Annual Report — Form 10-K — Sect. 13 / 15(d) – SEA’34 Filing Table of Contents
Document/ExhibitDescriptionPagesSize
1: 10-K Annual Report HTML 475K
2: EX-2.3 Plan of Purchase, Sale, Reorganization, HTML 407K Arrangement, Liquidation or Succession
3: EX-3.3 Articles of Incorporation / Bylaws HTML 25K
4: EX-4.2 Instruments Defining the Rights of Security HTML 26K
Holders, Including Indentures Instruments Defining
the Rights of Security Holders, Including
Indentures
5: EX-10.25 Waiver of Series A & B Interest Dated December 31, HTML 33K
2016
6: EX-10.26 Waiver of Triggering Event Redemption Notice Dated HTML 30K
December 31, 2016
7: EX-10.27 Material Contracts HTML 67K
8: EX-23.1 Consents of Experts and Counsel HTML 21K
13: EX-99.1 Press Release, Dated March 17, 2017 HTML 34K
9: EX-31.1 Certification Pursuant to Rule 13A-14(A)/15D-14(A) HTML 27K
Certifications Section 302 of the Sarbanes-Oxly
Act of 2002
10: EX-31.2 Certification Pursuant to Rule 13A-14(A)/15D-14(A) HTML 27K
Certifications Section 302 of the Sarbanes-Oxly
Act of 2002
11: EX-32.1 Certificate Pursuant to Section 18 U.S.C. Pursuant HTML 23K
to Section 906 of the Sarbanes-Oxley Act of 2002
12: EX-32.2 Certificate Pursuant to Section 18 U.S.C. Pursuant HTML 23K
to Section 906 of the Sarbanes-Oxley Act of 2002
20: R1 Document And Entity Information HTML 50K
21: R2 Balance Sheets HTML 124K
22: R3 Balance Sheets (Parenthetical) HTML 49K
23: R4 Statements of Operations HTML 63K
24: R5 Statements of Stockholders' Deficit HTML 31K
25: R6 Statements of Cash Flows HTML 77K
26: R7 Note 1 - Description of the Company HTML 24K
27: R8 Note 2 - Summary of Significant Accounting HTML 89K
Policies
28: R9 Note 3 - Related Party Transactions HTML 26K
29: R10 Note 4 - Line of Credit HTML 27K
30: R11 Note 5 - Long-Term Debt HTML 71K
31: R12 Note 6 - Equity HTML 38K
32: R13 Note 7 - Equity Incentive Plan HTML 23K
33: R14 Note 8 - Leases HTML 27K
34: R15 Note 9 - Income Taxes HTML 44K
35: R16 Note 10 - Commitments and Contingencies HTML 24K
36: R17 Note 11 - 401(k) Plan HTML 24K
37: R18 Note 12 - Subsequent Events HTML 26K
38: R19 Note 2 - Summary of Significant Accounting HTML 134K
Policies (Policies)
39: R20 Note 2 - Summary of Significant Accounting HTML 68K
Policies (Tables)
40: R21 Note 4 - Line of Credit (Tables) HTML 26K
41: R22 Note 5 - Long-Term Debt (Tables) HTML 54K
42: R23 Note 8 - Leases (Tables) HTML 24K
43: R24 Note 9 - Income Taxes (Tables) HTML 40K
44: R25 Note 2 - Summary of Significant Accounting HTML 24K
Policies (Details)
45: R26 Note 2 - Summary of Significant Accounting HTML 38K
Policies (Details 1)
46: R27 Note 2 - Summary of Significant Accounting HTML 26K
Policies (Details 2)
47: R28 Note 2 - Summary of Significant Accounting HTML 31K
Policies (Details 3)
48: R29 Note 2 - Summary of Significant Accounting HTML 28K
Policies (Details 4)
49: R30 Note 2 - Summary of Significant Accounting HTML 31K
Policies (Details 5)
50: R31 Note 2 - Summary of Significant Accounting HTML 66K
Policies (Details 6)
51: R32 Note 2 - Summary of Significant Accounting HTML 62K
Policies (Details Narrative)
52: R33 Note 3 - Related Party Transactions (Details HTML 25K
Narrative)
53: R34 Note 4 - Line of Credit (Details) HTML 35K
54: R35 Note 5 - Long-Term Debt (Details) HTML 43K
55: R36 Note 5 - Long-Term Debt (Details 1) HTML 39K
56: R37 Note 5 - Long-Term Debt (Details 2) HTML 31K
57: R38 Note 5 - Long-Term Debt (Details 3) HTML 37K
58: R39 Note 5 - Long-Term Debt (Details 4) HTML 34K
59: R40 Note 5 - Long-Term Debt (Details Narrative) HTML 23K
60: R41 Note 8 - Leases (Details) HTML 31K
61: R42 Note 8 - Leases (Details Narrative) HTML 22K
62: R43 Note 9 - Income Taxes (Details) HTML 44K
63: R44 Note 9 - Income Taxes (Details 1) HTML 51K
64: R45 Note 9 - Income Taxes (Details Narrative) HTML 25K
65: R46 Note 11 - 401(k) Plan (Details Narrative) HTML 22K
67: XML IDEA XML File -- Filing Summary XML 107K
66: EXCEL IDEA Workbook of Financial Reports XLSX 62K
14: EX-101.INS XBRL Instance -- aert-20161231 XML 805K
16: EX-101.CAL XBRL Calculations -- aert-20161231_cal XML 139K
17: EX-101.DEF XBRL Definitions -- aert-20161231_def XML 320K
18: EX-101.LAB XBRL Labels -- aert-20161231_lab XML 649K
19: EX-101.PRE XBRL Presentations -- aert-20161231_pre XML 486K
15: EX-101.SCH XBRL Schema -- aert-20161231 XSD 126K
68: ZIP XBRL Zipped Folder -- 0001654954-17-002109-xbrl Zip 95K
‘EX-2.3’ — Plan of Purchase, Sale, Reorganization, Arrangement, Liquidation or Succession
This
AGREEMENT AND PLAN OF MERGER (this “Agreement”) is made and
entered into as of March 16, 2017 (the “Agreement Date”) by and
among Advanced Environmental Recycling Technologies, Inc., a
Delaware corporation (the “Company”), Oldcastle
Architectural, Inc., a Delaware corporation (“Parent”), and Oldcastle
Ascent Merger Sub, Inc., a Delaware corporation and a wholly-owned
subsidiary of Parent (“Merger
Sub”).
RECITALS
WHEREAS, each of
the respective boards of directors of the Company, Parent and
Merger Sub have determined that it is advisable to effect a merger
of Merger Sub with and into the Company (the “Merger”) with the Company
remaining as the surviving corporation in the Merger in accordance
with and pursuant to the General Corporation Law of the State of
Delaware (the “DGCL”) upon the terms and
subject to the conditions set forth in this Agreement;
WHEREAS, the board
of directors of the Company (the “Company Board”) has (i)
approved and adopted this Agreement, the Merger and the other
transactions contemplated hereby, (ii) determined that this
Agreement and the Merger and the other transactions contemplated
hereby are fair to, advisable and in the best interests of the
Company and its stockholders, and (iii) subject to Section 5.3, resolved to
recommend approval of the Agreement by the Company’s
stockholders (such recommendation, the “Company Board
Recommendation”);
WHEREAS, the board
of directors of Merger Sub has approved, adopted and declared
advisable this Agreement and the Merger, upon and subject to the
terms of this Agreement;
WHEREAS, the board
of directors of Parent has determined that it is in the best
interests of Parent and its stockholders to consummate the Merger;
and
WHEREAS, Parent, as
the sole stockholder of Merger Sub, has adopted and approved this
Agreement and the Merger.
AGREEMENT
NOW,
THEREFORE, in consideration of the mutual covenants and premises
contained in this Agreement and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties to this Agreement agree as
follows:
ARTICLE
I.
DEFINITIONS
1.1 Definitions.
As used
in this Agreement, the following terms have the following meanings,
which meanings shall be applicable equally to the singular or
plural of the terms defined:
“Acceptable Confidentiality
Agreement” shall mean an agreement which contains
provisions limiting disclosure or use of non-public information
with respect to the Company that are not materially less favorable
in the aggregate to the Company than the terms of the
Confidentiality Agreement.
-1-
“Acquisition Proposal”
shall mean any offer, proposal, or inquiry (other than an offer,
proposal or inquiry by Parent) contemplating or otherwise relating
to any Acquisition Transaction.
“Acquisition Transaction”
shall mean any transaction or series of related transactions
involving: (i) any merger, consolidation, share exchange, business
combination, issuance of securities, direct or indirect acquisition
of securities, recapitalization, tender offer, exchange offer or
other similar transaction in which (A) a Person or
“group” (as defined in the Exchange Act) of Persons
directly or indirectly acquires, or if consummated in accordance
with its terms would acquire, beneficial or record ownership of
securities representing more than twenty percent (20%) of the
outstanding shares of any class of voting securities of the
Company; or (B) the Company issues securities representing
more than twenty percent (20%) of the outstanding shares of any
class of voting securities of the Company; or (ii) any sale, lease,
exchange, transfer, acquisition or disposition of any assets of the
Company that constitute or account for twenty percent (20%) or more
of the consolidated net revenues of the Company or consolidated net
income of the Company or twenty percent (20%) or more of the fair
market value of the assets of the Company.
“Adverse Recommendation
Change” has the meaning set forth in Section 5.3(c).
“Adverse Recommendation Change
Notice” has the meaning set forth in Section 5.3(d)(i).
“Affiliate” shall mean,
with respect to any other Person, any other Person, directly or
indirectly, controlling, controlled by, or under common control
with such Person. As used in this definition of Affiliate, the term
“control” means possession, directly or indirectly, of
the power to direct or cause the direction of the management or
policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.
“Agreement” has the
meaning set forth in the Preamble.
“Agreement Date” has the
meaning set forth in the Preamble.
“Antitrust Law” shall mean
the Sherman Antitrust Act of 1890, as amended, the Clayton Act of
1914, as amended, the HSR Act, the Federal Trade Commission Act, as
amended, and all other Laws that are designed or intended to
prohibit, restrict or regulate actions having the purpose of effect
of monopolization, restraint of trade or significant impediments or
lessening of competition or the creation or strengthening of a
dominant position through merger or acquisition, in any case that
are applicable to the transactions contemplated by this
Agreement.
“Book-Entry Shares” has
the meaning set forth in Section 2.5(a)(ii).
“Business Day” shall mean
any day, other than a Saturday, Sunday and any day which is a legal
holiday under the laws of the State of New York or is a day on
which banking institutions located in the State of New York are
authorized or required by Law or other governmental action to
close.
-2-
“Certificate” has the
meaning set forth in Section 2.5(a)(ii).
“Certificate of Merger”
has the meaning set forth in Section 2.2.
“Closing” has the meaning
set forth in Section 2.2.
“Closing Date” has the
meaning set forth in Section 2.2.
“Code” shall mean the U.S.
Internal Revenue Code of 1986, as amended.
“Company” has the meaning
set forth in the Preamble.
“Company Acquisition
Agreement” has the meaning set forth in Section 5.3(c).
“Company Approvals” has
the meaning set forth in Section 3.3(b).
“Company Balance Sheet”
has the meaning set forth in Section 3.6.
“Company Balance Sheet
Date” has the meaning set forth in Section 3.6.
“Company Benefit Plan” has
the meaning set forth in Section 3.15(a).
“Company Board” has the
meaning set forth in the Recitals.
“Company Board
Recommendation” has the meaning set forth in the
Recitals.
“Company Charter
Documents” has the meaning set forth in Section 3.3(c).
“Company Common Stock”
shall mean the common stock, $0.01 par value, of the
Company.
“Company Insurance Policy”
has the meaning set forth in Section 3.17.
“Company Intellectual Property
Rights” has the meaning set forth in Section 3.10(a).
-3-
“Company Material Adverse
Effect” shall mean any Effect that has or would
reasonably be expected to, individually or in the aggregate with
any other Effects, have a material adverse effect on (1) the
assets, liabilities, business, financial condition, or results of
operations of the Company, taken as a whole; or
(2) Parent’s ability to vote, receive dividends with
respect to or otherwise exercise ownership rights with respect to
the shares of the Surviving Corporation; provided, however, that with respect to clause
(1) in no event shall any of the following, alone or in
combination, be deemed to constitute, or be taken into account when
determining whether there has been or is reasonably expected to be,
a Company Material Adverse Effect, any Effect with respect to, or
resulting from: (A) general changes in the U.S. or global
economy, or change in general economic conditions, including
changes in the credit, debt, financial or capital markets, in each
case, in the United States of America or anywhere else in the
world; (B) operating, business, regulatory or other conditions
generally affect the industry in which the Company conduct business
(except to the extent that such Effect has a disproportionate
adverse effect on the Company relative to other companies of a
similar size operating in the industry in which the Company
conducts business); (C) changes in applicable Law or in GAAP
or other applicable accounting rules or the interpretation or
enforcement thereof; (D) changes in the market price or
trading volume of the Company Common Stock; (E) failure(s) by
the Company to meet any operating projections or forecasts, or
published revenue or earnings predictions or estimates (but not
excluding any of the reasons for or factors contributing to the
failure); (F) any act or threat of terrorism or war, any armed
hostilities or terrorist activities, any threat or escalation of
armed hostilities or terrorist activities or any governmental or
other response or reaction to any of the foregoing (other than any
act that is targeted at the Company or causes physical damage to
the assets, properties, facilities or personnel of the Company,
which such damage causes a Company Material Adverse Effect); (G)
any Legal Proceeding against the Company or any of its directors by
the stockholders of the Company challenging or seeking to restrain
or prohibit the consummation of the Merger or any other transaction
contemplated by this Agreement; (H) events attributable to any
action by the Company if that action is contemplated or required by
this Agreement and Parent or Merger Sub refuses to waive such
requirement, or the failure to take any action by the Company if
that action is prohibited by this Agreement and Parent or Merger
Sub refuses to waive such prohibition; (I) events attributable
to the announcement or performance of this Agreement or the
consummation of the transactions contemplated hereby or the
pendency of the Merger (including the loss or departure of officers
or other employees of the Company), or the termination, reduction
(or potential reduction) or any other negative effect (or potential
negative effect) on the Company’s relationships or agreements
with any of its licensors, licensees, customers, vendors, strategic
partners, suppliers or other business partners; or (J) any
change that the Company can demonstrate resulted from Parent
unreasonably withholding its consent under Section 5.2(a) to any
action requiring Parent’s consent under Section 5.2(a) and
requested to be taken by the Company to Parent in
writing.
“Company Permits” has the
meaning set forth in Section 3.12(a).
“Company Preferred Stock”
means the preferred stock, $0.01 par value, of the
Company.
“Company SEC Documents”
has the meaning set forth in Section 3.5(a).
“Company Share” means each
share of Company Common Stock and Company Preferred Stock
outstanding immediately prior to the Effective Time.
“Company Stockholder
Approval” has the meaning set forth in Section 3.3(a).
“Company Stockholders
Meeting” has the meaning set forth in Section 5.4(d).
“Company Stockholders”
shall mean the holders of Company Common Stock or Company Preferred
Stock.
“Confidentiality
Agreement” has the meaning set forth in Section 5.11.
-4-
“Consent” shall mean any
approval, consent, ratification, permission, waiver, filing, notice
or authorization (including any Governmental
Authorization).
“Contract” shall mean any
written agreement, contract, subcontract, lease, understanding,
instrument, note, option, warranty, insurance policy, benefit plan,
or other legally binding commitment, including any amendment,
modification, supplement, exhibit, annex, or schedule
thereto.
“Covered Employee” has the
meaning set forth in Section 5.10(a).
“Delaware SOS” shall mean
the Secretary of State of the State of Delaware.
“DGCL” has the meaning set
forth in the Recitals.
“Disclosure Schedule” has
the meaning set forth in Article III.
“Dissenting Company
Shares” has the meaning set forth in Section 2.8(a).
“DOJ” shall mean the
United States Department of Justice or any successor
thereto.
“EDGAR” has the meaning
set forth in Section
3.5(a).
“Effect” shall mean any
effect, change, event, occurrence, circumstance or
development.
“Effective Time” has the
meaning set forth in Section 2.2.
“Encumbrance” shall mean
any lien, pledge, hypothecation, charge, mortgage, security
interest, option, right of first refusal, preemptive right, or
community property interest.
“Entity” shall mean any
corporation (including any nonprofit corporation), general
partnership, limited partnership, limited liability partnership,
joint venture, estate, trust, company (including any limited
liability company or joint stock company), firm, or other
enterprise, association, organization or entity.
“Environmental Laws” shall
mean any Laws (and the regulations promulgated thereunder) relating
to the protection of the environment (including ambient air,
surface water, groundwater or land) or exposure of any individual
to Hazardous Substances or otherwise relating to the production,
use, emission, storage, treatment, transportation, recycling,
disposal, discharge, release or other handling of any Hazardous
Substances or the investigation, reporting, clean-up or other
remediation or analysis thereof.
“ERISA” shall mean the
Employee Retirement Income Security Act of 1974, as
amended.
“ERISA Affiliate” means
any person or entity other than the Company under common control
with the Company within the meaning of Section 414(b)(c), (m) or
(o) of the Code and the regulations issued thereunder.
“Exchange Act” shall mean
the Securities Exchange Act of 1934, as amended, and the
regulations promulgated thereunder.
-5-
“Exchange Agent” has the
meaning set forth in Section 2.7(a).
“FTC” shall mean the
United Stated Federal Trade Commission or any successor
thereto.
“GAAP” has the meaning set
forth in Section 3.5(b).
“Governmental
Authorization” shall mean any: (i) permit,
license, certificate, franchise, permission, variance, clearance,
registration, qualification or authorization issued, granted, given
or otherwise made available by or under the authority of any
Governmental Body or pursuant to any Law; or (ii) right under
any Contract with or for the benefit of any Governmental
Body.
“Governmental Body” shall
mean any: (i) country, nation, state, commonwealth, province,
territory, county, municipality, district or other jurisdiction of
any nature; (ii) federal, state, local, municipal, foreign or
other government (including the European Union); or
(iii) governmental or quasi-governmental authority of any
nature (including any governmental division, department, agency,
commission, instrumentality, official, organization, unit, body, or
Entity, and any court or other tribunal, including any arbitral
tribunal).
“Hazardous Substance”
shall mean any substance, material or waste (whether solid, liquid
or gas) that is characterized, defined, listed, or regulated under
any Environmental Law as “hazardous,”“pollutant,”“contaminant,”“toxic,”“radioactive,” or words of similar
meaning or effect, including petroleum and petroleum products,
polychlorinated biphenyls, asbestos and asbestos-containing
materials.
“HSR Act” shall mean the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and the regulations promulgated thereunder.
“Indebtedness” shall mean
any obligations of Company in respect of: (i) indebtedness for
borrowed money or indebtedness issued in substitution or exchange
for borrowed money or for the deferred or contingent purchase price
of property or services (but excluding any trade payables and
accrued expenses arising in the ordinary course of business), (ii)
indebtedness evidenced by any note, bond, debenture, interest swap
agreements, or other debt security, (iii) leases required to be
treated as capitalized leases under GAAP, consistently applied,
(iv) indebtedness of the types described in the foregoing clauses
(i) through (iii) of any other Person guaranteed by Company or
secured by an Encumbrance on any asset or property of Company, (v)
obligations with respect to interest-rate hedging, swaps or similar
financing arrangements, (vi) prepayment penalties or breakage costs
in respect of any of the foregoing, and (vii) letters of credit.
Indebtedness shall not include (1) undrawn letters of credit, trade
payables or any undrawn fidelity, performance, surety or licensing
bonds or similar instruments, or (2) any indebtedness incurred by,
on behalf of, or at the direction of the Parent or its Affiliates
in connection with the transactions contemplated by this
Agreement.
“Indemnified Parties” has
the meaning set forth in Section 5.8(a).
“Information Statement”
has the meaning set forth in Section 3.3(b).
-6-
“Intellectual Property”
shall mean all U.S. and foreign (i) patents (including design
patents and industrial designs); (ii) trademarks, service marks,
trade names, logos, trade dress, domain names and designs and all
goodwill associated therewith; (iii) copyrights and the underlying
works of authorship (including software); (iv) trade secrets
(including inventions, processes, know-how, formulae, methods,
software, business plans, schematics, drawings, and other
technology); and (v) all registrations and applications for any of
the foregoing (including all divisionals, contaminations,
contaminations in part, revisions, and extensions of any
thereof.
“Interim Period” has the
meaning set forth in Section 5.1.
“Intervening Event” shall
mean any material event with respect to the Company occurring or
arising prior to the Window Shop Date (other than a Superior
Proposal) that was neither known to the Company Board nor
reasonably foreseeable as of or prior to the Agreement Date, which
becomes known to the Company Board; provided, however, that in no event shall the
following events, developments or changes in circumstances
constitute an Intervening Event: (1) the receipt, existence or
terms of an Acquisition Proposal or any matter relating thereto or
consequence thereof, (2) any events, developments or changes in
circumstances relating to the Parent or any of Parent’s
Affiliates or any competitor of the Company, (3) changes in Law
applicable to the Company, or (4) changes in the market price or
trading volume of shares of Company Common Stock or the fact that
the Company meets or exceeds internal or published projections,
forecasts or revenue or earnings predictions for any period;
provided, however, that the underlying causes of
such change or fact shall not be excluded by this clause (4) prior
to the Window Shop Date.
“International Trade Laws”
shall mean all Laws concerning the importation of merchandise, the
export or re-export of products, services and technology, the terms
and conduct of international transactions, making or receiving
international payments and the authorization to hold an ownership
interest in a business located in a country other than the United
States, including but not limited to, the Tariff Act of 1930 as
amended and other laws administered by the United States Customs
Service, regulations issued or enforced by the United States
Customs Service, the Export Administration Act of 1979 as amended,
the Export Administration Regulations, the International Emergency
Economic Powers Act, the Arms Export Control Act, the International
Traffic in Arms Regulations, any other export controls administered
by an agency of the United States government, Executive Orders of
the President regarding embargoes and restrictions on trade with
designated countries and Persons, the embargoes and restrictions
administered by the United States Office of Foreign Assets Control,
the Foreign Corrupt Practices Act, the anti-boycott regulations
administered by the United States Department of Commerce, the
anti-boycott regulations administered by the United States
Department of the Treasury, legislation and regulations of the
United States and other countries implementing the North American
Free Trade Agreement, antidumping and countervailing duty laws and
regulations, laws and regulations by other countries concerning the
ability of U.S. Persons to own businesses and conduct business in
those countries, laws and regulations by other countries
implementing the OECD Convention on Combating Bribery of Foreign
Officials, restrictions by other countries on holding foreign
currency and repatriating funds, and other applicable Laws and
regulations adopted by the governments or agencies of other
countries relating to the same subject matter as the United States
statutes and regulations described above, including the U.K.
Bribery Act.
-7-
“IRS” shall mean the
Internal Revenue Service.
“Knowledge” shall mean,
with respect to the Company, the actual knowledge (after reasonable
inquiry of those employees or Representatives of the Company who
would reasonably be expected to have actual knowledge of the matter
in question) of those individuals set forth in Part 1.1 of the Disclosure
Schedule.
“Law” shall mean any
federal, state, local, municipal, foreign or other law, statute,
constitution, principle of common law, resolution, ordinance, code,
edict, decree, rule, regulation, Restraint ruling or requirement
issued, enacted, adopted, promulgated, implemented or otherwise put
into effect by or under the authority of any Governmental
Body.
“Leased Real Property” has
the meaning set forth in Section 3.16(c).
“Leased Real Property
Improvements” has the meaning set forth in
Section
3.16(c).
“Legal Proceeding” shall
mean any action, suit, litigation, arbitration, mediation,
proceeding (including any civil, criminal, administrative,
investigative or appellate proceeding), hearing, inquiry, audit,
examination or investigation commenced, brought, conducted or heard
by or before, or otherwise involving, any court or other
Governmental Body or any arbitrator or arbitration
panel.
“Material Contract” shall
mean any of the following to which the Company is a party or by
which it or its assets or properties is bound:
(i) any
Contract containing covenants limiting in any material respect the
freedom of the Company to compete in any line of business or with
any other Person or covenant not to solicit or hire any Person or
that grants “most favored nation” status to any Person
(other than the Company);
(ii) any
material joint venture, strategic alliance, licensing arrangement,
partnership, manufacturer, development or supply agreement or other
Contract, in each case, which involves a sharing of revenue,
profits, losses, costs or liabilities by the Company with any other
Person;
(iii)
any royalty, dividend or similar arrangement to be paid, or
received, by the Company that is based on the revenue or profits of
the Company or any material Contract or agreement involving fixed
price or fixed volume arrangements;
(iv) any
Contract for the purchase or sale of products, materials, supplies,
goods, services, advertisements, equipment or other assets or with
any agent, dealer or reseller and providing for annual payments by
or to the Company, respectively, of $125,000 or more, other than
Contracts that can be terminated by the Company on less than 60
calendar days’ notice without payment by the Company of any
penalty;
(v) any
Contract or agreement under which the Company has incurred any
Indebtedness or Company’s obligations or performance are
secured by any letter of credit or fidelity, performance, surety or
licensing bond or similar instrument of $125,000 or
more;
-8-
(vi) any
employment, severance agreement, change in control or similar
arrangement with any employee of the Company other than (A) at-will
employment arrangements and (B) Contracts requiring annual payment
of less than $150,000 and a remaining term of less than two (2)
years;
(vii) any
Company Benefit Plan, any of the benefits of which will be
increased, or the vesting or payment of benefits of which will be
accelerated, by the transactions contemplated hereby (whether or
not contingent on any other event or occurrence) or the value of
any of the benefits of which will be calculated on the basis of the
transactions contemplated hereby;
(viii)
any Contract (other than organizational documents) providing for
indemnification by the Company of any officer, director or employee
of the Company;
(ix)
any Contract that prohibits the payment of dividends or
distributions in respect of the capital stock of the Company or
that prohibits the pledging of the capital stock of the
Company;
(x)
any Contract that contains a put, call or similar right
pursuant to which the Company could be required to purchase or
sell, as applicable, any equity interests of any Person or
assets;
(xii)
any collective bargaining agreement or contract with any labor
organization, union or association;
(xiii)
any Contract that requires the Company to deal exclusively with any
Person or group of Persons and any “take or pay”Contract or Contract that contains any minimum purchase or payment
commitment;
(xiv)
any Contract that is an agency, dealer, reseller or other similar
Contract, other than Contracts that can be terminated by the
Company on less than 60 calendar days’ notice without payment
by the Company of any penalty;
(xv)
any Contract pursuant to which the Company licenses any
Intellectual Property of a third party that is material to the
business of the Company, or grants to any third party a license to
any material Intellectual Property of Company, excluding in all
cases (1) non-disclosure and confidentiality agreements entered
into in the ordinary course of business, (2) Contracts with
employees, contractors, consultants, customers, vendors, and
suppliers of the Company entered into in the ordinary course of
business, and (3) licenses for generally commercially available,
off-the-shelf software;
(xvi)
any Contract currently in effect that is a “material
contract” as defined in Item 601(b)(10) of Regulation S-K of
the SEC;
(xvii)
any Contract pursuant to which the Company has any obligation in
respect of any Transaction Expenses;
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(xviii)
any Contract that would prohibit or materially delay the
consummation of the Merger or otherwise impair the ability of the
Company to perform its obligations hereunder; or
(xix)
all Contracts pursuant to which the Company (1) leases, licenses,
subleases or sublicenses, from any other Person, or otherwise
occupies any real property, or (2) has the right or obligation to
acquire or dispose of any interest in real property.
“Merger” has the meaning
set forth in the Recitals.
“Merger Consideration”
shall mean the aggregate amount of consideration to be paid to the
holders of equity pursuant to this Agreement, including pursuant to
Section
2.5(a)(ii).
“Merger Consideration Calculation
Schedule” has the meaning set forth in Section 3.5(g).
“Merger Sub” has the
meaning set forth in the Preamble.
“New Plans” has the
meaning set forth in Section 5.10(a).
“OTCQB” shall mean the
OTCQB Venture Market.
“Outside Date” has the
meaning set forth in Section 7.1(b)(i).
“Owned Real Property” has
the meaning set forth in Section 3.16(b).
“Owned Real Property
Improvements” has the meaning set forth in
Section
3.16(b).
“Parent” has the meaning
set forth in the Preamble.
“Parent Approvals” has the
meaning set forth in Section 4.2(b).
“Parent Disclosure
Schedule” has the meaning set forth in Article IV.
“Parent Material Adverse
Effect” has the meaning set forth in Section 4.1.
“Payment Fund” has the
meaning set forth in Section 2.7(a).
“Per Share Merger
Consideration” has the meaning set forth in
Section
2.5(a)(ii).
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“Permitted Encumbrance”
shall mean: (i) liens for Taxes, including without limitation real
estate taxes, assessments, and other governmental levies, fees, or
charges imposed with respect to Real Property that are not yet due
and payable or liens for Taxes, including without limitation real
estate taxes, assessments, and other governmental levies, fees, or
charges imposed with respect to the Real Property, being contested
in good faith by any appropriate proceedings for which adequate
reserves have been established on the Company Balance Sheet; (ii)
liens to secure obligations to landlords, lessors, renters or other
third Persons under leases or rental agreements that have not been
breached; (iii) deposits or pledges made in connection with, or to
secure payment of, workers’ compensation, unemployment
insurance or similar programs mandated by applicable Law; (iv)
liens in favor of carriers, warehousemen, mechanics and
materialmen, to secure claims for labor, materials or supplies and
other like liens imposed by applicable Law for amounts not yet due;
(v) pledges and deposits to secure the performance of bids, trade
contracts, leases, surety and appeal bonds, performance bonds, and
other obligations of a similar nature, in each case in the ordinary
course of business; (vi) as to Real Property, defects,
imperfections or irregularities in title, easements, covenants,
conditions, restrictions, and rights of way (unrecorded and of
record) and other similar matters (or encumbrances of any type), in
each case that do not adversely affect in any material respect the
current use or occupancy of the applicable property owned, leased,
used or held for use by the Company; (vii) zoning, building codes,
and other land use laws, and other similar codes or restrictions
regulating use or occupancy or the activities conducted on the Real
Property that are not violated in any material respect by the
current use or occupancy of the real property subject thereto;
(viii) liens, the existence of which are disclosed in the notes to
the consolidated financial statements of the Company included in
the Company SEC Documents; (ix) liens in favor of depository banks
and financial institutions constituting statutory, common law or
contractual rights of set off or securing treasury or cash
management obligations arising in the ordinary course of business;
(x) restrictions on transfer of securities imposed by applicable
securities Laws, (xi) the rights of licensors and licensees under
licenses of Intellectual Property; and (xii) with respect to Real
Property, any Encumbrances described on Part 1.2 of the Disclosure
Schedule.
“Person” shall mean any
individual, Entity or Governmental Body.
“Planned Products” has the
meaning set forth in Section 3.10(e).
“Proxy Statement” has the
meaning set forth in Section 5.4(d).
“Real Property” has the
meaning set forth in Section 3.16(a).
“Representatives” shall
mean officers, directors, employees, agents, attorneys,
accountants, advisors, and representatives.
“Restraint” shall mean any
order, writ, conciliation or remediation agreement, award,
injunction, judgment, decision, decree, ruling or assessment
(whether temporary, preliminary or permanent).
“Reverse Termination Fee”
shall mean an amount, in cash, equal to $7,020,000.
“Sarbanes-Oxley Act” shall
mean the Sarbanes-Oxley Act of 2002, and the regulations
promulgated thereunder.
“SEC” shall mean the
United States Securities and Exchange Commission.
“Securities Act” shall
mean the Securities Act of 1933, as amended, and the
regulations promulgated thereunder.
“Stockholder Consent” has
the meaning set forth in Section 5.4(a).
“Stockholder Consent Delivery
Period” has the meaning set forth in Section 5.4(a).
-11-
“Subsidiary” of a Person
shall mean another Person as to which such first Person directly or
indirectly owns, beneficially or of record: (i) an amount of
voting securities of other interests in such Entity that is
sufficient to enable such Person to elect at least a majority of
the members of such Entity’s board of directors or other
governing body; or (ii) at least fifty percent (50%) of
the outstanding equity or financial interests of such
Entity.
“Superior Proposal” shall
mean a bona fide written proposal for an Acquisition Transaction
that the Company Board determines in good faith, after consultation
with its outside legal counsel and independent financial advisor,
to be more favorable to the Company’s stockholders from a
financial point of view than the Merger, in each case, taking into
account at the time of determination, all legal, financial and
regulatory considerations of such Acquisition Transaction and this
Agreement (including any modification to the terms of this
Agreement as may be proposed by Parent pursuant to Section 5.3(d)(i) that the
Company Board determines to be relevant) (including any required
financing, stockholder approval requirements of the Person or group
making the proposal, regulatory approvals, stockholder litigation,
breakup fee and expense reimbursement provisions, expected timing
and risk and likelihood of consummation, and, to the extent deemed
appropriate by the Company Board, such other factors that may be
considered in making such a determination under the DGCL);
provided, however, that for purposes of this
definition of Superior Proposal, the references to
“20%” in the definition of “Acquisition
Transaction” shall be deemed to be references to
“50%.”
“Surviving Corporation”
has the meaning set forth in Section 2.1.
“Takeover Laws” shall mean
any “control share acquisition,”“fair
price,”“moratorium” or other anti-takeover or
similar Law.
“Tax” shall mean any tax
(including any income tax, franchise tax, capital gains tax, gross
receipts tax, value added tax, surtax, excise tax, ad valorem tax,
transfer tax, stamp tax, sales tax, use tax, property tax, business
tax, withholding tax, employment tax, or payroll tax including
amounts due under any escheat or unclaimed property Law), levy,
assessment, tariff, duty (including any customs duty), deficiency
or fee, and any related charge or amount (including any additions
thereto, fine, penalty or interest), imposed, assessed or collected
by or under the authority of any Governmental Body.
“Tax Return” shall mean
any return (including any information return), report, statement,
declaration, estimate, schedule, notice, notification, form,
election, certificate or other document or information filed with
or submitted to, or required to be filed with or submitted to, any
Governmental Body in connection with the determination, assessment,
collection or payment of any Tax or in connection with the
administration, implementation or enforcement of or compliance with
any Law relating to any Tax.
“Termination Fee” shall
mean an amount, in cash, equal to $4,680,000.
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“Transaction Expenses”
shall mean any costs, fees and expenses, paid or payable by the
Company at or after the Closing, either to or for (i) any Person,
that is conditioned, in whole or in part, on the consummation of
the Merger, or (ii) advisors and other third parties in connection
with or in preparation for the Merger (whether or not contingent on
any other event or occurrence), the negotiation of this Agreement
or any other documents required to effectuate the Merger or the
performance thereof (including all fees and disbursements of
counsel, investment banks, financial advisers, lawyers, and
accountants).
“Window Shop Date” shall
have the meaning set forth in Section 5.3(b).
ARTICLE II.
THE
MERGER
2.1 The
Merger. Upon the terms
and subject to the conditions set forth in this Agreement and in
accordance with the DGCL, at the Effective Time, Merger Sub shall
be merged with and into the Company, and the separate existence of
Merger Sub shall thereupon cease. The Company will continue as the
surviving corporation in the Merger (the “Surviving Corporation”).
The Merger shall be governed by and shall be effected under the
DGCL. The parties hereto agree to take all necessary and
appropriate action to cause the Merger to become effective as soon
as practicable following the Agreement Date and after attainment of
the Company Stockholder Approval in accordance with the
DGCL.
2.2 Closing;
Effective Time. The closing of
the Merger (the “Closing”) shall take
place by electronic mail and overnight courier service, or by
physical exchange of documentation at the offices of Paul Hastings
LLP located at 71 South Wacker Drive, Suite 4500, Chicago, Illinois60606, at 10:00 a.m., New York time, on the later of thirty (30)
days after the Agreement Date or the Business Day after the
satisfaction or waiver of the last to be satisfied or waived of the
conditions set forth in Article VI (other than those
conditions that by their terms are to be satisfied at the Closing,
but subject to the satisfaction or waiver of such conditions), or
such other date and time as Parent and the Company shall mutually
designate. The date on which the Closing takes place is referred to
herein as the “Closing Date.” On the
Closing Date, a certificate of merger satisfying the applicable
requirements of the DGCL (the “Certificate of Merger”)
shall be duly executed by the Company and simultaneously with the
Closing shall be filed with the Delaware SOS. The Merger shall
become effective upon the date and time of the filing of the
Certificate of Merger with the Delaware SOS or such other date and
time as may be mutually agreed upon by Parent and the Company and
set forth in the Certificate of Merger (the time the Merger becomes
effective being referred to hereinafter as the “Effective
Time”).
2.3 Effect
of the Merger. The Merger shall
have the effects set forth in this Agreement, the Certificate of
Merger and in the applicable provisions of the DGCL.
2.4 Certificate
of Incorporation; Bylaws; Directors and
Officers. At the Effective
Time:
(a) 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 amended
in accordance with applicable Law;
(b) the
bylaws of Merger Sub as in effect immediately prior to the
Effective Time shall be the bylaws of the Surviving Corporation
until thereafter amended in accordance with applicable Law;
and
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(c) the
directors and officers of Merger Sub immediately prior to the
Effective Time shall be the initial directors and officers of the
Surviving Corporation, to serve until the earlier of their
respective resignations or removals or until their respective
successors are duly elected and qualified.
2.5 Conversion
of Shares.
(a) At
the Effective Time, by virtue of the Merger and without any further
action on the part of Parent, Merger Sub, the Company or any
stockholder of the Company:
(i) all
shares of Company Common Stock and Company Preferred Stock held by
the Company (or held in the Company’s treasury) immediately
prior to the Effective Time shall be canceled and retired and shall
cease to exist, and no consideration shall be paid in exchange
therefor;
(ii) except
as provided in clause (i) above and subject to Section 2.7 and
Section 2.8, (A)
each share of Company Common Stock outstanding immediately prior to
the Effective Time shall be converted into the right to receive
cash in the amount of $0.135936 and (B) each share of Company
Preferred Stock outstanding immediately prior to the Effective Time
shall be converted into the right to receive cash in the amount
such share would be entitled to receive under the Company Charter
Documents in relation to a Fundamental Transaction (as defined in
the Company Charter Documents) in the amount of $2,603.483278 (the
amounts in each of (A) and (B), the “Per Share Merger
Consideration”), less any required withholding Taxes
if any, as described in Section 2.7(e). As of the
Effective Time and subject to Section 2.8, all Company Shares
shall no longer be outstanding and shall automatically be canceled
and cease to exist, and the holders immediately prior to the
Effective Time of Company Shares not represented by certificates
(the “Book-Entry
Shares”) and the holders of certificates that
immediately prior to the Effective Time represented Company Shares
(each a “Certificate”) shall cease
to be outstanding, shall be cancelled, and shall cease to have any
rights with respect thereto, except the right to receive the
applicable Per Share Merger Consideration to be paid in
consideration therefor upon surrender of such Book-Entry Shares or
Certificates in accordance with Section 2.7;
and
(iii) each
share of the common stock, no par value, of Merger Sub outstanding
immediately prior to the Effective Time shall be converted into one
(1) share of common stock, no par value, of the Surviving
Corporation.
(b) If,
during the period commencing on the Agreement Date and ending at
the Effective Time, any outstanding Company Shares are changed into
a different number or class of shares (including by reason of any
reclassification, recapitalization, stock split, division or
subdivision of shares, stock dividend, reverse stock split,
consolidation of shares, or other similar transaction), the
applicable Per Share Merger Consideration and any other amounts
payable pursuant to this Agreement shall be appropriately
adjusted.
2.6 Closing
of the Company’s Transfer Books. At the Effective
Time, the stock transfer books of the Company shall be closed with
respect to all Company Shares outstanding immediately prior to the
Effective Time. After the Effective Time, there shall be no further
registration of the transfer of Company Shares. If, after the
Effective Time, Certificates or Book-Entry Shares are presented to
the Exchange Agent, they shall be canceled and shall be exchanged
for the applicable Per Share Merger Consideration as provided for
and in accordance with the procedures set forth in this
Article
II.
2.7 Surrender
of Certificates.
(a) On
or prior to the Closing Date, Parent shall designate a reputable
bank or trust company reasonably acceptable to the Company which is
authorized to exercise corporate trust or stock powers to act as
exchange agent with respect to the Merger (the “Exchange Agent”). At or
prior to the Closing, Parent shall irrevocably deposit, or cause to
be deposited, with the Exchange Agent a cash amount in immediately
available funds necessary for the Exchange Agent to make all
payments of the Merger Consideration as contemplated by
Section 2.5(a)(ii).
The cash amount so deposited with the Exchange Agent is referred to
as the “Payment
Fund.” The Exchange Agent will invest the funds
included in the Payment Fund in the manner directed by Parent;
provided, however, that: (i) no such investment
or losses thereon shall relieve Parent or the Surviving Corporation
or the Exchange Agent from making the payments of Merger
Consideration required to be paid under Section 2.5(a)(ii); (ii)
in the event there are any losses that result in the amount of
funds in the Payment Fund being insufficient to promptly pay the
portion of the aggregate Merger Consideration that remains unpaid,
Parent shall immediately provide additional funds to the Exchange
Agent to the extent of such insufficiency; and (iii) such
investments shall be in obligations of or guaranteed by the United
States of America or any agency or instrumentality thereof and
backed by the full faith and credit of the United States of
America, or in commercial paper obligations rated A-1 or P-1 or
better by Moody’s Investors Service, Inc. or Standard &
Poor’s Corporation, respectively. Any interest or other
income resulting from the investment of such funds shall be the
property of Parent.
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(b) As
soon as practicable after the Effective Time (but in no event more
than two (2) Business Days thereafter), the Surviving Corporation
shall cause the Exchange Agent to mail or otherwise provide to each
holder of record of Company Shares immediately prior to the
Effective Time: (i) a letter of transmittal in (and which, in
the case of Company Shares represented by Certificates, shall
specify that delivery shall be effected, and risk of loss and title
to the Certificates shall pass, only upon delivery of the
Certificates to the Exchange Agent); and (ii) instructions for
use in effecting the surrender of the Certificates or Book-Entry
Shares in exchange for payment of the applicable Per Share Merger
Consideration, in each case, in a customary form to be reasonably
agreed upon by Parent and the Company prior to Closing. Upon
surrender of Certificates for cancellation to the Exchange Agent,
or in the case of Book-Entry Shares, receipt of an
“agent’s message” by the Exchange Agent (or such
other evidence, if any, of transfer as the Exchange Agent may
reasonably request), together with the letter of transmittal, duly
completed and validly executed in accordance with the instructions
(and such other customary documents as may reasonably be required
by the Exchange Agent), the holder of such Certificate or
Book-Entry Share shall be entitled to receive in exchange for each
such Company Share, and Parent and the Surviving Corporation shall
cause the Exchange Agent to pay and deliver as promptly as
reasonably practicable after the Effective Time, subject to any
required withholding Taxes, the applicable Per Share Merger
Consideration without interest. Any Certificate surrendered in
accordance with the preceding sentence shall be canceled. If any
Certificate shall have been lost, stolen or destroyed, Parent or
the Exchange Agent may, in its discretion and as a condition
precedent to the payment of any Merger Consideration with respect
to the Company Shares previously represented by such Certificate,
require the owner of such lost, stolen or destroyed Certificate to
provide an appropriate affidavit and to deliver a bond in such
reasonable amount as Parent may direct as indemnity against any
claim that may be made against the Exchange Agent, Parent or the
Surviving Corporation with respect to such Certificate, and upon
the making of such affidavit and delivering any such bond, the
Exchange Agent will pay, in exchange for such lost, stolen or
destroyed Certificate the applicable Merger Consideration to be
paid in respect of the Company Shares formerly represented by such
Certificate.
(c) If
any portion of the Merger Consideration is to be paid to any Person
other than the Person in whose name the Certificate or the
Book-Entry Shares is registered, it shall be a condition to such
payment that: (i) either such Certificate shall be properly
endorsed or shall otherwise be in proper form for transfer or, in
the case of Book-Entry Shares, that such documentation as may be
reasonably requested by the Exchange Agent is provided; and
(ii) the Person requesting such payment shall pay to the
Exchange Agent any transfer or other Taxes required as a result of
the payment to a Person other than the registered holder of such
Certificate of Book-Entry Shares or to otherwise establish to the
satisfaction of the Exchange Agent that such Tax has been paid or
is not payable.
(d) Any
portion of the Payment Fund that remains undistributed to holders
of Certificates or Book-Entry Shares as of the date that is one (1)
year after the Closing Date shall be delivered to Parent upon
demand, and any holders of Certificates or Book-Entry Shares who
have not theretofore surrendered such Certificates or Book-Entry
Shares in accordance with this Section 2.7 shall
thereafter look only to Parent for satisfaction of their claims for
the Merger Consideration.
(e) Each
of the Exchange Agent, Parent and the Surviving Corporation shall
be entitled to deduct and withhold from any consideration payable
to any holder of Certificates or Book-Entry Shares (in his or her
capacity as a holder of Company Common Stock or Company Preferred
Stock) such amounts as are required to be deducted or withheld from
such consideration under the Code or any provision of state, local
or foreign Tax Law or under any other applicable Law, provided, however, that prior to making any such
deduction or withholding, the applicable withholding agent shall
provide notice to the affected recipient of the amounts subject to
withholding and a reasonable opportunity for such recipient to
provide forms or other evidence that would exempt such amounts from
withholding Tax. To the extent such amounts are so deducted or
withheld, such amounts shall be treated for all purposes under this
Agreement as having been paid to the Person to whom such amounts
would otherwise have been paid.
(f) Neither
Parent nor the Surviving Corporation shall be liable to any holder
of Certificates or Book-Entry Shares or to any other Person with
respect to any Merger Consideration delivered to any public
official pursuant to any applicable abandoned property Law, escheat
Law or similar Law.
-15-
2.8 Statutory
Rights of Appraisal.
(a) Notwithstanding
anything to the contrary set forth in this Agreement, all shares of
Company Common Stock that are issued and outstanding as of
immediately prior to the Effective Time and held by Company
Stockholders who have (A) neither voted in favor of the adoption of
this Agreement nor consented thereto in writing and (B) properly
and validly exercised their statutory rights of appraisal in
respect of such shares of Company Common Stock in accordance with
Section 262 of the DGCL (the “Dissenting Company
Shares”) will not be converted into, or represent the
right to receive, the applicable Per Share Merger Consideration
pursuant to Section
2.5. Such Company Stockholders will be entitled to receive
payment of the appraised value of such Dissenting Company Shares in
accordance with the provisions of Section 262 of the DGCL, except
that all Dissenting Company Shares held by Company Stockholders who
have failed to perfect or who have effectively withdrawn or lost
their rights to appraisal of such Dissenting Company Shares
pursuant to Section 262 of the DGCL will be deemed to have been
converted into, and to have become exchangeable for, as of the
Effective Time, the right to receive the applicable Per Share
Merger Consideration, upon surrender of the Certificates or
Book-Entry Shares that formerly evidenced such shares of Company
Common Stock in the manner provided in Section 2.5.
(b) The
Company will give Parent (A) prompt notice of any demands for
appraisal received by the Company, withdrawals of such demands and
any other instruments served pursuant to the DGCL and received by
the Company in respect of Dissenting Company Shares; and (B) the
opportunity to participate in all negotiations and Legal
Proceedings with respect to demands for appraisal pursuant to the
DGCL in respect of Dissenting Company Shares. The Company may not,
except with the prior written consent of Parent (which consent will
not be unreasonably withheld, conditioned or delayed), voluntarily
make any payment with respect to any demands for appraisal or
settle or offer to settle any such demands for payment in respect
of Dissenting Company Shares. For the purposes of this Section 2.8(b),
“participate” means that
Parent will be kept apprised of proposed strategy and other
significant decisions with respect to demands for appraisal
pursuant to the DGCL in respect of Dissenting Company Shares (to
the extent that the attorney-client privilege between the Company
and its counsel is not undermined or otherwise affected) and may
offer comments or suggestions with respect to such demands, and may
attend and participate in all negotiations and other proceedings
related thereto through counsel of its choosing, but prior to
Closing Parent will not be afforded any decision-making power or
other authority over such demands except for the payment,
settlement or compromise consent set forth above.
2.9 Further
Action. If, at any time
after the Effective Time, any further action is determined by
Parent to be necessary to carry out the purposes of this Agreement
or to vest the Surviving Corporation with full right, title, and
possession of and to all rights and property of Merger Sub and the
Company, the officers and directors of the Surviving Corporation
and Parent shall be fully authorized (in the name of Merger Sub, in
the name of the Company, and otherwise) to take such
action.
Except
as disclosed in (a) the Company SEC Documents filed since January1, 2014 and publicly available at least five (5) Business Days
prior to the Agreement Date (without giving effect to any amendment
to any such Company SEC Document filed on or after such date and
excluding any disclosures that contain general cautionary,
predictive or forward-looking statements set forth in any section
of a Company SEC Document entitled “Uncertainties, Issues and
Risks,”“Forward-looking information,”“risk factors” or a similar title, or constituting
“forward-looking statements”), or (b) the corresponding
section of the disclosure schedule delivered by the Company to
Parent (the “Disclosure Schedule”)
immediately prior to the execution of this Agreement (providing
that a matter disclosed in the Disclosure Schedule with respect to
one representation or warranty shall also be deemed to be disclosed
with respect to each other representation or warranty to the extent
that it is on its face reasonably apparent from the text of such
disclosure that such disclosure applies to or qualifies such other
representation or warranty), the Company represents and warrants to
Parent and Merger Sub, as of the Agreement Date and as of the
Closing Date (subject to any notices delivered by the Company in
accordance with Section
5.9 of this Agreement), as follows:
3.1 Qualifications,
Organization, etc. The Company is a
corporation duly organized, validly existing, and in good standing
under the Laws of the State of Delaware and has all requisite
corporate or similar power and authority to own, lease, and operate
its properties and assets and to carry on its business as presently
conducted and is qualified to do business. The Company is in good
standing as a foreign corporation in each jurisdiction where the
ownership, leasing or operation of its assets or properties or
conduct of its business requires such qualification, except where
the failure to be so qualified and in good standing, would not, (a)
individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect, or (b) prevent or materially delay
the consummation of the Merger.
3.2 Subsidiaries.
The Company does not own, directly or indirectly, any equity
interest in or other securities of any Person.
-17-
3.3 Corporate
Authority; Non-contravention.
(a) The
Company has the requisite corporate power and authority to enter
into this Agreement and, except for the receipt of the Company
Stockholder Approval, to consummate the transactions contemplated
hereby. The separate affirmative votes of the holders of (i) a
majority of the Preferred Company Stock and (ii) a majority of the
votes represented by the Company Shares (including, for the
avoidance of doubt, the votes represented by the Preferred Company
Stock) are the only votes of the holders of the Company’s
Shares required in connection with the consummation of the Merger
(the “Company
Stockholder Approval”). The Company Board at a duly
held meeting has: (i) determined that the Merger and the other
transactions contemplated hereby are fair and in the best interests
of the Company and its stockholders, and declared it advisable to
enter into this Agreement; (ii) approved the execution, delivery
and performance of this Agreement and the consummation of the
transactions contemplated hereby, including the Merger; and (iii)
subject to Section 5.3, resolved to
recommend that the Stockholders of the Company adopt this Agreement
and approve the Merger. Except for the Company Stockholder
Approval, no other corporate proceedings on the part of the Company
are necessary to authorize the consummation of the transactions
contemplated hereby. This Agreement has been duly and validly
executed and delivered by the Company and, assuming this Agreement
constitutes the valid and binding agreement of Parent and Merger
Sub, constitutes the valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms,
except where such enforceability may be limited by bankruptcy,
insolvency, reorganization, preference, fraudulent transfer,
moratorium or other similar Laws relating to or affecting the
rights and remedies of creditors, and by general principles of
equity regardless of whether enforcement is considered in a
proceeding in equity or Law.
(b) The
execution, delivery and performance by the Company of this
Agreement and the transactions contemplated hereby do not and will
not require any consent, approval, authorization or permit of,
action by, filing with or notification to any Governmental Body or
stock exchange other than: (i) the filing of the Certificate of
Merger; (ii) compliance with the applicable requirements of any
antitrust, competition or similar Laws of any foreign jurisdiction;
(iii) compliance with the applicable requirements of the Exchange
Act, including the filing with the SEC of an information statement
of the type contemplated by Rule 14c-2 under the Exchange Act
related to the Merger and this Agreement (such information
statement, including any amendment or supplement thereto, the
“Information
Statement”); (iv) compliance with the rules and
regulations of the OTCQB; and (v) compliance with any applicable
foreign or state securities or blue sky laws (collectively, clauses
(i) through (v), the “Company Approvals”). The
approvals of the Company Board referred to in Section 3.3(a) constitute
all necessary approvals of the Company Board such that no
restrictions of any Takeover Laws apply to the Company with respect
to this Agreement, the Merger or any of the other transactions
contemplated by this Agreement.
(c) Assuming
compliance with the matters referenced in Section 3.3(b), receipt of
the Company Approvals and the receipt of the Company Stockholder
Approval, the execution, delivery and performance by the Company of
this Agreement and the consummation by the Company of the Merger
and the other transactions contemplated hereby do not and will not:
(i) contravene or conflict with the certificate of incorporation,
bylaws or any certificate of designation of the Company, including
all amendments thereto (collectively, the “Company Charter
Documents”); (ii) contravene or conflict with in any
material respect or constitute a material violation of any
provision of any Law binding upon or applicable to the Company or
its properties or assets; or (iii) except as set forth on
Part 3.3(c) of the
Disclosure Schedule, result in any violation of, or default (with
or without notice or lapse of time, or both) under, or give rise to
a right of termination, cancellation or acceleration of any
material obligation or to the loss of a material benefit under any
Material Contract or any material oral arrangement binding upon the
Company or result in the creation of any Encumbrance (other than
Permitted Encumbrances) upon any of the properties or assets of the
Company.
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3.4 Capitalization.
(a) The
authorized capital stock of the Company consists of 525,000,000
shares of Company Common Stock, $0.01 par value and 30,000 shares
of Company Preferred Stock, $0.01 par value. 89,631,162 shares of
Company Common Stock are issued and outstanding, all of which are
shares of Company’s Class A Common Stock, and 20,524.149
shares of Company Preferred Stock are issued and outstanding, all
of which are shares of Company’s Class E Preferred Stock. No
shares of Company Common Stock are held in the treasury of the
Company and no shares of Company Preferred Stock are held in the
treasury of the Company. All of the outstanding shares of Company
Common Stock and Company Preferred Stock have been duly authorized
and validly issued, and are fully paid and nonassessable. Except as
described in Part 3.4(a) of the
Disclosure Schedule: (A) none of the outstanding shares of
Company Common Stock or Company Preferred Stock are entitled or
subject to any preemptive right, right of participation or any
similar right or subject to any right of first refusal in favor of
the Company; (B) there is no Company Contract or other
arrangement relating to the voting or registration of, or
restricting any Person from purchasing, selling, pledging or
otherwise disposing of (or granting any option or similar right
with respect to), any shares of Company Common Stock or Company
Preferred Stock; and (C) the Company is not under any
obligation or bound by any Company Contract or other arrangement
pursuant to which it may become obligated to repurchase, redeem or
otherwise acquire any outstanding shares of Company Common Stock or
Company Preferred Stock. An amendment to the Company’s
certificate of designation substantially identical to the amendment
attached as Exhibit
A hereto has been duly and validly adopted, and an amendment
to the Company’s bylaws substantially identical to the
amendment attached as Exhibit B hereto has been duly
and validly adopted.
(b) There
are no outstanding options issued by the Company or equity awards
subject to future vesting, including any outstanding
“phantom” stock, “phantom” stock rights,
stock appreciation rights, or stock-based performance units,
whether or not vested.
(c) Except
as set forth in Part 3.4(a) of the
Disclosure Schedule, there is no: (i) outstanding
subscription, option, call, warrant or similar right (whether or
not currently exercisable) to which the Company is a party
obligating the Company to issue, transfer or sell any shares of the
capital stock or other securities or equity interests of the
Company; (ii) outstanding security, instrument or obligation
that is or may become convertible into or exchangeable for any
shares of the capital stock or other securities of the Company;
(iii) rights agreement, stockholder rights plan (or similar
plan commonly referred to as a “poison pill”) or
Company Contract or other arrangement under which the Company is or
may become obligated to sell or otherwise issue any shares of its
capital stock or any other securities; or (iv) agreement or
understanding (including any voting trust or irrevocable proxy) to
which the Company is a party with respect to the issuance of or the
voting interest in or consent of any shares of capital stock or
other equity interests of the Company or which restrict the
transfer of any such shares or equity interests.
(d) All
outstanding shares of Company Common Stock, Company Preferred Stock
and other securities of the Company have been issued and granted in
compliance with: (i) all applicable securities Laws and other
applicable Laws; and (ii) all requirements set forth in
applicable Company Contracts.
-19-
3.5 SEC
Filings; Financial Statements.
(a) Except
as set forth on Part
3.5(a) of the Disclosure Schedule, the Company has filed or
furnished all registration statements, forms, reports,
certifications and other documents required to be filed by the
Company with the SEC since January 1, 2014 (the “Company SEC Documents”),
and, to the extent any Company SEC Document is not available in
full without redaction on the SEC’s website through the
Electronic Data Gathering, Analysis and Retrieval System
(“EDGAR”) (including the
full text of any document filed subject to a request for
confidential treatment), the Company has made available to Parent
the unredacted full text of such Company SEC Document. As of their
respective filing dates (after giving effect to any amendments or
supplements thereto), the Company SEC Documents complied as to form
in all material respects with the applicable requirements of the
Securities Act, the Exchange Act, and the Sarbanes-Oxley Act, as
the case may be. Except to the extent that information contained in
any Company SEC Document has been revised, amended, modified or
superseded (prior to the Agreement Date) by a later filed Company
SEC Document, none of the Company SEC Documents when filed or
furnished contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading in any
material respect. The Company has delivered to Parent true and
complete copies of all comment letters received by the Company from
the Staff of the SEC since January 1, 2014 and all responses to
such comment letters by or on behalf of the Company and all other
correspondence since January 1, 2014 between the SEC and the
Company. As used in this Section 3.5, the term
“file” shall be broadly construed to include any manner
in which a document or information is filed, furnished,
transmitted, supplied, or otherwise made available to the SEC. The
Annual Report on Form 10-K for the year ended December 31, 2016
(draft dated March 10, 2017) previously delivered by the Company to
Parent will be identical in all material respects to the form in
which it will be filed with the SEC (with such changes thereto
pertaining to this Agreement and the transactions contemplated
hereby as may be reasonably necessary, and which shall be provided
to Parent in advance of signing).
(b) Each
of the consolidated financial statements (including the related
notes) of the Company included in the Company SEC Documents: (i)
complied at the time it was filed (after giving effect to any
amendments or supplements thereto filed before the Agreement Date)
in all material respects with the applicable accounting
requirements and the published rules and regulations of the SEC
with respect thereto in effect at the time of such filing; (ii) was
prepared in accordance with generally accepted accounting
principles in the United States (“GAAP”) applied on a
consistent basis during the periods covered (except as may be
indicated in the notes to such financial statements or, in the case
of unaudited financial statements, as permitted by the rules and
regulations of the SEC, and except that the unaudited financial
statements may not contain all of the footnotes required in annual
audited financial statements and are subject to year-end
adjustments); and (iii) fairly presented in all material respects
the consolidated financial position of the Company as of the
respective dates thereof and the consolidated results of operations
and cash flows of the Company for the respective periods then ended
(subject, in the case of unaudited statements, to normal year-end
adjustments).
-20-
(c) The
Company is and, to the Company’s Knowledge, each of its
officers are, and has or have been since January 1, 2014, in
compliance with the applicable provisions of the Sarbanes-Oxley
Act. Except as set forth on Part 3.5(c) of the Disclosure
Schedule, the Company maintains disclosure controls and procedures
required by Rule 13a-15 or 15d-15 under the Exchange Act. Such
disclosure controls and procedures are designed to ensure that all
material information concerning the Company is made known on a
timely basis to the individuals responsible for the preparation of
the Company SEC Documents. Since January 1, 2014, Company’s
outside auditors and the audit committee of the Company Board have
not been advised of (A) any material weaknesses in the design or
operation of internal control over financial reporting which
adversely affect the Company’s ability to record, process,
summarize and report financial information, or (B) any fraud that
involves management or other employees who have a significant role
in the Company’s internal control over financial reporting.
Any material change in internal control over financial reporting
and any significant deficiency or material weakness in the design
or operation of internal control over financial reporting required
to be disclosed in any Company SEC Document has been so disclosed
and each material weakness previously so disclosed has been
remediated.
(d) The
Company is, and since January 1, 2014 has been, in compliance with
the applicable listing and corporate governance rules and
regulations of the OTCQB. The Company has delivered to Parent
complete and correct copies of all material correspondence between
the OTCQB and the Company since January 1, 2014.
(e)
Since January 1, 2014, neither the Company nor, to the Knowledge of
the Company, any Representative of the Company, has received or has
otherwise had written notice of any complaint, allegation,
assertion, or claim regarding the accounting or auditing practices,
procedures, methodologies, or methods of the Company or their
internal control over financial reporting, including any complaint,
allegation, assertion, or claim that the Company has engaged in
questionable accounting or auditing practices.
(f) The
Company has implemented and maintains a system of internal control
over financial reporting (as defined in Rules 13a-15(f) and
15d-15(f) under the Exchange Act) sufficient to provide reasonable
assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in
accordance with GAAP, including, that: (i) transactions are
executed in accordance with management’s general or specific
authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP
and to maintain asset accountability; (iii) access to assets is
permitted only in accordance with management’s general or
specific authorization; and (iv) the recorded accountability for
assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.
The Company has delivered to Parent copies of, all reports and
other documents concerning internal control delivered to the
Company by its auditors since January 1, 2014.
-21-
(g) The
Company has delivered to Parent a schedule (the “Merger Consideration Calculation
Schedule”) that sets forth, as of the Agreement Date,
the amount of: (i) all outstanding Indebtedness of the Company
(inclusive of any applicable prepayment penalties or breakage costs
assuming repayment in full as of the Agreement Date), (ii)
Transaction Expenses incurred by the Company in respect of all
periods through the Agreement Date, and without duplication of the
foregoing, the amount of any brokerage, finder’s, opinion,
success, transaction or other fee or commission payable or to
become payable to William Blair & Co. in connection with the Merger or
any of the other transactions contemplated by this Agreement based
on arrangements made by or on behalf of the Company, (iii) all
management, advisory or similar fees accrued or otherwise owing by
the Company to H.I.G. Capital, LLC or any Affiliate in respect of
all periods through the Agreement Date, and (iv) the proper
calculation of the Per Share Merger Consideration under the Company
Charter Documents assuming the Effective Time occurred on the
Agreement Date and the total Merger Consideration were
$65,618,159.00 in the aggregate. As of the Closing, (x) the amount
of outstanding Indebtedness of the Company (inclusive of any
applicable prepayment penalties or breakage costs assuming
repayment in full as of the Closing) shall not be in excess of the
amount shown on the Merger Consideration Calculation Schedule
pursuant to clause (i) of the preceding sentence, plus any
additional amounts incurred in accordance with Section 5.2(a)(vi) and
additional interest accrued in accordance with the stated terms of
the applicable Contract, (y) the amount of Transaction Expenses
incurred by the Company in respect of all periods through the
Closing Date shall be the same amount as shown on the Merger
Consideration Calculation Schedule, except that any amounts payable
to the Company’s legal or other third party advisors (other
than William Blair & Co.) shall have increased to include fees
for the periods between the Agreement Date and the Closing Date,
and (z) the amount of management, advisory or similar fees accrued
or otherwise owing by the Company to H.I.G. Capital, LLC or any
Affiliate shall be the same amount as shown on the Merger
Consideration Calculation Schedule plus any amounts accruing in the
period between the Agreement Date and Closing in accordance with
the stated terms of the applicable Contact.
3.6 No
Undisclosed Liabilities. The Company does
not have any liabilities or obligations except those liabilities or
obligations: (a) reflected or reserved against on the balance
sheet of the Company as of September 30, 2016, including the notes
and other disclosure items thereto (the “Company Balance Sheet”
and the date of such balance sheet, the “Company Balance Sheet
Date”) included in the Company SEC Documents;
(b) incurred after the Company Balance Sheet Date in the
ordinary course of business, consistent with past practice; or
(c) incurred in connection with this Agreement and the
transactions contemplated hereby.
3.7 Interested
Party Transactions. Except as
disclosed in the Company SEC Documents or Part 3.7 of the Disclosure
Schedule, from the Company Balance Sheet Date through the Agreement
Date, no event has occurred that would be required to be reported
by the Company pursuant to Item 404 of
Regulation S-K.
3.8 Absence
of Changes. Except in
connection with this Agreement and the transactions contemplated
hereby and as required by applicable Law and as set forth on
Part 3.8 of the
Disclosure Schedule, since the Company Balance Sheet Date: (a) the
Company has conducted its business in the ordinary course
consistent with past practice in all material respects; (b) there
has not been any Company Material Adverse Effect; and (c) neither
the Company has not taken any action that, if taken after the
Agreement Date, would require the prior written consent of Parent
under Section
5.2(a).
3.9 Title
to Assets. The Company owns,
and has good and valid title to, all tangible assets purported to
be owned by it on the Company Balance Sheet. All of said assets are
owned by the Company free and clear of any Encumbrances, except
for: (a) Permitted Encumbrances; and (b) Encumbrances
described in Part 3.9 of the Disclosure
Schedule. The Company is the lessee of, and holds valid leasehold
interests in, all assets purported to have been leased by
them.
-22-
3.10 Intellectual
Property.
(a) To
the Company’s Knowledge, the Company owns, licenses or
otherwise has the right to use all Intellectual Property used by
the Company in the conduct of the business of the Company as
currently conducted (the “Company Intellectual Property
Rights”). The Company Intellectual Property Rights
owned by the Company are free and clear of Encumbrances, other than
Permitted Encumbrances. The Company Intellectual Property Rights
which are material to the conduct of the business of the Company,
taken as a whole, as currently conducted, will be owned by or
available for use by the Company after the Closing on terms and
conditions identical to those under which the Company owned or used
such Company Intellectual Property Rights immediately prior to the
Closing. The Company has taken commercially reasonable steps under
the circumstances to protect and maintain the secrecy of its
material trade secrets and other confidential information. To the
Company’s Knowledge, the material Company Intellectual
Property Rights that are the subject of a patent or registration
owned by the Company are valid, subsisting and
enforceable.
(b) The
Company has not received, in the three (3) years preceding the date
hereof, any written charge, complaint, claim, demand, unsolicited
offer to license or notice alleging any material infringement,
misappropriation or violation by the Company that has not been
settled or otherwise fully resolved. To the Company’s
Knowledge, as of the date hereof, no other Person is infringing,
misappropriating or violating any material Company Intellectual
Property Rights owned by the Company.
(c) The
Company is in compliance in all material respects with: (i) all
applicable Laws; and (ii) all of the Company’s published
policies and contractual obligations, in each case relating to
privacy, data protection, and the collection and use of personal
information collected, used, or held for use by the Company. To the
Company’s Knowledge, during the three (3) years prior to the
date hereof, the Company has not experienced any incident in which
personally identifiable information or other information protected
under applicable Law relating to individuals was stolen or
improperly accessed, including any breach of security.
(d) Part
3.10(d) of the Disclosure Schedule sets forth a correct and
complete list as of the date hereof of all: (i) patented or
registered Intellectual Property owned by the Company; and (ii)
pending patent applications and applications for other
registrations of Intellectual Property filed by or on behalf of the
Company, including, to the extent applicable, the jurisdictions in
which each such item of Intellectual Property has been issued or
registered or in which any application for such issuance and
registration has been filed. The Company owns such Intellectual
Property, free and clear of all Encumbrances, other than Permitted
Encumbrances.
-23-
(e) The
Company owns, or has a valid and enforceable right to use, all
Intellectual Property created by employees, consultants or
contractors for the Company and that is material to the conduct of
the business of the Company, taken as a whole, (a) as currently
conducted and (b) as currently planned to be conducted in
connection with publicly announced but not yet currently marked
product technologies including Co-ex, LPC and CoolDeck (the
“Planned
Products”). In respect of the Planned Products, the
Company has delivered to Parent the results of all prior art
searches, freedom-to-operate opinions, and infringement
investigations conducted or prepared by it or on its behalf. The
Company does not currently make, use, sell, offer for sale, or
import products or perform steps that would infringe the as-filed
or currently-pending claims of U.S. patent application number
14/218,166, if issued, nor does the Company currently plan to do so
in the future.
(f) The
Company has not used, modified or distributed any “open
source” software in a manner that requires any software owned
by the Company be (i) disclosed or distributed in source code form,
(ii) licensed for the purpose of making derivative works or (iii)
redistributed at no charge.
(g) Except
for the Material Contracts, the Company is not a party to any
Contract pursuant to which the Company has an express obligation to
pay to any third party, which either individually or in the
aggregate exceed $125,000 or more, in the 12-month period
immediately following the Closing in consideration for a license of
any Intellectual Property from such third party.
(h) Notwithstanding
anything in this Agreement to the contrary, this Section 3.10, along with
Section 3.5(b),
Section 3.8,
Section 3.11 and
Section 3.18,
contain the sole and exclusive representations and warranties of
the Company with respect to Intellectual Property, privacy, and the
collection and use of data (including personal
information).
3.11 Contracts.
Except as set forth on Part 3.11 of the Disclosure
Schedule, each “Material Contract” is valid and binding
on the Company and, to the Company’s Knowledge, each other
party thereto and is enforceable against the Company in accordance
with its terms, except where such enforceability may be limited by
bankruptcy, insolvency, reorganization, preference, fraudulent
transfer, moratorium or other similar Laws relating to or affecting
the rights and remedies of creditors and by general principles of
equity regardless of whether enforcement is considered in a
proceeding in equity or Law. Except as set forth on Part 3.11 of the Disclosure
Schedule, the Company has delivered to Parent correct and complete
copies of all Material Contracts, and summaries of the terms of any
unwritten material contracts. The Company, and to the
Company’s Knowledge, any other party thereto, has performed
all obligations required to be performed under each Material
Contract and neither the Company nor, to the Company’s
Knowledge, the other party thereto, is (or would, with the passage
of time, the giving of notice, or both, be) in breach of or default
under any Material Contract. The Company has not received any
notice in writing from any Person that such Person intends to
terminate, or not renew, any Material Contract in effect as of the
Agreement Date, except for any such notices that have been
withdrawn or where the period for the taking of the threatened
action has lapsed without such action having been
taken.
3.12 Compliance
with Law; Permits. The Company, is,
and since January 1, 2014 has been, in compliance in all material
respects with, and has not been in material default under or in
material violation of, any applicable Law.
-24-
(a) The
Company is in possession of, and is, and since January 1, 2014 has
been, in material compliance with, all material franchises, grants,
authorizations, licenses, permits, easements, variances,
exceptions, consents, certificates, approvals and orders of any
Governmental Body necessary for the Company to own, lease, and
operate its properties and assets or to carry on its businesses as
it is now being conducted (the “Company Permits”). All
such material Company Permits are in full force and
effect.
(b) To
the Company’s Knowledge, since January 1, 2014, neither the
Company nor any other Person acting on its behalf, violated or made
any unlawful payment under any anti-bribery, anti-corruption or
similar Laws or any International Trade Laws and, since January 1,2014, the Company has not received any written notice from a
Governmental Body that alleges any of the foregoing.
3.13 Governmental
Authorizations. The Company holds
all material Governmental Authorizations necessary to enable the
Company to conduct its business in the manner in which such
business is currently being conducted. All such material
Governmental Authorizations are valid and in full force and effect.
Except as set forth in Part 3.13 of the
Disclosure Schedule: (a) the Company is, and at all times
since January 1, 2014, has been, in compliance in all material
respects with the terms and requirements of such material
Governmental Authorizations; and (b) since January 1, 2014,
the Company has not received any material notice or other
communication from any Person regarding (i) any actual or
possible violation of or failure to comply with any term or
requirement of any Governmental Authorization, or (ii) any actual
or possible revocation, withdrawal, suspension, cancellation,
termination or modification of any Governmental
Authorization.
3.14 Tax
Matters.
(a) Each
of the material Tax Returns required to be filed by or on behalf of
the Company with any Governmental Body on or before the Closing
Date: (i) has been or will be filed on or before the
applicable due date (including any extensions of such due date);
and (ii) has been, or will be when filed, prepared in all
material respects in compliance with all applicable Laws. All
material Taxes due or required to be paid by the Company on or
before the Closing Date have been or will be paid on or before the
Closing Date, other than any Taxes for which adequate reserves have
been established in accordance with GAAP.
(b) No
claim or Legal Proceeding by any Governmental Body is pending or,
to the Company’s Knowledge, has been threatened against or
with respect to the Company in respect of any material amount of
Taxes. There are no unsatisfied liabilities for material amount of
Taxes (including liabilities for interest, additions to Tax and
penalties thereon and related expenses) with respect to any notice
of deficiency or similar document received by the Company with
respect to any material amount of Taxes (other than liabilities for
Taxes asserted under any such notice of deficiency or similar
document which are being contested in good faith by the Company and
with respect to which adequate reserves for payment have been
established). No extension or waiver of the limitation period
applicable to any of the Company’s Tax Returns has been
granted (by the Company or any other Person), and no such extension
or waiver has been requested by the Company other than as a result
of extending the due date of such Tax Returns. There are no liens
for Taxes upon any of the assets of the Company except liens for
current Taxes not yet due and payable or liens being contested in
good faith by the Company and with respect to which adequate
reserves for payment have been established.
-25-
(c) No
written claim has been made within the last three (3) years by any
Governmental Body in a jurisdiction where the Company does not file
a Tax Return that the Company is or may be subject to taxation, or
required to file Tax Returns in, by that jurisdiction.
(d) The
Company is not a party to, bound by, or has any contractual
obligation under any Tax allocation or sharing agreement (except
for customary agreements to indemnify lenders or security holders
in respect of Taxes or other agreements of which the primary
subject matter is not Taxes).
(e) The
Company has not constituted either a “distributing
corporation” or a “controlled corporation” within
the meaning of Section 355(a)(1)(A) of the Code within the
last two (2) years.
(f) The
Company has not been a member of an affiliated group of
corporations within the meaning of Section 1504 of the Code or
within the meaning of any similar Law to which the Company may be
subject, other than the affiliated group of which the Company is
the common parent.
(g) The
Company has not participated, nor is it currently participating, in
a “Listed Transaction” within the meaning of Treasury
Regulation Section 1.6011-4(b)(2) or in a similar
transaction under any corresponding or similar Law.
3.15 Employee
Matters.
(a) Part 3.15(a)
of the Disclosure Schedule sets forth a true and complete list of
each material Company Benefit Plan. As used herein,
“Company Benefit
Plan” means each “employee benefit plan”
as defined in Section 3(3) of ERISA, and any other material
pension, retirement, incentive, bonus, employment, consulting,
change in control, retention, severance, deferred compensation,
cafeteria, medical, disability, stock purchase or equity based
compensation plan, policy, program, practice, agreement,
understanding or arrangement (whether written or oral) providing
compensation or other benefits to any current or former director,
officer, employee or consultant of the Company (or to any dependent
or beneficiary thereof), which is maintained, sponsored or
contributed to by the Company, or under which the Company has any
obligation or liability. The Company has made available to Parent
copies of all material documents evidencing the terms of each
material Company Benefit Plan, including all amendments thereto and
all related trust documents, to the extent applicable. Each Company
Benefit Plan has been administered in all material respects in
accordance with its terms and all applicable Laws, including ERISA
and the Code.
(b) (i)
Each Company Benefit Plan which is intended to qualify under
Section 401(a) of the Code has either received a favorable
determination letter from the IRS as to its qualified status or may
rely upon an opinion letter for a prototype plan and, to the
Company’s Knowledge, no event has occurred with respect to
such Company Benefit Plan that would reasonably be expected to
result in a material liability of Company, other than the
obligation to make contributions in the ordinary course of
business; and (ii) no suit, administrative proceeding, Action or
other litigation has been brought, or to the Company’s
Knowledge, is threatened against or with respect to any such
Company Benefit Plan, including any audit or inquiry by the IRS or
United States Department of Labor (other than routine benefit
claims and appeals).
-26-
(c) No
Company Benefit Plan is a multiemployer pension plan (as defined in
Section 3(37) of ERISA) or other pension plan subject to
Title IV of ERISA or Code Section 412. No Company Benefit Plan
is a “multiple employer plan” within the meaning of
Section 4063 of ERISA. No act or omission has occurred that has
caused or could reasonably be expected to cause the Company to
incur any Liability under Title IV of ERISA or Code Section 412 as
a result of being an ERISA Affiliate with any other
Person.
(d) The
consummation of any of the transactions contemplated by this
Agreement, alone or in combination with a termination of any
employee, officer, director, stockholder or other service provider
of the Company (whether current, former or retired) or their
beneficiaries, will not give rise to any liability under any
Company Benefit Plan, or accelerate the time of payment or funding
or vesting or increase the amount of compensation or benefits due
to any such Person. Except as set forth on Part 3.15(d) of the Disclosure
Schedule, no amount that could be received (whether in cash or
property or the vesting of property), as a result of the
consummation of any of the transactions contemplated by this
Agreement, by any employee, officer, director, stockholder or other
service provider of the Company who is a disqualified individual
(as such term is defined in proposed Treasury Regulation
Section 1.280G-1) under any Company Benefit Plan would not be
deductible by reason of Section 280G of the Code or would be
subject to an excise tax under Section 4999 of the Code. The
Company does not have any indemnity obligation on or after the
Effective Time for any Taxes imposed under Section 4999
or 409A of the Code.
(e) Except
as required by Law, no Company Benefit Plan or any other
arrangement provides any post-employment medical or life insurance
benefit coverage.
(f) Since
January 1, 2014, there has not been and there is no pending or, to
the Company’s Knowledge, threatened: (i) strike;
(ii) work stoppage; or (iii) other material labor dispute
against the Company that may interfere with the business activities
of the Company. The Company is not party to any collective
bargaining agreement or collective bargaining relationship with any
labor organization.
3.16 Real
Property; Leasehold; Tangible Assets.
(a) Part 3.16(i)
of the Disclosure Schedule sets forth a correct and complete list
of all real property owned, leased, subleased, licensed or
otherwise occupied by the Company (collectively,
“Real
Property”). Except as set forth on Part 3.16(ii) of the Disclosure
Schedule, no Person other than the Company has the right to use or
occupy any of the Real Property or any portion
thereof.
(b) The
improvements (the “Owned Real Property
Improvements”) constructed on any real property owned
in fee simple by the Company (the “Owned Real Property”) are
in a condition satisfactory for the operation of the
Company’s business in substantially the same manner as
currently conducted, subject to ordinary wear and tear. To the
Company’s Knowledge, the Company has not received any written
notice of the Owned Real Property Improvements violating any
applicable Laws. Since the date of the most current surveys
relating thereto that are in the possession of the Company, the
Company has not made any changes to the Owned Real Property
Improvements.
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(c) With
respect to the improvements (the “Leased Real Property
Improvements”) constructed on any real property to
which the Company has a leasehold or subleasehold estate (the
“Leased Real
Property”), such Leased Real Property Improvements are
in a condition satisfactory for the operation of the
Company’s business in substantially the same manner as
currently conducted, subject to ordinary wear and tear. For the
sake of clarity, the foregoing representation shall apply to the
particular spaces leased or subleased by the Company, and not the
other portions of the improvements adjacent to such Leased Real
Property to which the Company does not have a leasehold or
subleasehold estate.
(d) With
respect to the Owned Real Property, the Company has delivered or
made available to Parent: (y) the most current surveys relating
thereto that are in the possession of the Company, if any, and (z)
the most current title insurance policies that are in the
possession of the Company with respect thereto, if
any.
(e) The
tangible properties, assets and rights of the Company are all of
the material tangible properties, assets and rights necessary to
conduct the business as presently conducted by the
Company.
3.17 Insurance.
Each insurance policy under which the Company is an insured or
otherwise the principal beneficiary of coverage (each a
“Company Insurance
Policy”) is in full force and effect and all premiums
due thereon as of the Agreement Date have been paid in full. To the
Company’s Knowledge: (a) the Company is not in material
breach or default under any Company Insurance Policy; and
(b) no event has occurred which, with notice or lapse of time,
would constitute a material breach or default, or permit
termination or material modification, under any Company Insurance
Policy. The Company has timely given notice of all material losses
or liabilities reasonably expected to be covered under any such
Company Insurance Policy. The Company has delivered to Parent true
and complete copies of any insurance “loss runs” with
respect to Company for the past three (3) years.
3.18 Legal
Proceedings. There are no
pending Legal Proceedings pending (or, to the Company’s
Knowledge, threatened) by or before any Governmental Body that
involve an amount in controversy greater than $100,000, in the
aggregate, or that seek any form of non-monetary relief with
respect to the Company or any of its material assets, properties or
businesses, or that challenges or seeks to prevent, delay or make
illegal the Merger or any of the other transactions contemplated by
this Agreement. There is no Restraint to which the Company or any
of the assets owned or leased by the Company is
subject.
3.19 Environmental
Matters. Except as set
forth on Part 3.19
of the Disclosure Schedule:
(a) The
Company is, and since January 1, 2014, has been, in compliance in
all material respects with all applicable Environmental Laws, which
compliance includes the possession and maintenance of, and
compliance with, all permits required under applicable
Environmental Laws for the operation of the business of the
Company.
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(b) There
are no pending or, to the Company’s Knowledge, threatened,
demands, claims, investigations, proceedings, information requests,
or notices against the Company or, to the Company’s
Knowledge, any property owned, leased or occupied by the Company
alleging material non-compliance with or material liability under
any Environmental Law.
(c) The
Company has not stored, released, used or disposed of any Hazardous
Substances in a manner that would reasonably be expected to give
rise to material liability under any Environmental
Laws.
(d) The
Company has provided true and complete copies of all material
environmental assessment reports, health and safety audits, and
reports of investigations in the Company’s possession or
control with respect to the real property owned, leased, subleased,
licensed, other otherwise occupied by the Company or relating to
its operations.
3.20 Fairness
Opinion. The Company Board
has received the opinion of William Blair & Co. to the effect
that, as of the date of such opinion (which is not more than five
(5) Business Days prior to the Agreement Date), and subject to the
limitations, qualifications, and assumptions set forth therein, the
Per Share Merger Consideration applicable to the Company Common
Stock is fair, from a financial point of view, to the holders of
Company Common Stock.
3.21 Brokers.
Except for William Blair & Co. and H.I.G. Capital, LLC, no
broker, finder or investment banker is entitled to any brokerage,
finder’s, opinion, success, transaction or other fee or
commission in connection with the Merger or any of the other
transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Company.
3.22 Customers
and Suppliers. The Company has
provided a true, correct, and complete list of the names of (i) the
ten (10) largest customers of the Company, ranked by revenue
received or receivable by such customer, and (ii) the ten (10)
largest suppliers or vendors of the Company, ranked by costs paid
or owed to such supplier or vendor, and any sole source suppliers
or vendors, in each case for the years ended December 31, 2015 and
December 31, 2016. To the Company’s Knowledge, no such listed
customer or supplier (x) has terminated or intends to terminate its
relationship with the Company, (y) has materially reduced or
intends to materially reduce the use of services or goods provided
by or to the Company or (z) has notified the Company of an intent
to renegotiate its Contract or terms of supply with the
Company.
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3.23 No
Other Representations. Except for the
representations and warranties contained in this Article III and in any
certificate delivered by the Company hereunder, neither the Company
nor any other Person acting on behalf of the Company makes any
representation or warranty, express or implied with respect to the
Company or its business or with respect to any other information
provided to Parent, Merger Sub or their Representatives or
Affiliates in connection with the transactions contemplated in this
Agreement. Neither the Company nor any other Person acting on
behalf of the Company will have or be subject to any liability or
indemnification obligation to Parent, Merger Sub or any other
Person resulting from the distribution to Parent, Merger Sub or its
or their respective Representatives or Affiliates, or
Parent’s, Merger Sub’s or their Representatives’
or Affiliates’ use of, any such information, including any
information, documents, projections, forecasts or any other
material made available to Parent, Merger Sub or their
Representatives or Affiliates in certain “data rooms”
or management presentations in connection with Parent’s and
Merger Sub’s consideration and review of the transactions
contemplated in this Agreement, unless and to the extent any such
information is expressly included in a representation or warranty
contained in this Article
III or any certificate delivered by the Company
hereunder.
ARTICLE IV.
REPRESENTATIONS AND
WARRANTIES OF PARENT AND MERGER SUB
Except
as disclosed in the disclosure schedule delivered by Parent to the
Company immediately prior to the execution of this Agreement (the
“Parent Disclosure
Schedule”), Parent and Merger Sub jointly and
severally represent and warrant to the Company, as of the Agreement
Date and as of the Closing Date (subject to any notices delivered
by Parent in accordance with Section 5.9 of this Agreement),
as follows:
4.1 Qualifications;
Organization. Each of Parent
and Merger Sub is a corporation duly organized, validly existing,
and in good standing under the Laws of its respective jurisdiction
of organization and has all requisite corporate or similar power
and authority to own, lease and operate its properties and assets
and to carry on its business as presently conducted and is
qualified to do business and is in good standing as a foreign
corporation in each jurisdiction where the ownership, leasing or
operation of its assets or properties or conduct of its business
requires such qualification, except where the failure to be so
organized, validly existing, qualified or in good standing, or to
have such power or authority, would not, individually or in the
aggregate, restrict, prevent, prohibit, impede or materially delay
the consummation of Merger and the transactions contemplated by
this Agreement or prevent or materially impair the ability of
Parent or Merger Sub to satisfy the conditions precedent to the
Merger (any such prevention, delay or impairment, a
“Parent Material
Adverse Effect”).
4.2 Corporate
Authority; Non-contravention.
(a) Each
of Parent and Merger Sub has the requisite corporate power and
authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by the
board of directors of each of Parent and Merger Sub and by Parent,
as the sole stockholder of Merger Sub, no other corporate
proceedings on the part of Parent or Merger Sub are necessary to
authorize the transactions contemplated hereby. This Agreement has
been duly and validly executed and delivered by Parent and Merger
Sub and, assuming this Agreement constitutes the valid and binding
agreement of the Company, constitutes the valid and binding
agreement of each of Parent and Merger Sub, enforceable against
each of Parent and Merger Sub in accordance with its terms, except
where such enforceability may be limited by bankruptcy, insolvency,
reorganization, preference, fraudulent transfer, moratorium or
other similar Laws relating to or affecting the rights and remedies
of creditors and by general principles of equity regardless of
whether enforcement is considered in a proceeding in equity or
Law.
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(b) The
execution, delivery and performance by Parent and Merger Sub of
this Agreement and the consummation of the Merger by Parent and
Merger Sub do not and will not require any consent, approval,
authorization or permit of, action by, filing with or notification
to any Governmental Body other than: (i) the filing of the
Certificate of Merger; (ii) compliance with the applicable
requirements of any antitrust, competition or similar Laws of any
foreign jurisdiction; and (iii) the other consents and/or notices
set forth on Part 4.2(b) of the Parent
Disclosure Schedule (collectively, clauses (i) through (iii), the
“Parent
Approvals”), and other than any consent, approval,
authorization, permit, action, filing or notification the failure
of which to make or obtain would not individually or in the
aggregate, reasonably be expected to have a Parent Material Adverse
Effect.
(c) Assuming
compliance with the matters referenced in Section 4.2(b), and
receipt of the Parent Approvals, the execution, delivery and
performance by each of Parent and Merger Sub of this Agreement, the
consummation by Parent and Merger Sub of the Merger and the other
transactions contemplated hereby do not and will not: (i)
contravene or conflict with the organizational documents of Parent
or Merger Sub; (ii) contravene or conflict with in any material
respect or constitute a material violation of any provision of any
Law binding upon or applicable to Parent or Merger Sub or any of
their respective properties or assets; or (iii) result in any
violation of, or default (with or without notice or lapse of time,
or both) under, or give rise to a right of termination,
cancellation or acceleration of any material obligation or to the
loss of a material benefit under any material contract binding upon
Parent or Merger Sub or result in the creation of any Encumbrance
(other than Permitted Encumbrances) upon any of the properties or
assets of Parent or Merger Sub, other than, in the case of clauses
(ii) or (iii), any such violation, conflict, default, termination,
cancellation, acceleration, right, loss or Encumbrance that would
not, individually or in the aggregate, reasonably be expected to
have a Parent Material Adverse Effect.
4.3
No Legal Proceedings
Challenging the Merger. As of the
Agreement Date: (a) there is no Legal Proceeding pending
against Parent or Merger Sub that challenges or seeks to prevent,
delay or make illegal, the Merger or any other transaction
contemplated by this Agreement; and (b) to Parent’s
knowledge, no Legal Proceeding has been threatened against Parent
or Merger Sub that challenges or seeks to prevent, delay or make
illegal, the Merger or any other transaction contemplated by this
Agreement.
4.4 Activities
of Merger Sub. Merger Sub was
formed solely for the purpose of effecting the Merger. Merger Sub
has not and will not engage in any activities other than those
contemplated by this Agreement and has, and will have as of
immediately prior to the Effective Time, no liabilities other than
those contemplated by this Agreement.
4.5 Information
Supplied. None of the
information supplied or to be supplied to the Company in writing by
or on behalf of Parent, Merger Sub or any of their respective
Affiliates expressly for inclusion or incorporation by reference in
the Information Statement or, if applicable, Proxy Statement, will,
at the time such document is filed with the SEC, at any time such
documents are amended or supplemented or at the time such documents
are first published, sent or given to the Company’s
stockholders, 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.
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4.6 Availability
of Funds. Parent has
available to it as of the Agreement Date and will have available to
it at the Effective Time sufficient funds to consummate the Merger,
including payment in full for all Company Shares outstanding at the
Effective Time. Each of Parent and Merger Sub expressly acknowledge
and agree that its obligation to consummate the Merger and the
other transactions contemplated by this Agreement is not subject to
any condition or contingency with respect to
financing.
4.7 Brokers.
Except for Stifel Financial Corp., no broker, finder or investment
banker is entitled to any brokerage, finder’s, opinion,
success, transaction fee or other fee or commission in connection
with the Merger or any of the other transactions contemplated by
this Agreement based upon arrangements made by Parent or Merger
Sub.
4.8 Interested
Stockholder. None of Parent,
Merger Sub, any of Parent’s Subsidiaries and any of their
respective Affiliates, is or has been, an “interested
stockholder” of the Company as defined in
Section 203(c)(5) of the DGCL. None of Parent, Merger Sub nor
any of their respective Affiliates owns (directly or indirectly,
beneficially or of record) or is a party to any agreement,
arrangement or understanding for the purpose of acquiring, holding,
voting, or disposing of, in each case, any shares of capital stock
of the Company (other than as contemplated by this
Agreement).
4.9 No
Parent Vote or Approval Required. No vote or
consent of the holders of any capital stock of, or other equity or
voting interest in, Parent is necessary to approve this Agreement
or the Merger.
4.10
No Other Company
Representations or Warranties. Except for the
representations and warranties set forth in Article III, each of Parent and
Merger Sub hereby acknowledges and agrees that: (a) neither
the Company, nor any of its Affiliates or Representatives nor any
other Person, has made or is making any other express or implied
representation or warranty with respect to the Company or their
respective businesses or operations, including with respect to any
information provided or made available to Parent, Merger Sub or any
of their respective Affiliates or Representatives or any other
Person; and (b) it is not relying and has not relied on any
representations or warranties whatsoever regarding the subject
matter of this Agreement, express or implied.
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ARTICLE V.
COVENANTS
5.1 Access
and Investigation. Subject to the
Confidentiality Agreement, during the period commencing on the
Agreement Date and ending on the earlier of: (a) the Effective
Time; and (b) the termination of this Agreement pursuant to
Section 7.1
(such period being referred to herein as the “Interim Period”), the
Company shall: (A) provide Parent and Parent’s
Representatives with reasonable access during normal business
hours, upon reasonable notice by Parent, to the respective
Representatives of the Company, and to the books, records, Tax
Returns, material operating and financial reports, work papers and
other documents and information relating to the Company; (B)
provide reasonable access during normal business hours, to the real
property owned, leased, subleased, licensed, other otherwise
occupied by Company as of the Agreement Date for purposes of
conducting Phase I environmental site assessments and limited
reviews of compliance with Environmental Law, upon reasonable
notice, to the Company’s facilities and personnel; and
(C) permit Parent’s officers and other employees to
meet, upon reasonable notice and during normal business hours, with
the chief financial officer and other officers and managers of the
Company responsible for the Company’s financial statements
and the internal controls of the Company to discuss such matters as
Parent may reasonably deem necessary or appropriate in order to
enable Parent to satisfy its obligations under the Sarbanes-Oxley
Act and the rules and regulations relating thereto or otherwise in
connection with the Merger. Information obtained by Parent or
Merger Sub pursuant to this Section 5.1 will
constitute “Evaluation Material” under the
Confidentiality Agreement and will be subject to the provisions of
the Confidentiality Agreement. Nothing in this Section 5.1 will require
the Company to permit any inspection, or to disclose or provide any
access to any information, that in the reasonable judgment of the
Company would: (x) result in a violation of applicable Law; or
(y) reasonably be expected to violate or result in a waiver,
loss or impairment of any attorney-client privilege or work product
doctrine or similar applicable privilege or legal protection. Any
investigation conducted pursuant to this Section 5.1 shall be
conducted in a manner that does not unreasonably interfere with the
conduct of the business of the Company or create a reasonable risk
of damage or destruction to any property or assets of the Company,
shall be subject to the Company’s existing security measures
and insurance requirements, and shall not include the right to
perform invasive testing without the Company’s prior written
consent, in its reasonable discretion. The terms and conditions of
the Confidentiality Agreement shall apply to any information
obtained by Parent or any of its Representatives in connection with
any investigation conducted pursuant to this Section 5.1. Nothing in
this Section 5.1 or elsewhere
in this Agreement shall be construed to require the Company or any
of the Company’s Representatives to prepare any appraisals or
opinions.
(a) Except
as expressly contemplated, required or permitted by this Agreement,
as required by applicable Law, as set forth in Part 5.2(a) of the
Disclosure Schedule or as consented to in writing by Parent (which
consent will not be unreasonably withheld, conditioned or delayed),
during the Interim Period, the Company shall ensure that it
conducts its business in all material respects in the ordinary
course of business and consistent with past practices and in
material compliance with applicable Law, and the Company will use
commercially reasonable efforts to maintain and preserve intact its
business organization, present relationships with those Persons
having significant business relationships with the Company, keep
available the services of its current executive officers and
maintain in effect all material Governmental Authorizations.
Without limiting the generality of the foregoing, except as
expressly contemplated, required or permitted by this Agreement, as
required by applicable Law, as set forth in Part 5.2(a) of the
Disclosure Schedule, or as consented to in writing by Parent (which
consent will not be unreasonably withheld, conditioned or delayed),
during the Interim Period, the Company shall not:
(i) amend
or permit the adoption of any amendment to the Company Charter
Documents;
(ii)
effect or become a party to any merger, consolidation,
share exchange, business combination, amalgamation,
recapitalization, reclassification of shares, stock split, reverse
stock split, division or subdivision of shares, consolidation of
shares or similar transaction or adopt a plan of complete or
partial liquidation;
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(iii)
declare, accrue, set aside, or pay any dividend or make any other
distribution in respect of any shares of capital stock; split,
combine, or reclassify any capital stock; or acquire, redeem or
otherwise reacquire any shares of capital stock or other
securities, other than pursuant to the Company’s right to
acquire restricted shares of Company Common Stock held by an
employee of the Company upon termination of such employee’s
employment;
(iv)
sell, issue, grant or authorize the sale, issuance, or grant of:
(A) any capital stock or other security; (B) any option,
call, warrant or right to acquire any capital stock or other
security; or (C) any instrument convertible into or
exchangeable for any capital stock or other security, except that
the Company may adopt a stockholder rights plan in response to an
Acquisition Proposal and issue rights to Company stockholders in
connection therewith; or (D) or any “phantom” stock,
“phantom” stock rights, stock appreciation rights or
stock based performance units.
(v) lend
money to any Person (other than advances to employees of the
Company in the ordinary course of business);
(vi)
except in the ordinary course of business and not exceeding
$250,000, in the aggregate, incur or guarantee any
Indebtedness;
(vii)
other than as required by GAAP or SEC rules and regulations, change
any of its methods of accounting or accounting practices in any
material respect;
(viii)
make or change any material Tax election or method, settle or compromise any material
liability of the Company for Taxes (other than (A) in the ordinary
course of business and (B) the payment of Taxes that become due and
payable in the ordinary course), change any method of Tax
accounting, file any material amendment to a previously filed Tax
Return, agree to an extension or waiver of the statute of
limitations with respect to the assessment or determination of
material Taxes, enter into any closing agreement with respect to
any material Tax, or surrender any right to claim a material Tax
refund;
(ix)
enter into (or amend in any
respect that would increase the obligations or liabilities of the
Company under) any Contract or other arrangement with HIG AERT, LLC
or H.I.G. Capital, LLC or any Affiliate or related Person of HIG
AERT, LLC or H.I.G. Capital, LLC,
(x) enter
into (or amend in any respect that would increase the obligations
or liabilities of the Company under) any Contract or other
arrangement with any broker, finder or investment banker in
connection with the Merger or any of the other transactions
contemplated by this Agreement;
(xi)
make any acquisition (including by
merger, consolidation, stock acquisition or otherwise) of the
capital stock or (except in the ordinary course of business or as
otherwise permitted pursuant to this Agreement) assets of any other
Person;
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(xii) transfer,
sell, assign, lease, license, divest, mortgage, sell and leaseback
or otherwise encumber or subject to any Encumbrance (other than
Permitted Encumbrances) or otherwise dispose of any material
properties or other material assets (including any Intellectual
Property), except (A) for sales, licenses or dispositions of
properties or other assets or interests therein in the ordinary
course of business, or (B) dispositions of assets that are no
longer useful in the conduct of the business of the
Company;
(xiii)
pay, discharge, settle or satisfy any
Legal Proceeding, in each case for an amount in excess of $125,000,
or $250,000 in the aggregate (excluding amounts that will be paid
under any Company Insurance Policies), or that would impose any
material Restraint on the continued conduct by the Company of its
business consistent with past practices;
(xiv)
amend or modify in any material
respect or terminate any Material Contract, or unwritten material
agreement, in each case other than in the ordinary course of
business, or enter into any Contract or oral arrangement that would
constitute a Material Contract if it had been entered into in
writing prior to the Agreement Date;
(xv) except
as required to comply with applicable Law or to comply with any
Contract or Company Benefit Plan entered into prior to the date
hereof (A) adopt, enter into, terminate or materially amend (1) any
material Company Benefit Plan or (2) any other agreement, plan or
policy involving the Company and one or more of their respective
current or former officer, members of the Company Board, or
non-officer employees with base salary in excess of $100,000, in
each case that is not terminable by the Company at will without
liability, (B) increase the compensation, bonus or fringe or other
benefits offered by the Company other than increases in the
ordinary course of business consistent with past practice, (C) take
any action to accelerate the vesting or payment of any compensation
or benefit under any Company Benefit Plan, (D) loan or advance any
money or other property (other than reimbursement of reimbursable
expenses or any advances of such expenses, whether directly,
pursuant to Company credit cards or otherwise) or forgive any loans
to any current or former member of the Company Board or officer or
employee of the Company; (E) enter into any agreement or engage in
any transaction with one or more of the Company’s directors,
officers or stockholders, or with any corporation, partnership
(general or limited), limited liability company, association or
other organization of which one or more of the Company’s
directors, officers or stockholders is (1) a director, officer,
manager, managing partner, managing member (or the holder of any
office with similar authority), (2) has a direct or indirect
financial interest, or (3) directly or indirectly controls, is
controlled by or is under common control with;
(xvi)
enter into any line of business in any
geographic area other than the current lines of business of the
Company and products and services reasonably ancillary
thereto;
(xvii)
enter into any new commitment for
capital expenditures of the Company involving, individually or in
the aggregate, expected expenditures of more than
$875,000;
(xviii)
cancel, modify, or waive any debts or
claims held by it or waive any rights having in each case a value
or cost in excess of $100,000 individually or $250,000 in the
aggregate; or
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(xix) authorize
any of, or commit, resolve, propose, or agree in writing or
otherwise to take any of, the foregoing actions.
(a) Subject
to Section 5.3(b), from the
Agreement Date until the earlier of the Effective Time and the date
on which this Agreement is terminated pursuant to Section 7.1, the Company
shall not, nor shall it authorize any of its Representatives to,
directly or indirectly: (i) solicit, initiate or knowingly
encourage or knowingly facilitate the making, submission or
announcement of an Acquisition Proposal; (ii) other than informing
Persons of the provisions contained in this Section 5.3, enter into,
continue or participate in any discussions or any negotiations
regarding any Acquisition Proposal or furnish to any Person any
non-public information in connection with or for the purpose of
knowingly encouraging or knowingly facilitating any Acquisition
Proposal; or (iii) enter into any letter of intent, acquisition
agreement or similar agreement with respect to any Acquisition
Proposal or with respect to any proposal or offer that would
reasonably be expected to lead to an Acquisition Proposal. The
Company shall, and shall cause each of its directors and officers
to, and shall direct its other Representatives to, immediately
cease and cause to be terminated all discussions or negotiations
with any Person previously conducted with respect to any
Acquisition Proposal and require such Persons to return or destroy,
and to cease producing access to said Persons or their
Representatives to, any non-public information of or relating to
the Company promptly after the Closing. Nothing in this
Section 5.3
shall prohibit the Company from granting waivers of any
“standstill” provision to the limited extent that such
provision would otherwise prohibit the counterparty thereto from
making a confidential Acquisition Proposal directly to the Company
Board in accordance with the terms of this Section 5.3, in which case
the Company shall similarly waive or terminate any
“standstill” provision applicable to Parent contained
in the Confidentiality Agreement.
(b) Notwithstanding
anything to the contrary contained in Section 5.3(a), if at any
time prior to the date which is thirty (30) days after the
Agreement Date (the “Window Shop Date”), (i)
the Company, or any of its Representatives receives an unsolicited
bona fide written
Acquisition Proposal from any Person or group (other than HIG AERT,
LLC or its Affiliate) that did not result from a material breach of
this Section 5.3,
and (ii) the Company Board (or a duly authorized committee thereof)
determines in good faith, after consultation with its independent
financial advisors and outside legal counsel, that such Acquisition
Proposal constitutes or would reasonably be expected to lead to a
Superior Proposal and that the failure to take the actions
described in clause (A) or (B) below would be reasonably
likely to be inconsistent with its fiduciary duties under
applicable Law, then the Company, the Company Board (or a duly
authorized committee thereof) shall be permitted to (A) furnish
information with respect to the Company to the Person or group who
has made the Acquisition Proposal; provided, however, that (x) the Company shall
promptly (and in any event within twenty-four (24) hours) provide
to Parent any non-public information concerning the Company that is
provided to such Person or group and that was not previously
provided to Parent, (y) the Company shall have entered into an
Acceptable Confidentiality Agreement with such Person or group,
and (z) if the Person making such
Acquisition Proposal is a competitor of the Company, the Company
shall not provide any commercially sensitive non-public information
to such Person in connection with any actions permitted by
this Section 5.3(b)
other than in accordance with
“clean team” or other similar procedures designed to
limit any adverse effect on the Company of the sharing of such
information, and (B) engage in discussions or negotiations
with such Person or group regarding such Acquisition Proposal (and
waive such Person’s or group’s noncompliance with the
provisions of any “standstill” agreement solely to
permit such discussions and negotiations). The Company will keep
Parent reasonably apprised in all material respects on a reasonably
current basis of the status and content of any material discussions
regarding any Acquisition Proposal with any Person or group. The
Company will notify Parent in writing promptly after receipt (and
in any event within twenty four (24) hours) by the Company (or any
of its Representatives) of any Acquisition Proposal (or material
modification or amendment thereof), or the granting of any access
to non-public information of the Company or access to their books
and records, business property or assets and such notice shall
specify the identity of the Person making the Acquisition Proposal
or receiving such access and the material terms and conditions
thereof. The Company will keep Parent informed, on a reasonably
current basis, of the status of any such Acquisition Proposal or
access (including the material terms and conditions thereof and any
material modifications thereto). The Company shall provide Parent
with at least forty-eight (48) hours prior notice of any meeting of
the Company Board at which the Company Board is reasonably expected
to consider any Acquisition Proposal. The Company agrees that it
will not enter into any confidentiality agreement after the
Agreement Date that would prevent the Company from complying with
this Section
5.3(b).
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(c) Except
as otherwise provided in this Agreement (including Section 5.3(d) or
Section 5.3(e)), neither
the Company Board nor any duly authorized committee thereof shall:
(i)(A) withhold, withdraw or rescind (or modify or qualify in a
manner adverse to Parent or Merger Sub), the Company Board
Recommendation; (B) adopt, approve or recommend, or publicly
propose to adopt, approve or recommend, any Acquisition Proposal;
(C) fail to include the Company Board Recommendation in the Proxy
Statement if and when disseminated to the holders of Company
Shares; (D) in the event a tender offer that constitutes an
Acquisition Proposal subject to Regulation 14D under the
Exchange Act is commenced, fail to recommend against such
Acquisition Proposal in any solicitation or recommendation
statement made on Schedule 14D-9 within ten (10) Business Days
of such commencement thereof, or (E) make any public statement
inconsistent with the Company Board Recommendation (any action
described in this clause (i) being referred to herein as an
“Adverse
Recommendation Change”); or (ii) approve, cause or
authorize or permit the Company to execute or enter into, any
letter of intent, memorandum of understanding, agreement in
principle, agreement or commitment (other than an Acceptable
Confidentiality Agreement) with any Person or group from whom the
Company has received an Acquisition Proposal (a “Company Acquisition
Agreement”), or resolve, agree or publicly propose to
take any such action.
(d) Notwithstanding
anything to the contrary set forth in Section 5.3(c) or any
other provision contained in this Agreement,
(i) If
at any time prior to the Window Shop Date, the Company Board (or a
duly authorized committee thereof) may (A) make an Adverse
Recommendation Change, or (B) terminate this Agreement pursuant to
Section 7.1(d)(ii) to
accept such Superior Proposal, but only if, in either case of
clause (A) or (B), (1) the Company Board (or a duly authorized
committee thereof) determines in good faith, after consultation
with its outside legal counsel, that the failure to make an Adverse
Recommendation Change in response to the receipt of such Superior
Proposal not involving a material breach of this Section 5.3 would reasonably be
expected to be inconsistent with its fiduciary duties under
applicable Law, (2) the Company provides Parent prior written
notice of its intent to make an Adverse Recommendation Change or to
terminate this Agreement pursuant to Section 7.1(d)(ii) at
least four (4) Business Days prior to taking such action (which
notice shall include a summary of the material terms of the
Superior Proposal, the relevant proposed transaction agreements and
any financing commitments relating thereto) (an “Adverse Recommendation Change
Notice”) (it being understood that such Adverse
Recommendation Change Notice shall not in itself be deemed an
Adverse Recommendation Change), (3) during such four (4) Business
Day period following Parent’s receipt of the Adverse
Recommendation Change Notice, the Company shall, and shall cause
its financial and legal advisors and other Representatives to,
negotiate in good faith with Parent (if Parent desires to so
negotiate) to make such adjustments in the terms and conditions of
this Agreement that Parent proposes to make as would obviate the
basis for an Adverse Recommendation Change or the termination of
this Agreement pursuant to Section 7.1(d)(ii); (4) at
the end of such four (4) Business Day period and taking into
account any modifications to the terms of this Agreement proposed
by Parent to the Company in a written, binding and irrevocable
offer, the Company Board (or a duly authorized committee thereof)
determines in good faith (after consultation with outside legal
counsel) that the failure to make such an Adverse Recommendation
Change or the failure to terminate this Agreement pursuant to
Section 7.1(d)(ii) would
reasonably be expected to be inconsistent with its fiduciary duties
under applicable Law; and (5) in the event of any change to the
material terms of such Superior Proposal, the Company shall, in
each case, have delivered to Parent an additional notice consistent
with that described in clause (1) above and the notice period shall
have recommenced, except that the notice period in such case shall
be two (2) Business Days. Any termination of this Agreement
pursuant to Section
7.1(d)(ii) to enter into a definitive agreement for a
Superior Proposal shall not relieve the Company of the obligation
to pay the Termination Fee in full in accordance with Section 7.3(a).
-37-
(ii) other
than in connection with a Superior Proposal, the Company Board (or
a duly authorized committee thereof) may make an Adverse
Recommendation Change in response to an Intervening Event, if and
only if: (A) the Company Board (or a duly authorized committee
thereof) determines in good faith, after consultation with its
outside legal counsel, that the failure to take such action would
reasonably be expected to be inconsistent with its fiduciary duties
under applicable Law; (B) the Company then provides an Adverse
Recommendation Change Notice to Parent at least four (4) Business
Days prior to the taking of such action and not later than thirty
(30) days after the Agreement Date and describing the Intervening
Event that is the basis for such action in reasonable detail (it
being understood that such Adverse Recommendation Change Notice
shall not itself be deemed an Adverse Recommendation Change); (C)
during the four (4) Business Day period following Parent’s
receipt of the Adverse Recommendation Change Notice related to the
Intervening Event, the Company shall, and shall cause its financial
and legal advisors and other Representatives to, negotiate with
Parent (if Parent desires to so negotiate) to make such adjustments
in the terms and conditions of this Agreement that Parent proposes
to make as would obviate the basis for an Adverse Recommendation
Change; and (D) following the end of such four (4) Business Day
period, the Company Board (or a duly authorized committee thereof)
shall then have determined in good faith, taking into account any
changes to the terms of this Agreement proposed by Parent to the
Company in a written, binding and irrevocable offer in response to
the Adverse Recommendation Change Notice, that the failure to
effect an Adverse Recommendation Change in response to such
Intervening Event would reasonably be expected to be inconsistent
with its fiduciary duties under applicable Law.
(e) Nothing
contained in this Agreement shall prohibit the Company or the
Company Board (or a duly authorized committee thereof) from: (i)
taking and disclosing to the stockholders of the Company a position
contemplated by Rule 14e-2(a) under the Exchange Act or making
a statement contemplated by or otherwise complying with
Item 1012(a) of Regulation M-A or Rule 14d-9 under
the Exchange Act; or (ii) making any disclosure to the stockholders
of the Company if the Company Board (or a duly authorized committee
thereof) determines in good faith, after consultation with its
outside legal counsel, that the failure to make such disclosure
would be reasonably likely to be inconsistent with its fiduciary
duties under applicable Law; provided, however, that nothing in this
Section 5.3(e)
shall be deemed to modify or supplement the definition of (or the
requirements pursuant to this Section 5.3 with respect to an)
Adverse Recommendation Change.
5.4 Stockholder
Consent; Preparation of Information Statement.
(a) Immediately
after the execution of this Agreement and in lieu of calling a
meeting of the Company’s stockholders, the Company shall seek
and shall use its reasonable best efforts to obtain an irrevocable
(except as provided in this Section 5.4) written consent,
in the form attached hereto as Exhibit C, from HIG AERT, LLC
(such written consent, as duly executed and delivered by such
stockholder, the “Stockholder Consent”). As
soon as practicable upon receipt of the Stockholder Consent, the
Company shall provide Parent with a copy of such Stockholder
Consent, certified as true and complete by an executive officer of
the Company. If such Stockholder Consent is not delivered to the
Company and Parent within two (2) Business Days after the execution
of this Agreement (the “Stockholder Consent Delivery
Period”), Parent shall have the right to terminate
this Agreement as set forth in Section 7.1(b)(iii). In
connection with the Stockholder Consent, the Company shall take all
actions necessary to comply, and shall comply in all respects, with
the DGCL, including Section 228 and Section 262 thereof, and the
Company’s certificate of incorporation, bylaws or like
organizational documents.
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(b) As
promptly as reasonably practicable after the date of this Agreement
(and in any event within fifteen (15) days after the date hereof),
the Company shall, with the assistance of Parent, prepare and file
with the SEC the Information Statement. The Information Statement
shall also contain (i) the notice of action by written consent
required by Section 228(e) of the DGCL and (ii) the notice of
availability of appraisal rights and related disclosure required by
Section 262 of the DGCL. Parent, Merger Sub and the Company will
cooperate with each other in the preparation of the Information
Statement and each of Parent and Merger Sub will furnish to the
Company the information relating to it required by the Exchange Act
to be set forth in the Information Statement promptly following
request therefor from the Company. The Company shall promptly
provide Parent and Merger Sub (in writing, if written), and consult
with Parent and Merger Sub regarding, any comments (written or
oral) the Company or its counsel may receive from the SEC or its
staff with respect to the Information Statement as promptly as
practicable after receipt of such comments. Parent and its counsel
shall be given a reasonable opportunity to review any such written
and oral comments and proposed responses. The Company and Parent
shall each use its reasonable best efforts to promptly provide
responses to the SEC with respect to all comments received on the
Information Statement by the SEC and to have the Information
Statement cleared by the staff of the SEC as promptly as reasonably
practicable after such filing. After the Information Statement has
been cleared by the SEC, or, if applicable, eleven (11) calendar
days after the date of the filing of the preliminary Information
Statement with the SEC without notice from the SEC of its intent to
review the Information Statement (or, if such day is not a Business
Day, the first Business Day thereafter), the Company shall promptly
file with the SEC the Information Statement in definitive form as
contemplated by Rule 14c-2 promulgated under the Exchange Act
substantially in the form previously cleared or filed with the SEC,
as the case may be, and mail a copy of the Information Statement to
the Company’s stockholders of record in accordance with
Sections 228 and 262 of the DGCL. Notwithstanding anything to the
contrary herein, if the Company Board (or a duly authorized
committee thereof) makes an Adverse Recommendation Change in
accordance with Section
5.3(d), HIG AERT, LLC may revoke the Stockholder Consent in
its sole discretion and thereafter none of the obligations set
forth in Section
5.4(a) or this Section 5.4(b) shall apply to
any Person.
(c) Subject
to applicable Law, the Company and Parent (with respect to itself
and Merger Sub) shall each, upon request of the other, furnish the
other with all information concerning itself, its Subsidiaries,
directors, officers and stockholders and such other matters as may
be reasonably necessary or advisable in connection with the
Information Statement or the Proxy Statement or any other
statement, filing, notice or application made by or on behalf of
Parent, the Company or any of their respective Subsidiaries to any
third party and/or Governmental Body in connection with the Merger
and the other transactions contemplated by this
Agreement.
(d) In
the event the Stockholder Consent is not obtained and Parent does
not terminate this Agreement, in each case, as provided in
Section 5.4(a),
then as soon as practicable after the conclusion of the Stockholder
Consent Delivery Period, the Company shall prepare and file with
the SEC a proxy statement related to the Merger and this Agreement
(such proxy statement, including any amendment or supplement
thereto, the “Proxy
Statement”) and, subject to the other provisions of
this Agreement, the Company shall: (i) take all action necessary in
accordance with the DGCL and the Company Charter Documents to duly
call, give notice of, convene and hold a meeting of its
stockholders for the purpose of voting upon the approval and
adoption of this Agreement, including the Merger (the
“Company
Stockholders Meeting”), as soon as practicable
following the Agreement Date, and (ii) subject to an Adverse
Recommendation Change, use all reasonable efforts to solicit from
its stockholders proxies in favor of the adoption of this
Agreement. From and after the Agreement Date, unless this Agreement
is validly terminated in accordance with Section 7.1, the Company
shall submit this Agreement to its stockholders at the Company
Stockholders Meeting even if the Company Board shall have effected
an Adverse Recommendation Change. The consultation and cooperation
provisions with respect to the preparation, filing and
dissemination of the Information Statement shall apply to the
preparation, filing and dissemination of any Proxy Statement,
mutatis
mutandis.
-39-
5.5 Reasonable
Best Efforts to Complete.
(a) Upon
the terms and subject to the conditions set forth in this
Agreement, each of Parent, Merger Sub and the Company shall use its
reasonable best efforts to, and shall use its reasonable best
efforts to cause its Representatives 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 party or parties hereto in doing, all
things reasonably necessary, proper or advisable to consummate and
make effective, in the most expeditious manner practicable, the
Merger and each of the other transactions contemplated by this
Agreement, including using reasonable best efforts to: (i) cause
each of the conditions to the Merger set forth in Article VI to be satisfied as
promptly as practicable after the Agreement Date; (ii) without
limitation of Section 5.6, obtain, as
promptly as practicable after the Agreement Date, and maintain all
necessary actions or non-actions and Consents from any Governmental
Bodies and make all necessary registrations, declarations and
filings with any Governmental Bodies that are necessary to
consummate the Merger and the other transactions contemplated
hereby; and (iii) resist, contest, appeal and remove any Legal
Proceeding and to have vacated, lifted, reversed or overturned any
Restraint, whether temporary, preliminary or permanent, that is in
effect and that prohibits, prevents, restricts or restrains the
transactions contemplated hereby (including any Legal Proceeding or
Restraint in connection with the matters contemplated by
Section 5.6).
In addition to the foregoing, neither Parent or Merger Sub, on the
one hand, nor the Company, on the other hand, shall take any action
that is intended to prevent, impair, materially delay or otherwise
adversely affect the consummation of the Merger or the other
transactions contemplated hereby or the ability of such party to
fully perform its obligations under this Agreement. Notwithstanding
anything to the contrary herein, none of the Company, Parent or
Merger Sub shall be required prior to the Effective Time to pay any
consent or other similar fee or consideration or otherwise assume
or incur or agree to assume or incur any obligation, liability or
commitment that is not conditioned upon the consummation of the
Merger, to obtain any Consent of any Person (including any
Governmental Body) under any Contract.
(b) In
furtherance and not in limitation of the foregoing, each of Parent,
Merger Sub and the Company shall provide such information and
execute such further instruments and written assurances as may be
reasonably requested by the other parties and assist and cooperate
with the other parties, in each case in accordance with the terms
of this Agreement, in order to carry into effect the intents and
purposes of, and to consummate the transactions contemplated by,
this Agreement as promptly as practicable after the Agreement
Date.
(c) Each
party agrees, on behalf of itself and its Affiliates, that, between
the Agreement Date and the Effective Time, it shall not, and shall
cause its Affiliates not to, directly or indirectly, (i) acquire,
purchase, lease or license (or agree to acquire, purchase, lease or
license), by merging with or into or consolidating with, or by
purchasing a substantial portion of the assets of or equity in, or
by any other manner, any business or any Person or division or part
thereof, or any securities or collection of assets, if doing so
would, or such party reasonably anticipates it would, (A) result in
any material delay in obtaining, or materially increase the risk of
not obtaining, any Consent of any Governmental Body required in
connection with the transactions contemplated hereby (including the
Merger) or (B) restrict, prevent, prohibit, impede or materially
delay the consummation of the Merger or any of the other
transactions contemplated by this Agreement, or (ii) take or agree
to take any other action that it expects will (A) result in any
material delay in obtaining, or materially increase the risk of not
obtaining, any Consent of any Governmental Body required in
connection with the transactions contemplated hereby (including the
Merger) or (B) restrict, prevent, prohibit, impede, or materially
delay the consummation of the Merger or any of the other
transactions contemplated by this Agreement.
-40-
5.6 Antitrust
Filings.
(a) If
required, each of Parent and Merger Sub (and their respective
Affiliates, if applicable), on the one hand, and the Company, on
the other hand, shall file with the FTC and the Antitrust Division
of the DOJ a Notification and Report Form (which form shall
specifically request early termination of the waiting period
prescribed by the HSR Act) relating to this Agreement and the
transactions contemplated hereby as required by the HSR Act as soon
as practicable after the Agreement Date but in no event later than
five (5) Business Days following the Agreement Date. Each of Parent
and the Company shall: (i) cooperate and coordinate with the other
in the making of such filings; (ii) promptly, but in no event later
than fifteen (15) Business Days after the date hereof, make any
filings, and use reasonable efforts to timely obtain any consents,
permits, authorizations, waivers, clearances and approvals, and to
cause the expiration or termination of any applicable waiting
periods, as may be required under foreign Antitrust Laws; (iii)
supply the other with any information and documentary material that
may be required in order to make such filings; and (iv) supply any
additional information that reasonably may be required or requested
by the FTC, the DOJ or any applicable foreign Governmental Body.
Without limiting the generality of the foregoing or any other
provision of this Agreement, Parent and the Company shall take any
and all action necessary to cause the expiration or termination of
the applicable waiting periods under the HSR Act as soon as
practicable after the filings contemplated by the first sentence of
this Section 5.6(a), and to
avoid any impediment to the consummation of the Merger under any
Antitrust Laws, including: (A) proposing, negotiating, committing
to and effecting, by consent decree, hold separate order or
otherwise, conduct of business restrictions, a sale or disposition
of such assets or businesses as are required to be divested or a
license or grant of commercialization rights to businesses, product
lines, fields of use, divisions, business arrangements, Contracts,
assets or interests therein of Parent or its Affiliates (including,
after the Closing, the Surviving Corporation and its Affiliates);
(B) amending any venture or other arrangement of Parent or its
Affiliates (including the Surviving Corporation and its
Affiliates); and (C) otherwise taking or committing to take actions
after the Closing with respect to one or more of the businesses,
product lines, fields of use, or assets of Parent and its
Affiliates (including the Surviving Corporation and its
Affiliates), in each case, as may be required in order to enable
the consummation of the transactions contemplated hereby, including
the Merger, to occur as soon as reasonably practicable (and in any
event no later than the Outside Date) and to otherwise avoid the
entry of, or to effect the dissolution of, any preliminary or
permanent injunction which would otherwise have the effect of
preventing the consummation of the transactions contemplated
hereby, including the Merger. Further, and for the avoidance of
doubt, Parent will not extend any waiting period under the HSR Act
or enter into any agreement with the FTC, the Antitrust Division of
the DOJ or any other Governmental Body not to consummate the
transactions contemplated by this Agreement, except with the prior
written consent of the Company (which, in the case of the extension
of the waiting period, consent shall not be unreasonably withheld,
conditioned or delayed). Parent shall be responsible for all filing
fees payable in connection with such filings and for any local
counsel fees.
(b) Parent
and the Company shall, on behalf of the parties hereto, jointly
control and lead all communications with any Governmental Body
relating to Antitrust Laws, subject to compliance with this
Section 5.6.
Each of Parent and Merger Sub (and their respective Affiliates, if
applicable), on the one hand, and the Company, on the other hand,
shall promptly inform the other of any material communication from
any Governmental Body regarding any of the transactions
contemplated by this Agreement in connection with any filings or
investigations with, by or before any Governmental Body relating to
this Agreement or the transactions contemplated hereby, including
any proceedings initiated by a private party. If any party hereto
or an Affiliate thereof shall receive a request for additional
information or documentary material from any Governmental Body with
respect to the transactions contemplated by this Agreement in
relation to any of the filings contemplated by this Section 5.6, then such
party shall use its reasonable best efforts to make, or cause to be
made, as soon as reasonably practicable and after consultation with
the other party, an appropriate response in compliance with such
request. In connection with and without limiting the foregoing, to
the extent reasonably practicable and unless prohibited by
applicable Law or by the applicable Governmental Body, the parties
hereto agree to: (i) give each other reasonable advance notice of
all substantive meetings and conference calls with any Governmental
Body relating to the Merger; (ii) give each other an opportunity to
participate in each of such meetings and conference calls; (iii)
keep the other party reasonably apprised with respect to any oral
communications with any Governmental Body regarding the Merger;
(iv) cooperate in the filing of any analyses, presentations,
memoranda, briefs, arguments, opinions or other written
communications explaining or defending the Merger, articulating any
regulatory or competitive argument or responding to requests or
objections made by any Governmental Body; (v) provide each other
with a reasonable advance opportunity to review and comment upon,
and consider in good faith the views of the other with respect to,
all written communications (including any analyses, presentations,
memoranda, briefs, arguments and opinions) with a Governmental Body
regarding the Merger; (vi) provide each other (or counsel of each
party, as appropriate) with copies of all written communications to
or from any Governmental Body relating to the Merger; and (vii)
cooperate and provide each other with a reasonable opportunity to
participate in, and consider in good faith the views of the other
with respect to, all material deliberations with respect to all
efforts to satisfy the conditions set forth in Section 6.1(a). Any such
disclosures, rights to participate or provisions of information by
one party to the other shall be made on an outside counsel-only
basis at the request of any party.
-41-
5.7 Public
Statements and Disclosure. Neither the
Company, on the one hand, nor Parent or Merger Sub, on the other
hand, shall issue (or shall cause its Affiliates or Representatives
to issue) any public release or make any public announcement
concerning this Agreement or the transactions contemplated by this
Agreement without the prior written consent of the other (which
consent shall not be unreasonably withheld, conditioned, or
delayed), except as such release or announcement is required by
applicable Law or the rules or regulations of the OTCQB or any
other applicable stock exchange or stock market, in which case the
party required to make the release or announcement shall use its
reasonable best efforts to allow the other party or parties hereto
a reasonable opportunity to comment on such release or announcement
in advance of such issuance (it being understood that the final
form and content of any such release or announcement, as well as
the timing of any such release or announcement, shall be at the
final discretion of the disclosing party); provided, however, that the restrictions set
forth in this Section 5.7 shall not
apply to any release or announcement made or proposed to be made by
the Company in compliance with Section 5.3(e). The
parties agree that the initial press release to be issued with
respect to the transactions contemplated by this Agreement shall be
in the form heretofore agreed to by the parties. Notwithstanding
the foregoing, (a) to the extent the content of any press
release or other announcement has been approved and made in
accordance with this Section 5.7, no separate
approval shall be required in respect of such content to the extent
replicated in whole or in part in any subsequent press release or
other announcement and (b) each party may, without complying
with the foregoing obligations, make any public statement regarding
the transactions contemplated hereby in response to questions from
the press, analysts, investors or those attending industry
conferences, and make internal announcements to employees, in each
case to the extent that such statements are consistent with
previous press releases, public disclosures or public statements
made jointly by the parties or approved by the parties, and
otherwise in compliance with this Section 5.7 and
provided that such
public statements do not reveal Evaluation Material (as defined in
the Confidentiality Agreement) or material non-public information
regarding this Agreement or the transactions contemplated
hereby.
5.8 Director
and Officer Liability.
(a) For
six (6) years after the Effective Time, the Surviving Corporation
(or any successor thereto) shall indemnify, defend, and hold
harmless the present and former, and any other Persons who become
prior to the Effective Time, directors and officers of the Company
(the “Indemnified
Parties”) in respect of acts or omissions occurring at
or prior to the Effective Time to the fullest extent permitted by
Delaware Law or provided under the Company Charter Documents as in
effect on the Agreement Date.
(b) For
six (6) years after the Effective Time, Parent shall cause to be
maintained in effect provisions in the Surviving
Corporation’s certificate of incorporation and bylaws (or in
such documents of any successor to the business of the Surviving
Corporation) regarding elimination of liability of directors,
indemnification of directors and officers and employees and
advancement of expenses that are no less advantageous to the
intended beneficiaries than the corresponding provisions in the
Company Charter Documents in existence as of the Agreement
Date.
(c) Prior
to the Effective Time, the Company shall purchase a six (6) year
fully prepaid non-cancellable “tail” or
“run-off” directors and officers liability insurance
(including fiduciary liability) policy from a carrier with the same
or better credit rating as the Company’s current insurance
carrier with respect to directors’ and officers’
liability insurance with respect to any actual or alleged error,
misstatement, misleading statement, act, omission, neglect, breach
of fiduciary duty or any other matter claimed against a director or
officer of the Company by reason of him or her serving in such
capacity that existed or occurred prior to the Effective Time
covering each Person currently covered by the Company’s
directors’ and officers’ liability insurance policy on
terms with respect to coverage and amount no less favorable than
those contained in such policy in effect on the Agreement Date. In
the event any such policy is not available on a fully prepaid
basis, then the Company shall, prior to the Effective Time,
purchase such policy for as long a term as is then available, and
Parent shall or shall cause the Surviving Corporation or any
successor thereto, for the remaining period up to and including six
(6) years after the Closing Date, purchase and keep such policy
available at all times during such period; provided, however, that if the premiums required
to be paid by Parent (or the Surviving Corporation or any successor
thereto) for such insurance policy for any one year period would
exceed 300% of the current annual premium paid by the Company for
the directors’ and officers’ liability insurance in
effect as of the date hereof, then Parent or the Surviving
Corporation (or any successor thereto) shall cause to be maintained
policies of insurance that provide the maximum coverage available
at an annual premium equal to 300% of the Company’s current
premium for its insurance policy as of the date
hereof.
-42-
(d) From
and after the Effective Time through the sixth (6th) anniversary of
the Effective Time, the Surviving Corporation will, and Parent will
cause the Surviving Corporation to, fulfill and honor in all
respects the obligations of the Company pursuant to: (i) each
indemnification agreement between the Company and any Indemnified
Party; and (ii) any advancement of costs or expenses or
indemnification provisions and any exculpation provision set forth
in the Company Charter Documents as in effect on the Agreement
Date. If, at any time prior to the sixth (6th) anniversary of the
Effective Time, any Indemnified Party delivers to the Company, the
Surviving Corporation or Parent (or any successors thereto), as
applicable, a written notice asserting a claim for indemnification
under any of the provisions set forth in clause “(i)”
or “(ii)” of this Section 5.8(d), then the
claim asserted in such notice shall survive the sixth (6th)
anniversary of the Effective Time until such claim is fully and
finally resolved.
(e) If
Parent or the Surviving Corporation or any of their successors or
assigns, as the case may be, (A) shall consolidate with or
merge into any other Person and shall not be the continuing or
surviving corporation or entity of such consolidation or merger; or
(B) shall transfer or otherwise convey all or substantially
all of its properties and assets to any other Person, then and in
each such case, proper provisions shall be made so that the
successors and assigns of Parent or the Surviving Corporation or
their respective successors or assigns, as the case may be, shall
assume in writing all of the obligations set forth in this
Section 5.8.
(f) Except
as required by applicable Law, the obligations set forth in this
Section 5.8
shall not be terminated, amended or otherwise modified in any
manner that adversely affects any Indemnified Parties (or any other
Person who is a beneficiary under the “tail” or
“runoff” policy referred to in Section 5.8(c)) without
the prior written consent of such affected Indemnified Parties or
other Person who is a beneficiary under the “tail” or
“runoff” policy referred to in Section 5.8(c). Each of
the Indemnified Parties or other Persons who are beneficiaries
under the “tail” or “runoff” policy
referred to in Section 5.8(c) (and, if
and to the extent applicable, their heirs and representatives) are
intended to be third party beneficiaries of this Section 5.8, with full
rights of enforcement as if a party hereto. The rights of the
Indemnified Parties (and, if and to the extent applicable, their
heirs and representatives) under this Section 5.8 shall be in
addition to, and not in substitution for, any other rights that
such Persons may have under the certificates of incorporation,
bylaws or other equivalent organizational documents of the Company,
any and all indemnification agreements of or entered into by the
Company, or applicable Law (whether at law or in
equity).
(g) Prior
to the Closing, other than with respect to any directors identified
by Parent in writing to the Company two (2) calendar days prior to
the Closing Date, the Company shall use its reasonable best efforts
to deliver to Parent resignations executed by each director of the
Company in office immediately prior to the Effective Time, which
resignations shall be effective at the Effective Time.
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5.9 Notification
of Certain Events. Each of the
Company and Parent shall, as promptly as reasonably practicable,
notify the other:
(a) upon
becoming aware that any representation or warranty made by it in
this Agreement has become untrue or inaccurate in any material
respect, or of any failure of such Person to comply with or satisfy
in any material respect any covenant, condition or agreement to be
complied with or satisfied by it under this Agreement; provided, however, that no such notification
shall affect or be deemed to modify any representation or warranty
of such party set forth herein for purposes of the conditions to
the obligations of the other party to consummate the Merger, or the
remedies available to the parties hereto, and provided further, that failure to give
any such notice shall not be treated as a breach of covenant for
the purposes of Section 7.1(c)(ii)(A) or
Section 7.1(d)(i)(A), as
applicable;
(b) of
any material written communication from any Governmental Body
related to the Merger; and
(c) of
any Legal Proceeding commenced and served upon it that challenges
the Merger or would reasonably be expected to delay or materially
impair the Closing of the Merger.
5.10 Employee
Matters.
(a) In
the event any individual who is employed by the Company (including
the Surviving Corporation or its Subsidiaries) immediately prior to
the Effective Time (each, a “Covered Employee”) first
becomes eligible to participate under any employee benefit plan,
program, policy, or arrangement of Parent or the Surviving
Corporation or any of their respective Subsidiaries (the
“New
Plans”) following the Effective Time, Parent shall, or
shall cause the Surviving Corporation to: (i) waive any
preexisting condition exclusions, “actively-at-work”
requirements and waiting periods with respect to participation and
coverage requirements applicable to any Covered Employee under any
New Plan providing medical, dental, or vision benefits to the same
extent such limitation would have been waived or satisfied under
the employee benefit plan Covered Employee participated in
immediately prior to coverage under the New Plan; and
(ii) provide each Covered Employee with credit for any
copayments and deductibles paid prior to the Covered
Employee’s coverage under any New Plan during the calendar
year in which such amount was paid, to the same extent such credit
was given under the employee benefit plan Covered Employee
participated in immediately prior to coverage under the New Plan,
in satisfying any applicable deductible or out-of-pocket
requirements under the New Plan.
(b) As
of the Effective Time and thereafter, Parent shall recognize, or
shall cause the Surviving Corporation and their respective
Subsidiaries to recognize, all service of each Covered Employee
prior to the Effective Time, to the Company (or, to the extent
previously recognized by the Company, any predecessor entities of
the Company) for vesting and eligibility purposes, and for purposes
of calculating vacation and other paid time off benefits, under any
New Plans. In no event shall anything contained in this
Section 5.10(b)
result in any duplication of benefits for the same period of
service.
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(c) As
of the Effective Time, the Company shall take all necessary actions
to provide for full vesting of all amounts credited to the account
of each Covered Employee under the Company’s 401(k)
plan.
(d)
Nothing in this Section 5.10 shall be
construed to limit the right of Parent or any of its Subsidiaries
(including, following the Effective Time, the Surviving
Corporation) to amend or terminate any Company Benefit Plan or
other employee benefit plan, to the extent such amendment or
termination is permitted by the terms of the applicable plan, nor
shall anything in this Section 5.10 be construed
to require Parent or any of its Subsidiaries (including, following
the Effective Time, the Surviving Corporation) to retain the
employment of any particular Covered Employee for any fixed period
of time following the Effective Time; provided, however, that Parent otherwise complies
with its obligations under this Section 5.10.
5.11 Confidentiality.
The parties acknowledge that Parent and Company have previously
executed a Confidentiality Agreement, effective as of July 7, 2016,
and that Parent and William Blair & Co. on behalf of the
Company have previously entered into a First Amendment to
Confidentiality Agreement, dated September 28, 2016 (as so amended,
the “Confidentiality
Agreement”), which Confidentiality Agreement shall
continue in full force and effect in accordance with its terms
until the Effective Time, except as expressly modified
herein.
5.12 Stockholder
Litigation. Prior to the
earlier of the Effective Time or the date of termination of this
Agreement pursuant to Section 7.1: (a) the
Company shall promptly advise Parent in writing of any stockholder
litigation against the Company or its directors or officers
relating to this Agreement, the Merger or the other transactions
contemplated hereby and shall keep Parent reasonably informed
regarding any such stockholder litigation; (b) the Company
shall give Parent the opportunity, at Parent’s sole cost and
expense, to participate in the defense or settlement of any
stockholder litigation that arises after the Agreement Date against
the Company or its directors or officers as a result of this
Agreement or the transactions contemplated hereby; and
(c) neither the Company nor Parent shall agree to any
settlement without the other party’s consent to such
settlement, which consent shall not be unreasonably withheld,
conditioned or delayed; provided, however, that the Company shall not be
obligated to agree to any settlement unless such settlement
includes a full release of any director or executive officer of the
Company that was a party to such litigation.
5.13 Section
16 Exemption. The Company shall
take all such steps as may be required to cause the transactions
contemplated by Article
II, and any other dispositions of equity securities of the
Company by any director or executive officer of the Company who is
or will be subject to the reporting requirements of
Section 16(a) of the Exchange Act and the rules and
regulations thereunder, to be exempt under Rule 16b-3
promulgated under the Exchange Act.
5.14 Takeover
Laws. In the event that
any state Takeover Law is or becomes applicable to any of the
transactions contemplated by this Agreement, the Company, Parent
and Merger Sub shall use their respective reasonable best efforts
to ensure that the transactions contemplated by this Agreement may
be consummated as promptly as practicable on the terms and subject
to the conditions set forth in this Agreement and otherwise to
minimize the effect of such law on this Agreement and the
transactions contemplated by this Agreement.
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5.15 Post-Closing
Reports. Prior to the
Effective Time, the Company shall cooperate with Parent and use
commercially reasonable efforts to take, or cause to be taken, all
actions, and do or cause to be done all things reasonably
necessary, proper or advisable on its part under applicable Laws to
enable the deregistration of the applicable Company Shares under
the Exchange Act promptly after the Effective Time. The Surviving
Corporation will use all commercially reasonable efforts to cause
the applicable Company Shares to be deregistered under the Exchange
Act as soon as practicable after the Effective Time.
5.16 Terminations
and Releases. On the Closing
Date, the Company shall deliver to Parent a release of the Company
from any fees or expenses payable to (a) William Blair & Co.
under the Engagement Letter, dated July 20, 2016, between the
Company and William Blair & Co. and (b) H.I.G. Capital, LLC
under the Advisory Services Agreement, dated March 18, 2011,
between the Company and H.I.G. Capital, LLC.
5.17 Data
Room CD-ROM. Promptly after
the date hereof, the Company shall deliver to Parent a CD-ROM
reflecting the full and complete contents of the “Project
ASCENT” Intralinks data room maintained by the Company as of
the date of this Agreement.
5.18 Filing
of Annual Report on Form 10-K. The Company will
file its Annual Report on Form 10-K for the year ended December 31,2016 as soon as practicable after execution and delivery this
Agreement.
ARTICLE VI.
CONDITIONS TO
MERGER
6.1 Conditions
to Obligations of all Parties.
The
respective obligations of each party to this Agreement to effect
the Merger shall be subject to the satisfaction (or, if permitted
by applicable Law, written waiver by the party entitled to the
benefit thereof) at or prior to the Closing of the following
conditions:
(a) All
applicable Governmental Authorizations shall have been
obtained.
(b)
No Governmental Body shall have enacted, issued, promulgated or
entered any Law or Restraint which is in effect and has the effect
of making the transactions contemplated by this Agreement illegal
or other restraining or prohibiting consummation of such
transactions.
(c) Either
the Stockholder Consent or the Company Stockholder Approval shall
have been obtained.
(d) The
Information Statement shall have been cleared by the SEC and mailed
to the stockholders of the Company (in accordance with Regulation
14C of the Exchange Act) at least twenty (20) days prior to the
Closing Date.
6.2 Conditions
to Obligations of Parent and Merger Sub. The obligations
of Parent and Merger Sub to effect the Merger shall be subject to
the satisfaction or waiver, of the following
conditions:
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(a) (i)
The representations and warranties of the Company contained in
Sections 3.3(a),
3.4(a)-(c) (except
for de minimis inaccuracies), and 3.21 of this Agreement shall be
true and correct in all respects as of the Effective Time as though
made on and as of the Effective Time, (ii) the representations and
warranties of the Company contained in Section 3.5(g) of this Agreement shall
be true and correct in all material respects (without giving effect
to any limitation as to “materiality” or “Company
Material Adverse Effect”) as of the Effective Time as though
made on and as of the Effective Time, and (iii) all other
representations and warranties of the Company contained in this
Agreement shall be true and correct in all respects (without giving
effect to any limitation as to “materiality” or
“Company Material Adverse Effect”) as of the Effective
Time as though made on and as of the Effective Time, except where
the failure of such representations and warranties described in
this clause (iii) to be true and correct has not had, individually
or in the aggregate, a Company Material Adverse Effect; provided in
each case that representations and warranties made as of a specific
date need only be true and correct (subject, in the case of the
representations and warranties described in clauses (ii) and (iii),
to such qualifications) as of such specified date.
(b) The
Company shall have performed in all material respects with its
obligations or covenants contained in this Agreement at or prior to
the Closing.
(c) Since
the Agreement Date, there shall not have occurred any event that
has had, or would reasonably be expected to have, a Company
Material Adverse Effect.
(d)
The Company shall have provided to Parent a certificate dated the
Closing Date signed on its behalf by the chief financial officer of
the Company to the effect that the conditions set forth in
Section 6.2(a),
Section 6.2(b)
and Section 6.2(c) have been
satisfied.
(e)
At least two Business Days prior to Closing, the Company shall have
delivered to Parent a payoff letter from each holder of the types
of Company Indebtedness specified in clauses (i) and (ii) of the
definition of “Indebtedness” indicating that upon
payment of a specific amount, such Indebtedness shall be paid in
full and, if applicable, any related security interest shall be
automatically released and Parent or its designees shall, to the
extent applicable, be authorized to file releases of all
Encumbrances relating thereto on the assets and properties of the
Company, including, to the extent applicable Uniform Commercial
Code termination statements, or such other customary documents or
endorsements necessary to evidence the release of the securities
interests of all holders.
6.3 Conditions
to Obligations of the Company. The obligations
of the Company to effect the Merger shall be subject to the
satisfaction or waiver, of the following conditions:
(a) The
representations and warranties of Parent and Merger Sub contained
in this Agreement shall be true and correct as of the Effective
Time as though made on and as of the Effective Time (other than
such representations and warranties that are made as of a specific
date, which need only be true and correct as of such specified
date), except where the failure of such representations and
warranties to be true and correct (without giving effect to any
limitation as to “materiality” or “Parent
Material Adverse Effect”) has not had, individually or in the
aggregate, a Parent Material Adverse Effect.
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(b) Parent
and Merger Sub shall have performed in all material respects with
its obligations or covenants contained in this Agreement at or
prior to the Closing.
(c) Parent
shall have provided to the Company a certificate dated the Closing
Date signed on its behalf by the chief financial officer of Parent
to the effect that the conditions set forth in Section 6.3(a) and
Section 6.3(b)
have been satisfied.
(d) Simultaneously
with the Closing, Parent shall, on behalf of the Company, pay the
amounts reflected in the payoff letters described in Section 6.2(e) to the lenders
named therein in the manner set forth therein.
ARTICLE VII.
TERMINATION
7.1 Termination.
This Agreement may be terminated and the Merger may be abandoned at
any time prior to the Effective Time, notwithstanding the receipt
of the Company Stockholder Approval:
(a) by
mutual written consent of Parent and the Company;
(b) by
either Parent or the Company, upon written notice to the other
party, if:
(i) the
Effective Time shall not have occurred on or prior to the close of
banking business, New York time, on May 31, 2017 (the
“Outside
Date”); provided, however, that a party shall not be
permitted to terminate this Agreement pursuant to this Section 7.1(b)(i) if the
failure of the Effective Time to occur by the Outside Date is
attributable to a failure of such party (and in the case of Parent,
including the failure of Merger Sub) to perform in any material
respect its obligations under this Agreement;
(ii) any
Governmental Body of competent jurisdiction shall have (A) enacted,
issued or promulgated any Law that is in effect as of immediately
prior to the Effective Time and which has the effect of making the
Merger illegal or which has the effect of prohibiting or otherwise
preventing the consummation of the Merger in the United States, or
(B) issued or granted any Restraint that is in effect as of
immediately prior to the Effective Time and which has the effect of
making the Merger illegal or which has the effect of prohibiting or
otherwise preventing the consummation of the Merger, and such
Restraint is final and nonappealable; provided, however, that the right to terminate
this Agreement under this Section 7.1(b)(ii) shall
not be available to a party if the issuance of such Restraint is
attributable to a failure of such party (and in the case of Parent,
including the failure of Merger Sub) to perform in any material
respect its obligations under this Agreement;
(iii) on
or prior to the Outside Date, the Stockholder Consent has not been
obtained and the Company Stockholder Approval shall not have been
obtained at the Company Stockholders Meeting duly convened therefor
or at any adjournment or postponement thereof, at which a final
vote on the approval of this Agreement was taken;
(c) by
Parent, upon written notice to the Company, if:
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(i) the
Company Board shall have made an Adverse Recommendation Change; it
being understood that any actions permitted to be taken by the
Company or the Company Board under Section 5.3(b) shall not give
rise to a right to terminate under this Section 7.1(c)(i);
(ii) (A) there
shall have been a breach of any covenant or agreement on the part
of the Company set forth in this Agreement; or (B) any
representation or warranty of the Company set forth in Article III shall have been
inaccurate when made or, if not made as of a specific date, shall
have become inaccurate, that would, in either case of clauses
“(A)” or “(B)”, result in the conditions
set forth in Section 6.2(a) or
Section 6.2(b)
not being satisfied, and in the case of both clauses (A)
and (B), such breach or inaccuracy is not curable by the
Outside Date, or, if curable, is not cured by the Outside
Date;
(iii)
Either (x) the Stockholder Consent shall not have been obtained and
delivered to Parent within the Stockholder Consent Delivery Period,
or (y) the Company Stockholder Approval shall not have been
obtained at the Company Stockholders Meeting duly convened therefor
or at any adjournment or postponement thereof, at which a final
vote on the approval of this Agreement was taken;
(d) by
the Company, upon written notice to Parent, if:
(i) (A) there
shall have been a breach of any covenant or agreement on the part
of Parent or Merger Sub set forth in this Agreement; or
(B) any representation or warranty of Parent and Merger Sub
set forth in Article
IV shall have been inaccurate when made or shall have become
inaccurate, that would, in either case of clauses “(A)”
or “(B)”, result in the conditions set forth in
Section 6.3(a)
or Section 6.3(b) not being
satisfied, and in the case of both clauses (A) and (B),
such breach or inaccuracy is not curable by the Outside Date, or,
if curable, is not cured by the Outside Date; or
(ii)
the Company Board shall have effected an Adverse Recommendation
Change with respect to a Superior Proposal or an Intervening Event
(other than an Intervening Event that would reasonably be expected
to have a material adverse effect on the Parent and its
Subsidiaries, taken as a whole) in accordance with, and in
compliance with the requirements of, Section 5.3 and
concurrently with the termination hereunder, the Company shall have
(A) entered into a Company Acquisition Agreement, if such Adverse
Recommendation Change relates to a Superior Proposal, and (B) and
paid the Termination Fee in accordance with Section 7.3(a).
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7.2 Effect
of Termination. The party
desiring to terminate this Agreement pursuant to Section 7.1 (other than
pursuant to Section 7.1(a)) shall give
written notice of such termination to the other party and such
termination shall become effective immediately upon delivery of
such notice. In the event this Agreement is terminated as provided
in Section 7.1, this
Agreement shall become void and be of no further force or effect;
provided, however, that Section 5.11 (together
with the Confidentiality Agreement), this Section 7.2, Section 7.3, and
Article VIII shall
survive termination of this Agreement, and, except as provided in
such Sections, there shall be no liability on the part of Parent,
Merger Sub or the Company or their respective directors, officers,
other Representatives or Affiliates, whether arising before or
after such termination, based on, arising out of, or relating to
this Agreement or the negotiation, execution, performance, or
subject matter hereof (whether in contract or in tort or otherwise,
or whether at law (including at common law or by statute) or in
equity); provided,
however, that no party
shall be relieved or released from any liabilities or damages
arising out of any fraud or willful and material breach of any
representations and warranties set forth in this Agreement or any
material breach of any covenant set forth in this Agreement, in
each case, that occurred prior to such termination, in which case
the aggrieved party shall be entitled to all remedies available to
such party in law and equity. Without limiting the meaning of a
material breach, the parties acknowledge and agree that any failure
by Parent or Merger Sub to consummate the Merger and other
transactions contemplated hereby after the applicable conditions to
the Closing set forth in Article VI have been satisfied
or waived (except for those conditions that by their nature are to
be satisfied at the Closing, which conditions would be capable of
being satisfied at the time of such failure to consummate the
Merger) shall constitute a material breach of a covenant set forth
in this Agreement.
(a) In
the event that this Agreement is terminated by Parent pursuant to
Section 7.1(c)(i) or by
the Company pursuant to Section 7.1(d)(ii), then
the Company shall pay to Parent the Termination Fee; it being
understood that in no event shall the Company be required to pay to
the Termination Fee on more than one occasion. The
Termination Fee payable pursuant to this Section 7.3(a) shall be
paid (i) no later than two (2) Business Days following
termination pursuant to Section 7.1(c)(i) and (ii)
substantially concurrently (or the next Business Day if payment is
not feasible on the date of termination) with any termination
pursuant to Section 7.1(d)(ii) if
Parent shall have provided wiring instructions for payment of the
Termination Fee as of such termination, or if Parent has not then
provided such wiring instructions, then such payment of the
Termination Fee shall be made promptly following delivery of such
wiring instructions by Parent (even if after such
termination). All payments under this Section 7.3(a) shall be
made by wire transfer of immediately available funds to an account
designated in writing by Parent. Notwithstanding anything to
the contrary set forth in this Agreement, including Section 8.8, Parent’s
right to receive payment of the Termination Fee shall constitute
the sole and exclusive remedy of Parent and Merger Sub against the
Company and its Affiliates and Representatives for all losses and
damages suffered as a result of the failure of the Merger to be
consummated hereunder.
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(b) In
the event that this Agreement is terminated by the Company pursuant
to (i) Section
7.1(b)(i) or (ii) Section 7.1(d)(i), and in the
case of clause (i), both (A) the conditions to the
Closing set forth in Sections 6.1 and 6.2 are satisfied or capable of
being satisfied or are waived (other than those conditions that by
their nature are to be satisfied by actions taken at the Closing,
each of which shall be capable of being satisfied at the Closing),
and (B) either Parent or Merger Sub has failed to satisfy its
obligations to effect the Closing by the date the Closing is
required to have occurred pursuant to Section 2.2, then Parent shall
pay to the Company the Reverse Termination Fee; it being understood that in no
event shall the Parent be required to pay to the Reverse
Termination Fee on more than one occasion. The Reverse
Termination Fee payable pursuant to this Section 7.3(b) shall be
paid (i) no later than two (2) Business Days following
termination pursuant to Section 7.1(b)(i) and (ii)
substantially concurrently (or the next Business Day if payment is
not feasible on the date of termination) with any termination
pursuant to Section
7.1(d)(i) if the Company shall have provided wiring
instructions for payment of the Reverse Termination Fee as of such
termination, or if the Company has not then provided such wiring
instructions, then such payment of the Reverse Termination Fee
shall be made promptly following delivery of such wiring
instructions by the Company (even if after such termination).
All payments under this Section 7.3(b) shall be
made by wire transfer of immediately available funds to an account
designated in writing by the Company. The Company’s right to
receive payment of the Reverse Termination Fee shall constitute the
sole and exclusive remedy of the Company or its stockholders
against the Parent, Merger Sub and their respective Affiliates and
Representatives for all losses and damages suffered as a result of
the failure of the Merger to be consummated hereunder. For the
avoidance of doubt, nothing herein shall preclude the
Company’s right to enforce payment of the Reverse Termination
Fee, if applicable, pursuant to this Section 7.3(b).
ARTICLE VIII.
MISCELLANEOUS
PROVISIONS
8.1 Notices.
All notices and other communications hereunder shall be in writing
and shall be deemed duly delivered: (a) four (4) Business
Days after being sent by registered or certified mail, return
receipt requested, postage prepaid; (b) one (1) Business
Day after being sent for next Business Day delivery, fees prepaid,
via a reputable nationwide overnight courier service; (c) on
the date of confirmation of receipt (or the first (1st)
Business Day following such receipt if the date of such receipt is
not a Business Day) of transmission by facsimile; or (d) on
the date delivered if sent by email (or the first (1st)
Business Day following such receipt if the date of such receipt is
not a Business Day) (provided confirmation of email receipt is
obtained), in each case to the intended recipient as set forth
below (or to such other address or facsimile telephone number, with
email as such party shall have specified in a written notice given
to the other parties hereto):
8.2 No
Survival. None of the
representations and warranties set forth in this Agreement or in
any instrument delivered pursuant to this Agreement shall survive
the Effective Time. Upon the Effective Time, Parent, Merger Sub,
Surviving Corporation, and its Subsidiaries shall be deemed to have
waived, relinquished and released the Company Board and Company
Stockholders, and each of their representatives, from and against
any and all claims, demands, causes of action (including causes of
action in tort), losses, damages, liabilities, costs and expenses
(including reasonable attorneys’ fees) of any and every kind
or character, known or unknown, which might have asserted or
alleged against them at any time by reason of or arising out of the
environmental condition of the real property owned, leased,
subleased, licensed, or otherwise occupied by Company prior to or
as of the Agreement Date, including without limitation, for
releases of Hazardous Substances; provided, however, this sentence shall not apply
to any claims arising out of any actions by such Persons in
violation of Law. This Section 8.2 shall not
limit the survival of any covenant or agreement of the parties
hereto contained in this Agreement which by its terms contemplates
performance after the Effective Time.
8.3 Amendment
or Supplement. At any time prior
to the Effective Time, this Agreement and any exhibit attached
hereto, may be amended or supplemented in any and all respects only
by a written agreement signed by all of the parties hereto;
provided, however, that if in connection with any
amendment or supplement, the Stockholder Consent or Company
Stockholder Approval is required under the DGCL, after the
Stockholder Consent or Company Stockholder Approval has been
obtained there shall be no amendment or supplement that would
require the further approval of the stockholders of the Company
under the DGCL without such approval having first been
obtained.
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8.4 Waiver.
Except as otherwise provided in this Agreement, any provision of
this Agreement may be waived prior to the Effective Time, if, but
only if, such waiver is in writing and is signed by each party
against whom the waiver is to be effective. Notwithstanding the
foregoing, no failure or delay by any party in exercising any right
hereunder shall operate as a waiver of rights, nor shall any single
or partial exercise of such rights preclude any other or further
exercise of such rights or the exercise of any other right
hereunder. Except as otherwise provided herein, the rights and
remedies herein provided shall be cumulative and not exclusive of
any rights provided by Law.
8.5
Entire Agreement; No Third
Party Beneficiary. This Agreement,
any exhibits hereto, the Disclosure Schedule, the Parent Disclosure
Schedule, the documents and instruments relating to the Merger
referred to in this Agreement, and the Confidentiality Agreement,
constitute the entire agreement, and supersedes and cancels all
prior agreements and understandings, both written and oral, among
the parties hereto with respect to the subject matter of this
Agreement. This Agreement is not intended, and shall not be deemed,
to create any agreement of employment with any Person, to confer
any rights or remedies upon any Person other than the parties
hereto and their respective successors and permitted assigns or to
otherwise create any third-party beneficiary hereto, except with
respect to: (a) the rights of Company Stockholders to receive
the applicable Per Share Merger Consideration provided in
Article II;
(b) the Persons covered by Section 5.8; and
(c) the right of the Company on behalf of its stockholders to
recover the Reverse Termination Fee in the event of Parent’s
or Merger Sub’s breach of this Agreement (whether or not the
Agreement has been terminated pursuant to Article VII).
8.6 Governing
Law; Jurisdiction. This Agreement,
and all actions arising under or in connection therewith shall be
governed by, and construed 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, except to
the extent the laws of Delaware are mandatorily applicable to the
Merger (including for the avoidance of doubt any laws relating to
appraisal or dissenters’ rights) and the Company Stockholder
Approval. The parties hereto agree that all actions and proceedings
arising out of or relating to this Agreement, the negotiation,
validity or performance of this Agreement, the Merger or the other
transactions contemplated hereby shall be brought and heard in the
Court of Chancery of the State of Delaware (or if the Court of
Chancery lacks jurisdiction, any court in the State of Delaware),
and the parties irrevocably submit to the exclusive jurisdiction of
such court (and, in the case of appeals, the appropriate appellate
court therefrom), in any such action or proceeding and irrevocably
waive the defense of an inconvenient forum to the maintenance of
any such action or proceeding. The consents to jurisdiction set
forth in this paragraph shall not constitute general consents to
service of process in the State of Delaware and shall have no
effect for any purpose except as provided in this Section 8.6 and shall not
be deemed to confer rights on any Person other than the parties
hereto. The parties agree that service of process in any action or
proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby shall be properly served or
delivered if delivered in the manner contemplated by Section 8.1 or by any
other manner permitted by applicable Law or court rules governing
service of process in such court. The parties hereto agree that a
final judgment in any such action or proceeding shall be conclusive
and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by applicable Law. EACH OF THE
PARTIES HERETO IRREVOCABLY WAIVES ANY AND ALL RIGHTS TO TRIAL BY
JURY IN ANY LEGAL ACTION OR PROCEEDING (WHETHER SUCH ACTION OR
LEGAL PROCEEDING IS BASED IN CONTRACT, TORT OR OTHERWISE) ARISING
OUT OF OR RELATED TO THIS AGREEMENT, ANY RELATED DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED HEREUNDER AND THEREUNDER.
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8.7 Attorneys’
Fees. In any action at
law or suit in equity to enforce this Agreement or the rights of
any of the parties hereunder, the prevailing party in such action
or suit shall be entitled to receive a reasonable sum for its
attorneys’ fees and all other reasonable costs and expenses
incurred in such action or suit.
8.8 Specific
Enforcement. Notwithstanding
Section 7.3(b), the
parties hereto agree that irreparable damage would occur for which
monetary damages would not be an adequate remedy in the event that
any of the provisions of this Agreement are not performed in
accordance with the terms hereof or are otherwise breached, and
that the party seeking to enforce this Agreement against such
nonperforming party under this Agreement shall be entitled to
specific performance and the issuance of injunctive and other
equitable relief to prevent breaches or threatened breaches of this
Agreement. The parties hereto further agree to waive any
requirement for the securing or posting of any bond or similar
collateral in connection with the obtaining of any such injunctive
or other equitable relief, this being in addition to any other
remedy to which they are entitled at law or in equity. Each party
hereto agrees that it will not oppose the granting of an
injunction, specific performance and other equitable relief on the
basis that or otherwise assert that (a) the other party has an
adequate remedy at law, or (b) an award of specific performance is
not an appropriate remedy for any reason at law or
equity.
8.9 Assignment.
Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties
hereto, in whole or in part (whether by operation of Law or
otherwise), without the prior written consent of the other parties,
and any attempt to make any such assignment without such consent
shall be null and void, except that Merger Sub may assign, in its
sole discretion, any or all of its rights, interests and
obligations under this Agreement to any one or more direct or
indirect wholly-owned Subsidiaries of Parent without the consent of
the Company, but no such assignment shall relieve Parent or Merger
Sub of any of its respective obligations under this Agreement.
Subject to the preceding sentence, this Agreement will be binding
upon, inure to the benefit of and be enforceable by the parties
hereto and their respective successors and assigns.
8.10
Severability. Any term or
provision of this Agreement that is invalid or unenforceable in any
situation in any jurisdiction shall not affect the validity or
enforceability of the remaining terms and provisions of this
Agreement or the validity or enforceability of the offending term
or provision in any other situation or in any other jurisdiction.
If a final judgment of a court of competent jurisdiction declares
that any term or provision of this Agreement is invalid or
unenforceable, the parties hereto agree that the court making such
determination shall have the power to limit such term or provision,
to delete specific words or phrases or to replace such term or
provision with a term or provision that is valid and enforceable
and that comes closest to expressing the intention of the invalid
or unenforceable term or provision, and this Agreement shall be
valid and enforceable as so modified. In the event such court does
not exercise the power granted to it in the prior sentence, the
parties hereto agree to replace such invalid or unenforceable term
or provision with a valid and enforceable term or provision that
will achieve, to the extent possible, the economic, business, and
other purposes of such invalid or unenforceable term or
provision.
-54-
8.11 Construction.
(a)
Each of the parties hereto acknowledges that it has been
represented by counsel of its choice throughout all negotiations
that have preceded the execution of this Agreement, and that it has
executed the same with the advice of said independent counsel. Each
party and its counsel cooperated and participated in the drafting
and preparation of this Agreement and the documents referred to
herein, and any and all drafts relating thereto exchanged among the
parties shall be deemed the work product of all of the parties and
may not be construed against any party by reason of its drafting or
preparation. Accordingly, any rule of law or any legal decision
that would require interpretation of any ambiguities in this
Agreement against any party that drafted or prepared it is of no
application and is hereby expressly waived by each of the parties
hereto, and any controversy over interpretations of this Agreement
shall be decided without regard to events of drafting or
preparation.
(b)
For purposes of this Agreement, whenever the context requires:
(i) the singular number shall include the plural, and vice
versa; (ii) the masculine gender shall include the feminine
and neuter genders; (iii) the feminine gender shall include
the masculine and neuter genders; and (iv) the neuter gender
shall include the masculine and feminine genders.
(c) As
used in this Agreement, the words “include” and
“including,” and
variations thereof, shall not be deemed to be terms of limitation,
but rather shall be deemed to be followed by the words
“without
limitation.”
(d) Except
as otherwise indicated, all references in this Agreement to
“Sections,”
“Exhibits,” and
“Annexes” are intended to
refer to Sections of this Agreement and Exhibits and Annexes to
this Agreement.
8.12
Descriptive
Headings. The descriptive
headings herein are inserted for convenience of reference only and
are not intended to be part of or to affect the meaning or
interpretation of this Agreement.
8.13
Disclosure
Schedule. Any matter
disclosed in any section of the Disclosure Schedule shall qualify:
(a) the correspondingly numbered and/or lettered section or
paragraph of this Agreement; and (b) any other sections and
paragraphs in this Agreement to the extent that it is reasonably
apparent that such disclosure qualifies, and constitutes an
exception to, another section or paragraph in this
Agreement.
8.14 Ownership
of Attorney-Client Confidences. All
communications involving attorney-client confidences between the
Company or its Affiliates and Paul Hastings LLP in the course of
the negotiation, documentation, and consummation of the
transactions contemplated by this Agreement (other than in
connection with shareholder litigation against the Company arising
out of such transactions) shall be deemed to be attorney-client
confidences that belong solely to H.I.G. AERT, LLC, a Delaware
limited liability company, and its Affiliates (and not the
Company). Accordingly, the Company shall not have access to any
such communications, or to the files of Paul Hastings LLP relating
to the engagement. For the avoidance of doubt, and notwithstanding
anything herein to the contrary, nothing contained in this
Section 8.14 waives
or transfers any attorney-client or other privilege to the extent
relating to Paul Hastings LLP’s representing the Company with
respect to any of on-going or routine matters relating to
Company’s operations, businesses, assets or liabilities
(other than principally in preparation for or in connection with
the transactions contemplated by this Agreement), and such
attorney-client and other privileges shall continue to be the
privilege of the Company.
8.15 Counterparts;
Signatures. This Agreement
may be executed in two (2) or more counterparts, each of which
shall be deemed an original but all of which together shall be
considered one and the same agreement and shall become effective
when counterparts have been signed by each of the parties hereto
and delivered to the other parties, it being understood that all
parties need not sign the same counterpart. This Agreement may be
executed and delivered by facsimile transmission, by electronic
mail in “portable document format” (“.pdf”)
form, or by any other electronic means intended to preserve the
original graphic and pictorial appearance of a document, or by
combination of such means, each of which shall be deemed an
original.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
-55-
IN
WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first above written.
OLDCASTLE
ARCHITECTURAL, INC.
By:
/s/
Tim
Ortman
Name:
Tim
Ortman
Title:
President
OLDCASTLE
ASCENT MERGER SUB, INC.
By:
/s/
Tim
Ortman
Name:
Tim
Ortman
Title:
President
ADVANCED
ENVIRONMENTAL RECYCLING TECHNOLOGIES, INC.
Advanced
Environmental Recycling Technologies, Inc., a corporation organized
and existing under the laws of the State of Delaware (the
“Corporation”),
hereby executes and adopts the following Certificate of Amendment
of the Certificate of Designations, Preferences and Rights of the
Series E Convertible Preferred Stock of the Corporation and does
hereby certify as follows:
FIRST:
The name of the
Corporation is Advanced Environmental Recycling Technologies, Inc.,
the date of filing of its original Certificate of Incorporation
with the Secretary of State of the State of Delaware was December
2, 1988, and the date of filing of its original Certificate of
Designations, Preferences and Rights of the Series E Convertible
Preferred Stock with the Secretary of State of the State of
Delaware was March 17, 2011.
SECOND:
Section 8 of the
Certificate of Designations, Preferences and Rights of the Series E
Convertible Preferred Stock is amended by adding the following as a
new subsection (d):
“In the event
of a Fundamental Transaction occurring prior to August 1, 2017, for
the purposes of determining the amount to which each Holder of
Series E Preferred Stock is entitled pursuant to Section 8(a),
“Conversion Rate” shall mean
19,152.27.”
THIRD:
The foregoing
amendment was duly adopted in accordance with the applicable
provisions of Section 242(b) of the General Corporation Law of the
State of Delaware, Article Fourth of the Certificate of
Incorporation of the Corporation, as amended, and Section 21(b) of
the Certificate of Designations, Preferences and Rights of the
Series E Convertible Preferred Stock of the
Corporation.
FOURTH:
The effective time
of the amendment herein certified shall be the date of
filing.
IN WITNESS WHEREOF, the undersigned has
executed this amendment of the Certificate of Designations,
Preferences and Rights of the Series E Convertible Preferred Stock
of the Corporation as of the date first written above.
Advanced
Environmental Recycling Technologies, Inc.
Written Consent of the Board of Directors of the Company (the
“Board”)
Certain
capitalized terms not otherwise defined herein shall have the
meanings ascribed to such term in the Bylaws of the Corporation (as
the same may be amended, restated or otherwise modified, the
“Bylaws”).
PRELIMINARY STATEMENT
WHEREAS, the Board
wishes to amend the Bylaws to alter certain provisions;
and
WHEREAS, pursuant
to section 6.19 of the Bylaws, the Bylaws may be amended by the
Board, and the Board has consented to the execution of this
Amendment No. 1 in accordance with the terms of the
Bylaws.
NOW,
THEREFORE, the Bylaws are hereby amended as follows:
1.
Addition of Section 6.20. Article VI is
hereby amended by adding a new Section 6.20 to the end
thereof:
6.20.
Forum for Adjudication of
Disputes. Unless the Corporation consents in writing to the
selection of an alternative forum, the Court of Chancery in the
State of Delaware (the “Court of Chancery”) shall
be the sole and exclusive forum for any stockholder (including a
beneficial owner) to bring (i) any derivative action or proceeding
brought on behalf of the Corporation, (ii) any action asserting a
claim of breach of fiduciary duty owed by any director, officer or
other employee of the Corporation to the Corporation or the
Corporation’s stockholders, (iii) any action asserting a
claim against the Corporation, its directors, officers or employees
arising pursuant to any provision of these Bylaws, the Certificate
of Incorporation or the General Corporation Law of the State of
Delaware, (iv) any action asserting a claim against the Corporation
or its directors, officers or employees governed by the internal
affairs doctrine, or (v) any action to interpret, apply, enforce or
determine the validity of these Bylaws or the Certificate of
Incorporation, except for, as to each of clauses (i) through (v)
above, any claim (a) as to which the Court of Chancery determines
that there is an indispensable party not subject to the
jurisdiction of the Court of Chancery (and the indispensable party
does not consent to the personal jurisdiction of the Court of
Chancery within ten (10) days following such determination), or (b)
for which the Court of Chancery does not have subject matter
jurisdiction. If any provision or provisions of this Section 6.20
shall be held to be invalid, illegal or unenforceable as applied to
any person or entity or circumstance for any reason whatsoever,
then, to the fullest extent permitted by law, the validity,
legality and enforceability of such provisions in any other
circumstance and of the remaining provisions of this Section 6.20
(including, without limitation, each portion of any sentence of
this Section 6.20 containing any such provision held to be invalid,
illegal or unenforceable that is not itself held to be invalid,
illegal or unenforceable) and the application of such provision to
other persons or entities and circumstances shall not in any way be
affected or impaired thereby. Any person or entity purchasing or
otherwise acquiring any interest in shares of capital stock of the
Corporation shall be deemed to have notice of and consented to the
provisions of this Section 6.20. Failure to enforce this Section
6.20 would cause the Corporation irreparable harm and the
Corporation shall be entitled to equitable relief, including
injunction and specific performance, to enforce this Section
6.20.
2.
Entire Agreement. This Amendment No. 1,
the Bylaws and the other agreements and documents referred to
herein and therein contain the complete agreement and understanding
among the parties with respect to the subject matter hereof, and
terminate, supersede, and preempt any prior understandings,
agreements, or representations by or among the parties, written or
oral, which may have related to the subject matter hereof in any
way.
3.
Governing Law. This Amendment No. 1
shall be governed by, and construed in accordance with, the laws of
the State of Delaware without giving effect to any choice of law or
conflict of law rules or provisions (whether of the State of
Delaware or any other jurisdiction) that would cause the
application of the laws of any other jurisdiction other than the
State of Delaware.
*
* * *
Exhibit C
Advanced Environmental Recycling Technologies, Inc.
Form of
Written Consent of Stockholder
In Lieu of Meeting
The
undersigned (the “Stockholder”), being the holder of
(i) a majority of the voting power of the issued and outstanding
shares of common stock and (ii) all of the issued and outstanding
preferred stock of Advanced Environmental Recycling Technologies,
Inc., a Delaware corporation (the “Company”), hereby
irrevocably consents in writing, pursuant to Section 228(a) and
Section 251 of the General Corporation Law of the State of Delaware
(the “DGCL”) and as authorized by the Company’s
bylaws and certificate of incorporation, to the following actions
and adoption of the following resolutions by written consent dated
as of March ___, 2017 in lieu of a meeting of stockholders of the
Company:
WHEREAS, the
Company has entered into an Agreement and Plan of Merger (the
“Merger Agreement”), dated as of March 16, 2017, by and
among the Company, Oldcastle Architectural, Inc., a Delaware
corporation (“Parent”) and Oldcastle Ascent Merger Sub,
Inc., a Delaware corporation and a wholly owned subsidiary of
Parent (“Merger Sub”), a copy of which has been
provided to the undersigned Stockholder and is attached hereto as
Annex A
(capitalized terms used herein without definition shall have the
respective meanings ascribed to them in the Merger
Agreement);
WHEREAS, pursuant
to the Merger Agreement, Merger Sub will be merged with and into
the Company (the “Merger”), with the Company continuing
as the surviving corporation of the Merger, upon the terms and
subject to the conditions set forth in the Merger
Agreement;
WHEREAS, pursuant
to the Merger Agreement, at the effective time of the Merger (the
“Effective Time”), each share of common stock, par
value $0.01 per share of the Company (such shares, collectively,
the “Common Shares”) issued and outstanding immediately
prior to the Effective Time (other than shares for which Company
stockholders have exercised their statutory rights of appraisal)
will be converted into the right to receive $0.135936 in cash, and
each share of preferred stock, par value $0.01 per share of the
Company (such shares, collectively, the “Preferred
Shares”; together with the Common Shares, the
“Shares”) issued and outstanding immediately prior to
the Effective Time will be converted into the right to receive
$2,603.483278 in cash, subject in each case to any withholding of
taxes required by applicable Law (the “Merger
Consideration”);
WHEREAS, the Board
of Directors of the Company has received the opinion of William
Blair & Co., dated as of the date of the Merger Agreement,
addressed to the Board of Directors of the Company, to the effect
that, as of such date, the Merger Consideration to be received by
the holders of the Shares pursuant to the terms and subject to the
conditions set forth in the Merger Agreement is fair, from a
financial point of view, to such holders;
WHEREAS, the Board
of Directors of the Company has unanimously (i) determined that the
Merger Agreement is in the best interests of the Company and its
stockholders and declared the Merger Agreement and the transactions
contemplated thereby advisable, (ii) approved the execution,
delivery and performance of the Merger Agreement and the
consummation of the transactions contemplated thereby, including
the Merger, upon the terms and subject to the conditions set forth
in the Merger Agreement, and (iii) resolved to recommend adoption
and approval of the Merger Agreement and the transactions
contemplated thereby, including the Merger, by the holders of the
Shares, upon the terms and subject to the conditions set forth
therein;
WHEREAS, the
affirmative vote in favor of the adoption of the Merger Agreement
by a majority of the votes entitled to be cast thereon by the
stockholders of the Company is required pursuant to Section 251 of
the DGCL;
WHEREAS, pursuant
to the Merger Agreement and in accordance with Section 251(d) of
the DGCL, the Board of Directors of the Company has the power to
terminate the Merger Agreement under certain circumstances after
the Company Stockholder Approval is obtained by this written
consent, upon the terms and subject to the conditions set forth in
the Merger Agreement; and
WHEREAS, pursuant
to Section 5.4(b) the Merger Agreement, in the event the Board of
Directors of the Company terminates the Merger Agreement under
certain circumstances after the Company Stockholder Approval is
obtained by this written consent, this written consent may be
revoked.
NOW,
THEREFORE, BE IT RESOLVED as follows:
RESOLVED, that the
Merger Agreement and the transactions contemplated thereby,
including the Merger, are hereby adopted, authorized, accepted and
approved in all respects, and that the undersigned Stockholder
hereby votes all of the Shares of the Company held by such
Stockholder and entitled to vote thereon in favor of the adoption
and approval of the Merger Agreement and the transactions
contemplated thereby, including the Merger; provided, however, that this
written consent shall be of no further force or effect following
any termination of the Merger Agreement in accordance with its
terms;
FURTHER
RESOLVED, that the undersigned Stockholder hereby expressly waives
in all respects, and shall not assert, any and all rights of
appraisal (and otherwise) under Section 262 of the DGCL in
connection with the Merger;
FURTHER
RESOLVED, that the undersigned Stockholder hereby waives any and
all notice requirements, with respect to the time and place of
meeting, and consents to the transaction of all business
represented by this written consent;
FURTHER
RESOLVED, that this written consent shall be irrevocable except to
the extent permitted by Section 5.4(b) of the Merger Agreement;
and
FURTHER
RESOLVED, that a copy of this written consent may be signed in one
or more counterparts, each of which shall be deemed an original,
and all of which shall constitute one instrument and that this
written consent shall be irrevocable and filed with the minutes of
the proceedings of the stockholders of the Company.
[signature pages follow]
IN
WITNESS WHEREOF, the undersigned has executed this Written Consent
as of the date written above.
H.I.G. AERT, LLC
By
_______________________________________________
Name:
Title:
(Signature
Page to Stockholder Consent Approving the Merger)
Dates Referenced Herein and Documents Incorporated by Reference
