Section 4.01 Existence and Power. The Buyer is a corporation duly incorporated, validly existing and in good standing under the Delaware Code. The Buyer has full corporate power and authority to own or lease its properties and to conduct its businesses in the manner and in the places where such properties are owned or leased and where such businesses are currently conducted and has all corporate powers and all material governmental licenses, authorizations, permits, consents and approvals required to carry on its business as now conducted.
Section 4.02 Organizational Authorization.
(a) The Buyer has full right, power and authority to enter this Agreement and each Other Agreement to be executed and delivered by it and to carry out the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and each Other Document and the performance of the Buyer's obligations hereunder and thereunder have been duly authorized by all necessary corporate action on the part of the Buyer and no other corporate proceedings on the part of the Buyer and no other stockholder votes are necessary to authorize each Other Document and the transactions contemplated hereby. This Agreement and each Other Document constitutes, or will when executed and delivered constitute, a valid and binding obligation of the Buyer, enforceable in accordance with their respective terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors' rights generally, and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).
(b) The execution and delivery by the Buyer of each Other Document and the performance of the Buyer's obligations hereunder and thereunder:
(i) do not and will not violate any provision of the certificate of incorporation or bylaws or other equivalent governing document of the Buyer;
(ii) do not and will not violate any laws of the United States, or any state or other jurisdiction
applicable to the Buyer, or require the Buyer to obtain any approval, consent or waiver of, or make any filing with, or provide notice to, any Person (governmental or otherwise) that has not been obtained or made; and
(iii) do not and will not result in a breach of, constitute a default under, accelerate any obligation under, or give rise to a right of termination, acceleration, modification, cancellation of, or require any notice, consent, authorization, approval or exemption under any indenture, loan or credit agreement, or any other material agreement, contract, understanding, commitment, instrument, mortgage, deed of trust, lien, lease, permit, authorization, order, writ, judgment, injunction, decree, determination or arbitration award,
whether written or oral, to which the Buyer is a party or by which the property of the Buyer is bound (or result in the imposition of any Liens upon any of its assets).
Section 4.03 Governmental Authorization. The execution, delivery and performance by the Buyer of this Agreement and the consummation of the transactions contemplated hereby require no material action by or in respect of, or material filing with, any governmental body, agency or official.
Section 4.04 Noncontravention. The execution, delivery and performance by the Buyer of this
Agreement and the consummation of the transactions contemplated hereby do not and will not (i) violate the certificate of incorporation or bylaws of the Buyer, (ii) violate any applicable material Law, rule, regulation, judgment, injunction, order or decree or (iii) require any material consent, notice,
authorization, approval or exemption or other material action by any Person under, constitute a default under, or give rise to any right of termination, cancellation or acceleration of any right or obligation of the Buyer under any provisions of any material agreement or other material instrument binding upon the Buyer.
Section 4.05 Financing. The Buyer has, and at the Closing shall have, sufficient cash, available lines of credit or other sources of immediately available funds to enable it to fulfill its obligations hereunder and to make payment of all amounts to be paid by it hereunder on and after the Closing Date.
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Section 4.06 Purchase for Investment. The Buyer is purchasing the Shares for investment for its own account and not with a view to, or for sale in connection with, any distribution thereof. The Buyer is an \to be capable of evaluating the merits and risks of its investment in the Shares and is capable of bearing the economic risks of such investment.
Section 4.07 Actions and Proceedings. There is no litigation, action, suit, proceeding, claim, arbitration or investigation pending or, to the knowledge of the Buyer, threatened in writing, against the Buyer or any of its respective Affiliates, and neither the Buyer nor any of its respective Affiliates is subject to any
outstanding order, writ, judgment, injunction or decree of any Governmental Authority that, in either case, would, individually or in the aggregate, (a) prevent or materially delay the consummation of the
transactions contemplated by this Agreement or (b) otherwise prevent or materially delay performance by the Buyer of any of its material obligations under this Agreement.
Section 4.08 Finder's Fees. There is no investment banker, broker, finder or other intermediary who has been retained by or is authorized to act on behalf of the Buyer who might be entitled to any fee or commission upon the consummation of the transactions contemplated by this Agreement.
Section 4.09 No Reliance. The Buyer acknowledges and agrees that the representations and warranties made by the Stockholders in this Agreement (as qualified by the Schedules) supersede, replace and nullify in every respect the data set forth in any other document, material or statement, whether written or oral, made available to the Buyer, and the Buyer shall be deemed to have not relied on any data contained in such other document, material or statement for any purpose whatsoever, including, without limitation, as a promise, projection, guaranty, representation, warranty or covenant. Nothing in this section shall limit a claim for fraud against the Person committing such fraud.
ARTICLE 5
COVENANTS OF THE STOCKHOLDERS
Section 5.01 Conduct of the Company. During the period from the date of this Agreement and continuing until the Closing, the Stockholders agree that, except (i) as expressly contemplated or
permitted by this Agreement or the Schedules, (ii) as required by applicable law or regulation, (iii) as set forth on Schedule 5.01 hereto, or (iv) to the extent that the Buyer shall otherwise consent in writing: (a) the Company shall carry on its business in the usual, regular and ordinary course in all material respects, in substantially the same manner as heretofore conducted, and shall use reasonable efforts to preserve intact its present lines of business, maintain its rights, franchises, facilities and assets (including application of insurance proceeds and repair and replacement thereof consistent with historical practice), and preserve its relationships (contractual or otherwise)
with customers, suppliers and others having business dealings with it (including, without limitation, through ordinary course renewals, negotiations with and amendments to such relationships) to the end that its ongoing businesses shall not be impaired in any material respect at the Closing; provided that no action by the Company with respect to matters specifically addressed by any other provision of this Section 5.01 shall be deemed a breach of this Section 5.01(a), unless such action would constitute a breach of one or more of such other provisions;
(b) the Company shall not (A) declare or pay any dividends on or make other distributions in respect of any of its capital stock (except for dividends in Cash), (B) split, combine or reclassify any of its or their capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for, shares of its capital stock, or (C) repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible into or exercisable for any shares of its capital stock (except for repurchases and redemptions paid in Cash);
(c) the Company shall not issue, deliver, or sell, or authorize or propose the issuance, delivery or sale of, any shares of its capital stock of any class, or any securities convertible into or exercisable for, or any
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rights, warrants or options to acquire, any such shares of its capital stock, or enter into any agreement with respect to any of the foregoing;
(d) other than to the extent required to comply with its obligations hereunder or required by law, the Company shall not amend its certificate of incorporation, bylaws or other equivalent governing documents;
(e) the Company shall not acquire or agree to acquire by merging or consolidating with, or by
purchasing a substantial equity interest in or a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or sell or otherwise acquire or agree to sell or acquire or license any assets or rights;
(f) other than as may be required by or in conformance with applicable law or regulation in order to permit or facilitate the consummation of the transactions contemplated hereby or the transactions
disclosed in the Schedules, the Company shall not sell, encumber, lease, sublease, license, or otherwise dispose of, or agree to sell, encumber, lease, sublease, license, or otherwise dispose of, any of its assets; (g) the Company shall not (x) make any loans, advances or capital contributions to, or investments in, any other Person, or (y) create, incur, assume or suffer to exist any indebtedness, issuances of debt
securities, guarantees, loans or advances to the Company not in existence as of the date of this Agreement except as authorized in writing by the Buyer;
(h) the Company shall not (A) increase the amount of compensation or severance pay of, or enter into any new bonus or incentive agreement or arrangement with, or amend or accelerate any existing
agreement with, any director, employee or independent contractor, (B) make any material increase in, or commitment to increase materially, any employee benefits, (C) amend, adopt or make any commitment to amend or adopt any Employee Benefit Plan or make any contribution, or (D) enter into or amend any retention, bonus, incentive, employment, severance, consulting, or other similar agreement with any of its existing employees, officers or directors or hire any new employees or independent contractors;
(i) the Company shall not change its fiscal year, make or change any election with respect to any Taxes (except as required by applicable Law or regulation), change any Tax accounting period, adopt or change any material method of Tax accounting (except as required by changes in GAAP or as required by
applicable law or regulation), file any amended Tax return, enter into a closing agreement with any Tax Authority, consent to an extension of the statute of limitations applicable to any non-income Tax claim or assessment or take any other similar action (or omit to take any action), if such election, change,
amendment, agreement, action or omission would have the effect of increasing the Tax liability of the Company after the Closing Date.
(j) the Company shall not (i) enter into or become bound by, or permit any of the assets owned or used by it to become bound by, any contract, or (ii) prematurely terminate or waive any right or remedy under, any such contract;
(k) the Company shall not make or commit to make any capital expenditures;
(l) the Company shall not cancel, compromise or settle any claim or any debts owed by a third-party to the Company;
(m) prior to the Closing Date, and consistent with the requirements of Section 280G(b)(5)(A)(ii) of the Code and the regulations, the Company, as required, shall (i) use commercially reasonable efforts to take all actions necessary (including obtaining appropriate waivers) such that a vote of the requisite number of shareholders in accordance with Section
280G(b)(5)(A)(ii) of the Code, if affirmative, will establish the \payment, benefit, or compensation in accordance with Section 280G(b)(5)(A)(ii) and the regulations
promulgated thereunder and (ii) provide adequate disclosure of all material facts to all persons required to vote concerning all payments which would be parachute payments in accordance with
Section 280G(b)(5)(B)(ii) of the Code and the regulations promulgated thereunder. Following the receipt
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of such waivers and the completion of such actions, the Company , as required, shall submit for a separate stockholder vote the right of any \
(as defined in Section 280G(c) of the Code) to receive any and all payments (or other benefits or compensation) that could be deemed \\Section 280G(b)(5) of the Code and the regulations promulgated thereunder.
Section 5.02 Access. From the date hereof until the Closing Date, the Company will give the Buyer, its counsel, financial advisors, auditors and other authorized representatives reasonable access to the offices, properties, books and records, contracts and documents of or pertaining to the Company, and to
appropriate personnel, including legal counsel and accountants; provided that any such access (a) shall be during normal business hours on reasonable notice, (b) shall not be required where such access would be prohibited or otherwise limited by any applicable Law, (c) shall not otherwise unreasonably interfere with the conduct of the business of the Company, and (d) in the case of personnel, shall be granted only after receipt by the chief executive officer of the Company of prior written request from Buyer requiring access and the chief executive officer consents to such access, such consent not to be unreasonably withheld. Section 5.03 Subsequent Actions. Prior to the Closing, the Stockholders may supplement or amend the Schedules to this Agreement if the Stockholders become aware of any matter hereafter arising which, if existing, occurring or known at the date of this Agreement, would have been required to be set forth or described in such Schedules or which is otherwise necessary to correct any information in such Schedules which has been rendered inaccurate thereby. In the event that the Stockholders supplement or amend the Schedules pursuant to this section and the Buyer remains obligated to consummate the transactions contemplated hereby despite such supplements or amendments, then the Buyer will not be deemed to have waived any breaches of representations and warranties of this Agreement disclosed pursuant to such supplements or amendments and accordingly shall be entitled to indemnification for any such matters. Notwithstanding the foregoing, for purposes of determining the accuracy of the representations and
warranties of the Stockholders contained in this Agreement for purposes of determining satisfaction of the conditions set forth in Section 7.01(a), except as agreed in writing by the Buyer, the Schedules delivered by the Stockholders shall be deemed to include only that information contained therein on the date of this Agreement and shall be deemed to exclude any information contained in any subsequent supplement or amendment thereto. Notwithstanding the foregoing, should Buyer consummate the transactions
contemplated hereby despite any supplement or amendment to the Schedules to this Agreement which discloses the occurrence or existence of a Material Adverse Effect, then Buyer will be deemed to have waived any claim for breaches of representations and warranties of this Agreement disclosed pursuant to such supplements or amendments relating to the matters or events giving rise to such Material Adverse Effect and accordingly shall not be entitled to indemnification for such matters or events.
Section 5.04 Exclusivity. Until the Closing Date, neither the Company nor any Stockholder shall (or permit any other Person on their behalf to) directly or indirectly, solicit or engage in discussion with third parties, initiate, entertain, engage in or respond to offers, inquiries, proposals or discussions, or enter into any agreement involving any transaction that has as its purpose a business combination involving or disposing of the whole or part of the Company or any other transaction that would prevent the
transactions contemplated by this Agreement (each a \as soon as practicable if any Person makes any proposal, offer, inquiry to or contact with the Company or any Stockholder with respect to any Proposal and shall describe in reasonable detail the identity of any such Person and the substance and material terms of any such contact and the material terms of any such proposal, offer or inquiry. For purposes of this Agreement, \actual (a) sale, merger, consolidation or similar transaction involving the Company, (b) sale, lease or other disposition, directly or indirectly, by merger, consolidation, share exchange or otherwise, of any
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assets or properties of the Company representing more than 10% of the assets, revenues, earnings before interest, tax, depreciation and amortization or profits of the Company, or (c) sale or other disposition by the Company (including by way of merger, consolidation or share exchange) of any interest or securities (or options, rights or warrants to purchase, or securities convertible into, such securities) representing 10% or more of the votes associated with the Shares. Section 5.05 Confidentiality.
(a) From and after the Closing until the fifth anniversary of the Closing, each of the Stockholders shall, and shall direct those of its directors, officers, members, stockholders, partners, employees, attorneys, accountants, consultants, trustees, Affiliates and other advisors (\Information to keep strictly confidential and not disclose any Confidential Information (except to or among its Seller Parties) without the prior written consent of the Buyer, unless such disclosure (i) is required by or advisable under applicable Law, governmental rule or regulation or court order, (ii) is required or advisable in any legal, administrative or arbitral process or proceeding, including in connection with any tax audit involving such Person, (iii) is required or advisable to be made in
connection with the enforcement or defense of any right, remedy or claim relating to this Agreement, or (iv) is effected by Buyer or any of its Affiliates, representatives, agents or employees. In the event that any Seller Party is required to disclose any of the Confidential Information, such Person will use
commercially reasonable efforts to provide the Company and the Buyer with prompt written notice so that the Company or Buyer may seek a protective order or other appropriate remedy and/or waive compliance with the provisions of this Agreement, and such Person will use commercially reasonable efforts to cooperate with the Company and Buyer, as the case may be, in any effort the Company or the Buyer undertakes to obtain a protective order or other remedy. In the event that such protective order or other remedy is not obtained, or that the Company (after the Closing) or the Buyer waives compliance with the provisions of this section, such Person will furnish only that portion of the Confidential Information that is legally required or advisable and will exercise all commercially reasonable efforts to obtain reasonably reliable assurance that the Confidential Information will be accorded confidential treatment. \Information\Buyer, the Company or the transactions contemplated hereby, other than information (i) that is or
becomes publicly available (other than as a result of disclosure by such Stockholder or any Seller Party), (ii) that was already in the possession of such Stockholder or its Seller Parties on a non-confidential basis before being disclosed to such Stockholder or its Seller Parties by the Company or any other Seller Party, (iii) becomes available to such Stockholder or its Seller Parties on a non-confidential basis from a source (other than the Company or its representatives or any Seller Party) that is not and was not prohibited from disclosing such information to such Stockholder or its Seller Parties by a legal obligation or other
obligation of confidentiality with respect to such information or (iv) was or is developed by such Seller or its Seller Parties without the use of the Confidential Information.
(b) The Buyer shall be entitled to specific performance through injunctive relief, without the necessity of posting a bond, to prevent breaches of this section and to enforce specifically the provisions of this section in addition to any other remedy to which the Buyer may be entitled, at law or in equity.
ARTICLE 6
ADDITIONAL COVENANTS OF THE PARTIES
Section 6.01 Commercially Reasonable Efforts; Further Assurances. Subject to the terms and conditions of this Agreement, the Buyer and the Stockholders shall use their commercially reasonable efforts to take, or cause to be taken, all actions necessary or desirable to cause the conditions set forth in Article 7 to be satisfied and the transactions contemplated by this Agreement to be consummated, in each case as promptly after the date hereof as practicable. Without limiting the generality of the foregoing, the parties hereto shall use their commercially reasonable efforts to obtain all consents and approvals of all
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