institutions in
connection with the PLR Bank Guarantee or Historic Bank Guarantee, as the case may be,
remaining outstanding from the date it otherwise would have been released pursuant to
Section 10.10 through the date on which it is actually released. |
72
Exhibit 11
Form
of Bank Guarantee
73
AGREED FORM
[LETTERHEAD OF BANK]
|
|
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Allscripts-Misys Healthcare Solutions, Inc.
|
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[DATE] |
000 Xxxxxxxxxxx Xxxx Xxxxx, Xxxxx 0000 |
|
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Xxxxxxx, XX 00000 |
|
|
XXX |
|
|
Dear Sir,
ON DEMAND BANK GUARANTEE NO: [NUMBER]
We are informed by Misys plc [COMPANY NUMBER] (“Misys”) that it has entered into a framework
agreement with you dated as of June 9, 2010 (as amended, varied or modified from time to time) (the
“Framework Agreement”). We have been requested to issue this on demand bank guarantee in
connection with Section [10.10(a) / 10.10(b)] of the Framework Agreement.
In consideration of your entering into the Framework Agreement, we [NAME AND ADDRESS OF BANK],
irrevocably and unconditionally undertake, as primary obligor, to pay to you from time to time on
your first written demand over original hand-written signatures in the form of Exhibit A (including
all attachments required by paragraph 3 of Exhibit A) (a “Demand Notice”), and waiving all rights
of objection and defence and without reference to Misys or the Framework Agreement and despite any
objection by Misys or its affiliates, an amount or amounts not exceeding in aggregate the Maximum
Guarantee Amount (as defined below).
A Demand Notice must be received by us prior to the expiration of this guarantee. You are not
limited in the number of Demand Notices you may make hereunder; provided, however,
that the aggregate sum of all amounts demanded under such Demand Notices may in no event exceed the
Maximum Guarantee Amount (as defined below). All amounts payable under this guarantee will be paid
in U.S. dollars.
Any Demand Notice shall be validly given by you if delivered to us in person as follows:
[BANK]
[ADDRESS OF BANK] [NOTE: To include NY and/or Chicago branches.]
Any Demand Notice that you give shall be deemed to have been received by us on the day of actual
delivery to us in person.
We shall accept any executed Demand Notice as conclusive evidence that the amount claimed is due to
you under this guarantee.
AGREED FORM
ALWAYS PROVIDED THAT
1. |
|
Our liability under this guarantee is limited to an amount or amounts not exceeding in
aggregate US$[•] million (the “Maximum Guarantee Amount”) as reduced from time to time
by a notice from Misys in the form of Exhibit B hereto (including all attachments required by
paragraph 3 of Exhibit B) (a “Reduction Notice”). |
2. |
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This guarantee will come into force on [date of Coniston Closing]. |
3. |
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This guarantee will expire upon our receipt of a duly executed certificate of the Chief
Executive Officer of Misys certifying that this guarantee is terminated in the form of Exhibit
C hereto (including all attachments required by paragraph 3 of Exhibit C) (a “Release
Notice”). |
This guarantee is personal to yourselves and is not transferable or assignable, except that this
guarantee shall inure to the benefit of your successors in title by operation of law.
Except to the extent it is inconsistent with the express terms of this guarantee, this guarantee is
subject to [the International Standby Practices 1998 (International Chamber of Commerce Publication
No. 590)] [the Uniform Rules for Demand Guarantees ICC publication 458].
Upon receipt by us of a notice in the form of either Exhibit D-1 or Exhibit D-2 (each, a “Bank
Notice”) stating that a payment is required (in the case of Exhibit D-1) or an event permitting the
reduction or termination of this guarantee has occurred (in the case of Exhibit D-2), we shall,
within one business day following receipt thereof, send by confirmed facsimile to each of you and
Misys a copy of such Bank Notice to the addresses for you and Misys contained in Exhibit E hereto.
Notwithstanding anything herein to the contrary, we shall not make any payment pursuant to a Demand
Notice received by us unless and until seven (7) business days have elapsed from our receipt of a
Bank Notice from you specifying the payment amount to be demanded.
Notwithstanding anything herein to the contrary, we shall not reduce or terminate this guarantee
pursuant to a Reduction Notice or Release Notice received from Misys unless and until ten (10)
business days have elapsed from our receipt of a Bank Notice from Misys specifying the reduction
amount or stating that an event permitting the termination of this guarantee has occurred,
respectively.
This guarantee and all non-contractual obligations arising out of or in connection with this
guarantee shall be governed by and construed in accordance with the laws of England and Wales and
we hereby irrevocably submit to the exclusive jurisdiction of the English courts to settle any
dispute arising out of or in connection with this guarantee (including
AGREED FORM
any dispute regarding the existence, validity or termination of this guarantee or any
non-contractual obligation arising out of or in connection with this guarantee).
[To be executed by Bank as a Deed]
We hereby irrevocably submit to the exclusive jurisdiction of the English courts to settle any
dispute arising out of or in connection with this guarantee (including any dispute regarding the
existence, validity or termination of this guarantee or any non-contractual obligation arising out
of or in connection with this guarantee).
[To be executed by Allscripts-Misys Healthcare Solutions, Inc. as a Deed]
AGREED FORM
EXHIBIT A
FORM OF DEMAND NOTICE
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To:
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[BANK] |
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[ADDRESS] |
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Attn: |
The undersigned, the Chief Executive Officer of Allscripts-Misys Healthcare Solutions, Inc. (
“Allscripts”), as beneficiary under that certain on demand bank guarantee [ ] dated [ ],
2010 (the “Guarantee”), granted by [BANK] (the “Issuing Bank”), hereby provides notice to the
Issuing Bank as follows:
1. |
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We hereby demand payment in the amount of $ . |
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2. |
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We hereby certify that each of the [Transaction Tax Conditions or Post-Closing Franchise Tax
Conditions] [NOTE: PLR Bank Guarantee only] [Historic Tax Conditions] [NOTE: Historic Bank
Guarantee only] (as defined in the Framework Agreement) has been satisfied. |
3. |
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We hereby certify that attached hereto is a copy of resolutions adopted by the Board of
Directors of Allscripts affirming that the Board of Directors of Allscripts has determined
that each of the [Transaction Tax Conditions or Post-Closing Franchise Tax Conditions] [NOTE:
PLR Bank Guarantee only] [Historic Tax Conditions] [NOTE: Historic Bank Guarantee only] (as
defined in the Framework Agreement) has been satisfied, which resolutions are complete and
accurate and were duly passed by the Board of Directors of Allscripts and have not been
altered, amended or rescinded and remain in full force and effect as of the date of this
Demand Notice. |
4. |
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We hereby certify that the amount hereby demanded, when aggregated with any other amount or
amounts previously demanded under the Guarantee, does not exceed the Maximum Guarantee Amount
available under the Guarantee on the date hereof, as determined in accordance with the terms
of the Guarantee. |
5. |
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Payment by the Issuing Bank pursuant to this demand notice shall be made to
, ABA Number , Account Number
, Attention:
, Re: . |
Capitalised terms used herein and not otherwise defined herein shall have the meanings given to
them in the Guarantee.
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ALLSCRIPTS-MISYS HEALTHCARE SOLUTIONS, INC.
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By: |
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Name: |
[•] |
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Title: |
[•]
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Date: |
[•]
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AGREED FORM
EXHIBIT B
FORM OF REDUCTION NOTICE
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To:
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[BANK] |
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[ADDRESS] |
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Attn: |
The undersigned, the Chief Executive Officer of Misys plc (“Misys”), the arranger of that certain
on demand bank guarantee [ ] dated [ ], 2010 (the “Guarantee”), granted by [BANK] (the
“Issuing Bank”), hereby provides notice to the Issuing Bank as follows:
1. |
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We hereby request that the Maximum Guarantee Amount be reduced to $ . |
2. |
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We hereby certify that the conditions set forth in Section [•] of the Framework
Agreement for the reduction of the Maximum Guarantee Amount as requested in paragraph 1 above
have been satisfied. |
3. |
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We hereby certify that attached hereto is a copy of resolutions adopted by the Board of
Directors of Misys affirming that the conditions set forth in Section [•] of the
Framework Agreement for the reduction of the Maximum Guarantee Amount as requested in
paragraph 1 above have been satisfied, which resolutions are complete and accurate and were
duly passed by the Board of Directors of Misys and have not been altered, amended or rescinded
and remain in full force and effect as of the date of this reduction notice. |
Capitalised terms used herein and not otherwise defined herein shall have the meanings given to
them in the Guarantee.
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MISYS PLC
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By: |
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Name: |
[•] |
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Title: |
[•]
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Date: |
[•]
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AGREED FORM
EXHIBIT C
FORM OF RELEASE NOTICE
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To:
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[BANK] |
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[ADDRESS] |
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Attn: |
The undersigned, the Chief Executive Officer of Misys plc (“Misys”), the arranger of that certain
on demand bank guarantee [ ] dated [ ], 2010 (the “Guarantee”), granted by [BANK] (the
“Issuing Bank”), hereby provides notice to the Issuing Bank as follows:
1. |
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We hereby request that the Guarantee be terminated with immediate effect. |
2. |
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We hereby certify that one of the conditions set forth in Section [•] of the Framework
Agreement for the full release and termination of the Guarantee has been satisfied (without
any required reduction of the released amount under Section [•] of the Framework
Agreement). |
3. |
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We hereby certify that attached hereto is a copy of resolutions adopted by the Board of
Directors of Misys affirming that one of the conditions set forth in Section [•] of the
Framework Agreement for the full release and termination of the Guarantee has been satisfied
(without any required reduction of the released amount under Section [•] of the
Framework Agreement), which resolutions are complete and accurate and were duly passed by the
Board of Directors of Misys and have not been altered, amended or rescinded and remain in full
force and effect as of the date of this release notice. |
Capitalised terms used herein and not otherwise defined herein shall have the meanings given to
them in the Guarantee.
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MISYS PLC
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By: |
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Name: |
[•] |
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Title: |
[•]
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Date: |
[•]
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AGREED FORM
EXHIBIT D-1
FORM OF BANK NOTICE
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To:
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Misys plc |
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Xxx Xxxxxxx Xxxxxx |
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Xxxxxxxxxx |
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Xxxxxx X0 0XX, XX |
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Attention: General Counsel |
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Facsimile number: x00 (0)00 0000 0000 |
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Cc:
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[BANK] |
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[ADDRESS] |
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Attn: |
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Facsimile number [ ] |
The undersigned, the Chief Executive Officer of Allscripts-Misys Healthcare Solutions, Inc. hereby
provides notice to Misys plc as follows:
1. |
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[Reason for payment to be specified in accordance with Section 10.10 of the Framework
Agreement and appropriate evidence (if any) to be attached]. |
2. |
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Misys has agreed to indemnify Newco or such Allscripts Group Member from the [Transaction
Tax] [Historic Tax] [Post-Closing Franchise Tax] described in paragraph 1 above pursuant to
Section [•] of the Framework Agreement. |
3. |
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We therefore hereby request that Misys make payment in the amount of $ in
satisfaction of the [Transaction Tax] [Historic Tax] [Post-Closing Franchise Tax] described in
paragraph 1 above to or on behalf of Newco or such Allscripts Group Member within seven (7)
business days after receipt by Misys of this notice. |
4. |
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If Misys fails to make the payment requested in paragraph 3 above within seven (7) business
days after receipt of this notice, we intend to demand payment of the amount set forth in
paragraph 3 above pursuant to a Demand Notice to be delivered in person to [BANK]. |
Capitalised terms used herein and not otherwise defined herein shall have the meanings given to
them in the Framework Agreement.
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ALLSCRIPTS-MISYS HEALTHCARE SOLUTIONS, INC.
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By: |
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Name: |
[•] |
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Title: |
[•]
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Date: |
[•]
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AGREED FORM
EXHIBIT D-2
FORM OF BANK NOTICE
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To:
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Allscripts-Misys Healthcare Solutions, Inc. |
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000 Xxxxxxxxxxx Xxxx Xxxxx, Xxxxx 0000 |
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Xxxxxxx, XX 00000 |
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Attention: General Counsel |
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Facsimile number: x0 000 000 0000 |
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Cc:
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[BANK] |
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[ADDRESS] |
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Attn: |
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Facsimile number [ ] |
The undersigned, the Chief Executive Officer of Misys plc hereby provides notice to
Allscripts-Misys Healthcare Solutions, Inc. as follows:
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[For any reduction of a guarantee:] |
1. |
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[Reason for reduction to be specified in accordance with Section 10.10 of the Framework
Agreement and appropriate evidence (if any) to be attached]. |
2. |
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The occurrence of the event described in paragraph 1 above satisfies the conditions for the
reduction of the amount of the [PLR Bank Guarantee] [Historic Tax Guarantee] set forth in
Section [•] of the Framework Agreement. |
3. |
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We therefore intend to deliver to [BANK], ten (10) business days after receipt by Allscripts
of this notice, a Reduction Notice instructing [BANK] to reduce the maximum guarantee amount
of the [PLR Bank Guarantee] [Historic Tax Guarantee] to $ in accordance with
Section [•] of the Framework Agreement. |
Or
[For any termination of a guarantee:]
1. |
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[Reason for termination to be specified in accordance with Section 10.10 of the Framework
Agreement and appropriate evidence (if any) to be attached]. |
2. |
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The occurrence of the event described in paragraph 1 above satisfies the conditions for the
full release and termination of the [PLR Bank Guarantee] [Historic Tax Guarantee] set forth in
Section [•] of the Framework Agreement (without any required reduction of the released
amount under Section [•] of the Framework Agreement). |
AGREED FORM
3. |
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We therefore intend to deliver to [BANK], ten (10) business days after receipt by Allscripts
of this notice, a Release Notice instructing [BANK] to fully release and terminate the [PLR
Bank Guarantee] [Historic Tax Guarantee] in accordance with Section [•] of the Framework
Agreement (without any required reduction of the released amount under Section [•] of
the Framework Agreement). |
Capitalised terms used herein and not otherwise defined herein shall have the meanings given to
them in the Framework Agreement.
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MISYS PLC
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By: |
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Name: |
[•] |
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Title: |
[•]
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Date: |
[•]
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AGREED FORM
EXHIBIT E
ADDRESSES FOR ALLSCRIPTS AND MISYS
If to Allscripts, to:
Allscripts-Misys Healthcare Solutions, Inc.
000 Xxxxxxxxxxx Xxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Telephone: x0 000 000 0000
Fax: x0 000 000 0000
Attn: General Counsel
If to Misys, to:
Misys plc
Xxx Xxxxxxx Xxxxxx
Xxxxxxxxxx
Xxxxxx X0 0XX, XX
Telephone: x00 (0)00 0000 0000
Fax: x00 (0)00 0000 0000
Attn: General Counsel
Each of Allscripts and Misys may change its address for receipt of notices under this guarantee by
delivering a written notice to us (with a copy to Allscripts or Misys, as the case may be), which
upon receipt by us shall automatically amend this Exhibit E and replace the then existing address
with the new address.
Exhibit 12
Form of Amended and Restated Relationship Agreement
Incorporated by reference to Exhibit 99.11 attached to this Schedule 13D.
74
Exhibit 13
Registration Rights Agreement
Incorporated by reference to Exhibit 99.12 attached to this Schedule 13D.
75
Exhibit 14
Form of Transitional Services Agreement
Incorporated by reference to Exhibit 99.16 attached to this Schedule 13D.
76