UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Filed by the
Registrant
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Filed by a Party other than the
Registrant
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Check the appropriate box:
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Preliminary
Proxy Statement
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Confidential,
for Use of the Commission Only (as permitted by Rule14a-6(e)(2))
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Definitive
Proxy Statement
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Definitive
Additional Materials
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Soliciting
Material Pursuant to §240.14a-12
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AMICAS, INC.
(Name of Registrant as Specified In
Its Charter)
(Name of Person(s) Filing Proxy
Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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Fee computed on table below per Exchange Act
Rules 14a-6(i)(1)
and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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Common Stock, par value $.001 per share, together with the
associated rights to purchase Series B Preferred Stock (the
Common Stock)
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(2)
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Aggregate number of securities to which transaction applies:
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36,465,023 shares of Common Stock and options to purchase
7,907,046 shares of Common Stock.
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(3)
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Per unit price or other underlying value of transaction computed
pursuant to Exchange Act
Rule 0-11
(set forth the amount on which the filing fee is calculated and
state how it was determined):
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The maximum aggregate value was determined based upon the sum
of (A) 36,216,123 shares of Common Stock multiplied by $5.35 per
share and (B) options to purchase 7,907,046 shares of
Common Stock multiplied by $2.81 (which is the difference
between $5.35 and the weighted average exercise price of $2.54
per share). In accordance with Section 14(g) of the
Securities Exchange Act of 1934, as amended, the filing fee was
determined by multiplying 0.0000713 by the sum of the numbers in
the preceding sentence.
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(4)
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Proposed maximum aggregate value of transaction:
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$217,268,266
$15,491
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by
Exchange Act
Rule 0-11(a)(2)
and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its
filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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AMICAS,
Inc.
20 Guest Street, Suite 400
Boston, Massachusetts 02135
January 15, 2010
Dear Stockholder:
The board of directors of AMICAS, Inc., a Delaware corporation,
has approved a merger agreement providing for the acquisition of
AMICAS by Project Alta Holdings Corp., an entity controlled by a
private equity fund associated with Thoma Bravo, LLC. If the
merger contemplated by the merger agreement is completed, you
will be entitled to receive $5.35 in cash, without interest and
less any applicable withholding tax, for each share of AMICAS
Common Stock owned by you.
At a special meeting of our stockholders, you will be asked to
vote on a proposal to adopt the merger agreement. The special
meeting will be held on February 19, 2010 at 9:00 a.m.
local time, at the Companys offices at 20 Guest Street,
Suite 400, Boston, Massachusetts 02135. Notice of the
special meeting and the related proxy statement are enclosed.
The accompanying proxy statement provides you with detailed
information about the special meeting, the merger agreement and
the merger. A copy of the merger agreement is attached as
Annex A to the proxy statement. We encourage you to read
the entire proxy statement and the merger agreement carefully.
You may also obtain more information about AMICAS from documents
we have filed with the Securities and Exchange Commission.
Our board of directors has unanimously determined that the
merger agreement is advisable, fair to and in the best interests
of AMICAS and its stockholders and recommends that you vote
FOR the adoption of the merger agreement.
Your vote is very important.
We cannot
complete the merger unless the merger agreement is adopted by
the affirmative vote of the holders of a majority of the
outstanding shares of AMICAS Common Stock entitled to vote
thereon. The failure of any stockholder to vote on the proposal
to adopt the merger agreement will have the same effect as a
vote against the adoption of the merger agreement.
Whether or not you plan to attend the special meeting, please
complete, date, sign and return, as promptly as possible, the
enclosed proxy in the accompanying reply
envelope.
If you attend the special meeting and
vote in person, your vote by ballot will revoke any proxy
previously submitted.
Thank you in advance for your cooperation and continued support.
Sincerely,
Stephen N. Kahane, M.D., M.S.
CEO and Chairman
Neither the Securities and Exchange Commission nor any state
securities regulatory agency has approved or disapproved the
merger, passed upon the merits or fairness of the merger or
passed upon the adequacy or accuracy of the disclosure in this
document. Any representation to the contrary is a criminal
offense.
The proxy statement is dated January 15, 2010, and is first
being mailed to stockholders on or about January 19, 2010.
AMICAS,
Inc.
20 Guest Street, Suite 400
Boston, Massachusetts 02135
NOTICE OF SPECIAL MEETING OF
STOCKHOLDERS
To Be Held On
February 19, 2010
Dear Stockholder:
A special meeting of stockholders of AMICAS, Inc., a Delaware
corporation (the Company), will be held on
February 19, 2010, at 9:00 a.m. local time, at the
Companys offices at 20 Guest Street, Suite 400,
Boston, Massachusetts 02135 for the following purposes:
1. To consider and vote on a proposal to adopt the
Agreement and Plan of Merger, dated as of December 24,
2009, by and among Project Alta Holdings Corp., a Delaware
corporation (Newco), Project Alta Merger Corp., a
Delaware corporation and a wholly owned subsidiary of Newco
(Merger Sub), and the Company, as it may be amended
from time to time (the Merger Agreement). A copy of
the Merger Agreement is attached as Annex A to the
accompanying proxy statement. Pursuant to the terms of the
Merger Agreement, Merger Sub will merge with and into the
Company (the Merger) and each outstanding share of
the Companys Common Stock (other than shares owned by the
Company, Newco or Merger Sub) will be converted into the right
to receive $5.35 in cash, without interest and less any
applicable withholding tax.
2. To consider and vote on a proposal to adjourn the
special meeting, if necessary or appropriate to solicit
additional proxies, if there are insufficient votes at the time
of the meeting to approve the proposal to adopt the Merger
Agreement.
In addition, the Company will transact any other business that
may properly come before the special meeting, or any adjournment
or postponement thereof, by or at the direction of the board of
directors of the Company.
Only stockholders of record as of the close of business on
January 15, 2010 are entitled to notice of and to vote at
the special meeting or at any adjournment or postponement of the
special meeting. All stockholders of record are cordially
invited to attend the special meeting in person.
The adoption of the Merger Agreement requires the affirmative
vote of the holders of a majority of the outstanding shares of
the Companys Common Stock entitled to vote thereon. Even
if you plan to attend the special meeting in person, we request
that you complete, sign, date and return the enclosed proxy
prior to the special meeting to ensure that your shares will be
represented at the special meeting if you are unable to attend.
If you fail to attend the special meeting in person or by proxy,
your shares will not be counted for purposes of determining
whether a quorum is present at the meeting and it will have the
same effect as a vote against the adoption of the Merger
Agreement, but will not affect the outcome of the vote regarding
the proposal to adjourn the special meeting. If you are a
stockholder of record, voting in person at the meeting will
revoke any proxy previously submitted.
Attendance at the special meeting is limited to stockholders. If
you hold shares in street name (that is, through a
bank, broker or other nominee) and would like to attend the
special meeting, you will need to bring an account statement or
other acceptable evidence of ownership of the Companys
Common Stock as of the close of business on January 15,
2010, the Record Date. In addition, if you would like to attend
the special meeting and vote in person, in order to vote, you
must contact the person in whose name your shares are
registered, obtain a proxy from that person and bring it to the
special meeting. The use of cell phones, PDAs, pagers, recording
and photographic equipment, camera phones
and/or
computers is not permitted in the meeting rooms at the special
meeting.
WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, PLEASE
COMPLETE, DATE, SIGN AND RETURN, AS PROMPTLY AS POSSIBLE, THE
ENCLOSED PROXY IN THE ACCOMPANYING REPLY ENVELOPE. STOCKHOLDERS
WHO ATTEND THE MEETING MAY REVOKE THEIR PROXIES AND VOTE IN
PERSON.
By Order of the Board of Directors,
Craig Newfield
General Counsel & Secretary
Boston, Massachusetts
January 19, 2010
TABLE
OF CONTENTS
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A-1
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B-1
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Annex D Proxy Card
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D-1
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References to AMICAS, the Company,
we, our or us in this proxy
statement refer to AMICAS, Inc. and its subsidiaries unless
otherwise indicated by context.
ii
SUMMARY
The following summary highlights selected information in this
proxy statement and may not contain all the information that may
be important to you. Accordingly, we encourage you to read
carefully this entire proxy statement, its annexes and the
documents referred to or incorporated by reference in this proxy
statement. Each item in this summary includes a page reference
directing you to a more complete description of that topic. See
Where You Can Find More Information beginning on
page 56.
The
Parties to the Merger (Page 13)
AMICAS
AMICAS, Inc.
20 Guest Street, Suite 400
Boston, Massachusetts 02135
(617) 779-7878
AMICAS is the leading independent provider of image and
information management solutions for image-intensive specialties
in health care. AMICAS offers a comprehensive suite of image and
information management solutions that are designed to drive
productivity and quality improvements for image-intensive
specialties across the continuum of care. AMICAS solutions are
installed at thousands of facilities across the United
States ranging from the largest integrated delivery
networks (IDNs) to independent imaging
centers. AMICAS solution suite includes radiology picture
archiving and communication system (PACS),
cardiology PACS, radiology information systems, cardiovascular
information management systems, revenue cycle management
solutions, workflow, and enterprise content management tools
designed to manage integration of the imaging component into the
electronic medical record. AMICAS is focused on two primary
markets: ambulatory imaging businesses and acute care
facilities. AMICAS provides a complete,
end-to-end
solution for imaging centers, ambulatory care facilities, and
radiology practices. Hospitals are provided with a comprehensive
image management solution for cardiology, radiology and
enterprise imaging that complements existing EMR strategies to
enhance clinical, operational, and administrative functions.
We were incorporated in Delaware in November 1996 as InfoCure
Corporation. On November 25, 2003, we acquired one hundred
percent (100%) of the outstanding capital stock of Amicas PACS
Corp. (Amicas PACS), a developer of Web-based
diagnostic image management software solutions. The addition of
Amicas PACS provided us with the ability to offer radiology
groups and imaging center customers a comprehensive information
and image management solution that incorporates the key
components of a complete radiology data management system (i.e.,
image management, workflow management and financial management).
The acquisition was completed to position us to achieve our goal
of establishing a leadership position in the growing PACS
market. PACS allows radiologists to access, archive and
distribute diagnostic images for interpretation as well as to
enable fundamental workflow changes, including support for
flexible teleradiology service delivery that can support growth
initiatives and result in improvements in operating efficiency.
The AMICAS PACS solution also supports radiologists and other
groups to distribute images and digital information to their
customers the referring physicians.
On April 2, 2009 we completed the acquisition of Emageon
Inc., a leading provider of technology solutions for hospitals
and healthcare networks offering cardiology IT and enterprise
content management solutions that were complementary to ours.
Under the terms of the merger agreement, we acquired all of the
outstanding shares of Emageon common stock for $1.82 per share
in cash. AMICAS acquisition of Emageon enabled us to
become the largest independent image and information management
vendor, offering one of the most comprehensive solutions on the
market, including radiology PACS, cardiology PACS, radiology
information systems, cardiology information systems, revenue
cycle management systems, referring physician tools, business
intelligence tools, and electronic medical record-enabling
enterprise content management capabilities, including enterprise
image management.
For more information about AMICAS, please visit our website at
www.amicas.com. Our website address is provided as an inactive
textual reference only. The information provided on our website
is not part of this proxy statement, and therefore is not
incorporated by reference. See also Where You Can Find
More
1
Information beginning on page 56. The Companys
Common Stock is publicly traded on the NASDAQ under the symbol
AMCS.
Newco
Project Alta Holdings Corp.
c/o Thoma
Bravo, LLC
600 Montgomery Street, 32nd Floor
San Francisco, CA 94111
(415) 263-3660
Project Alta Holdings Corp., which we refer to as Newco, is a
Delaware corporation that was formed solely for the purpose of
acquiring AMICAS and has not engaged in any business except for
activities incidental to its formation and as contemplated by
the Merger Agreement.
Newco is, and upon the consummation of the Merger will be, owned
by a private equity fund associated with Thoma Bravo, LLC.
Merger
Sub
Project Alta Merger Corp.
c/o Thoma
Bravo, LLC
600 Montgomery Street, 32nd Floor
San Francisco, CA 94111
(415) 263-3660
Project Alta Merger Corp., which we refer to as Merger Sub, is a
Delaware corporation that was organized solely for the purpose
of completing the proposed Merger. Merger Sub is a wholly owned
subsidiary of Newco and has not engaged in any business except
for activities incidental to its formation and as contemplated
by the Merger Agreement. Upon the consummation of the proposed
Merger, Merger Sub will cease to exist and AMICAS will continue
as the Surviving Corporation.
The
Merger (Page 16)
The Agreement and Plan of Merger, dated as of December 24,
2009, by and among Newco, Merger Sub and the Company, as it may
be amended from time to time (the Merger Agreement),
provides that Merger Sub will merge with and into the Company
(the Merger). The Company will be the surviving
corporation in the Merger (the Surviving
Corporation) and will continue to do business as
AMICAS, Inc. following the Merger. In the Merger,
each outstanding share of the Companys Common Stock (other
than shares owned by the Company, Newco or Merger Sub) will be
converted into the right to receive $5.35 in cash, without
interest and less any applicable withholding tax, which amount
we refer to in this proxy statement as the merger consideration.
Effects
of the Merger
If the Merger is completed, you will be entitled to receive
$5.35 in cash, without interest and less any applicable
withholding taxes, for each share of the Companys Common
Stock owned by you. As a result of the Merger, AMICAS will cease
to be an independent, publicly traded company. You will not own
any shares of the Surviving Corporation.
The
Special Meeting (Page 14)
Time,
Place and Date (Page 14)
The special meeting will be held on February 19, 2010,
starting at 9:00 a.m. local time, at the Companys
offices at 20 Guest Street, Suite 400, Boston,
Massachusetts, 02135.
2
Purpose
You will be asked to consider and vote upon the adoption of the
Merger Agreement, pursuant to which Merger Sub will merge with
and into the Company.
Record
Date and Quorum (Page 14)
You are entitled to vote at the special meeting, or any
adjournment or postponement thereof, if you owned shares of the
Companys Common Stock at the close of business on
January 15, 2010, the record date for the special meeting.
You will have one vote for each share of the Companys
Common Stock that you owned on the record date. As of the record
date there were 36,465,023 shares of the Companys
Common Stock outstanding and entitled to vote. At the special
meeting, one-third of the number of shares of the Companys
Common Stock outstanding and entitled to vote thereat, present
in person or by proxy, shall constitute a quorum.
Vote
Required
The adoption of the Merger Agreement requires the affirmative
vote of the holders of a majority of the outstanding shares of
the Companys Common Stock entitled to vote thereon. We
will only adjourn the special meeting pursuant to proposal
number 2 if the proposal to adjourn the special meeting, if
necessary or appropriate for the purpose of soliciting
additional proxies, is approved by the affirmative vote of a
majority of the number of shares of the Companys Common
Stock entitled to vote and present at the meeting.
Common
Stock Ownership of Directors and Executive
Officers
As of the record date, the directors and executive officers of
the Company held 0.68% in the aggregate of the shares of the
Companys Common Stock entitled to vote at the special
meeting. In the aggregate, these shares represent 1.36% of the
voting power necessary to adopt the Merger Agreement at the
special meeting.
Voting
of Proxies
Any stockholder of record entitled to vote at the special
meeting may authorize a proxy by telephone, the Internet or by
returning the enclosed proxy card by mail, or may vote in person
by appearing at the special meeting. If your shares of the
Companys Common Stock are held in street name
by your broker, you should instruct your broker on how to vote
your shares of the Companys Common Stock using the
instructions provided by your broker. If your broker cannot vote
your shares on a particular matter because it has not received
instructions from you and does not have discretionary voting
authority on that matter or because your broker chooses not to
vote on a matter for which it does have discretionary voting
authority, this is referred to as a broker
non-vote.
Brokers do not have discretionary voting authority to vote on
the proposal to adopt the Merger Agreement or the proposal to
adjourn the special meeting pursuant to proposal number 2.
The effect of a broker non-vote with respect to the proposal to
adopt the Merger Agreement is a vote against adoption of the
Merger Agreement. The effect of a broker non-vote on the
proposal to adjourn the special meeting pursuant to proposal
number 2, if necessary or appropriate to solicit additional
proxies, is a vote against the proposal to adjourn the meeting.
If you fail to submit a proxy or vote in person at the
special meeting, or do not provide your broker with
instructions, as applicable, your shares of Company Common Stock
will not be voted. This will have the same effect as a vote
against the proposal to adopt the Merger Agreement and will have
no effect on the proposal to adjourn the special meeting
pursuant to proposal number 2.
Revocability
of Proxies
You may revoke your proxy and change your vote at any time
before the polls close at the special meeting. You may do this
by:
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sending timely written notice to Craig Newfield our General
Counsel and Secretary at AMICAS, Inc., 20 Guest Street,
Suite 400, Boston, Massachusetts 02135;
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signing, and returning to us in a timely manner, another proxy
card with a later date, or re-voting via telephone or the
Internet (only your latest vote will be counted);
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voting in person at the special meeting. Please note that
attending the special meeting in person will not in and of
itself revoke a previously submitted proxy unless you
specifically request it; or
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if you have instructed a broker, bank or other nominee to vote
your shares, by following the directions received from your
broker, bank or other nominee to change those instructions.
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Treatment
of Stock Options, Restricted Stock and Employee Stock Purchase
Plan (Page 40)
Stock
Options
Except as directed by the Company in consultation with Newco,
upon the consummation of the Merger, each then outstanding
Company option, whether vested or unvested, shall be cancelled
without consideration in accordance with the terms of the
applicable stock option plan of the Company. Most outstanding
stock options are already vested, and the Companys 2006
Stock Incentive Plan, under which most of the unvested options
were granted, does not provide for automatic vesting of unvested
options upon a change in control of the Company. However, the
board of directors has determined to accelerate the vesting of
50% of the unvested options under the Companys 2006 Stock
Incentive Plan, other than options by which their terms
expressly do not accelerate, immediately prior to the closing of
the Merger (such that they will vest) in connection with this
transaction if this transaction is completed. Between now and
the effective time of the Merger an option holder may exercise
his or her stock options in accordance with the applicable stock
option plan of the Company and the agreement pursuant to which
such options were granted. If an option holder does exercise he
or she will become a stockholder of AMICAS and receive the
merger consideration. In addition, shortly before closing each
option holder will be notified of the final date to exercise his
or her stock options that will vest in connection with the
Merger. The shares of Company Common Stock to be issued upon the
exercise of stock options during this final exercise period will
also be sold to Newco for $5.35 per share, with the proceeds
paid to the option holder, without interest thereon, less
applicable taxes required to be withheld with respect to these
payments.
Restricted
Stock
Upon the consummation of the Merger, all restrictions and
repurchase rights on each share of the Companys restricted
Common Stock that is outstanding immediately prior thereto shall
lapse and each share of restricted Common Stock shall be
converted automatically into the right to receive $5.35 in cash,
without interest and less any applicable withholding tax.
Employee
Stock Purchase Plan
The final offering period under our 2007 Employee Stock Purchase
Plan (the ESPP) will be completed on
January 31, 2010. The ESPP will terminate prior to the
effective time of the Merger.
Recommendation
of Our Board of Directors (Page 22)
After careful consideration, our board of directors has
determined that the Merger, the Merger Agreement and the
transactions contemplated by the Merger Agreement are advisable,
fair to and in the best interests of AMICAS and its
stockholders. This determination was made by a unanimous vote of
all of the members of the Companys board of directors. The
board of director unanimously recommends that our stockholders
vote FOR the adoption of the Merger Agreement and
FOR the proposal to adjourn the special meeting, if
necessary or appropriate to solicit additional proxies. For a
discussion of the material factors considered by the board of
directors in reaching its conclusions, see The
Merger Reasons for the Merger; Recommendation of Our
Board of Directors beginning on page 22.
4
Interests
of the Companys Directors and Executive Officers in the
Merger (Page 32)
In considering the recommendation of the board of directors, you
should be aware that our directors and executive officers may
have interests in the Merger that are different from, or in
addition to, your interests as a stockholder, and that may
present actual or potential conflicts of interest.
Opinion
of Financial Advisor (Page 24)
Raymond James & Associates, Inc. (Raymond
James) delivered a written opinion to our board of
directors that, as of December 24, 2009, and based upon and
subject to the qualifications, limitations and assumptions set
forth therein, from a financial point of view, the merger
consideration to be offered in the Merger to the holders of
Company Common Stock (other than Newco and its affiliates) in
the Merger was fair to such stockholders.
The full text of the written opinion of Raymond James, dated
December 24, 2009, is attached as Annex B to this
proxy statement. The written opinion of Raymond James sets
forth, among other things, the assumptions made, procedures
followed, factors considered and limitations on the review
undertaken by Raymond James in rendering its opinion. Raymond
James provided its opinion for the information and assistance of
our board of directors in connection in its consideration of the
transaction. The Raymond James opinion is not a recommendation
as to how any holder of our shares of the Companys Common
Stock should vote with respect to the Merger.
Financing
Newco and Merger Sub estimate that the total amount of funds
necessary to consummate the Merger and related transactions will
be approximately $217 million, which Newco and Merger Sub
expect will be funded by equity and debt financings, and to the
extent available, cash of the Company. Notwithstanding the
financing arrangements that Newco has in place, the consummation
of the Merger is not subject to any financing conditions
(although funding of the equity and debt financings is subject
to the satisfaction of the conditions set forth in the
commitment letters under which the financings will be provided).
The following arrangements are in place for the financing of the
Merger, including the payment of related transaction costs,
charges, fees and expenses:
Equity Financing.
Newco and Merger Sub have
received equity commitment letters (the Equity Commitment
Letters) from Thoma Bravo Fund IX, L.P., HarbourVest
2007 Direct Associates L.P., HarbourVest Partners VIII-Buyout
Fund L.P., Mesirow Financial Capital Partners IX, L.P. and
Mesirow Financial Capital Partners X, L.P. (the
Sponsors) to provide equity financing in an
aggregate amount sufficient to fully finance the Merger and
other transactions contemplated by the Merger Agreement.
Debt Financing.
Thoma Bravo LLC has received
(i) a debt commitment letter from Wells Fargo Foothill, LLC
and Bank of Montreal, pursuant to which, and subject to the
conditions of that letter, Wells Fargo Foothill (on a several
basis) has agreed to provide to the Company $42,500,000 and Bank
of Montreal (on a several basis) has agreed to provide to the
Company $30,000,000 of a $72,500,000 senior secured credit
facility, and (ii) a debt commitment letter from
HarbourVest Partners VIII-Buyout Fund L.P. and HarbourVest
2007 Direct Associates L.P. (each a HarbourVest
Fund), pursuant to which, and subject to the conditions of
that letter, each HarbourVest Fund (on a several basis) has
agreed to provide the Company $12,500,000 of a $25,000,000
senior subordinated facility; provided, however, that the each
HarbourVest Funds obligation to fund its respective
$12,500,000 portion of such senior subordinated facility shall
be reduced by the amount by which its respective aggregate
equity investment pursuant to the Equity Commitment Letters plus
its respective payments under its respective Guarantees in favor
of the Company exceeds $10,000,000.
Regulatory
Approvals
Under the
Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the HSR
Act), and the rules promulgated thereunder by the Federal
Trade Commission (FTC), the Merger may not be
completed
5
until notification and report forms have been filed with the FTC
and the Antitrust Division of the Department of Justice
(DOJ), and the applicable waiting period has expired
or been terminated. AMICAS and Newco filed notification and
report forms under the HSR Act with the FTC and the Antitrust
Division of the DOJ on January 7, 2010.
Material
U.S. Federal Income Tax Consequences (Page 38)
The conversion of shares of the Companys Common Stock into
the right to receive cash pursuant to the Merger Agreement
generally will be a taxable transaction for U.S. federal
income tax purposes. Stockholders who exchange their shares of
the Companys Common Stock in the Merger will generally
recognize gain or loss in an amount equal to the difference, if
any, between the cash received in the Merger and their adjusted
tax basis in their shares of the Companys Common Stock.
You should consult your tax advisor for a complete analysis of
the effect of the Merger on your federal, state and local
and/or
foreign taxes.
Conditions
to the Merger (Page 47)
The obligations of each of AMICAS, Newco and Merger Sub to
consummate the Merger are subject to the satisfaction or waiver
of certain conditions, which include but are not limited to the
following conditions:
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our stockholders have adopted the Merger Agreement;
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the absence of legal restraints on the Merger;
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the representations and warranties of each party are true and
correct without reference to any qualification as to materiality
or material adverse effect, such that the aggregate effect of
any inaccuracies in such representations and warranties does not
have a material adverse effect on such party;
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the parties are in material compliance with all covenants to be
complied with prior to the closing of the Merger, including the
requirement that the Company has a minimum cash and cash
equivalents balance of $42 million, excluding all costs and
expenses incurred or arising in connection with the transactions
contemplated by the Merger Agreement; and
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no material adverse effect with respect to AMICAS has occurred
subsequent to execution of the Merger Agreement that is
continuing.
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Solicitations
of Other Offers and Restrictions on Solicitations of Other
Offers (Page 48)
The Merger Agreement provides that, until 12:01
a.m. Eastern Standard Time (EST) on
February 7, 2010 (referred to as the No-Shop Period
Start Date) and subject to certain restrictions, we are
permitted to:
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solicit up to fifteen third party acquisition proposals,
including by providing non-public information relating to the
Company pursuant to an Acceptable Confidentiality
Agreement (as more fully described below under
Solicitations of Other Offers and Restrictions on
Solicitations of Other Offers beginning on Page 48),
provided that we must promptly make available to Newco and
Merger Sub any material non-public information that we provided
to another person that was not previously delivered to Newco and
Merger Sub; and
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respond to any number of unsolicited third party acquisition
proposals.
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We have agreed that, from and after the No-Shop Period Start
Date, neither we, nor any of our affiliates or representatives
will, other than in connection with the continuation of
negotiations commenced prior to the No-Shop Period Start Date,
initiate, solicit, propose, encourage or take action to
facilitate the submission of any alternative proposal to the
Merger or participate in any discussions or negotiations
regarding any alternative proposal or furnish any non-public
information to any third party if it is reasonably likely that
the third party will use the information for purposes of
evaluating or making an alternative proposal.
Notwithstanding these restrictions, at all times during the
period commencing as of the No-Shop Period Start Date and
continuing until the approval of the Merger by our stockholders,
we may participate or engage
6
in discussions or negotiations with, furnish non-public
information to, or afford access to the business, properties,
assets, books, records or other non-public information, or to
the personnel, of the Company or any of its subsidiaries
pursuant to an Acceptable Confidentiality Agreement to any
person that has made an acquisition proposal that either
constitutes a Superior Proposal (as described in The
Merger Agreement Solicitations of Other Offers
and Restrictions on Solicitations of Other Offers) or
would be reasonably likely to lead to a Superior Proposal.
Termination
of the Merger Agreement (Page 51)
The Merger Agreement may be terminated under the following
circumstances, subject to certain exceptions set forth in the
Merger Agreement:
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by the mutual agreement of us and Newco;
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by either us or Newco if:
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any governmental entity of competent jurisdiction has enacted a
law that makes the Merger illegal in the United States or any
State thereof, or has issued an order or injunction permanently
prohibiting the Merger in the United States or any State thereof;
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our stockholders do not adopt the Merger Agreement at the
special meeting; or
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the Merger has not been consummated prior to May 24, 2010;
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we terminate the Merger Agreement in order to enter into an
acquisition agreement for a Superior Proposal and we pay the
applicable termination fee;
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there has been a breach by Newco of any representation,
warranty, covenant or agreement contained in the Merger
Agreement that would result in a failure of a condition to our
obligation to close the Merger that has not been cured; or
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if any Sponsor shall have breached any covenant or agreement
under any Guarantee (as described in Summary
Guarantees) or any Equity Commitment Letter that would
result in a failure of a condition to our obligation to close
the Merger that has not been cured;
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our board of directors has withdrawn or adversely modified its
approvals or recommendations of the Merger;
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we have materially breached any of our non-solicitation
obligations;
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any member of our board of directors shall have made a written
public statement that such director opposes the Merger, or
required the inclusion in any filing made by us with the SEC a
statement to the effect that such director opposes the
Merger; or
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there has been a breach by us of any representation, warranty,
covenant or agreement contained in the Merger Agreement that
would result in a failure of a condition to Newcos
obligation to close the Merger that has not been cured.
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Termination
Fees (Page 51)
Except as set forth below, all fees and expenses incurred in
connection with the Merger Agreement will be paid by the party
or parties incurring the expenses whether or not the Merger is
consummated. If we terminate the Merger Agreement, or the Merger
Agreement is terminated by Newco or Merger Sub under the
conditions described in further detail below, we must pay a
termination fee at the direction of Newco.
7
We are required to pay a termination fee of $4.3 million if
the Merger Agreement is terminated by us prior to the No-Shop
Period Start Date and we enter into a definitive agreement for a
Superior Proposal or if our board of directors has withdrawn or
adversely modified its approvals or recommendations of the
Merger prior to the No-Shop Period Start Date.
Subject to certain limitations, we are required to pay a
termination fee of $8.6 million if:
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we terminate the Merger Agreement in order to enter into an
acquisition agreement for a Superior Proposal at any time after
the No-Shop Period Start Date;
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Newco terminates the Merger Agreement because:
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our board of directors has withdrawn or adversely modified its
approvals or recommendations of the Merger;
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there has been a material breach by us of our obligations with
respect to the solicitation of other offers from the No-Shop
Period Start Date to the effective time of the Merger; or
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any member of our board of directors shall have made a written
public statement that such director opposes the Merger, or
required the inclusion in any filing made by us with the SEC a
statement to the effect that such director opposes the Merger
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or
we enter into an acquisition agreement with a party other than
Newco within twelve (12) months following a termination of
the Merger Agreement by Newco because:
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our stockholders do not adopt the Merger Agreement at the
special meeting;
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the Merger has not been consummated prior to May 24,
2010; or
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there has been a breach by us of any representation, warranty,
covenant or agreement contained in the Merger Agreement that
would result in a failure of a condition to Newcos
obligation to close the Merger that has not been cured.
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Specific
Performance (Page 53)
The Company, Newco and Merger Sub are each entitled to seek an
injunction to prevent breaches of the Merger Agreement and to
enforce specifically the terms and provisions of the Merger
Agreement, in addition to any other legal or equitable remedy to
which they are entitled.
Guarantees
In connection with the Merger Agreement, the Sponsors have
entered into guarantees with respect to the obligations and
liabilities of Newco and Merger Sub arising under, or in
connection with the Merger Agreement.
Market
Price of the Companys Common Stock
Our common stock is listed on The NASDAQ Global Market under the
symbol AMCS. On December 24, 2009, the last
trading day prior to the public announcement of the Merger, our
common stock closed at a price of $4.42 per share. On
January 14, 2010, the last trading day prior to the date of
this proxy statement, our common stock closed at a price of
$5.50 per share.
8
QUESTIONS
AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETING
The following are some questions that you, as a stockholder
of AMICAS, may have regarding the Merger and the special meeting
of AMICAS stockholders, and brief answers to such questions. We
urge you to read carefully this entire proxy statement, because
the information in this section does not provide all the
information that may be important to you with respect to the
adoption of the Merger Agreement. Additional important
information is also contained in the appendices to this proxy
statement.
As an
AMICAS stockholder, what will I receive upon completion of the
Merger?
If the Merger is completed, you will receive $5.35 in cash for
each share of our Common Stock that you own immediately prior to
the effective time of the Merger, unless you exercise and
perfect your appraisal rights under Delaware law.
What do I
need to do now?
After you carefully read this proxy statement in its entirety,
including its appendices, consider how the Merger affects you
and then vote or provide voting instructions as described in
this proxy statement.
How does
the AMICAS board of directors recommend I vote?
At a meeting held on December 24, 2009, the AMICAS board of
directors determined that the Merger, the Merger Agreement and
the transactions contemplated by the Merger Agreement are
advisable, fair to and in the best interests of AMICAS and its
stockholders. This determination was made by a unanimous vote of
all of the members of the AMICAS board of directors.
Accordingly, the board of directors of AMICAS unanimously
recommends that you vote FOR the adoption of the
Merger Agreement and FOR the proposal to adjourn the
special meeting, if necessary or appropriate to solicit
additional proxies, if there are not sufficient votes in favor
of adoption of the Merger Agreement.
Who can
vote and attend the special meeting?
All stockholders of record as of the close of business on
January 15, 2010, the record date for the special meeting,
are entitled to receive notice of and to attend and vote at the
special meeting, or any postponement or adjournment thereof. If
you want to attend the special meeting and your shares are held
in an account at a brokerage firm, bank or other nominee, you
must bring to the special meeting a proxy from the record holder
(your broker, bank or nominee) of the shares authorizing you to
vote at the special meeting.
How do I
vote?
Whether you plan to attend the special meeting or not, we urge
you to vote by proxy. Voting by proxy will not affect your right
to attend the special meeting. Unless otherwise provided, the
following instructions assume that your shares are registered
directly in your name through our stock transfer agent,
StockTrans, Inc., or you have stock certificates.
You may vote by mail.
You do this by
completing and signing your proxy card and mailing it in the
enclosed, prepaid and addressed envelope. If you mark your
voting instructions on the proxy card, your shares will be voted
as you instruct. If you return a signed card but do not provide
voting instructions, your shares will be voted FOR
the adoption of the Merger Agreement and FOR any
proposal by our board of directors to adjourn the special
meeting pursuant to proposal number 2, if necessary or
appropriate to solicit additional proxies, if there are
insufficient votes at the time of the special meeting to adopt
the Merger Agreement. The failure to attend the special meeting
in person or by proxy will count as a vote against the adoption
of the Merger Agreement and will not affect the outcome of any
proposal by our board of directors to adjourn the special
meeting, but will reduce the number of votes required to approve
the adjournment. If your shares are held in street
name (held in the name of a bank, broker or other
nominee), you must provide your bank, broker or other nominee
with instructions regarding how to vote your shares, and receive
directions from your bank, broker or other nominee explaining
how to provide such nominee with your voting instructions.
9
You may vote via telephone or the Internet.
If
your shares are held in street name, you must follow the
instructions you receive from your bank, broker or other nominee
to vote via telephone or the Internet.
You may vote in person at the special
meeting.
Written ballots will be passed out to
anyone who wants to vote at the special meeting. If you hold
your shares in street name, you must request a brokers
proxy card from your broker or other nominee and bring it to the
special meeting in order to vote at the special meeting. You
will not be able to vote at the special meeting unless you have
a proxy card from your broker.
What does
it mean if I receive more than one proxy card?
It means that you have multiple accounts at the transfer agent
and/or
with
brokers. Please vote in the manner described under How do
I vote? for each account to ensure that all of your shares
are voted.
What if I
change my mind after I return my proxy?
You may revoke your proxy and change your vote at any time
before the polls close at the special meeting. You may do this
by:
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sending timely written notice to Mr. Craig Newfield, our
General Counsel and Secretary, at AMICAS, Inc., 20 Guest
Street, Suite 400, Boston, Massachusetts 02135;
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signing, and returning to us in a timely manner, another proxy
card with a later date, or re-voting via telephone or the
Internet (only your latest vote will be counted);
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voting in person at the special meeting. Please note that
attending the special meeting in person will not in and of
itself revoke a previously submitted proxy unless you
specifically request it; or
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if you have instructed a broker, bank or other nominee to vote
your shares, by following the directions received from your
broker, bank or other nominee to change those instructions.
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Will my
shares be voted if I do not sign and return my proxy
card?
No. If your shares are registered in your name or if you have
stock certificates, they will not be voted if you do not sign
and return your proxy card by mail, or vote via telephone or the
Internet or in person as described above under How do I
vote?
If your shares are held in street name, your broker,
bank or nominee will not be able to vote your shares without
instructions from you. Therefore, you should instruct your
broker, bank or nominee to vote your shares following the
procedure provided by your broker, bank or nominee. Under the
rules of the NYSE, brokers who hold shares in street name for
customers have the authority to vote on routine
proposals when they have not received instructions from
beneficial owners. However, brokers are precluded from
exercising their voting discretion with respect to approving
non-routine matter, which includes the adoption of the Merger
Agreement and the proposal to adjourn the special meeting
pursuant to proposal number 2 and, as a result, absent specific
instructions from a beneficial owner of shares, brokers are not
empowered to vote those shares.
If you fail to submit a proxy or vote in person at the special
meeting, or do not provide your broker with instructions, as
applicable, your shares of Company Common Stock will not be
voted. This will have the same effect as a vote against the
proposal to adopt the Merger Agreement and will have no effect
on the proposal to adjourn the special meeting pursuant to
proposal number 2.
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Is the
Merger expected to be taxable to me for U.S. federal income tax
purposes?
Generally, yes. The receipt of cash for each share of our Common
Stock pursuant to the Merger will be a taxable transaction for
U.S. federal income tax purposes. For U.S. federal
income tax purposes, generally you will recognize gain or loss
as a result of the Merger measured by the difference, if any,
between the merger consideration received for each share and
your adjusted tax basis in that share. Gain or loss will be
determined separately for each block of shares (that is, shares
acquired at the same cost in a single transaction).
You should read the section titled The Merger
Material U.S. Federal Income Tax Consequences
beginning on page 38 for a more complete discussion of the
U.S. federal income tax consequences of the Merger. Tax
matters can be complicated, and the tax consequences of the
Merger to you will depend on the facts of your own situation.
You should consult your own tax advisor as to the tax
consequences of the Merger to you
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Should I
send in my AMICAS stock certificates now?
No. Promptly after the Merger is completed, each holder of
record immediately prior to the effective time of the Merger
will be sent a letter of transmittal and written instructions
for exchanging share certificates for the cash merger
consideration. These instructions will tell you how and where to
send in your certificates or how to transfer ownership of
book-entry shares, as applicable, for the cash merger
consideration. You will receive your cash payment after the
paying agent receives your stock certificates or a confirmation
of a book-entry transfer by The Depository Trust Company,
as applicable, and any other documents requested in the
instructions. If your shares are held in street name
by your brokerage firm, bank, trust or other nominee, you will
receive instructions from your brokerage firm, bank, trust or
other nominee as to how to effect the surrender of your
street name shares in exchange for the merger
consideration.
PLEASE DO NOT SEND YOUR CERTIFICATES IN
NOW
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When do
you expect the Merger to be completed?
We are working toward completing the Merger promptly. We
currently expect the Merger to be completed in February 2010,
subject to obtaining stockholder approval and satisfying all the
other closing conditions contained in the Merger Agreement.
Am I
entitled to appraisal rights?
Under the Delaware General Corporate Law (DGCL),
holders of AMICAS common stock who do not vote in favor of
adoption of the Merger Agreement will have the right to seek
appraisal of the fair value of their shares as determined by the
Delaware Court of Chancery if the Merger is completed, but only
if they submit a written demand for an appraisal prior to the
vote on the adoption of the Merger Agreement and they comply
with the DGCL procedures summarized in this proxy statement. For
additional information about appraisal rights, see the section
titled The Merger Appraisal Rights
beginning on page 35.
Is my
vote confidential?
Only the inspectors of election and certain employees of AMICAS
will have access to your proxy card. They will tabulate and
certify the vote. Management will not know how you voted unless
it is necessary to meet legal requirements. We will, however,
forward to management any written comments you make on the proxy
card or elsewhere. All comments will remain confidential unless
you ask that your name be disclosed.
What are
the costs of soliciting these proxies?
We will pay all of the costs of soliciting these proxies. Our
directors and employees may solicit proxies in person or by
telephone, fax or email. We will pay these directors and
employees no additional compensation for these services. We will
ask banks, brokers and other institutions, nominees and
fiduciaries to forward these proxy materials to their principals
and to obtain authority to execute proxies. We will then
reimburse them for their expenses.
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Who can
help answer my questions?
If you would like additional copies, without charge, of this
proxy statement or if you have questions about the Merger,
including the procedures for voting your shares, you should
contact:
Innisfree M&A Incorporated
501 Madison Avenue,
20
th
Floor
New York, NY 10022
Stockholders may call
toll-free:
(888) 750-5834
Banks and Brokers may call collect:
(212) 750-5833
CAUTIONARY
STATEMENT CONCERNING FORWARD-LOOKING INFORMATION
This proxy statement, and the documents to which we refer you in
this proxy statement, include forward-looking statements based
on estimates and assumptions. There are forward-looking
statements throughout this proxy statement, including, without
limitation, under the headings Summary,
Questions and Answers about the Special Meeting and the
Merger, The Merger, Opinion of Financial
Advisor, Regulatory Approvals, and in
statements containing words such as believes,
estimates, anticipates,
continues, contemplates,
expects, may, will,
could, should or would or
other similar words or phrases. These statements, which are
based on information currently available to us, are not
guarantees of future performance and may involve risks and
uncertainties that could cause our actual growth, results of
operations, performance and business prospects, and
opportunities to materially differ from those expressed in, or
implied by, these statements. These forward-looking statements
speak only as of the date on which the statements were made and
we expressly disclaim any obligation to release publicly any
updates or revisions to any forward-looking statement included
in this proxy statement or elsewhere. In addition to other
factors and matters contained or incorporated in this document,
these statements are subject to risks, uncertainties, and other
factors, including, among others:
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the occurrence of any event, change or other circumstances that
could give rise to the termination of the Merger Agreement;
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the outcome of any legal proceedings that have been or may be
instituted against AMICAS and others relating to the Merger
Agreement;
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the inability to complete the Merger due to the failure to
obtain stockholder approval or the failure to satisfy other
conditions to consummation of the Merger;
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the failure of the Merger to close for any other reason;
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risks that the proposed transaction disrupts current plans and
operations and the potential difficulties in employee retention
as a result of the Merger;
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the effect of the announcement of the Merger on our customer
relationships, operating results and our business generally;
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the ability to recognize the benefits of the Merger;
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the amount of the costs, fees, expenses and charges related to
the Merger and the actual terms of certain financings that will
be obtained for the Merger;
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and other risks detailed in our current filings with the SEC,
including our most recent filings on
Forms 10-Q
and
10-K.
See Where You Can Find More Information beginning on
page 56. Many of the factors that will determine our future
results are beyond our ability to control or predict. In light
of the significant uncertainties inherent in the forward-looking
statements contained herein, readers should not place undue
reliance on forward-looking statements, which reflect
managements views only as of the date hereof. We cannot
guarantee any future results, levels of activity, performance or
achievements. The statements made in this proxy statement
represent our views as of the date of this proxy statement, and
it should not be assumed that the statements made herein remain
accurate as of any future date. Moreover, we assume no
obligation to
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update forward-looking statements or update the reasons that
actual results could differ materially from those anticipated in
forward-looking statements, except as required by law.
THE
PARTIES TO THE MERGER
AMICAS
AMICAS, Inc.
20 Guest Street, Suite 400
Boston, Massachusetts 02135
(617) 779-7878
AMICAS is the leading independent provider of image and
information management solutions for image-intensive specialties
in health care. AMICAS offers a comprehensive suite of image and
information management solutions that are designed to drive
productivity and quality improvements for image-intensive
specialties across the continuum of care. AMICAS solutions are
installed at thousands of facilities across the United
States ranging from the largest IDNs to
independent imaging centers. AMICAS solution suite
includes radiology PACS, cardiology PACS, radiology information
systems, cardiovascular information management systems, revenue
cycle management solutions, workflow, and enterprise content
management tools designed to manage integration of the imaging
component into the electronic medical record. AMICAS is focused
on two primary markets: ambulatory imaging businesses and acute
care facilities. AMICAS provides a complete,
end-to-end
solution for imaging centers, ambulatory care facilities, and
radiology practices. Hospitals are provided with a comprehensive
image management solution for cardiology, radiology and
enterprise imaging that complements existing EMR strategies to
enhance clinical, operational, and administrative functions.
We were incorporated in Delaware in November 1996 as InfoCure
Corporation. On November 25, 2003, we acquired one hundred
percent (100%) of the outstanding capital stock of Amicas PACS,
a developer of Web-based diagnostic image management software
solutions. The addition of Amicas PACS provided us with the
ability to offer radiology groups and imaging center customers a
comprehensive information and image management solution that
incorporates the key components of a complete radiology data
management system (i.e., image management, workflow management
and financial management). The acquisition was completed to
position us to achieve our goal of establishing a leadership
position in the growing PACS market. PACS allows radiologists to
access, archive and distribute diagnostic images for
interpretation as well as to enable fundamental workflow
changes, including support for flexible teteradiology service
delivery that can support growth initiatives and result in
improvements in operating efficiency. The AMICAS PACS solution
also supports radiologists and other groups to distribute images
and digital information to their customers the
referring physicians.
On April 2, 2009 we completed the acquisition of Emageon
Inc., a leading provider of technology solutions for hospitals
and healthcare networks offering cardiology IT and enterprise
content management solutions that were complementary to ours.
Under the terms of the merger agreement, we acquired all of the
outstanding shares of Emageon common stock for $1.82 per share
in cash. AMICAS acquisition of Emageon enabled us to
become the largest independent image and information management
vendor, offering one of the most comprehensive solutions on the
market, including radiology PACS, cardiology PACS, radiology
information systems, cardiology information systems, revenue
cycle management systems, referring physician tools, business
intelligence tools, and electronic medical record-enabling
enterprise content management capabilities, including enterprise
image management.
Newco
Project Alta Holdings Corp.
c/o Thoma
Bravo, LLC
600 Montgomery Street, 32nd Floor
San Francisco, CA 94111
(415) 263-3660
13
Project Alta Holdings Corp., which we refer to as Newco, is a
Delaware corporation that was formed solely for the purpose of
acquiring AMICAS and has not engaged in any business except for
activities incidental to its formation and as contemplated by
the Merger Agreement.
Newco is, and upon the consummation of the Merger will continue
to be, owned by a private equity fund associated with Thoma
Bravo, LLC.
Merger
Sub
Project Alta Merger Corp.
c/o Thoma
Bravo, LLC
600 Montgomery Street, 32nd Floor
San Francisco, CA 94111
(415) 263-3660
Project Alta Merger Corp., which we refer to as Merger Sub, is a
Delaware corporation that was organized solely for the purpose
of completing the proposed Merger. Merger Sub is a wholly owned
subsidiary of Newco and has not engaged in any business except
for activities incidental to its formation and as contemplated
by the Merger Agreement. Upon the consummation of the proposed
Merger, Merger Sub will cease to exist and AMICAS will continue
as the Surviving Corporation.
THE
SPECIAL MEETING
Time,
Place and Purpose of the Special Meeting
This proxy statement is being furnished to our stockholders as
part of the solicitation of proxies by our board of directors
for use at the special meeting to be held on February 19,
2010, starting at 9:00 a.m. local time, at the
Companys offices at 20 Guest Street, Suite 400,
Boston, Massachusetts 02135, or at any postponement or
adjournment thereof. The purpose of the special meeting is for
our stockholders to consider and vote upon adoption of the
Merger Agreement and any proposal to adjourn the special
meeting, if necessary or appropriate to solicit additional
proxies. Our stockholders must adopt the Merger Agreement in
order for the Merger to occur. If we do not receive the
requisite vote of our stockholders to adopt the Merger
Agreement, the Merger will not occur. A copy of the Merger
Agreement is attached to this proxy statement as Annex A.
This proxy statement and the enclosed form of proxy are first
being mailed to our stockholders on January 19, 2010.
Record
Date and Quorum
We have fixed the close of business on January 15, 2010 as
the record date for the special meeting, and only holders of
record of the Companys Common Stock on the record date are
entitled to vote at the special meeting and any adjournments or
postponements thereof. On the record date, there were
36,465,023 shares of the Companys Common Stock
outstanding and entitled to vote. Each share of the
Companys Common Stock entitles its holder to one vote on
all matters properly coming before the special meeting.
One-third of the number of shares of the Companys Common
Stock, outstanding and entitled to vote at the special meeting,
present in person or by proxy, shall constitute a quorum for the
purpose of considering the proposals. Shares of the
Companys Common Stock represented at the special meeting
in person or by proxy, but for which stockholders have
abstained, will be treated as present at the special meeting for
purposes of determining the presence or absence of a quorum for
the transaction of all business. In the event that a quorum is
not present at the special meeting, it is expected that the
meeting will be adjourned or postponed to solicit additional
proxies.
Vote
Required for Approval
Adoption of the Merger Agreement requires the affirmative vote
of the holders of a majority of the outstanding shares of the
Companys Common Stock entitled to vote thereon. For the
proposal to adopt the
14
Merger Agreement, you may vote FOR, AGAINST or ABSTAIN.
Abstentions and broker non-votes will have the same effect as
a vote AGAINST the approval of the Merger
.
We will only adjourn the special meeting pursuant to proposal
number 2 if the proposal to adjourn the special meeting, if
necessary or appropriate for the purpose of soliciting
additional proxies, is approved by the affirmative vote of a
majority of the number of shares of the Companys Common
Stock entitled to vote and present at the meeting. For any
proposal to adjourn the special meeting, if necessary or
appropriate, you may vote FOR, AGAINST or ABSTAIN.
Abstentions and broker non-votes will have the same effect as
a vote AGAINST any proposal to adjourn the special
meeting pursuant to proposal number 2, if necessary or
appropriate for the purpose of soliciting additional proxies.
On December 24, 2009, the Company and selected stockholders
(including Kevin C. Burns, Stephen J. Denelsky, Joseph D. Hill,
Stephen N. Kahane, M.D., Stephen J. Lifshatz, Paul Merrild,
Craig Newfield, David B. Shepherd, Frank E.
Stearns, Jr., John J. Sviolka and Kang Wang), (referred to
in this proxy statement as the selected stockholders), entered
into a voting agreement pursuant to which the selected
stockholders agreed to vote in favor of the adoption and
approval of the Merger Agreement, the Merger and the
transactions contemplated by the Merger Agreement. In addition,
the selected stockholders agreed not to directly or indirectly
transfer their respective shares of the Companys Common
Stock during the term of their respective voting agreement,
subject to certain exceptions. As of January 15, 2010, the
record date, the selected stockholders held and are entitled to
vote, in the aggregate, 248,632 shares of the
Companys Common Stock, representing 0.68% of the
outstanding Companys Common Stock. The selected
stockholders include all directors and executive officers of the
Company, with the exception of Keith Stahlhut.
Proxies
and Revocation
If you submit a proxy, your shares will be voted at the special
meeting as you indicate on your proxy card or by such other
method. If you sign your proxy card without indicating your
vote, your shares will be voted FOR the adoption of
the Merger Agreement and FOR any proposal to adjourn
the special meeting, if necessary or appropriate to solicit
additional proxies, and in accordance with the recommendations
of our board of directors on any other matters properly brought
before the special meeting for a vote. If your shares of the
Companys Common Stock are held in street name,
you will receive instructions from your broker, bank or other
nominee that you must follow in order to have your shares voted.
Proxies received at any time before the special meeting, and not
revoked or superseded before being voted, will be voted at the
special meeting. You have the right to change or revoke your
proxy at any time before the vote taken at the special meeting.
You may do this by:
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sending timely written notice to Mr. Craig Newfield, our
General Counsel and Secretary, at AMICAS, Inc., 20 Guest Street,
Suite 400, Boston, Massachusetts 02135;
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signing, and returning to us in a timely manner, another proxy
card with a later date or re-voting via telephone or the
Internet (only your latest vote will be counted);or
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voting in person at the special meeting. Please note that
attending the special meeting in person will not in and of
itself revoke a previously submitted proxy unless you
specifically request it; or
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if you have instructed a broker, bank or other nominee to vote
your shares, by following the directions received from your
broker, bank or other nominee to change those instructions.
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Please do not send in your stock certificates with your proxy
card.
When the Merger is completed, a separate
letter of transmittal will be mailed to you that will enable you
to receive the merger consideration in exchange for your stock
certificates.
Adjournments
and Postponements
Although it is not currently expected, the special meeting may
be adjourned or postponed for the purpose of soliciting
additional proxies. Any adjournment may be made without notice
(if the adjournment is not for more than 30 days after the
record date), other than by an announcement made at the special
meeting of the
15
time, date and place of the adjourned meeting. If a quorum is
present, we will only adjourn the special meeting if the
proposal to adjourn the special meeting, if necessary or
appropriate for the purpose of soliciting additional proxies, is
approved by the affirmative vote of the number of shares of the
Companys Common Stock entitled to vote and present at the
meeting. Any signed proxies received by AMICAS in which no
voting instructions are provided on such matter will be voted
FOR any proposal to adjourn the special meeting
pursuant to proposal number 2. Any adjournment or
postponement of the special meeting for the purpose of
soliciting additional proxies will allow AMICAS stockholders who
have already sent in their proxies to revoke them at any time
prior to their use at the special meeting as adjourned or
postponed.
Solicitation
of Proxies
This proxy solicitation is being made and paid for by AMICAS on
behalf of its board of directors. In addition, we have retained
Innisfree M&A Incorporated (Innisfree) to
assist in the solicitation. We will pay Innisfree up to $30,000
plus reasonable
out-of-pocket
expenses for their assistance. Our directors, officers and
employees may also solicit proxies by personal interview, mail,
e-mail,
telephone, facsimile or other means of communication. These
persons will not be paid additional remuneration for their
efforts. We will also request brokers and other fiduciaries to
forward proxy solicitation material to the beneficial owners of
shares of the Companys Common Stock that the brokers and
fiduciaries hold of record. Upon request, we will reimburse them
for their reasonable
out-of-pocket
expenses. In addition, we will indemnify Innisfree against any
losses arising out of that firms proxy soliciting services
on our behalf.
Questions
and Additional Information
If you have more questions about the Merger or how to submit
your proxy, or if you need additional copies of this proxy
statement or the enclosed proxy card or voting instructions,
please call Innisfree toll-free at (888) 750-5834 (brokers and
banks may call collect at (212) 750-5833).
Availability
of Documents
The reports, opinions or appraisals referenced in this proxy
statement will be made available for inspection and copying by
any interested holder of the Companys Common Stock by
written or telephonic request directed to AMICAS, Inc., Investor
Relations, 20 Guest Street, Boston, Massachusetts 02135,
telephone (617)
779-7878
during the Companys regular business hours or through the
Companys website at
http://www.amicas.com/investorrelations/.
THE
MERGER
This discussion of the Merger is qualified in its entirety by
reference to the Merger Agreement, which is attached to this
proxy statement as Annex A. You should read the entire
Merger Agreement carefully as it is the legal document that
governs the Merger.
Background
of the Merger
Since our inception, our board of directors and management team
have been regularly evaluating our business and operations, our
long-term strategic goals and alternatives, and our prospects as
an independent company. Our board of directors and management
team have regularly reviewed and assessed trends and conditions
impacting the Company and its industry, changes in the
marketplace and applicable law, the competitive environment and
the future prospects of the Company. As part of its ongoing
review of the Company and its position in its industry, our
board of directors also regularly reviews the strategic
alternatives available to the Company, including, among other
things, possible strategic combinations, acquisitions and
divestitures.
16
Consistent with the boards periodic review of its
strategic alternatives, in late 2008 and early 2009, AMICAS
negotiated and executed a definitive agreement to purchase
Emageon, Inc. On April 2, 2009, AMICAS completed its
acquisition of Emageon Inc., investing a substantial portion of
the Companys cash.
The Emageon acquisition substantially broadened the
Companys customer base and product footprint, and was the
largest single strategic action taken by the Company in recent
years. After the Emageon acquisition, AMICAS embarked upon
significant actions to restructure and integrate Emageon to
simplify and rationalize the activities and operations of the
combined companies. In particular, these integration efforts
allowed for substantial changes in AMICASs employee base,
operations, marketing and sales, research and development, and
general and administrative. As a result of the Emageon
transaction and these subsequent restructuring and integration
actions, AMICAS significantly revised its outlook, estimates and
guidance. The increase in the Companys overall size,
revenues and profits brought about by this investment
substantially changed the Companys profile and visibility.
Historically and prior to the Emageon transaction, AMICAS had
from time to time received unsolicited inquiries from third
parties regarding the possible acquisition of the Company.
AMICAS had rejected such inquiries in the past as the terms
being proposed were determined to not be in the best interests
of the AMICAS shareholders. After the Emageon transaction and
the attendant change in the Companys profile discussed
above, during the summer of 2009, the Company continued to
receive unsolicited inquiries. These inquiries (other than the
inquiry from Thoma Bravo described below), expressed interest in
a transaction to acquire AMICAS at prices ranging from $2.75 to
$4.00 per share utilizing cash and in some cases securities of
the proposed acquirer. In each case, although the board of
directors was not engaged in the process of selling the Company,
the Company pursued such inquiries and the board of directors
determined after due inquiry and consideration that such
transactions were not in the best interests of shareholders,
both due to the prices offered and in certain cases the nature
of the consideration offered, therefore and the board of
directors ultimately rejected these inquiries.
On or about August 12, 2009, Mr. Seth Boro of Thoma
Bravo, LLC called Dr. Kahane, the Chairman of our board of
directors and our Chief Executive Officer, and verbally
expressed Thoma Bravos interest in acquiring all of the
shares of Companys Common Stock for a price of $4.00 per
share in an all cash, fully guaranteed transaction. On or about
August 14, 2009, Dr. Kahane consulted with Mr. Stephen
DeNelsky, the lead independent director of AMICAS, and, after
consulting with other board members and on
Mr. DeNelskys instruction, Dr. Kahane
subsequently called Mr. Boro and rejected the $4.00 per
share offer, while expressing a willingness to continue
discussions on improved terms. Mr. DeNelsky also instructed
Dr. Kahane at this time that, while no such discussions had
yet taken place, it would be inappropriate for any future
conversations or proposals with financial sponsors such as Thoma
Bravo to include any direct or indirect discussions or
negotiations regarding compensation or equity participation of
Dr. Kahane or Company management following the consummation
of any proposed transaction.
With approval of the board of directors, through the rest of
August, Mr. DeNelsky and management continued discussions
with Mr. Boro. In these discussions, Mr. Boro
reiterated Thoma Bravos desire to acquire the Company, and
his understanding that the price and other terms offered were
inadequate. Ultimately, Mr. Boro did indicate a willingness
to substantially increase the Thoma Bravo offer subject to the
ability to do more detailed due diligence on AMICAS. In contrast
to the other inquiries received by AMICAS at lower prices and in
some cases for forms of consideration other than cash, the Thoma
Bravo indicative offer for the Company was all cash with no
financing contingency and with a strong indication that the
offer would be raised to a price level that could be of interest
to the board of directors. Accordingly, and with
Mr. DeNelskys active participation, the Company began
negotiation of a confidentiality agreement. On September 1,
2009, the parties executed a confidentiality agreement
containing standstill provisions in which Thoma
Bravo agreed that it would not act unilaterally to acquire five
percent or more of the shares of the Company without the
Companys consent.
On September 1, 2009, Dr. Kahane and several members
of the Companys senior management team met with
Mr. Boro, Mr. Orlando Bravo and other members of Thoma
Bravos management team to provide Thoma Bravo with more
information regarding the Companys business. On
September 9, 2009, after further due diligence, Thoma Bravo
submitted a written offer to acquire the Company for $4.75 per
share in an all cash
17
transaction. At the insistence of the AMICAS board of directors
(communicated to Thoma Bravo by Mr. DeNelsky and
Dr. Kahane and Company counsel), the Thoma Bravo proposal
was for a transaction that would be fully guaranteed by Thoma
Bravo and subject to specific performance of Thoma Bravos
obligations directly against its fund in the event of a breach
of the Merger Agreement by Thoma Bravo. Thoma Bravo also
proposed a thirty day exclusivity period, within which Thoma
Bravo would conduct its confirmatory due diligence
investigation, and the parties would negotiate a definitive
agreement. On that date, September 9, 2009, the closing
price of the Companys Common Stock was $3.75 per share.
On September 11, 2009, the board of directors of AMICAS
held a special meeting to consider the latest Thoma Bravo offer.
Present at the meeting with Dr. Kahane, were Mr. Kevin
Burns, Chief Financial Officer, and Mr. Craig Newfield,
General Counsel (collectively, Management) and
representatives of Mintz, Levin, Cohn, Ferris, Glovsky and
Popeo, P.C., the Companys corporate and securities
counsel (Mintz Levin). At this meeting, the board of
directors discussed the appropriate processes for discussions
with Thoma Bravo. Among other things, in consultation with
counsel, the board of directors determined that all directors
other than Dr. Kahane (the Independent
Directors) would deliberate without Management regarding
the substantive decisions to be considered in connection with
the proposal from Thoma Bravo, but that it would not be
necessary to formally constitute a special committee of the
board of directors. The board of directors also determined that
Mr. DeNelsky would act as lead director (the Lead
Director) and would engage in the substantive discussions
between Thoma Bravo and AMICAS alongside Management and within
the parameters set by the Independent Directors, such that
Management would not negotiate the proposed transaction without
Mr. DeNelsky. In addition, Mr. DeNelsky would both
keep the directors informed, and provide instruction to
Management, during the interim periods between board meetings as
to all matters related to the Thoma Bravo offer. The board of
directors confirmed its prior instructions to Management
regarding the transaction under discussion, and again instructed
Management that they should have no discussions with Thoma Bravo
regarding management compensation or equity investment or
participation with Thoma Bravo until instructed otherwise.
Management confirmed that it had had no such discussions with
Thoma Bravo.
At the September 11, 2009 special meeting, the board of
directors next considered the substantive aspects of the most
recent offer from Thoma Bravo and determined that it was
deficient in several respects. First and foremost, the price of
$4.75 was inadequate. The offer also contained a
go-shop provision whereby the Company would have the
right to solicit alternative acquisition proposals after a
merger agreement was signed. However the board of directors
rejected the go-shop proposal as inadequate. The board of
directors instructed Management to so advise Thoma Bravo. The
board of directors also determined that if the discussions
proceeded, it would be appropriate for the Company to engage a
financial advisor to advise it as to the financial aspects of
potential transactions in light of the fact that subsequent
higher offers would be of potential interest to the board of
directors.
After the September 11, 2009 board of directors meeting,
Company Management interviewed four investment banking firms
with experience in the healthcare information technology
industry and focus on transactions of the size potentially
contemplated. Both Management and Mr. DeNelsky made
reference calls in connection the selection of a financial
advisor. The financial advisors interviewed were selected for an
interview based on their experience and industry focus and in
certain cases the recommendation of the board of directors.
On September 14, 2009, Thoma Bravo submitted a revised
offer at a price of $5.00 per share, with all other terms
substantially the same, and with a deadline for response of
September 18, 2009. On September
15
th
,
Management met and interviewed representatives of Raymond James
to review that firms health care investment banking
experience and credentials. On September
18
th
, the
Company advised Thoma Bravo of the board of directors
decision to engage a financial advisor, and Thoma Bravo accepted
the Companys request that the September
18
th
deadline be extended. Management continued discussions with the
candidate financial advisors and sought proposals from them. On
September 21
st
,
representatives from Raymond James met again with the Company.
On September 22, 2009, the board of directors of AMICAS
held a special meeting to consider the engagement of a financial
advisor and to consider the most recent proposal from Thoma
Bravo. The board of
18
directors reviewed the credentials, experience and other
information provided concerning the candidate investment banking
firms, including the results of reference checks that had been
performed by Mr. DeNelsky and Management. Representatives
of Raymond James were invited to join a portion of the board of
directors meeting to present their credentials, discuss the
Thoma Bravo proposal on a preliminary basis and answer
questions. The representatives of Raymond James presented
Raymond Jamess credentials and answered questions from the
board of directors. At the request of the board of directors,
the representatives of Raymond James discussed the Thoma Bravo
proposal and answered questions from the board of directors
concerning the proposal. After Raymond James left the meeting,
the board of directors voted unanimously to engage Raymond James
as the Companys financial advisor. The board of directors
determined that all future discussions with Thoma Bravo would be
conducted through or with Raymond James in attendance, and that
the Lead Director would be consulted in, and would be
responsible for, giving director input in, consultation with the
Independent Directors, that might be required during the interim
periods between formal board of directors meetings, and
Management was again instructed not to have substantive
discussions of the terms and conditions of any proposed
transactions without Mr. DeNelsky.
At the September 22, 2009 special meeting, the board of
directors next considered the substantive aspects of the most
recent offer from Thoma Bravo and determined that it was
deficient in several respects. Based on the discussion with
Raymond James, the board of directors determined that the price
of $5.00 was inadequate. The latest offers
go-shop provisions had not changed and were also
deemed inadequate. The board of directors instructed Management
to so advise Thoma Bravo.
On September 23, 2009, the Company and Raymond James signed
a letter agreement containing the terms of Raymond James
engagement. Dr. Kahane indicated to Mr. Bravo that all
future discussions would be conducted through Raymond James and
Mr. DeNelsky where the Companys participation was
necessary or desirable. Raymond James indicated that the
proposal most recently submitted by Thoma Bravo was rejected by
the board of directors as containing inadequate consideration.
Over the next several days Raymond James continued to discuss
the proposed valuation with Thoma Bravo and its advisors. On
September 28, 2009, Thoma Bravo requested the opportunity
for direct discussions with Company management before it
submitted any revised offer. With Mr. DeNelskys
consent, and subject to compliance with the board of
directors prior directives, on September 29, 2009
Thoma Bravo spoke with Dr. Kahane and Mr. Burns solely
about the Companys business and prospects and forecast.
Later that day, Thoma Bravo submitted a revised proposal at a
price of $5.10 per share. Raymond James and Mr. DeNelsky
also discussed the proposed transaction that day.
Raymond James and Mr. Bravo had numerous discussions over
the next several days regarding the Companys operations,
results, prospects and valuation. On October 5, 2009,
Mr. Bravo orally indicated that Thoma Bravo would be
willing to increase the proposed price to $5.18, and Raymond
James indicated that would be viewed by the board of directors
as inadequate.
On October 6, 2009, Thoma Bravo submitted a revised written
proposal at a price of $5.30 per share, with all other terms
consistent with prior offers. Based on that proposal, a board of
directors meeting was scheduled for the next day. Also on
October 6, 2009, Dr. Kahane received an unsolicited
phone call from a potential strategic acquirer expressing an
interest in engaging in discussions regarding a possible
business combination. In light of the known exclusivity request
from Thoma Bravo and in consultation with Raymond James and
given the critical stage of the negotiations with Thoma Bravo,
the Company deferred any discussion with the potential strategic
acquirer.
On October 7, 2009, the board of directors met with
Management and representatives of Mintz Levin and discussed the
offer submitted by Thoma Bravo. In consultation with Mintz
Levin, the board of directors at length considered the most
effective method for insuring that it achieved the greatest
value possible for Company shareholders, in light of the terms
contained in the latest proposal from Thoma Bravo and the
possibility of other bids for the Company. The board of
directors authorized and instructed Company management to
communicate its willingness to consider a
30-day
exclusivity and due diligence period with Thoma Bravo based on a
transaction price of $5.40 per share, and with the proviso that
the definitive agreement would contain a
60-day
go-shop period with a reduced customary
break-up
fee
within which the
19
Company would be free to solicit competing proposals, following
which a customary fiduciary out would be available
with respect to continuing discussions or additional unsolicited
proposals at a higher customary
break-up
fee. Raymond James communicated these terms to Thoma Bravo later
in the day. On that date, the closing price of the
Companys Common Stock was $3.78 per share.
From October
8
th
through October 18, 2009, Raymond James and Thoma Bravo
engaged in numerous discussions, and Raymond James worked
directly with Mr. DeNelsky to keep Mr. DeNelsky fully
informed as to the status of discussions.
On October 19, 2009, the board of directors met and
formally reiterated its rejection of Thoma Bravos proposal
of October 6, 2006 at a price of $5.30 per share. At or
about this time, on Mintz Levins recommendation, the
Company engaged Morris, Nichols, Arsht & Tunnell LLP
(Morris Nichols) as Delaware counsel to advise the
board of directors. Over the next several days, Raymond James,
Mr. DeNelsky, Dr. Kahane, and Mintz Levin had numerous
discussions and negotiations regarding the most recent Thoma
Bravo proposal. During these discussions, with the concurrence
of the Lead Director, Raymond James suggested the possibility of
$5.35 as a compromise price between the current bid and ask
prices of $5.30 and $5.40, indicating that the board of
directors had not approved this suggestion. Thoma Bravo
indicated that they were encouraged by this
suggestion, but that they were concerned with the go-shop
negotiation. Raymond James engaged in numerous discussions with
Thoma Bravo, and Mintz Levin and Morris Nichols engaged in
extensive negotiations with Kirkland & Ellis, LLP,
counsel to Thoma Bravo (Kirkland), primarily over
the go-shop terms and fiduciary out provisions.
On October 27, 2009, during its regular quarterly meeting,
the board of directors considered the course of the ongoing
discussions, and the nature of the go-shop and other terms under
consideration. Following this meeting, the Lead Director advised
Raymond James as to the board of directors guidance.
Company management, Mintz Levin, Morris Nichols and Raymond
James then proposed revisions to the October
6
th
offer
reflecting the board of directors guidance and provided
those revisions to Thoma Bravo. The terms of the proposed letter
of intent were then extensively negotiated over the next several
days, involving multiple interactions among Raymond James, Thoma
Bravo, Kirkland, Mintz Levin, and Morris Nichols, and multiple
revisions of the proposed letter of intent were exchanged by the
parties and counsel.
On November 3, 2009, Thoma Bravo issued a revised proposal
containing their statement of their best and final terms,
including a price of $5.35 per share, a
30-day
exclusive negotiation period and a
45-day
go-shop
to
commence upon signing a definitive agreement with a reduced
break-up
fee. The board of directors held a special meeting later that
day to consider this proposal, with Management, Raymond James
and Mintz Levin in attendance. The Independent Directors also
met separately with Mintz Levin without Management present.
Counsel and Raymond James provided a summary of the terms of the
proposed letter of intent, and counsel advised the board of
directors concerning its fiduciary duties. The board of
directors and the Independent Directors discussed the terms of
the proposed letter of intent with counsel and Raymond James.
The board of directors carefully considered the terms and
conditions of the proposed letter of intent and all of its
options as to how to proceed. After a detailed discussion, the
full board of directors unanimously voted to accept the
proposal, which was countersigned by the Company later in the
day. On that date, the closing price of the Companys
Common Stock was $3.32 per share.
From November 5, 2009 through December 10, 2009,
counsel for the parties exchanged drafts of the Merger Agreement
and related documents, and negotiated their terms. The Company
made data, documents and other information available to Thoma
Bravo for due diligence purposes, and opened an on-line
data room on November 11, 2009. The Lead
Director remained fully engaged in the process, and the board of
directors met several times and received updates and provided
guidance on the issues under discussion including the terms of
the deal protection provisions, guarantees of the purchase price
from the acquiring funds, equity commitment letters from the
acquiring funds, the option to seek specific performance of the
agreements against the acquiring funds, the limitation of
consummation risk as reflected in the conditions to closing and
the terms of the material adverse change clause and the payment
of
break-up
fees by the Company.
20
After extensive negotiation of the terms and conditions of the
agreements, on December 10, 2009, the parties reached
agreement on the terms of the Merger Agreement and related
documents. The board of directors convened a special meeting
that evening, with Management, Mintz Levin, Morris Nichols and
Raymond James in attendance, to consider the transaction.
Counsel then reviewed with the board of directors the Merger
Agreement and related agreements which had been distributed to
the board of directors and discussed all of the key terms and
conditions of the agreements. After such discussion, Raymond
James reviewed their financial analysis and draft fairness
opinion, copies of which had been provided to the board of
directors prior to the meeting, and Raymond James then provided
a detailed discussion of its financial analysis. A discussion
ensued. After the discussion, Raymond James delivered its
opinion to our board to the effect that, as of such date, the
consideration to be received by holders of AMICAS Common Stock
(other than Newco and its affiliates) in the Merger was fair to
such shareholders from a financial point of view. The board of
directors then dismissed Management from the meeting, and the
Independent Directors discussed the terms and conditions of the
agreements, the Raymond James analysis and the fiduciary duties
of the board of directors with Mintz Levin and Morris Nichols.
After such discussion, Management was invited back to the
meeting. After further discussion, the board of directors
approved the transaction and authorized Management to execute
the Merger Agreement and related agreements. Subsequent to the
board meeting, however, Mr. Bravo advised Dr. Kahane
that Thoma Bravos investment committee was not prepared to
move forward at that time, referring to last-minute concerns
regarding items discovered in due diligence. Dr. Kahane
advised the Lead Director immediately, and the full board of
directors was informed in a brief meeting held later in the
morning. Mr. Newfield subsequently closed the data room,
and gave notice of termination of the exclusivity period under
the November 3, 2009 letter of intent.
From December 11, 2009 forward, the parties continued to
discuss the transaction. On December 16, 2009, with the
consent of the Lead Director, Dr. Kahane and Mr. Bravo
met to discuss the events of
December 10-11,
2009, and Mr. Bravo expressed continued interest in the
transaction, albeit at a reduced price. Dr. Kahane informed
the Lead Director and Raymond James regarding the content of
this discussion, and on December 19, 2009 Raymond James,
Thoma Bravo and Dr. Kahane had a further discussion
regarding the possibility of moving forward, in which Thoma
Bravo continued to seek a price reduction. On December 23,
2009, after consultation with the Lead Director, Raymond James,
Dr. Kahane and Mr. Burns communicated to Thoma Bravo
that the board of directors would only consider the transaction
on the same price and on the same terms as contained in the
Merger Agreement. The board of directors met with Management,
Raymond James, Mintz Levin and Morris Nichols in attendance, and
indicated that it would not be willing to reduce the price, or
change the terms of the transaction. Subsequent to this meeting,
Raymond James had several discussions with Thoma Bravo in which
the board of directors views were communicated. Thoma
Bravo subsequently indicated its willingness to proceed under
the same price and terms as originally negotiated.
On the morning of December 24, 2009 the parties reached
agreement on updated versions of the Merger Agreement and
associated documents, which contained no substantive changes
from the versions of December 10, 2009, and the board of
directors convened a meeting with Management, Mintz Levin,
Morris Nichols and Raymond James in attendance. Once again,
counsel reviewed with the board of directors a discussion of the
Merger Agreement and related agreements which had been
distributed to the board of directors and noted that there had
been no substantive changes to the agreements. After this
discussion, Raymond James discussed with our board its financial
analysis, and delivered its opinion to our board of directors
that, as of such date, the consideration to be received by
holders of AMICAS Common Stock (other than Newco and its
affiliates) in the Merger was fair to such shareholders from a
financial point of view. The board of directors then dismissed
Management and Raymond James from the meeting, and the
Independent Directors discussed the terms and conditions of the
agreements, the Raymond James analysis and the fiduciary duties
of the board of directors with Mintz Levin and Morris Nichols.
After such discussion, Management and Raymond James were invited
back to the meeting. After further discussion, the board of
directors approved the transaction and authorized Management to
execute the Merger Agreement and related agreements. Later that
day, the Merger Agreement and related agreements were signed and
delivered.
21
Under the Merger Agreement, the Company has a
45-day
go-shop period from the execution of the Merger
Agreement within which to solicit alternative acquisition
proposals. The Company may consider any number of unsolicited
proposals at any time until the date of the special meeting.
From and after the date that the Merger Agreement was signed,
Raymond James proactively contacted fifteen other parties that
might be potentially interested in presenting an acquisition
proposal to the Company. These parties were selected by
Mr. DeNelsky, in consultation with Management and Raymond
James, as being the parties most likely to have an interest in
acquiring the Company, and included both strategic and financial
potential acquirors. The Company will provide additional
disclosure with respect to events, if any, that would require
additional disclosure and that occurred after the execution of
the Merger Agreement, either prior to or following the
expiration of the go-shop period.
Reasons
for the Merger; Recommendation of Our Board of
Directors
Board of Directors.
After careful
consideration, on December 24, 2009 the AMICAS board of
directors unanimously (1) determined that the Merger
Agreement, the terms thereof and the Merger and the other
transactions contemplated thereby are fair to and in the best
interests of AMICAS and the holders of AMICAS common stock and
(2) approved and declared the advisability of the Merger
Agreement. Accordingly, the AMICAS board of directors recommends
that stockholders vote FOR the proposal to adopt the Merger
Agreement and FOR any adjournment proposal by AMICAS board
of directors.
Reasons for the Merger.
The material factors
and potential benefits of the Merger considered by AMICAS
board of directors, each of which support the determination and
recommendation set forth above, include the following:
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the recent and historical market prices of AMICAS common stock,
including the market price of AMICAS common stock relative to
those of other industry participants and general market indices,
and the fact that the $5.35 per share cash merger consideration
represents a premium of approximately 24% to the average closing
price of AMICAS Common Stock during the 30 trading days ending
on December 24, 2009, the last trading day before the
announcement of the Merger Agreement, and a premium of
approximately 38% based on the
90-day
average price of AMICAS common stock as of such date;
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the current volatile state of the economy and general
uncertainty surrounding forecasted economic conditions in both
the near-term and the long-term, globally as well as within the
healthcare information technology industry;
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the proposed changes in the laws, rules, and regulations
governing healthcare in the United States, and the impact of
such changes on the Companys customer base and their
respective reimbursement prospects, and the resulting potential
impact on the Companys revenues and prospects;
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the increasing and disproportionate costs of operating as a
small public company;
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AMICAS historical performance relative to its operating
plan and strategic goals;
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the increased competition from much larger-scale competitors;
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the cash consideration of $5.35 per share was likely the most
favorable financial consideration that could be obtained from
Parent and its affiliates, and further negotiation would have
caused Parent and its affiliates to abandon the transaction;
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the merger consideration is all cash, allowing AMICAS
stockholders to immediately realize at the closing of the Merger
a fair value in cash for their investment and certainty of value
for their AMICAS shares;
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the absence of a financing condition in the Merger Agreement,
and the equity commitment letters and guarantees provided by
Thoma Bravo and its co-investors for the full value of the
transaction, which may be specifically enforced directly by
AMICAS;
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22
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AMICAS right to compel Thoma Bravo and its co-investors to
specifically perform and thus to consummate the transaction;
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Thoma Bravos delivery of debt commitment letters from
Wells Fargo Foothill, Bank of Montreal and the HarbourVest Funds;
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the absence of any significant antitrust risk;
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AMICAS entitlement to a
45-day
post-signing go-shop period during which AMICAS is
permitted to both solicit interest in and receive from third
parties expressions of interest in alternative transactions
involving AMICAS at lower
break-up
fees, and, after such
45-day
period, permits AMICAS to continue discussions with persons who
submit qualifying written indications of interest during the
go-shop period and to respond to unsolicited qualifying written
proposals under certain circumstances;
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subject to compliance with the terms and conditions of the
Merger Agreement, the AMICAS board of directors is permitted to
change its recommendation to vote in favor of the proposal to
adopt the Merger Agreement and, prior to the adoption of the
Merger Agreement by stockholders, to terminate the Merger
Agreement in order to enter into a definitive agreement with a
competing bidder with respect to a Superior Proposal, upon the
payment to Parent or Merger Sub of the following termination
fees:
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a $4.3 million termination fee (inclusive of expense
reimbursement of up to $2.0 million) in the event that the
Merger Agreement is terminated in connection with entry into an
alternative definitive agreement during the go-shop
period, or
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an $8.6 million termination fee (inclusive of expense
reimbursement of up to $2.0 million) in the event that the
Merger Agreement is terminated in connection with entry into an
alternative definitive agreement after the go-shop period;
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AMICAS board of directors belief that the Merger was more
favorable to AMICAS stockholders than the potential value that
might result from other alternatives available, including
continuing to operate in the ordinary course of business and the
alternatives of pursuing other strategic initiatives;
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AMICAS board of directors belief that prospective
improvements in AMICAS operating performance and financial
results are fairly compensated by the price in the proposed
transaction, in light of the risks to the achievement of such
improvements, including significant execution risks on a going
forward basis;
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the opinion and financial presentation dated December 24,
2009 of Raymond James to the board of directors as to the
fairness, from a financial point of view and as of the date of
the opinion, of the $5.35 per share merger consideration to be
received by holders of AMICAS common stock (other than Newco and
its affiliates), as more fully described below under The
Merger Opinion of Financial Advisor beginning
on page 24;
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the availability of statutory appraisal rights to holders of
AMICAS common stock who comply with all of the required
procedures under Delaware law, which allows such holders to seek
appraisal of the fair value of their shares as determined by the
Delaware Court of Chancery; and
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the board of directors prohibition of Dr. Kahane or
any other member of Management discussing his or their
compensation, equity participation or other aspects of their
respective roles in the Company following the proposed
transaction until after the go-shop period expires.
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AMICAS board also considered certain material risks or
potentially adverse factors in making its determination and
recommendation, including the following:
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the fact that the $5.35 price per share will represent the
maximum price per share receivable by AMICAS stockholders unless
the Merger Agreement is terminated in accordance with its terms,
and that AMICAS will cease to be a public company and its
stockholders will no longer participate in any future earnings
or growth of AMICAS and therefore will not benefit from any
appreciation in the
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23
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Companys value, including any appreciation in value that
could be realized as a result of improvements to operations;
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the fact that gains from all-cash transactions are generally
taxable to AMICAS stockholders for U.S. federal income tax
purposes;
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the fact that some of the Companys directors and named
executive officers, as stockholders, may have interests that may
differ from those of AMICAS other stockholders (see
The Merger Interests of the Companys
Directors and Executive Officers in the Merger beginning
on page 32 for more information);
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the restrictions on the conduct of AMICAS business prior
to the completion of the Merger, requiring AMICAS to conduct
business only in the ordinary course, subject to specific
limitations, which could delay or prevent the Company from
undertaking business opportunities that may arise pending
completion of the Merger and the length of time between signing
and closing when these restrictions are in place;
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the terms of the Merger Agreement that place limitations on
AMICAS ability to consider competing proposals and to
terminate the Merger Agreement and accept a Superior Proposal;
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the requirement that AMICAS pay to Parent and Merger Sub a
termination fee of up to $8.6 million inclusive of expense
reimbursement of up to $2.0 million in the event that the
Merger Agreement is terminated under certain
circumstances; and
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the possibility of disruption to AMICAS operations
following the announcement of the Merger, and the resulting
effect if the Merger does not close, including the diversion of
management and employee attention, potential employee attrition
and the potential effects on the Companys business and its
relationships with customers and suppliers.
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The foregoing summarizes the material factors considered by the
board of directors in its consideration of the Merger. After
considering these factors, the board of directors concluded that
the positive factors relating to the Merger Agreement and the
Merger outweighed the potential negative factors. In view of the
wide variety of factors considered by the board of directors and
the complexity of these matters, the board of directors did not
find it practicable to quantify or otherwise assign relative
weights to the foregoing factors. In addition, individual
members of the board of directors may have assigned different
weights to various factors. The board of directors approved and
declared the advisability of the Merger Agreement based upon the
totality of the information presented to and considered
by it.
Our board of directors recommends that you vote
FOR the adoption of the Merger Agreement and
FOR the proposal to adjourn the special meeting, if
necessary or appropriate, to solicit additional proxies.
Opinion
of Financial Advisor
Pursuant to an engagement letter dated September 22, 2009,
we retained Raymond James as our exclusive financial advisor in
connection with the proposed Merger. At the meeting of our board
of directors on December 24, 2009, Raymond James delivered
to our board of directors its opinion that, as of such date and
based upon, and subject to, various qualifications and
assumptions described with respect to its opinion, the
consideration to be received in the proposed Merger by holders
of AMICAS Common Stock (other than the Parent and its
affiliates) was fair, from a financial point of view, to such
holders.
In selecting Raymond James as its exclusive financial advisor in
connection with the proposed Merger, our board of directors
considered, among other things, the fact that Raymond James is a
reputable investment banking firm with substantial experience
providing strategic advisory services to companies like AMICAS.
Raymond James, as part of its investment banking business, is
continuously engaged in the valuations of businesses and
securities in connection with mergers and acquisitions,
underwritings, private placements and other securities offerings
and valuations for corporate and other purposes.
24
The full text of the written opinion of Raymond James, dated
December 24, 2009, which sets forth assumptions made,
matters considered, and limits on the scope of review
undertaken, is attached as Annex B to this Proxy Statement.
Raymond Jamess opinion, which is addressed to our board of
directors, is directed only to the fairness, from a financial
point of view, to the holders of AMICAS Common Stock (other than
the Parent and its affiliates), of the consideration to be
received in the proposed Merger by such holders. Raymond James
expressed no opinion on the relative merits of the Merger
compared to any alternative that might be available to AMICAS or
the terms of the Merger Agreement. Raymond Jamess opinion
does not constitute a recommendation to our board of directors
or any holder of AMICAS Common Stock as to how to vote with
respect to the proposed Merger or otherwise and does not address
any other aspect of the proposed Merger or any related
transaction. Raymond Jamess opinion does not address the
fairness of the proposed Merger to, or any consideration that
may be received by, the holders of any other class of
securities, creditors or constituencies of AMICAS, or the
underlying decision by AMICAS or our board of directors to
approve the Merger Agreement. Raymond James expressed no opinion
as to the price at which AMICAS Common Stock or any other
securities would trade at any future time. In addition, Raymond
James did not express any view or opinion as to the fairness,
financial or otherwise, of the amount or nature of any
compensation payable to or to be received by our officers,
directors, or employees, or any class of such persons, in
connection with or as a result of the Merger. Raymond
Jamess opinion was authorized for issuance by the Fairness
Opinion Committee of Raymond James. The summary of the opinion
of Raymond James set forth in this proxy statement is qualified
in its entirety by reference to the full text of such opinion.
Holders of AMICAS Common Stock are urged to read the Raymond
James opinion in its entirety.
In arriving at its opinion, Raymond James, among other things:
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reviewed the financial terms and conditions as stated in the
Merger Agreement draft dated December 24, 2009;
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reviewed the Companys annual report filed on
Form 10-K
for the fiscal year ended December 31, 2008;
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reviewed the Companys quarterly reports filed on
Form 10-Q
for the quarters ended September 30, 2009, June 30,
2009, and March 31, 2009;
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reviewed certain other publicly available information regarding
the Company;
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reviewed other Company financial and operating information
provided by the Company;
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discussed the Companys operations, historical financial
results, future prospects and performance, and certain other
information related to the aforementioned with certain members
of the Companys management team;
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reviewed the historical stock price and trading activity for the
Companys Common Stock;
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compared certain financial and stock price-related information
for the Company with similar information for certain other
publicly-traded companies with businesses, or with business
segments, deemed by Raymond James to be similar in certain
respects to those of the Company;
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reviewed the financial terms and conditions of certain recent
business combinations involving companies in businesses, or with
business segments, deemed by Raymond James to be similar in
certain respects to those of the Company;
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reviewed certain historical information related to premiums paid
in acquisitions of publicly-traded companies within a size range
similar to the proposed Merger;
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performed a discounted cash flow analysis based on the
Companys financial projections for the five-year period
ending December 31, 2014; and
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considered such other quantitative and qualitative factors that
Raymond James deemed to be relevant to its evaluation.
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25
Raymond James did not assume responsibility for independent
verification of, and did not independently verify, any
information, whether publicly available or furnished to it by us
or any other party, including, without limitation, any financial
information, forecasts, or projections considered in connection
with the rendering of its opinion. For purposes of its opinion,
Raymond James assumed and relied upon, with permission from our
board of directors, the accuracy and completeness of all such
information. Raymond James did not conduct a physical inspection
of any of our properties or assets, and did not prepare or
obtain any independent evaluation or appraisal of any of our
assets or liabilities (contingent or otherwise). With respect to
the Companys financial projections and estimates,
including the Companys publicly announced financial
guidance, along with other information and data provided to or
otherwise reviewed by or discussed by certain members of the
Companys management team with Raymond James, Raymond James
(i) assumed, with permission from our board of directors,
that such financial projections, estimates and other such
information and data had been reasonably prepared in good faith
on bases reflecting the best currently available estimates and
judgments of management and (ii) relied upon each party to
advise Raymond James promptly if any information previously
provided became inaccurate or was required to be updated during
the period of its review. Raymond James expressed no view as to
any such projections or estimates or the bases and assumptions
on which there were prepared.
In rendering its opinion, Raymond James assumed that the Merger
would be consummated on the terms described in the Merger
Agreement. Furthermore, Raymond James assumed, in all respects
material to its analysis, that the representations and
warranties of each party contained in the Merger Agreement were
true and correct, that each party will perform all of the
covenants and agreements required to be performed by it under
the Merger Agreement, and that all conditions to the
consummation of the Merger will be satisfied without being
waived. Raymond James also assumed that all material
governmental, regulatory, or other consents and approvals will
be obtained and that, in the course of obtaining any necessary
governmental, regulatory, or other consents and approvals
necessary for the consummation of the Merger, as contemplated by
the Merger Agreement, no restrictions will be imposed or
amendments, modifications, or waivers made that would have any
material adverse effect on AMICAS. Raymond James expressed no
opinion regarding the structure or tax consequences of the
Merger, or the availability or advisability of any alternatives
to the Merger.
Raymond Jamess opinion is necessarily based on economic,
market, and other conditions and the information made available
to Raymond James as of December 24, 2009. It should be
understood that subsequent developments could affect Raymond
Jamess opinion and that Raymond James does not have any
obligation to reaffirm its opinion.
Summary
of Financial Analyses Conducted by Raymond James
The following is a summary of the material financial analyses
underlying Raymond Jamess opinion, dated December 24,
2009, delivered to our board of directors in connection with the
Merger at a meeting of our board of directors on
December 24, 2009. The order of the analyses described
below does not represent the relative importance or weight given
to those analyses by Raymond James or by our board of directors.
Considering such data without considering the full narrative
description of the financial analyses could create a misleading
or incomplete view of Raymond Jamess financial analyses.
In arriving at its opinion, Raymond James did not attribute any
particular weight to any analysis or factor considered by it,
but rather made qualitative judgments as to the significance and
relevance of each analysis and factor. Accordingly, Raymond
James believes that its analyses must be considered as a whole
and that selecting portions of its analyses, without considering
all analyses, would create an incomplete view of the process
underlying its opinion.
The following summarizes the material financial analyses
presented by Raymond James to our board of directors at its
meeting on December 24, 2009 and considered by Raymond
James in rendering its opinion. The description below explains
Raymond Jamess methodology for evaluating the fairness,
from a financial point of view, of the consideration to be
received in the proposed Merger by the holders of AMICAS Common
Stock (other than the Parent and its affiliates). No company or
transaction used in the analyses described
26
below was deemed to be directly comparable to AMICAS or the
Merger, and the summary set forth below does not purport to be a
complete description of the analyses or data presented by
Raymond James.
Historical
Stock Trading Analysis
Raymond James analyzed the performance of AMICAS Common Stock
between December 23, 2008 and December 23, 2009.
During this period, AMICAS Common Stock achieved a closing price
high of $4.71 and a closing price low of $1.51. The results of
the historical stock trading analysis are summarized below.
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Implied Premium of
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Price
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Merger Consideration
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Merger consideration
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$
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5.35
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One-day
volume-weighted average price* (VWAP)
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$
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4.36
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22.7
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%
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Five-day
VWAP
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$
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4.39
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21.9
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%
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30-day
VWAP
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$
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4.36
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22.7
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%
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60-day
VWAP
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$
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4.04
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32.4
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%
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90-day
VWAP
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$
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3.94
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35.8
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%
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*
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Volume weighted average price is the ratio of the value traded
to total volume traded over a particular time horizon prior to
December 23, 2009, as provided by Bloomberg. Raymond James
used a volume weighted average price to analyze historical
prices of AMICAS Common Stock because closing prices for shares
of companies that have relatively small average trading volumes,
such as AMICAS, are subject to increased levels of volatility
that may not accurately reflect market prices at which shares
are generally traded over a particular period of time.
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Selected
Public Companies Analysis
Raymond James compared certain operating, financial, trading,
and valuation information for AMICAS to similar publicly
available operating, financial, trading, and valuation
information for four selected companies, each of which Raymond
James believes to have a business model reasonably similar, in
whole or in part, to that of AMICAS. These selected companies
included:
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Merge Healthcare, Inc.;
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Nighthawk Radiology Holdings, Inc.;
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Virtual Radiologic Corporation; and
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Vital Images, Inc.
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For each of the selected companies, Raymond James calculated and
analyzed the multiples of enterprise value (calculated as the
sum of the value of common equity on a fully diluted basis and
the value of net debt) divided by (i) projected revenue and
(ii) projected earnings before interest, income taxes,
depreciation, and amortization, or EBITDA (adjusted for
non-recurring income and expenses), for the years ending
December 31, 2009 and 2010. Raymond James also calculated
and analyzed the multiples of price per share divided by the
projected diluted earnings per share (EPS) (adjusted
for non-recurring income and expenses) for the years ending
December 31, 2009 and 2010. Raymond James reviewed the
relative valuation multiples of the selected companies and
compared them to the corresponding multiples for AMICAS implied
by the merger
27
consideration of $5.35 per share of AMICAS common stock. The
results of the selected public company analysis are summarized
below:
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AMICAS
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(Implied by
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the Merger
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Selected Companies
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Multiple
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Consideration)
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Mean
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Median
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Enterprise Value/Revenue:
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Calendar Year (CY) 2009
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1.9
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x
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1.6
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x
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1.2
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x
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CY2010
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1.6
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x
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1.4
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x
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1.1
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x
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Enterprise Value/EBITDA:
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CY2009
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14.0
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x
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12.1
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x
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8.5
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x
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CY2010
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9.0
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x
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7.8
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x
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6.3
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x
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Price/EPS:
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CY2009
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35.7
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x
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13.6
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x
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16.2
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x
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CY2010
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10.9
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x
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10.0
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x
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Raymond James then applied the mean and median multiples of the
selected companies to the relevant AMICAS revenue, EBITDA, and
EPS metrics, using the Companys publicly announced
financial guidance and consensus Wall Street analyst estimates,
to determine a range of implied AMICAS enterprise values. After
adjusting for our net debt, Raymond James reviewed the range of
per share prices derived in the selected public companies
analysis as of December 23, 2009 and compared them to the
merger consideration of $5.35 per share for AMICAS. The results
of the selected public companies analysis are summarized below:
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AMICAS
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(Merger
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Selected Companies
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Equity Value per Share
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Consideration)
|
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Mean
|
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Median
|
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Enterprise Value/Revenue:
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CY2009
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$
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5.35
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$
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4.68
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$
|
3.76
|
|
CY2010
|
|
$
|
5.35
|
|
|
$
|
4.92
|
|
|
$
|
4.19
|
|
Enterprise Value/EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
CY2009
|
|
$
|
5.35
|
|
|
$
|
4.77
|
|
|
$
|
3.67
|
|
CY2010
|
|
$
|
5.35
|
|
|
$
|
4.79
|
|
|
$
|
4.10
|
|
Price/EPS:
|
|
|
|
|
|
|
|
|
|
|
|
|
CY2009
|
|
$
|
5.35
|
|
|
$
|
2.04
|
|
|
$
|
2.44
|
|
CY2010
|
|
$
|
5.35
|
|
|
$
|
2.84
|
|
|
$
|
2.61
|
|
No company utilized in the selected companies analysis is
identical to AMICAS, and, accordingly, an analysis of the
results of the foregoing necessarily involves complex
considerations and judgments concerning our financial and
operating characteristics and other factors that would affect
the companies to which AMICAS is being compared.
Selected
Transactions Analysis
Raymond James derived a range of potential values for AMICAS
relative to the valuation of the target companies in twelve
select mergers and acquisitions involving companies that Raymond
James believed to have similar business models, in whole or in
part, to that of AMICAS and were announced and completed (or
were then pending) between January 1, 2005 and
December 23, 2009. The selected transactions considered
included the following:
|
|
|
|
|
Francisco Partners Management LLC pending acquisition of
Quadramed Corp., announced in December 2009;
|
|
|
|
AMICAS, Inc. acquisition of Emageon Inc., closed in April 2009;
|
|
|
|
HealthPort Inc. acquisition of ChartOne, Inc., closed in
September 2008;
|
28
|
|
|
|
|
St. Jude Medical Inc. acquisition of EP Medsystems, Inc., closed
in July 2008;
|
|
|
|
Companion Technologies Corporation acquisition of Smart Document
Solutions, LLC, closed in June 2007;
|
|
|
|
Battery Ventures acquisition of Quovadx, Inc., closed in July
2007;
|
|
|
|
Nighthawk Radiology Holdings, Inc. acquisition of The Radlinx
Group, LTD, closed in April 2007;
|
|
|
|
McKesson Corporation acquisition of Per-Se Technologies, Inc.,
closed in January 2007;
|
|
|
|
Koninklijke Philips Electronics NV acquisition of Witt
Biomedical Corporation, closed in April 2006;
|
|
|
|
GE Healthcare Ltd. acquisition of IDX Systems Corp., closed in
January 2006;
|
|
|
|
Per-Se Technologies, Inc. acquisition of NDCHealth Corp., closed
in January 2006;
|
|
|
|
Merge Healthcare, Inc. acquisition of Cedara Software
Corporation, closed in June 2005.
|
Raymond James calculated and analyzed the valuation multiples of
transaction enterprise value compared to the revenue and EBITDA
(adjusted for non-recurring income and expenses) of the target
companies, in each case for the reported twelve month period
prior to announcement of the transaction, where such information
was publicly available. Raymond James reviewed the relative
valuation multiples of the selected target companies and
compared them to the corresponding multiples for AMICAS implied
by the merger consideration of $5.35 per share of AMICAS Common
Stock. The results of the selected transactions analysis are
summarized below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMICAS
|
|
|
|
|
|
|
(Implied by
|
|
|
|
|
|
|
the Merger
|
|
Target Companies
|
Multiple
|
|
Consideration)
|
|
Mean
|
|
Median
|
|
Revenue
|
|
|
1.9
|
x
|
|
|
2.2
|
x
|
|
|
2.2
|
x
|
EBITDA
|
|
|
14.0
|
x
|
|
|
13.4
|
x
|
|
|
13.8
|
x
|
Raymond James then applied the mean and median multiples of the
selected target companies to the relevant AMICAS revenue and
EBITDA metrics, using the Companys publicly announced
financial guidance, to determine a range of implied AMICAS
enterprise values. After adjusting for our net debt, Raymond
James reviewed the range of per share prices derived in the
selected transactions analysis and compared them to the offer
price of $5.35 per share for AMICAS. The results of the selected
transactions analysis are summarized below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMICAS
|
|
|
|
|
|
|
Merger
|
|
Target Companies
|
Equity Value per Share
|
|
Consideration
|
|
Mean
|
|
Median
|
|
CY2009:
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
5.35
|
|
|
$
|
5.98
|
|
|
$
|
5.90
|
|
EBITDA
|
|
$
|
5.35
|
|
|
$
|
5.17
|
|
|
$
|
5.29
|
|
No transaction utilized in the selected transactions analysis is
identical to the proposed Merger, including the timing or size
of the transactions, and, accordingly, an analysis of the
results of the foregoing necessarily involves complex
considerations and judgments concerning our financial and
operating characteristics and other factors that would affect
the selected transactions to which AMICAS is being compared.
Premiums
Paid Analysis
For informational purposes, Raymond James calculated and
analyzed the premiums paid in all-cash acquisitions for 65
U.S. publicly-traded companies with transaction enterprise
values between $100 and $500 million that were announced
and completed between September 1, 2007 and
December 23, 2009.
Raymond Jamess analysis was based on the one-, five-,
thirty-, sixty- and
ninety-day
average implied premiums paid in such transactions. The implied
premiums in this analysis were calculated by comparing the
29
publicly disclosed transaction price to the target
companys one-, five-, thirty-, sixty- and
ninety-day
average stock price prior to the announcement of each of the
applicable transactions. Raymond James compared the one-, five-,
thirty-, sixty- and
ninety-day
average implied premiums paid for the target companies to the
corresponding average implied premiums for AMICAS based on the
merger consideration of $5.35 per share of AMICAS common stock,
as summarized below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMICAS
|
|
|
|
|
|
|
(Implied by
|
|
|
|
|
|
|
the Merger
|
|
Target Companies
|
Implied Premiums Paid
|
|
Consideration)
|
|
Mean
|
|
Median
|
|
One-day
premium
|
|
|
22.1
|
%
|
|
|
66.2
|
%
|
|
|
44.7
|
%
|
Five-day
premium
|
|
|
19.7
|
%
|
|
|
66.6
|
%
|
|
|
48.8
|
%
|
30-day
premium
|
|
|
31.1
|
%
|
|
|
62.6
|
%
|
|
|
42.3
|
%
|
60-day
premium
|
|
|
48.6
|
%
|
|
|
53.9
|
%
|
|
|
42.7
|
%
|
90-day
premium
|
|
|
61.1
|
%
|
|
|
40.1
|
%
|
|
|
34.8
|
%
|
The implied price per share range for AMICAS shown in the table
below was calculated with the above transaction premiums using
the average closing prices of AMICAS common stock as measured
from December 23, 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMICAS
|
|
|
|
|
|
|
(Merger
|
|
Target Companies
|
Implied Premiums Paid
|
|
Consideration)
|
|
Mean
|
|
Median
|
|
One-day
premium
|
|
$
|
5.35
|
|
|
$
|
7.28
|
|
|
$
|
6.34
|
|
Five-day
premium
|
|
$
|
5.35
|
|
|
$
|
7.45
|
|
|
$
|
6.65
|
|
30-day
premium
|
|
$
|
5.35
|
|
|
$
|
6.64
|
|
|
$
|
5.80
|
|
60-day
premium
|
|
$
|
5.35
|
|
|
$
|
5.54
|
|
|
$
|
5.14
|
|
90-day
premium
|
|
$
|
5.35
|
|
|
$
|
4.65
|
|
|
$
|
4.47
|
|
No transaction utilized in the premiums paid analysis is
identical to the Merger, including the timing or size of the
transactions, and, accordingly, an analysis of the results of
the foregoing necessarily involves complex considerations and
judgments concerning our financial and operating characteristics
and other factors that would affect the acquisition value of
companies to which AMICAS is being compared.
Discounted
Cash Flow Analysis
Raymond James calculated and analyzed the discounted present
value of our projected free cash flows for the years ending
December 31, 2010 through 2014 on a standalone basis.
Raymond James defined free cash flows as earnings after taxes,
plus depreciation, plus amortization, less capital expenditures,
less investment in working capital.
The discounted cash flow analysis was based on projections of
our financial performance provided to Raymond James by certain
members of our management team. Consistent with the periods
included in the financial projections, Raymond James used a
range of perpetual growth rates from 3.0% to 4.0% to derive a
range of terminal values for us in 2014.
The projected free cash flows and terminal values, including the
future tax benefits associated with the utilization of net
operating losses as described to Raymond James by certain
members of our management team, were discounted using rates
ranging from 11.0% to 15.0%, which reflects our weighted average
cost of capital. The resulting range of present equity values
was divided by the number of diluted shares outstanding in order
to arrive at a range of present values per share. Raymond James
reviewed the range of per share
30
prices implied by the discounted cash flow analysis and compared
them to the merger consideration of $5.35 per share of AMICAS
common stock. The results of the discounted cash flow analysis
are summarized below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMICAS
|
|
|
|
|
|
|
(Implied by
|
|
|
|
|
|
|
the Merger
|
|
Present Equity Value
|
Discounted Cash Flow
|
|
Consideration)
|
|
Low
|
|
High
|
|
Equity value per share
|
|
$
|
5.35
|
|
|
$
|
4.32
|
|
|
$
|
6.24
|
|
Additional
Considerations
The foregoing summary describes all analyses and quantitative
factors that Raymond James deemed material in its presentation
to our board of directors but is not a comprehensive description
of all analyses performed and factors considered by Raymond
James in connection with preparing its opinion. The preparation
of a fairness opinion is a complex process involving the
application of subjective business judgment in determining the
most appropriate and relevant methods of financial analysis and
the application of those methods to the particular circumstances
and, therefore, is not readily susceptible to summary
description.
The analyses are not appraisals nor do they necessarily reflect
the prices at which assets or securities actually may be sold.
In performing its analyses, Raymond James made, and was provided
by certain members of our management team with, numerous
assumptions with respect to industry performance, general
business, economic, and regulatory conditions and other matters,
many of which are beyond the control of AMICAS. The analyses
performed by Raymond James, particularly those based on
projections or estimates, are not necessarily indicative of
actual values, trading values, or actual future results which
might be achieved, all of which may be significantly more or
less favorable than suggested by such analyses at the time of
the opinion delivery. Because such analyses are inherently
subject to uncertainty, being based upon numerous factors or
events beyond the control of AMICAS or its advisors, none of
AMICAS, Raymond James or any other person assumes responsibility
if future results or actual values are materially different from
these projections, estimates, or assumptions. All such analyses
were prepared solely as a part of Raymond Jamess analysis
of the fairness, from a financial point of view, of the
consideration to be received in the proposed Merger by holders
of AMICAS common stock (other than the Parent and its
affiliates). Raymond Jamess opinion is directed to our
board of directors and is intended for its use in considering
the Merger. The per share merger consideration was determined
through negotiations between our board of directors and the
Parent. The opinion of Raymond James was one of many factors
taken into consideration by the AMICAS board of directors in
making its determination to approve the Merger. Consequently,
the analyses described above should not be viewed as
determinative of the opinion of the AMICAS board of directors or
management with respect to the value of AMICAS. We placed no
limits on the scope of the analysis performed by Raymond James,
other than as described above.
The AMICAS board of directors selected Raymond James as
financial advisor in connection with the Merger based on Raymond
Jamess qualifications, expertise, reputation, and
experience in mergers and acquisitions. Upon engagement of
Raymond James, AMICAS paid Raymond James a retainer of $50,000.
For services rendered in connection with the delivery of its
opinion, AMICAS paid Raymond James an investment banking fee
upon delivery of its opinion of $250,000. Compensation of
approximately $1.8 million (to be determined at the time of
closing of the Merger) will be payable to Raymond James upon
completion of the Merger, against which the amounts paid for the
retainer and for the opinion will be credited. AMICAS also
agreed to reimburse Raymond James for expenses incurred in
connection with its services, including the fees and expenses of
its counsel, and will indemnify Raymond James, including
liabilities under federal securities laws, relating to, or
arising out of, its engagement.
Raymond James is actively involved in the investment banking
business and regularly undertakes the valuation of investment
securities in connection with public offerings, private
placements, business combinations, and similar transactions. In
the ordinary course of business, Raymond James may trade in the
securities of AMICAS for its own account and for the accounts of
its customers and, accordingly, may at any time hold a long or
short position in such securities.
31
Interests
of the Companys Directors and Executive Officers in the
Merger
In considering the recommendations of the board of directors,
AMICAS stockholders should be aware that certain of our
directors and executive officers have interests in the
transaction that are different from, or in addition to, the
interests of our stockholders generally. These interests may
present them with actual or potential conflicts of interest, and
these interests, to the extent material, are described below.
The board of directors was aware of these potential conflicts of
interest and considered them, among other matters, in reaching
its decisions to approve the Merger Agreement and the Merger and
the recommendation that our stockholders vote in favor of
approving the Merger.
Treatment
of Stock Options
Equity
Compensation Awards
As of the record date, there were approximately
4,464,252 shares of the Companys Common Stock
issuable pursuant to stock options granted under our equity
incentive plans to our current executive officers and directors.
Except as directed by the Company in consultation with Newco,
upon the consummation of the Merger, each then outstanding
Company option, whether vested or unvested, shall be cancelled
without consideration in accordance with the terms of the
applicable stock option plan of the Company. Most outstanding
stock options are already vested, and the Companys 2006
Stock Incentive Plan under which most of the unvested options
were granted, does not provide for automatic vesting of unvested
options upon a change in control of the Company. However, the
board of directors has determined to accelerate the vesting of
50% of the unvested options under the Companys 2006 Stock
Incentive Plan, other than options by which their terms
expressly do not accelerate, immediately prior to the closing of
the Merger (such that they will vest) in connection with this
transaction if this transaction is completed. Between now and
the effective time of the Merger an option holder may exercise
his or her stock options in accordance with the applicable stock
option plan of the Company and the agreement pursuant to which
such options were granted. If an option holder does exercise, he
or she will become a stockholder of AMICAS and receive the
merger consideration. In addition, shortly before closing each
option holder will be notified of the final date to exercise his
or her stock options that will vest in connection with the
Merger. The shares of Company Common Stock to be issued upon the
exercise of stock options during this final exercise period will
also be sold to Newco for $5.35 per share, with the proceeds
paid to the option holder, without interest thereon, less
applicable taxes required to be withheld with respect to these
payments. The aggregate value of all options that are or will
become vested and exercised in connection with the Merger will
be approximately $11,175,588 with respect to our executive
officers and approximately $751,850 with respect to our
non-employee directors. Options for approximately
41,915 shares of Common Stock have exercise prices above
$5.35 per share and if not exercised prior to the Merger, will
be cancelled upon the consummation of the Merger. In addition,
approximately 567,872 unvested options will be cancelled upon
the consummation of the Merger.
As of the record date, there were approximately
60,690 shares of restricted Common Stock granted under our
equity incentive plans to our current directors. Upon the
consummation of the Merger, all restrictions and repurchase
rights on each share of the Companys restricted Common
Stock that is outstanding immediately prior thereto shall lapse
and each share of restricted Common Stock shall be cancelled and
extinguished and converted automatically into the right to
receive $5.35 in cash, without interest and less any applicable
withholding tax.
The aggregate value of all outstanding shares of restricted
Common Stock that will be purchased from our directors in
connection with the Merger will be approximately $324,692. Our
executive officers do not hold any shares of restricted Common
Stock.
Under our 2010 executive compensation plan, all of our executive
officers are entitled to receive a cash payment upon a change of
control equal to his or her on-target annual cash bonus.
The value of all stock options that will be exercised and cashed
out, outstanding shares of restricted Common Stock that will be
purchased, and cash bonuses that will be paid in connection with
the Merger with
32
respect to each of our non-employee directors and executive
officers on an individual basis is expected to be as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of Stock
|
|
Value of
|
|
Cash Bonus Payable
|
|
|
Option
|
|
Restricted
|
|
Under 2010 Executive
|
Name
|
|
Awards
|
|
Stock
|
|
Compensation Plan
|
|
Non-Employee Directors:
|
|
|
|
|
|
|
|
|
|
|
|
|
Stephen J. Denelsky
|
|
$
|
115,800
|
|
|
$
|
69,753
|
|
|
$
|
0
|
|
Joseph D. Hill
|
|
$
|
446,950
|
|
|
$
|
61,728
|
|
|
$
|
0
|
|
Stephen J. Lifshatz
|
|
$
|
34,950
|
|
|
$
|
69,753
|
|
|
$
|
0
|
|
David B. Shepherd
|
|
$
|
115,175
|
|
|
$
|
61,728
|
|
|
$
|
0
|
|
John J. Sviokla
|
|
$
|
38,975
|
|
|
$
|
61,728
|
|
|
$
|
0
|
|
Executive Officers:
|
|
|
|
|
|
|
|
|
|
|
|
|
Stephen N. Kahane
|
|
$
|
6,875,758
|
|
|
$
|
0
|
|
|
$
|
620,000
|
|
Kevin C. Burns
|
|
$
|
1,644,460
|
|
|
$
|
0
|
|
|
$
|
290,000
|
|
Frank E. Stearns, Jr. (1)
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
Paul Merrild
|
|
$
|
909,160
|
|
|
$
|
0
|
|
|
$
|
120,000
|
|
Craig Newfield
|
|
$
|
648,000
|
|
|
$
|
0
|
|
|
$
|
110,000
|
|
Keith Stahlhut
|
|
$
|
86,100
|
|
|
$
|
0
|
|
|
$
|
75,000
|
|
Kang Wang
|
|
$
|
969,060
|
|
|
$
|
0
|
|
|
$
|
110,000
|
|
|
|
|
(1)
|
|
Frank C. Stearns, Jr., our senior vice president of client
solutions, resigned effective as of January 15, 2010.
|
Management
Arrangements
As of the date of this proxy statement, we have not entered into
any employment agreements with our management in connection with
the Merger, nor amended or modified any existing employment
agreements in connection with the Merger.
Although it is likely that certain members of our management
team will enter into new arrangements with Newco or its
affiliates regarding employment (and severance arrangements)
with, and the right to purchase or participate in the equity of,
Newco (and/or a subsidiary thereof), there can be no assurance
that the parties will reach agreement, and these matters may be
subject to negotiations and discussion.
Existing
Change of Control and Severance Benefits
Our employment agreement with Dr. Stephen N. Kahane, our
president and chief executive officer, provides that upon
termination of employment within 12 months following a
change in control of AMICAS, Dr. Kahane will receive a
severance payment in an amount equal to twice his then-current
annual base salary and the payment of health insurance premiums
for up to eighteen months. Pursuant to his employment agreement,
all of Dr. Kahanes options vest upon a change of
control.
Our employment agreement with Kevin C. Burns, our Chief
Financial Officer, provides that upon termination of employment
within twelve (12) months following a change in control of
AMICAS, Mr. Burns will receive a severance payment in an
amount equal to one and one-half times his then-current annual
base salary and the Company will also pay his health insurance
premiums for up to eighteen months. Pursuant to his employment
agreement, all of Mr. Burns options, except
3,692 shares, will vest upon a change of control. Under the
Merger Agreement, 1,846 shares of the remaining 3,692
unvested shares will accelerate and become vested, and the
remaining 1,846 shares will be forfeited.
33
Our employment agreement with Paul Merrild, our senior vice
president of marketing and business development, provides that
upon termination of employment (irrespective of a change in
control of AMICAS), Mr. Merrild will receive severance in
an amount equal to one-half of his then-current annual base
salary in the form of salary continuation, and the payment of
health insurance premiums for up to three months. Pursuant to
his option agreements, 105,001 of Mr. Merrilds stock
options that are unvested at the time of the change in control
will accelerate and become vested. Under the Merger Agreement,
209 (50%) of the remaining 417 unvested shares will accelerate
and become vested, and the remaining 208 shares will be
forfeited.
Our employment arrangement with Craig Newfield, our vice
president and general counsel, provides that upon termination of
employment following a change in control of AMICAS,
Mr. Newfield will receive severance in an amount equal to
his then-current annual base salary in the form of salary
continuation, and the payment of health insurance premiums for
up to twelve months. Pursuant to his option agreement, all of
Mr. Newfields options vest upon a change of control.
Our employment arrangement with Kang Wang, our senior vice
president of research and development and chief technology
officer, provides that upon termination of employment
(irrespective of a change in control of AMICAS), Mr. Wang
will receive severance in an amount equal to one-half of his
then-current annual base salary in the form of salary
continuation, and the payment of health insurance premiums for
up to six months. Pursuant to his option agreements, 105,001 of
Mr. Wangs stock options that are unvested at the time
of the change in control will accelerate and become vested.
Under the Merger Agreement, 209 (50%) of the remaining 417
unvested shares will accelerate and become vested, and the
remaining 208 shares will be forfeited.
Our employment arrangement with Keith Stahlhut, our senior vice
president of sales, provides that upon termination of employment
(irrespective of a change in control of AMICAS),
Mr. Stahlhut will receive severance in an amount equal to
one-half of his then-current annual base salary in the form of
salary continuation, and the payment of health insurance
premiums for up to six months. Pursuant to his option agreement,
30,000 shares (50%) of Mr. Stahlhuts options
that are unvested at the time of the change in control will
accelerate and become vested. Under the Merger Agreement, 15,000
(50%) of the remaining 30,000 unvested shares will accelerate
and become vested, and the remaining 15,000 shares will be
forfeited.
The severance payments to Dr. Kahane and Mr. Burns
described above (other than health insurance premiums and
payments that are made upon change in control) will be made in a
lump sum six months following the date that their employment is
terminated, and payments based on base salary will be forfeited
if the executive becomes employed by a competitor during such
six month period.
Indemnification
and Insurance
For a period of six years from and after the consummation of the
Merger, the Surviving Corporation has agreed to indemnify,
advance expenses to, and hold harmless all of our past and
present officers and directors to the same extent and in the
same manner such persons are indemnified as of the date of the
Merger Agreement by us pursuant to the DGCL, our Certificate of
Incorporation and our Bylaws for acts or omissions occurring at
or prior to the consummation of the Merger.
Voting
Agreements
On December 24, 2009, the Company and selected stockholders
(including Kevin C. Burns, Stephen J. Denelsky, Joseph D. Hill,
Stephen N. Kahane, M.D., Stephen J. Lifshatz, Paul Merrild,
Craig Newfield, David B. Shepherd, Frank E.
Stearns, Jr., John J. Sviolka and Kang Wang), (referred to
in this proxy statement as the selected stockholders), entered
into a voting agreement pursuant to which the selected
stockholders agreed to vote in favor of the adoption and
approval of the Merger Agreement, the Merger and the
transactions contemplated by the Merger Agreement. In addition,
the selected stockholders agreed not to directly or indirectly
transfer their respective shares of the Companys Common
Stock during the term of their respective voting agreement,
subject to certain exceptions. As of January 15, 2010, the
record date, the selected stockholders held and are entitled to
vote, in the aggregate, 248,632 shares of the
Companys Common Stock,
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representing 0.68% of the outstanding Companys Common
Stock. The selected stockholders include all directors and
executive officers of the Company, with the exception of Keith
Stahlhut.
Regulatory
Matters
The notification and waiting period requirements of the HSR Act
apply to the proposed transaction. AMICAS and Newco filed
notification and report forms under the HSR Act with the FTC and
the Antitrust Division of the DOJ on January 7, 2010. The
FTC and the Antitrust Division frequently scrutinize the
legality under the antitrust laws of transactions such as the
Merger. At any time before or after the consummation of the
Merger, the FTC or the Antitrust Division could take such action
under the antitrust laws as it deems necessary or desirable in
the public interest, including seeking to enjoin the transaction
or seeking the divestiture of shares purchased or the
divestiture of substantial assets of Newco, AMICAS or their
respective subsidiaries. Private parties, state attorneys
general
and/or
foreign governmental entities may also bring legal action under
antitrust laws under certain circumstances. Based upon an
examination of information available relating to the businesses
in which Newco, AMICAS and their respective subsidiaries are
engaged, the parties believe that the transaction will not
violate the antitrust laws. Nevertheless, there can be no
assurance that a challenge to the transaction on antitrust
grounds will not be made or, if such a challenge is made, what
the result would be.
We believe we are not required to make any other filings nor
obtain any other material governmental consents or approvals
before the parties completion of the purchase. If any such
other approvals, consents or filings are required to consummate
the Merger, we will seek or make such consents, approvals or
filings. See the section titled The Merger
Agreement Consummation of the Merger beginning
on page 40.
Appraisal
Rights
The discussion of the provisions set forth below is not a
complete summary regarding your appraisal rights under Delaware
law and is qualified in its entirety by reference to the text of
the relevant provisions of Delaware law, which are attached to
this proxy statement as
Annex C.
Stockholders
intending to exercise appraisal rights should carefully review
Annex C.
Failure to follow precisely any of the
statutory procedures set forth in
Annex C
may result
in a termination or waiver of these rights.
If the Merger is consummated, dissenting holders of our Common
Stock who follow the procedures specified in Section 262 of
the DGCL (Section 262), within the appropriate
time periods will be entitled to have their shares of our Common
Stock appraised by the Delaware Court of Chancery and to receive
the fair value of such shares in cash as determined
by the Delaware Court of Chancery in lieu of the consideration
that such stockholder would otherwise be entitled to receive
pursuant to the Merger Agreement.
The following is a brief summary of Section 262, which sets
forth the procedures for dissenting from the Merger and
demanding statutory appraisal rights. Failure to follow the
procedures set forth in Section 262 precisely could result
in the loss of appraisal rights. This proxy statement
constitutes notice to holders of our Common Stock concerning the
availability of appraisal rights under Section 262. A
stockholder of record wishing to assert appraisal rights must
hold the shares of stock on the date of making a demand for
appraisal rights with respect to such shares and must
continuously hold such shares through the effective time of the
Merger. All references in this summary of appraisal rights to a
stockholder or holders of shares are to
the record holder or holders of such shares.
Stockholders who desire to exercise their appraisal rights must
satisfy all of the conditions of Section 262. A written
demand for appraisal of shares must be filed with us before the
special meeting on , 2010. This written demand for
appraisal of shares must be in addition to and separate from a
vote against the Merger Agreement. Stockholders electing to
exercise their appraisal rights must not vote FOR
adoption of the Merger Agreement. Any proxy or vote against
adoption of the Merger Agreement will not in and of itself
constitute a demand for appraisal within the meaning of
Section 262. Also, because a submitted proxy not marked
AGAINST or ABSTAIN will be voted
FOR the proposal to adopt the Merger Agreement, the
submission of a proxy not marked AGAINST or
ABSTAIN will result in the waiver of appraisal
rights.
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A demand for appraisal must be executed by or for the
stockholder of record, and must reasonably inform the Company of
the identity of the stockholder of record and that such
stockholder intends thereby to demand appraisal of the Common
Stock. If the shares are owned of record in a fiduciary
capacity, such as by a trustee, guardian or custodian, this
demand must be executed by or for the fiduciary. If the shares
are owned by or for more than one person, as in a joint tenancy
or tenancy in common, such demand must be executed by or for all
joint owners. An authorized agent, including an agent for two or
more joint owners, may execute the demand for appraisal for a
stockholder of record; however, the agent must identify the
record owner and expressly disclose the fact that, in exercising
the demand, he is acting as agent for the record owner. A person
having a beneficial interest in our common stock held of record
in the name of another person, such as a broker or nominee, must
act promptly to cause the record holder to follow the steps
summarized below and in a timely manner to perfect whatever
appraisal rights the beneficial owners may have.
Any of our stockholders who elects to exercise appraisal rights
should mail or deliver his, her or its written demand to us at
our address at 20 Guest Street, Boston, Massachusetts 02135,
Attention: Secretary. The written demand for appraisal should
specify the stockholders name and mailing address, and
that the stockholder is demanding appraisal of his, her or its
AMICAS common stock. Within ten days after the effective time of
the Merger, we must provide notice of the effective time of the
Merger to all of our stockholders who have complied with
Section 262 and have not voted for adoption of the Merger
Agreement.
Within 120 days after the effective time of the Merger, but
not thereafter, any stockholder who has satisfied the
requirements of Section 262 may deliver to us a written
demand for a statement listing the aggregate number of shares
not voted in favor of adoption of the Merger Agreement and with
respect to which demands for appraisal have been received and
the aggregate number of holders of such shares. We, as the
surviving corporation in the Merger, must mail such written
statement to the stockholder no later than the later of ten days
after the stockholders request is received by us. Within
one hundred twenty (120) days after the effective time of
the Merger, either we or any stockholder who has complied with
the required conditions of Section 262 and who is otherwise
entitled to appraisal rights may file a petition in the Delaware
Court of Chancery demanding a determination of the fair value of
the AMICAS shares of stockholders entitled to appraisal rights.
We have no obligation or present intention to file such a
petition if demand for appraisal is made. A person who is the
beneficial owner of shares of our Common Stock held in a voting
trust or by a nominee on behalf of such person may, in such
persons own name, file a petition or request from the
Company the statement described in this paragraph.
Upon the filing of any petition by a stockholder in accordance
with Section 262, service of a copy must be made upon us,
and then we must, within twenty (20) days after service,
file in the office of the Register in Chancery in which the
petition was filed, a duly verified list containing the names
and addresses of all stockholders who have demanded payment for
their shares and with whom agreements as to the value of their
shares have not been reached by us. If we file a petition, the
petition must be accompanied by the verified list. The Register
in Chancery, if so ordered by the court, will give notice of the
time and place fixed for the hearing of such petition by
registered or certified mail to us and to the stockholders shown
on the list at the addresses therein stated, and notice will
also be given by publishing a notice at least one week before
the day of the hearing in a newspaper of general circulation
published in the City of Wilmington, Delaware, or such
publication as the court deems advisable. The forms of the
notices by mail and by publication must be approved by the
court, and we will bear the costs thereof. The Delaware Court of
Chancery may require the stockholders who have demanded an
appraisal for their shares, and who hold stock represented by
certificates, to submit their stock certificates to the Register
in Chancery for notation of the pendency of the appraisal
proceedings and the Delaware Court of Chancery may dismiss the
proceedings as to any stockholder that fails to comply with such
direction.
If a petition for an appraisal is filed in a timely fashion,
after a hearing on the petition, the court will determine which
stockholders are entitled to appraisal rights and will appraise
the shares owned by these stockholders, determining the fair
value of such shares, exclusive of any element of value arising
from the accomplishment or expectation of the Merger, together
with interest to be paid, if any, upon the amount determined to
be the fair value.
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AMICAS stockholders considering seeking appraisal of their
shares should note that the fair value of their shares
determined under Section 262 could be more than, the same
as or less than the consideration they would receive pursuant to
the Merger Agreement if they did not seek appraisal of their
shares. Moreover, we do not anticipate offering more than the
merger consideration to any stockholder exercising appraisal
rights and reserve the right to assert, in any appraisal
proceeding, that, for purposes of Section 262, the
fair value of a share of our Common Stock is less
than the merger consideration. In determining fair
value, the Delaware Court is required to take into account
all relevant factors. In
Weinberger v. UOP, Inc.
the
Delaware Supreme Court discussed the factors that could be
considered in determining fair value in an appraisal proceeding,
stating that proof of value by any techniques or methods
which are generally considered acceptable in the financial
community and otherwise admissible in court should be
considered and that [f]air price obviously requires
consideration of all relevant factors involving the value of a
company. The Delaware Supreme Court has stated that in
making this determination of fair value the court must consider
market value, asset value, dividends, earnings prospects, the
nature of the enterprise and any other facts which could be
ascertained as of the date of the merger which throw any light
on future prospects of the merged corporation. Section 262
provides that fair value is to be exclusive of any element
of value arising from the accomplishment or expectation of the
merger. In
Cede & Co. v. Technicolor,
Inc.
, the Delaware Supreme Court stated that such exclusion
is a narrow exclusion [that] does not encompass known
elements of value, but which rather applies only to the
speculative elements of value arising from such accomplishment
or expectation. In
Weinberger
, the Delaware Supreme Court
construed Section 262 to mean that elements of future
value, including the nature of the enterprise, which are known
or susceptible of proof as of the date of the merger and not the
product of speculation, may be considered.
The costs of the appraisal proceeding may be determined by the
court and taxed against the parties as the court deems equitable
under the circumstances, however costs do not include
attorneys and expert witness fees. Upon application of a
dissenting stockholder, the court may order that all or a
portion of the expenses incurred by any dissenting stockholder
in connection with the appraisal proceeding, including
reasonable attorneys fees and the fees and expenses of
experts, be charged pro rata against the value of all shares
entitled to appraisal. In the absence of a determination or
assessment, each party bears his, her or its own expenses. The
exchange of shares for cash pursuant to the exercise of
appraisal rights will be a taxable transaction for
U.S. federal income tax purposes and possibly state, local
and foreign income tax purposes, as well. Any stockholder
considering seeking appraisal of their shares should consult
with such stockholders own tax advisors regarding the tax
consequences to such stockholders exercise of appraisal
rights.
Any stockholder who has duly demanded appraisal in compliance
with Section 262 will not, after the effective time of the
Merger, be entitled to vote for any purpose the shares subject
to demand or to receive payment of dividends or other
distributions on such shares, except for dividends or
distributions payable to stockholders of record at a date prior
to the effective time of the Merger.
At any time within sixty (60) days after the effective time
of the Merger, any stockholder who has not commenced an
appraisal proceeding or joined that proceeding as a named party
will have the right to withdraw his demand for appraisal and to
accept the terms offered in the Merger Agreement. After this
period, a stockholder may withdraw his demand for appraisal and
receive payment for his shares as provided in the Merger
Agreement only with our consent. If no petition for appraisal is
filed with the court within one hundred twenty (120) days
after the effective time of the Merger, stockholders
rights to appraisal (if available) will cease and all holders of
shares of our Common Stock will be entitled to receive the
consideration offered pursuant to the Merger Agreement. Inasmuch
as we have no obligation to file such a petition, any
stockholder who desires a petition to be filed is advised to
file it on a timely basis. No petition timely filed in the court
demanding appraisal may be dismissed as to any stockholder
without the approval of the court, which approval may be
conditioned upon such terms as the court deems just.
Failure by any AMICAS stockholder to comply fully with the
procedures described above and set forth in
Annex C
to this proxy statement may result in termination of such
stockholders appraisal rights.
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Material
U.S. Federal Income Tax Consequences
The following is a summary of the material U.S. federal
income tax consequences of the Merger to U.S. persons (as
defined below) whose shares of the Companys Common Stock
are converted into the right to receive cash in the Merger. This
summary does not purport to consider all aspects of
U.S. federal income taxation that might be relevant to our
stockholders. For purposes of this discussion, we use the term
U.S. person to mean a beneficial owner of
shares of the Companys Common Stock that is, for
U.S. federal income tax purposes:
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a citizen or resident of the United States;
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a corporation created or organized under the laws of the United
States or any of its political subdivisions;
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a trust that (i) is subject to the supervision of a court
within the United States and the control of one or ore
U.S. persons or (ii) has a valid election in effect
under applicable U.S. Treasury regulations to be treated as
a U.S. person;
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an estate that is subject to U.S. federal income tax on its
income regardless of its source.
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If a partnership (including an entity treated as a partnership
for U.S. federal income tax purposes) holds the
Companys Common Stock, the tax treatment of a partner
generally will depend on the status of the partners and the
activities of the partnership. A partner of a partnership
holding the Companys Common Stock should consult its tax
advisor.
This discussion is based on current law, which is subject to
change, possibly with retroactive effect. It applies only to
beneficial owners who hold shares of the Companys Common
Stock as capital assets, and may not apply to shares of the
Companys Common Stock received in connection with the
exercise of employee stock options or otherwise as compensation,
stockholders who hold an equity interest, directly or
indirectly, in Newco or the Surviving Corporation after the
Merger, or to certain types of beneficial owners who may be
subject to special rules (such as insurance companies, banks,
tax-exempt organizations, financial institutions,
broker-dealers, partnerships, S corporations or other
pass-through entities, mutual funds, traders in securities who
elect the
mark-to-market
method of accounting, stockholders subject to the alternative
minimum tax, stockholders that have a functional currency other
than the U.S. dollar, or stockholders who hold the
Companys Common Stock as part of a hedge, straddle or a
constructive sale or conversion transaction). This discussion
does not address the receipt of cash in connection with the
cancellation of options to purchase shares of the Companys
Common Stock, or any other matters relating to equity
compensation or benefit plans. This discussion also does not
address the U.S. tax consequences to any stockholder who,
for U.S. federal income tax purposes, is a non-resident
alien individual, foreign corporation, foreign partnership or
foreign estate or trust, and does not address any aspect of
state, local or foreign tax laws.
Conversion of Shares of the Companys Common Stock into
the Right to Receive Cash Pursuant to the Merger
Agreement
. The exchange of shares of the
Companys Common Stock for cash in the Merger will be a
taxable transaction for U.S. federal income tax purposes.
In general, a stockholder whose shares of the Companys
Common Stock are converted into the right to receive cash in the
Merger will recognize capital gain or loss for U.S. federal
income tax purposes equal to the difference, if any, between the
amount of cash received with respect to such shares and the
stockholders adjusted tax basis in such shares. Gain or
loss will be determined separately for each block of shares
(i.e., shares acquired at the same cost in a single
transaction). Such gain or loss will be long-term capital gain
or loss provided that a stockholders holding period for
such shares is more than twelve (12) months at the time of
the consummation of the Merger. Long-term capital gains of
individuals are eligible for reduced rates of taxation. There
are limitations on the deductibility of capital losses.
Backup Withholding and Information
Reporting.
Backup withholding of tax may apply to
cash payments to which a non-corporate stockholder is entitled
under the Merger Agreement, unless the stockholder or other
payee provides a taxpayer identification number, certifies that
such number is correct, and otherwise complies with the backup
withholding rules. Each of our stockholders should complete and
sign the Substitute
Form W-9
38
included as part of the letter of transmittal and return it to
the paying agent, in order to provide the information and
certification necessary to avoid backup withholding, unless an
exemption applies and is established in a manner satisfactory to
the paying agent.
Backup withholding is not an additional tax. Any amounts
withheld under the backup withholding rules will be allowable as
a refund or a credit against a stockholders
U.S. federal income tax liability provided the required
information is timely furnished to the Internal Revenue Service.
Cash received in the Merger will also be subject to information
reporting unless an exemption applies.
The U.S. federal income tax consequences described above
are not intended to constitute a complete description of all tax
consequences relating to the Merger. Because individual
circumstances may differ, each stockholder should consult the
stockholders tax advisor regarding the applicability of
the rules discussed above to the stockholder and the particular
tax effects to the stockholder of the Merger in light of such
stockholders particular circumstances, the application of
state, local and foreign tax laws, and, if applicable, the tax
consequences of the receipt of cash in connection with the
cancellation of options, stock appreciation rights or restricted
stock units to purchase shares of the Companys Common
Stock, including the transactions described in this proxy
statement relating to our other equity compensation and benefit
plans.
Delisting
and Deregistration of the Companys Common Stock
If the Merger is completed, our Common Stock will be delisted
from the NASDAQ and deregistered under the Securities Exchange
Act of 1934, as amended (the Exchange Act) and we
will no longer file periodic reports with the SEC on account of
our Common Stock.
Amendment
to Rights Agreement
On December 24, 2009, we entered into Amendment No. 1
to the Rights Agreement, dated as of December 5, 2002,
between the Company and StockTrans, Inc. as rights agent (the
Rights Agreement). Prior to the amendment, the
rights agreement generally provided for certain stockholder
rights to be triggered in the event a person or entity acquires
more than 15% of our voting securities. The amendment to the
rights agreement permits the execution of the Merger Agreement
and the performance and consummation of the transactions
contemplated by the Merger Agreement, including the Merger,
without triggering the provisions of the Rights Agreement.
Litigation
Related to the Merger
On January 14, 2010 a purported stockholder class action
complaint was filed in the Superior Court of Suffolk County,
Massachusetts in connection with the announcement of the
proposed Merger entitled Progress Associates, on behalf of
itself and all others similarly situated v. AMICAS, Inc.,
et al., Civil Action
No. 10-0174.
The complaint names as defendants the Company and its directors,
as well as Thoma Bravo LLC. The plaintiff purports to represent
similarly situated stockholders of AMICAS. The complaint alleges
that the Company and its directors breached fiduciary duties
owed to our stockholders. The complaint further alleges that
Thoma Bravo aided and abetted the alleged breach of fiduciary
duties by the Company and its directors. The plaintiff seeks
certification of a class, damages, costs and fees. We believe
that the plaintiffs allegations are without merit; however
the outcome of the litigation cannot be predicted at this time.
THE
MERGER AGREEMENT
This section of the proxy statement describes the material
provisions of the Merger Agreement but does not purport to
describe all of the terms of the Merger Agreement. The following
summary is qualified in its entirety by reference to the
complete text of the Merger Agreement, which is attached as
Annex A to this proxy statement and incorporated into this
proxy statement by reference. We urge you to read the full text
of the Merger Agreement because it is the legal document that
governs the Merger. It is not intended to provide you
39
with any other factual information about us. Such information
can be found elsewhere in this proxy statement and in the public
filings we make with the SEC, as described in the section
entitled Where You Can Find More Information
beginning on page 56.
The
Merger
The Merger Agreement provides for the Merger of Merger Sub with
and into AMICAS upon the terms, and subject to the conditions,
of the Merger Agreement. As the surviving corporation, the
Company will continue to exist following the Merger (the Company
is sometimes referred to herein as the Surviving Corporation).
Upon consummation of the Merger, the certificate of
incorporation attached to the Merger Agreement as Exhibit E
will be the certificate of incorporation of the Surviving
Corporation and the bylaws of the Merger Sub will be the bylaws
of the Surviving Corporation and all references to Merger Sub
will be amended to refer to AMICAS, Inc. In addition, upon
consummation of the Merger, the directors of Merger Sub will be
the initial directors of the Surviving Corporation and the
officers of Merger Sub will be the initial officers of the
Surviving Corporation. All Surviving Corporation officers will
hold their positions until their successors are duly elected.
We, Newco or Merger Sub may terminate the Merger Agreement prior
to the consummation of the Merger in some circumstances, whether
before or after the adoption by our stockholders of the Merger
Agreement. Additional details on termination of the Merger
Agreement are described in Termination of the
Merger Agreement beginning on page 51.
Consummation
of the Merger
The Merger will be effective at the time the articles of Merger
are filed with the Secretary of State of the State of Delaware
(or at a later time, not to exceed thirty (30) days from
the date of filing, if agreed in writing upon by the parties).
We expect to complete the Merger as promptly as practicable
after our stockholders adopt the Merger Agreement.
Unless otherwise agreed by the parties to the Merger Agreement,
the parties are required to close the Merger no later than the
second business day after the satisfaction or waiver of the last
to be satisfied or waived of the conditions described under
Conditions to the Merger beginning on
page 47.
Merger
Consideration
If the Merger is completed, each share of the Companys
Common Stock issued and outstanding immediately prior to the
consummation of the Merger will be entitled to receive $5.35 in
cash (which we sometimes refer to in this proxy statement as the
per share price or in the aggregate as the merger
consideration), without interest and less any applicable
withholding taxes.
After the Merger is effective, each holder of a certificate
representing any shares of our Common Stock will no longer have
any rights with respect to the shares, except for the right to
receive the merger consideration.
Treatment
of Stock Options, Restricted Stock and Employee Stock Purchase
Plan
Stock
Options
Except as directed by the Company in consultation with Newco,
upon the consummation of the Merger, each then outstanding
Company option, whether vested or unvested, shall be cancelled
without consideration in accordance with the terms of the
applicable stock option plan of the Company. Most outstanding
stock options are already vested, and the Companys 2006
Stock Incentive Plan under which most of the unvested options
were granted, does not provide for automatic vesting of unvested
options upon a change in control of the Company. However, the
board of directors has determined to accelerate the vesting of
50% of the unvested options under the Companys 2006 Stock
Incentive Plan, other than options by which their terms
expressly do not accelerate, immediately prior to the closing of
the Merger (such that they will vest) in connection with this
transaction if this transaction is completed. Between now and
the effective time of the Merger an option holder may exercise
his or her stock options in accordance with the applicable stock
option plan of the Company and the agreement pursuant to which
such options were granted. If an option holder does exercise he
or she will
40
become a stockholder of AMICAS and receive the merger
consideration. In addition, shortly before closing each option
holder will be notified of the final date to exercise his or her
stock options that will vest in connection with the Merger. The
shares of Company Common Stock to be issued upon the exercise of
stock options during this final exercise period will also be
sold to Newco for $5.35 per share, with the proceeds paid to the
option holder, without interest thereon, less applicable taxes
required to be withheld with respect to these payments.
Restricted
Stock
Upon the consummation of the Merger, all restrictions and
repurchase rights on each share of the Companys restricted
Common Stock that is outstanding immediately prior thereto shall
lapse and each share of restricted Common Stock shall be
converted automatically into the right to receive $5.35 in cash,
without interest and less any applicable withholding tax.
Employee
Stock Purchase Plan
The final offering period under our 2007 Employee Stock Purchase
Plan (the ESPP) will be completed on
January 31, 2010. The ESPP will terminate prior to the
effective time of the Merger.
Payment
for the Shares of the Companys Common Stock
Newco will designate a payment agent reasonably satisfactory to
us to make payment of the merger consideration as described
above. Upon the consummation of the Merger, Newco will deposit,
or Newco will cause to be deposited, with the payment agent the
funds appropriate to pay the merger consideration to the
stockholders.
Promptly following the consummation of the Merger, Newco and the
Surviving Corporation will cause the payment agent to send each
holder of record immediately prior to the effective time of the
Merger a letter of transmittal and written instructions advising
you how to surrender your certificates and uncertificated shares
in exchange for an amount in cash equal to the product obtained
by multiplying the aggregate number of shares of the
Companys Common Stock represented by your certificate(s)
or the uncertificated shares, as the case may be, and $5.35
(less any applicable withholding taxes payable in respect
thereof). The payment agent will pay you your merger
consideration after you have surrendered your certificates for
cancellation to the payment agent together with the letter of
transmittal duly completed and validly executed, or upon receipt
of an agents message by the payment agent in
the case of a book-entry transfer or uncertificated shares.
Interest will not be paid or accrue in respect of the merger
consideration. YOU SHOULD NOT FORWARD YOUR STOCK CERTIFICATES TO
THE PAYMENT AGENT WITHOUT A LETTER OF TRANSMITTAL, AND YOU
SHOULD NOT RETURN YOUR STOCK CERTIFICATES WITH THE ENCLOSED
PROXY.
If any portion of the cash deposited with the payment agent
remains undistributed within twelve (12) months following
the consummation of the Merger, this undistributed cash will be
delivered to the Surviving Corporation upon demand, subject to
any applicable unclaimed property laws. Any holders of shares of
AMICAS common stock that were outstanding immediately prior to
the effective time of the Merger who have not previously
exchanged such shares for the merger consideration will only be
entitled to request payment of the merger consideration from the
Surviving Corporation, subject to abandoned property, escheat or
other similar laws.
If you want the payment agent to pay some or all of your portion
of the merger consideration to someone other than you, as the
registered owner of a stock certificate or of uncertificated
shares, you must have your certificate(s) properly endorsed or
otherwise in proper form for transfer, and you must pay any
transfer or other taxes payable by reason of the transfer or
establish to the paying agents reasonable satisfaction
that the taxes have been paid or are not required to be paid.
In the event that you have lost your certificate, or if it has
been stolen or destroyed, the payment agent will only issue to
you your portion of the merger consideration in exchange for
such lost, stolen or destroyed certificates upon the making of
an affidavit of that fact. Newco may, in its sole discretion and
as a condition precedent to the payment of your portion of the
merger consideration, require that you deliver a bond in an
41
amount that directs as indemnity against any claim that may be
made against Newco, the Surviving Corporation or the payment
agent with respect of the lost, stolen or destroyed certificate.
Representations
and Warranties
The Merger Agreement contains representations and warranties
made by us to Newco and Merger Sub and representations and
warranties made by Newco and Merger Sub to us. The assertions
embodied in those representations and warranties were made as of
specific dates, solely for purposes of the Merger Agreement and
may be subject to important qualifications and limitations
agreed to by the parties in connection with negotiating its
terms. Moreover, some of those representations and warranties
may not be accurate or complete as of any particular date
because they are subject to a contractual standard of
materiality or a Company Material Adverse Effect
(defined below) different from that generally applicable to
public disclosures to stockholders or used for the purpose of
allocating risk between the parties to the Merger Agreement
rather than establishing matters of fact. In addition, factual
disclosures about the Company contained in this proxy statement
or in the Companys public reports filed with the SEC may
supplement, update or modify the factual disclosures about the
Company contained in the Merger Agreement.
In the Merger Agreement, the Company, Newco and Merger Sub each
made representations and warranties relating to, among other
things:
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corporate organization, existence and good standing;
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corporate power and authority to enter into and perform its
obligations under, and enforceability of, the Merger Agreement;
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the absence of conflicts with or defaults under organizational
documents, other contracts and applicable laws;
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required regulatory filings and consents and approvals of
governmental entities;
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brokers fees; and
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information supplied for inclusion in this proxy statement.
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In the Merger Agreement, Newco and Merger Sub also each made
representations and warranties relating to:
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the availability of the funds necessary to perform their
respective obligations under the Merger Agreement;
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the operations of Newco and Merger Sub; and
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the absence of litigation or legal orders that would prevent or
materially delay the Merger.
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The Company also made representations and warranties relating to:
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the approval and recommendation of the Companys board of
directors;
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the fairness opinion from Raymond James;
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state anti-takeover statutes;
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the requisite stockholder approval;
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capital structure;
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subsidiaries;
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documents filed with the SEC;
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financial statements;
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undisclosed liabilities;
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the absence of certain changes or events since December 31,
2008;
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material contracts;
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title to personal and real properties;
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intellectual property matters;
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tax matters;
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compliance with the Employee Retirement Income Securities Act of
1974, as amended, and other employee benefit matters;
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labor matters;
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environmental matters;
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permits;
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compliance with laws;
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absence of litigation or legal orders threatened against the
Company;
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insurance;
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related party transactions; and
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product warranty matters.
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Many of the Companys representations and warranties are
qualified by a material adverse effect standard. For purposes of
the Merger Agreement, Company Material Adverse
Effect is defined to mean any effect change, event,
occurrence, circumstance or development (each, an
Effect) that is or would reasonably be expected to
become materially adverse to the business, financial condition
or results of operations of the Company and its subsidiaries,
taken as a whole, other than:
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changes in the Companys stock price or trading volume, in
and of itself;
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any failure by the Company to meet published revenue or earnings
projections, in and of itself;
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changes affecting any of the industries in which the Company
operates generally or the United States economy generally (which
changes in each case do not disproportionately affect the
Company);
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changes affecting general worldwide economic or capital market
conditions;
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changes in political conditions in the United States or any
other country or region in the world; acts of war, sabotage or
terrorism (including any escalation or general worsening of any
such acts of war, sabotage or terrorism) in the United States or
any other country or region in the world;
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earthquakes, hurricanes, tsunamis, tornadoes, floods, mudslides,
wild fires or other natural disasters or weather conditions in
the United States or any other country or region in the world;
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the announcement of the Merger Agreement or the pendency or
consummation of the transactions contemplated hereby;
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compliance with the terms of, or the taking of any action
required or contemplated by, the Merger Agreement, or the
failure to take any action prohibited by the Merger Agreement;
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any actions taken, or failure to take action, in each case, to
which Newco has in writing expressly approved, consented to or
requested;
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changes in law, regulation or other legal or regulatory
conditions (or the interpretation thereof) (to the extent such
changes do not disproportionately affect the Company relative to
other companies in its industry);
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changes in GAAP or other accounting standards (or the
interpretation thereof);
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any legal proceedings made or brought by any of the current or
former stockholders of the Company (on their own behalf or on
behalf of the Company) against the Company arising out of the
Merger or in connection with any other transactions contemplated
by this Agreement; or
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any matters expressly set forth in the Company Disclosure Letter.
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Conduct
of Business Prior to Closing
The Company has agreed in the Merger Agreement that, until the
consummation of the Merger, and unless the Merger Agreement is
terminated pursuant to the termination provisions described
hereinafter, the Company shall and shall cause each of its
subsidiaries to:
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maintain its existence in good standing under applicable law;
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conduct its business and operations only in the ordinary and
usual course of business and in a manner consistent with prior
practice (subject to certain restrictions and exceptions
otherwise set forth in the Merger Agreement); and
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use commercially reasonable efforts to preserve intact its
assets, properties, contracts or other legally binding
understandings, licenses and business organizations; keep
available the services of its current officers and key
employees; and preserve the current relationships with those
persons with which the Company or its subsidiaries have business
relationships.
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The Company has also agreed that, until the consummation of the
Merger, except as expressly contemplated by the Merger Agreement
and as set forth in the Company Disclosure Letter or approved by
Newco (which approval will not be unreasonably withheld, delayed
or conditioned), the Company and its subsidiaries will not:
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declare, set aside, establish a record date for, make or pay any
dividends or other distributions (whether in cash, stock or
property) in respect of any of its capital stock or enter into
any agreement with respect to the voting of its capital stock;
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adjust, split, combine or reclassify any of its capital stock or
that of its subsidiaries 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 that of its
subsidiaries;
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repurchase, redeem or otherwise acquire, directly or indirectly,
any shares of its or its subsidiaries capital stock or any
rights to acquire Company Common Stock or rights to acquire its
subsidiaries capital stock (except pursuant to restricted
stock award agreements outstanding as of the date of the Merger
Agreement);
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issue, deliver or sell, pledge or encumber any shares of its or
its subsidiaries capital stock, or any rights to acquire
Company Common Stock (other than the issuance of shares of
Company Common Stock upon the exercise of options to purchase
Company Common Stock or, subject to certain limitations,
pursuant to the ESPP);
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take any action that would reasonably be expected to or does
result in any of the conditions to consummation of the Merger
not being satisfied or that would impair the ability of the
Company to consummate the Merger in accordance with the terms of
the Merger Agreement;
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amend the Company Articles of Incorporation or Company Bylaws or
equivalent organizational documents of the Companys
subsidiaries;
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incur, create, assume or otherwise become liable for any
indebtedness or assume, guaranty, endorse or otherwise become
liable or responsible for the indebtedness of any other person;
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make any loans, advances or capital contributions to or
investments in any other person;
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merge or consolidate with any other entity or adopt a plan of
complete or partial liquidation, dissolution, recapitalization
or other reorganization or otherwise permit its corporate
existence to be suspended, lapsed or revoked;
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change its tax accounting methods, principles or practices,
except as required by GAAP or applicable laws;
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alter, amend or create any obligations with respect to
compensation, severance, benefits, change of control payments or
any other payments to present or former employees, directors or
affiliates of the Company, other than alterations or amendments:
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made with respect to non-officers and
non-directors
in the ordinary course of business consistent with past practice
that, in the aggregate, do not result in a material increase in
benefits or compensation expense to the Company,
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required under applicable Laws, or
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as otherwise expressly contemplated by the Merger Agreement;
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hire any new employees other than non-officer employees in the
ordinary course of business consistent with past practice;
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sell, license, mortgage, transfer, lease, pledge or otherwise
subject to any encumbrance (including by merger, consolidation,
or sale of stock or assets) or otherwise dispose of any entity,
business, rights, material properties or assets (including stock
or other ownership interests of its subsidiaries), other than in
the ordinary course of business consistent with prior practice;
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acquire any material business, assets or securities;
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make any tax election not consistent with prior practice or
settle or compromise any income tax liability or fail to file
any material tax return when due or fail to cause such tax
returns when filed to be complete and accurate in all material
respects or file any material amended tax return;
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incur or commit to incur any capital expenditures, or any
obligations or liabilities in connection therewith that
individually or in the aggregate, are in excess of $250,000,
except in the ordinary course of business consistent with past
practices or delay any capital expenditures;
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pay, discharge, settle, cancel, incur or satisfy any
liabilities, other than the payment, discharge or satisfaction
of liabilities in the ordinary course of business, consistent
with past practice, as required by any applicable law, as
accrued for in the Companys financial statements or as
required by the terms of any contract of the Company, as in
effect on the date of the Merger Agreement;
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waive, release, grant or transfer any right of material value,
other than in the ordinary course of business, consistent with
past practice, or waive any material benefits of, or agree to
modify in any material adverse respect, or, subject to the terms
hereof, fail to enforce, or consent to any material matter with
respect to which its consent is required under, any material
confidentiality, standstill or similar agreement to which the
Company or any of its Subsidiaries is a party;
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enter into, modify, amend or terminate:
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any contract which if so entered into, modified, amended or
terminated could be reasonably likely to
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have a Company Material Adverse Effect,
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impair in any material respect the ability of the Company to
perform its obligations under this Agreement, or
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prevent or materially delay the consummation of the transactions
contemplated by this Agreement
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or
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except in the ordinary course of business, any material contract;
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terminate any officer or key employee of the Company or any of
its subsidiaries other than for good reason or for reasonable
cause except as determined by our Chief Executive Officer in
consultation with Newco;
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maintain insurance at less than current levels or otherwise in a
manner inconsistent with past practice;
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except as required by GAAP, revalue any of its material assets
or make any changes in accounting methods, principles or
practices;
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enter into any transaction that could give rise to a disclosure
obligation as a reportable transaction under
Section 6011 of the Internal Revenue Code of 1986, as
amended, and the regulations thereunder;
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engage in any transaction with, or enter into any agreement,
arrangement or understanding with any affiliate of the Company
or other person covered by Item 404 of
Regulation S-K
promulgated under the Exchange Act that would be required to be
disclosed under such Item 404;
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compromise, release, waive or settle any action directly
relating to or affecting the Companys intellectual
property, having a value or in an amount in excess of $250,000,
or that is brought by any current, former or purported holder of
any capital stock or debt securities of the Company or any
Company subsidiary relating to the transactions contemplated by
the Merger Agreement;
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effectuate a plant closing or mass
layoff, as those terms are defined in WARN, affecting in
whole or in part any site of employment, facility, operating
unit or employee of the Company or any of its subsidiaries;
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grant any material refunds, credits, rebates or other allowances
by the Company to any end user, customer, reseller or
distributor, in each case, other than in the ordinary course of
business;
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abandon or allow to lapse or expire any registration or
application for material Company intellectual property;
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enter into any new line of business outside of its existing
business segments;
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communicate with employees of the Company or any Company
subsidiary regarding the compensation, benefits or other
treatment that they will receive in connection with the Merger,
unless any such communications are consistent with prior
directives or documentation provided to the Company by
Parent; or
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except as otherwise contemplated by the Merger Agreement, agree
to take or enter into any letter of intent or similar agreement
or arrangement with respect to any of the foregoing.
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Required
Action and Forbearance
Upon the terms and conditions set forth in the Merger Agreement,
each of the parties to the Merger Agreement has agreed to use
its reasonable best efforts take, or cause to be taken, all
actions and to do, or cause to be done, and assist and cooperate
with the other party or parties in doing, all things necessary,
proper or advisable under applicable law to consummate the
Merger in the most expeditious manner practicable.
In the event that any state anti-takeover or other similar law
is or becomes applicable to any of the transactions contemplated
by the Merger Agreement, the parties have agreed to use their
respective commercially reasonable efforts to ensure that the
transactions contemplated by the Merger Agreement may be
consummated as promptly as practicable on the terms and subject
to the conditions set forth in the Merger Agreement and
otherwise to minimize the effect of such law on the Merger.
Cooperation
to Obtain Financing
The Company has agreed to use commercially reasonable efforts to
cooperate, and to cause its subsidiaries and representatives to
cooperate, with Newco and representatives of Newco in connection
with obtaining financing in order to consummate the transactions
contemplated by the Merger Agreement.
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Conditions
to the Merger
Conditions to Each Partys
Obligations.
Each partys obligation to
complete the Merger is subject to the satisfaction or waiver
prior to the consummation of the Merger of the following
conditions:
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the Merger must have been approved by the affirmative vote of
the holders of a majority of the outstanding shares of the
Companys Common Stock;
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any applicable waiting period (and any extension of the waiting
period, if any) under the HSR Act shall have expired or been
terminated; and
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no governmental entity of competent jurisdiction shall have
enacted a law that would render the Merger illegal in the United
States or any State thereof or formally issued an injunction is
in effect and would prohibit the Merger in the United States or
any State thereof.
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Conditions to Newcos and Merger Subs
Obligations.
The obligation of Newco and Merger
Sub to complete the Merger is subject to the satisfaction or
waiver of the following additional conditions:
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our representations and warranties with respect to our corporate
organization, our authority to enter into the agreement, our
capitalization must each be true and correct in all material
respects as of the date of the Merger Agreement and as of the
closing date (provided that the aggregate number of shares of
our common stock outstanding or issuable upon exercise or
conversion of any outstanding stock options cannot be
understated by more than 50,000 shares, subject to certain
adjustments);
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all other representations and warranties made by us in the
Merger Agreement, with the exception of those listed above, must
be true and correct (without giving effect to any materiality or
Company Material Adverse Effect qualifications set
forth therein) on and as of the closing date with the same force
and effect as if made on and as of such date, except for:
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those representations and warranties that address matters only
as of a particular date, which representations and warranties
shall have been true and correct as of such particular date;
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any failure to be so true and correct which, individually or in
the aggregate, have not and would not have a Company
Material Adverse Effect;
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we shall have performed or complied in all material respects
with all agreements and covenants that are to be performed or
complied with under the Merger Agreement prior to the
consummation of the Merger;
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we must have delivered to Newco and Merger Sub at closing a
certificate with respect to the satisfaction of the foregoing
conditions relating to representations, warranties, agreements
and covenants;
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no Company Material Adverse Effect must have arisen
or occurred following the execution, delivery and effectiveness
of the Merger Agreement that is continuing;
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we must have delivered to Newco a certificate from the Company
to the effect that the Company is not a U.S. real property
holding company;
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we must have a minimum cash and cash equivalents balance of not
less than $42 million, excluding all costs and expenses
incurred or arising in connection with the transactions
contemplated by the Merger Agreement;
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we must have filed all reports that are required to be filed
with the SEC prior to the consummation of the Merger; and
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we must have filed or delivered to Newco UCC-3 termination
statements for certain encumbrances.
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Conditions to the Companys
Obligations.
Our obligation to complete the
Merger is subject to the satisfaction or waiver of the following
further conditions, which may be waived exclusively by us:
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with certain exceptions, all representations and warranties made
by Newco and Merger Sub in the Merger Agreement must be true and
correct on and as of the closing date with the same force and
effect as if made on and as of such date;
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Newco must have performed or complied in all material respects
with all agreements and covenants that are to be performed or
complied with by it under the Merger Agreement prior to the
consummation of the Merger; and
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Newco must have delivered to us a certificate with respect to
the satisfaction of the foregoing conditions relating to
representations, warranties, agreements and covenants.
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Solicitations
of Other Offers and Restrictions on Solicitations of Other
Offers
The Merger Agreement provides that, until the No-Shop Period
Start Date, the Company is permitted to:
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solicit written acquisition proposals from no more than fifteen
(15) third parties, subject to certain terms and conditions
contained in the Merger Agreement and described below; and
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respond to any third party that makes a written acquisition
proposal, subject to certain terms and conditions contained in
the Merger Agreement and described below.
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In either case, prior to engaging in substantive discussions or
negotiations with a third party submitting such an acquisition
proposal, the Company shall make a determination that, to the
best of its knowledge:
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such third party is reasonably likely to have adequate sources
of financing or adequate funds to consummate such acquisition
proposal;
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such third party has stated in writing that it does not propose
obtaining financing as a condition to its obligation to
consummate such acquisition proposal; and
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it is reasonably possible that such discussions could lead to a
Superior Proposal.
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If the preceding criteria are satisfied and the third party has
executed an acceptable confidentiality agreement, the Company
may provide such third party with access to non-public
information, provided that the Company promptly makes available
to Newco any material non-public information concerning it or
its subsidiaries that is provided to any such third party.
Except as expressly permitted by the Merger Agreement and
described below, the Company, its representatives and its
subsidiaries and their representatives shall, from the No-Shop
Period Start Date to the effective time of the Merger, not:
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initiate, solicit, propose, encourage (including by providing
information) or take any action to facilitate any inquiries or
the making of any proposal or offer that constitutes, or may
reasonably be expected to lead to, an acquisition proposal;
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engage in or otherwise participate in any discussions or
negotiations regarding, or provide any information or data
concerning the Company or any of its subsidiaries to any person
relating to any acquisition proposal or any proposal or offer
that could reasonably be expected to lead to an acquisition
proposal, or provide any information or data concerning the
Company or any of its subsidiaries to any person pursuant to any
commercial arrangement, joint venture arrangement, or other
existing agreement or arrangement if it is reasonably likely
that the person receiving the confidential information could use
such information for purposes of evaluating or developing an
acquisition proposal;
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grant any waiver, amendment or release under any agreement or
takeover statute;
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approve, endorse, recommend, or execute or enter into any letter
of intent, agreement in principle, merger agreement, acquisition
agreement or other similar agreement relating to an acquisition
proposal
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or any proposal or offer that could reasonably be expected to
lead to an acquisition proposal, or that contradicts the Merger
Agreement or requires the Company to abandon the Merger
Agreement; or
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resolve, propose or agree to do any of the foregoing.
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Notwithstanding anything to the contrary contained in the Merger
Agreement, at any time following the No-Shop Period Start Date
and prior to, but not after, the receipt of the requisite vote
of the Companys stockholders, the Company may:
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provide information in response to a request therefor to a
person who has made an unsolicited written acquisition proposal
after the date of the Merger Agreement if and only if, prior to
providing such information, the Company has received from the
person so requesting such information an acceptable
confidentiality agreement, provided that the Company shall
promptly make available to Newco any material information
concerning the Company or its subsidiaries that is provided to
any person making such acquisition proposal; or
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engage or participate in any discussions or negotiations with
any person who has made such an unsolicited written acquisition
proposal; provided, that prior to taking any of the actions
described above:
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the Companys board of directors shall have determined in
good faith, after consultation with outside legal counsel, that
failure to take such action would violate the directors
fiduciary duties under applicable laws, and
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the Companys board of directors shall have determined in
good faith, based on the information then available and after
consultation with its independent financial advisor and outside
legal counsel, that such acquisition proposal either constitutes
a Superior Proposal or is reasonably likely to result in a
Superior Proposal.
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Prior to engaging in substantive discussions or negotiations
with a third party submitting an unsolicited written acquisition
proposal, the Company shall make a determination that, to the
best of its knowledge:
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such third party is reasonably likely to have adequate sources
of financing or adequate funds to consummate such acquisition
proposal, and
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such third party has stated in writing that it will not propose
obtaining financing as a condition to its obligation to
consummate such acquisition proposal.
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Except as expressly provided in the Merger Agreement, at any
time after the date of the Merger Agreement (whether before or
after the No-Shop Period Start Date), no member of the
Companys board of directors nor of any committee thereof
shall:
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withhold, withdraw (or not continue to make), qualify or modify
(or publicly propose or resolve to withhold, withdraw (or not
continue to make), qualify or modify), in a manner adverse to
Newco or Merger Sub, the Companys recommendation with
respect to the Merger;
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adopt, approve or recommend or propose to adopt, approve or
recommend (publicly or otherwise) an acquisition proposal;
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fail to publicly reaffirm the Companys recommendation with
respect to the Merger within ten (10) business days after
Newco so requests in writing, except that no such reaffirmation
need be made prior to the No-Shop Period Start Date or at a time
when an acquisition proposal has been made and not withdrawn;
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fail to recommend against any acquisition proposal pursuant to
Regulation 14D under the Exchange Act within twenty
(20) business days after the commencement of such
acquisition proposal (the taking of any of the preceding actions
is referred to as a Company Adverse Recommendation
Change); or
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cause or permit the Company or any of its subsidiaries to enter
into any acquisition agreement relating to any acquisition
proposal.
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49
Notwithstanding anything to the contrary set forth in the Merger
Agreement, at any time prior to obtaining the requisite vote of
the Companys stockholders, (i) the Company board of
directors (or any committee thereof) may effect a Company
Adverse Recommendation Change if the Company board of directors
determines in good faith, after consultation with its outside
legal counsel, that the failure to do so is reasonably likely to
violate the directors fiduciary duties under applicable
laws, and (ii) if the Company has received a written
acquisition proposal from any Person that is not withdrawn and
that the Company board of directors concludes constitutes a
Superior Proposal, the Company board of directors may authorize
the Company to terminate this Agreement to enter into an
Acquisition Agreement with respect to such Superior Proposal,
provided, however, that the Company may take the action provided
for in this clause (ii), if and only if:
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the Company shall have complied with its relevant obligations in
the Merger Agreement;
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the Company shall have provided prior written notice to Newco at
least five (5) business days in advance (Notice
Period), to the effect that the Companys board of
directors has received a written acquisition proposal, concluded
that such proposal constitutes a Superior Proposal and, absent
any revision to the terms and conditions of the Merger
Agreement, resolved to terminate the Merger Agreement pursuant
to its terms; and
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prior to effecting such termination, the Company shall, and
shall cause their financial and legal advisors to, during the
Notice Period, negotiate with Newco and its representatives in
good faith (to the extent Newco desires to negotiate) to make
such adjustments in the terms and conditions of the Merger
Agreement, so that such acquisition proposal would cease to
constitute a Superior Proposal; provided, that in the event of
any material revisions to the acquisition proposal that the
Companys board of directors has determined to be a
Superior Proposal, the Company shall be required to deliver a
new written notice to Newco and to comply with the requirements
of the Merger Agreement with respect to such new written
notice; and
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in the case of authorization by the Companys board of
directors to terminate the Merger Agreement to enter into an
alternative acquisition agreement with respect to a Superior
Proposal, the Company shall have validly terminated the Merger
Agreement in accordance with its terms, including the payment of
the Company termination fee.
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Nothing contained in the Merger Agreement shall be deemed to
prohibit the Company or the Companys board of directors
from complying with its disclosure obligations under
U.S. federal or state Law with regard to an acquisition
proposal, including taking and disclosing to its stockholders a
position contemplated by
Rule 14d-9
or
Rule 14e-2(a)
under the Exchange Act (or any similar communication to
stockholders) or making any stop-look-and-listen
communication or similar communication of the type contemplated
by
Rule 14d-9(f)
under the Exchange Act.
From and after the No-Shop Period Start Date, the Company agrees
that it will promptly (and, in any event, within two
(2) days) notify Newco if any proposals or offers with
respect to an acquisition proposal (including any material
amendments thereto) are received by, any non-public information
is requested from, or any discussions or negotiations are sought
to be initiated or continued with, the Company or any of its
representatives and thereafter shall keep Newco reasonably
informed, on a prompt basis, of the status and terms of any such
proposals or offers and the status of any such discussions or
negotiations, including any change in the Companys
intentions as previously notified.
If any of the Companys representatives takes any action
which, if taken by the Company, would constitute a breach of the
above described non-solicitation terms, then the Company shall
be deemed to be in breach of such non-solicitation terms.
As used above, Superior Proposal shall mean a
written acquisition proposal, not solicited in material
violation of the terms of the Merger Agreement, which the
Companys board of directors determines in good faith,
after consultation with its independent financial advisor and
outside legal counsel:
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is for a price per share higher than the merger consideration
provided in the Merger Agreement; and
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50
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would result in a transaction more favorable to the stockholders
of the Company after taking into account all relevant factors
including the form of the consideration, capital commitments (if
any), timing of the proposed transaction, and risks of
non-consummation.
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Termination
of the Merger Agreement
The Merger Agreement may be terminated under specified
circumstances, including, without limitation, the following
circumstances and subject to certain exceptions:
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by the mutual agreement of us and Newco;
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by either us or Newco if:
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any governmental entity has enacted a law that is in effect at
the time of termination that makes the Merger illegal in the
United States or any State threof, or issued an order or
injunction permanently prohibiting the Merger in the United
States or any State threof;
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our stockholders do not adopt the Merger Agreement at the
special meeting; or
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the Merger has not been consummated prior to May 24, 2010;
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we terminate the Merger Agreement in order to enter into an
acquisition agreement for a Superior Proposal and we pay the
applicable termination fee;
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if Newco shall have breached of any representation or warranty
contained in the Merger Agreement, or any such representation
and warranty shall have become untrue and incapable of being
cured prior to the effective time of the Merger that would
result in a failure of a condition to our obligation to close
the Merger that has not been cured, or
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if any Sponsor shall have breached any covenant or agreement
under any Guarantee or any Equity Commitment Letter that would
result in a failure of a condition to our obligation to close
the Merger that has not been cured;
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there has been a Company Adverse Recommendation Change;
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we have materially breached any of our non-solicitation
obligations;
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any member of our board of directors shall have made a written
public statement that such director opposes the Merger, or any
member of our board of directors shall have required the
inclusion in any filing made by us with the SEC a statement to
the effect that such director opposes the Merger; or
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there has been a breach by us of any representation, warranty,
covenant or agreement contained in the Merger Agreement that
would result in a failure of a condition to Newcos
obligation to close the Merger that has not been cured.
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Termination
Fees and Expenses Payable by the Company
Termination
Fees
If we terminate the Merger Agreement, or the Merger Agreement is
terminated by Newco or Merger Sub under the conditions described
in further detail below, we must pay a termination fee at the
direction of Newco.
We are required to pay a termination fee of $4.3 million if
the Merger Agreement is terminated by us prior to the No-Shop
Period Start Date to enter into a definitive agreement for a
Superior Proposal or in connection with a Company Adverse
Recommendation Change occurring prior to the No-Shop Period
Start Date.
51
Subject to certain limitations, we are required to pay a
termination fee of $8.6 million if:
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we terminate the Merger Agreement in order to enter into an
acquisition agreement for a Superior Proposal at any time after
the No-Shop Period Start Date;
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Newco terminates the Merger Agreement because:
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our board of directors has withdrawn or adversely modified its
approvals or recommendations of the Merger;
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there has been a material breach by us of our obligations with
respect to the solicitation of other offers from the No-Shop
Period Start Date to the effective time of the Merger; or
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any member of our board of directors shall have made a written
public statement that such director opposes the Merger, or any
member of our board of directors shall have required the
inclusion in any filing made by us with the SEC a statement to
the effect that such director opposes the Merger
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or
we enter into an acquisition agreement with a party other than
Newco within twelve (12) months following a termination of
the Merger Agreement by Newco because:
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our stockholders do not adopt the Merger Agreement at the
special meeting;
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the Merger has not been consummated prior to May 24, 2010;
or
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there has been a breach by us of any representation, warranty,
covenant or agreement contained in the Merger Agreement that
would result in a failure of a condition to Newcos
obligation to close the Merger that has not been cured.
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The parties have agreed that in no event will AMICAS be required
to pay a termination fee on more than one occasion, whether or
not a termination fee may be payable under more than one
provision of the Merger Agreement at the same time or at
different times.
Expenses
Except as described below or agreed in writing by the parties,
all
out-of-pocket
costs and expenses incurred in connection with the Merger shall
be paid by the party incurring such cost or expense; provided,
however, that Newco and the Company shall share equally the fee
for filings required by the HSR Act.
In the event the Merger Agreement is terminated due to failure
of the Companys stockholders to adopt the Merger Agreement
at the special meeting, any member of our board of directors
making a written public statement that such director opposes the
Merger, or any member of our board of directors having required
the inclusion in any filing made by us with the SEC a statement
to the effect that such director opposes the Merger, or a breach
by us of any representation, warranty, covenant or agreement
contained in the Merger Agreement that would result in a failure
of a condition to Newcos obligation to close the Merger
that has not been cured, and under circumstances in which the
Company is not required to pay a termination fee, then the
Company shall pay all of Newcos reasonably documented
out-of-pocket
fees and expenses (including reasonable legal fees and expenses)
incurred by Newco and its affiliates on or prior to the
termination of the Merger Agreement in connection with the
transactions contemplated by the Merger Agreement (including the
equity financing described in Summary
Financing on page 5) in an amount not to exceed $2,000,000.
Indemnification
and Insurance
For a period of six years from and after the consummation of the
Merger, the Surviving Corporation has agreed to indemnify,
advance expenses to, and hold harmless all of our past and
present officers and directors to the fullest extent permitted
by law and to the same extent and in the same manner such
persons are indemnified as of the date of the Merger Agreement
by us pursuant to the DGCL, our Certificate of Incorporation and
our Bylaws for acts or omissions occurring at or prior to the
consummation of the Merger.
52
In addition, subject to certain limitations, during the period
of six (6) years following the consummation of the Merger,
the Company will maintain in effect its current directors
and officers liability insurance (D&O
Insurance), or the substantial equivalent thereof, in
respect of acts or omissions occurring at or prior to the
consummation of the Merger, covering each person covered by the
D&O Insurance on the effective date of the Merger.
Continued
Benefits
After the effective time of the Merger and through the end of
the fiscal year of the Company in which the Merger is effective,
the Company shall provide to its employees benefits (other than
any bonus or incentive plans, and individual employment
agreements) that will, in the aggregate, be substantially
similar to those provided by the Company and its subsidiaries to
its employees as of the effective time of the Merger.
With respect to the benefit plans in which the Companys
employees participate following the effective time of the Merger
(other than any bonus or incentive plans, and individual
employment agreements), Newco has agreed that it shall
(i) recognize all service performed for the Company prior
to the effective time of the Merger for eligibility and vesting
purposes, (ii) waive any pre-existing condition exclusions
(other than pre-existing conditions that, as of the effective
time of the Merger, have not been satisfied under any Company
benefit plan) and (iii) provide that any deductible,
coinsurance or
out-of-pocket
expenses incurred on or before the effective time of the Merger
during the plan year in which the Merger becomes effective that
occurs under any applicable Company benefit plan providing
health benefits will be taken into account for purposes of
satisfying applicable deductible, coinsurance and maximum
out-of-pocket
provisions.
Amendment,
Extension and Waiver
The parties may amend the Merger Agreement at any time, except
that after our stockholders have approved the Merger, there
shall be no amendment that by law requires further approval by
our stockholders without such approval having been obtained. All
amendments to the Merger Agreement must be in a writing signed
by us, Newco and Merger Sub.
At any time before the consummation of the Merger, each of the
parties to the Merger Agreement may, by written instrument and
to the extent legally allowed:
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extend the time for the performance of any of the obligations or
other acts of the other parties;
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waive any inaccuracies in the representations and warranties of
the other parties contained in the Merger Agreement or in any
document delivered pursuant to the Merger Agreement; or
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waive compliance with any of the agreements or conditions
contained in the Merger Agreement.
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Specific
Performance
The Company, Newco and Merger Sub are each entitled to seek an
injunction to prevent breaches of the Merger Agreement and to
enforce specifically the terms and provisions of the Merger
Agreement, in addition to any other legal or equitable remedy to
which they are entitled.
53
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information concerning
beneficial ownership of our outstanding common stock as of
January 15, 2010 by:
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each stockholder that we know to be the beneficial owner of more
than 5% of our outstanding common stock;
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each of our directors;
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each of our named executive officers; and
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all of our current directors and executive officers as a group.
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Information with respect to beneficial ownership
shown in the table below is based on information supplied by the
respective beneficial owners. Beneficial ownership is determined
in accordance with the rules of the SEC and generally includes
voting or investment power with respect to securities. For
purposes of calculating the percentage beneficially owned by a
particular beneficial owner, the shares of common stock deemed
outstanding include 36,465,023 shares outstanding as of
January 15, 2010, plus all common stock issuable on
exercise of options within 60 days of January 15, 2010
held by the particular beneficial owner, giving effect to the
Merger and the resulting acceleration of vesting as described
under Existing Change of Control and Severance
Benefits at page 33 (Presently Exercisable
Options). Presently Exercisable Options are deemed to be
outstanding and to be beneficially owned by the person holding
such options for the purpose of computing the percentage
ownership of such person, but are not treated as outstanding for
the purpose of computing the percentage ownership of any other
person. Unless otherwise noted, the mailing address of each
beneficial owner is
c/o AMICAS,
Inc., 20 Guest Street, Suite 400, Boston, Massachusetts
02135. Except as indicated in the footnotes to this table, we
believe that the stockholders named in this table have sole
voting and investment power with respect to all shares of common
stock shown to be beneficially owned by them based on
information provided to us by these stockholders.
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Shares
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Percentage
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Beneficially
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Beneficially
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Name of Beneficial Owner
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Owned
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Owned
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5% Owners
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Gagnon Securities LLC(1)
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4,560,592
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12.51
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%
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Wellington Management Company, LLP(2)
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3,884,362
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10.65
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%
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Dimensional Fund Advisors LP(3)
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3,557,430
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9.76
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%
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S Squared Technology(4)(4)
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2,464,375
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6.76
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%
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GAMCO Investors, Inc.(5)
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2,346,280
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6.43
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%
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Directors and Named Executive Officers
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Stephen N. Kahane(6)
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2,442,185
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6.28
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%
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Kevin C. Burns(6)
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555,429
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1.50
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%
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Joseph D. Hill(6)
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295,717
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0.80
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%
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Paul Merrild(6)
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319,792
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0.87
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%
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Craig Newfield(6)
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195,000
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0.53
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%
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Frank E. Stearns, Jr.(7)
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David B. Shepherd(6)
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107,190
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0.29
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%
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Stephen J. DeNelsky(6)
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95,434
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0.26
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%
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John J. Sviokla(6)
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44,325
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0.12
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%
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Stephen J. Lifshatz(6)
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36,769
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0.11
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%
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All Current Directors and Executive Officers as a Group
(12 persons)(6)(8)
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4,546,931
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11.11
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%
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54
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(1)
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Number of shares beneficially owned based solely upon a
Schedule 13G filed by Gagnon Securities LLC and Neil Gagnon
on February 13, 2009. The address of Gagnon Securities LLC
is 1370 Avenue of the Americas, Suite 2400, New York, New
York 10019. Mr. Gagnon is the managing member and principal
owner of Gagnon Securities LLC. Gagnon Securities LLC has shared
power to vote or to direct the vote as well as shared power to
dispose or to direct the disposition of 2,745,170 shares.
Mr. Gagnon has shared power to vote or to direct the vote
of 2,093,875 shares and has shared power to dispose or to
direct the disposition of 2,207,952 shares. Mr. Gagnon
has the sole power to vote or to direct the vote as well as the
sole power to dispose or to direct the disposition of
2,352,640 shares.
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(2)
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Number of shares beneficially owned based solely upon a
Schedule 13G filed by Wellington Management Company, LLP on
May 11, 2009. The address of Wellington Management Company,
LLP is 75 State Street, Boston, Massachusetts 02109.
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(3)
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Number of shares beneficially owned based solely upon a
Schedule 13G filed by Dimensional Fund Advisors, LP on
February 9, 2009. The address of Dimensional
Fund Advisors, LP is Palisades West, Building One,
6300 Bee Cave Road, Austin, Texas, 78746.
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(4)
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Number of shares beneficially owned based solely upon a
Schedule 13G filed by S Squared Technology, LLC. on
January 30, 2009, and includes 1,981,775 shares owned
by S Squared Technology, LLC, and 482,600 shares owned by S
Squared Technology partners, L.P. The address of S Squared
Technology, LLC is 515 Madison Avenue, New York, New York 10022.
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(5)
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Number of shares beneficially owned based solely upon a
Schedule 13D filed by GAMCO Investors, Inc. on
March 3, 2009, and includes 560,000 shares owned by
Gabelli Funds, LLC, 1,155,980 shares owned by GAMCO Asset
Management, Inc., 4,000 shares owned by Gabelli Securities,
Inc., and 626,300 shares owned by Teton Advisors, Inc. The
address of GAMCO Investors, Inc. is One Corporate Center,
Rye, New
York 10580-1435.
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(6)
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Includes shares that are issuable on exercise of Presently
Exercisable Options as follows:
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Presently
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Exercisable
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Holder
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Options
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Stephen N. Kahane
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2,401,425
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Joseph D. Hill
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277,500
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Kevin C. Burns
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552,291
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Paul Merrild
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319,792
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Craig Newfield
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180,000
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David B. Shepherd
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52,500
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Stephen J. DeNelsky
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52,500
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John J. Sviokla
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17,500
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Stephen J. Lifshatz
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15,000
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(7)
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Mr. Stearns resigned from the Company effective as of
January 15, 2010.
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(8)
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Includes 452,092 shares beneficially owned by two
additional executive officers, 429,792 of which are issuable
upon the exercise of Presently Exercisable Options.
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SUBMISSION
OF STOCKHOLDER PROPOSALS
If the Merger is consummated, we will not have public
stockholders and there will be no public participation in any
future meeting of stockholders. However, if the Merger is not
completed or if we are otherwise required to do so under
applicable law, we would hold a 2010 annual meeting of
stockholders (the 2010 Annual Meeting). The deadline
of December 31, 2009, by which stockholder proposals were
required to be submitted in order to be considered for inclusion
in the Companys proxy statement and proxy card relating to
that meeting, has passed.
55
If a stockholder of the Company wishes to present a proposal
before the 2010 Annual Meeting, but does not wish to have the
proposal considered for inclusion in the Companys proxy
statement and proxy card, such stockholder must also give
written notice to the Secretary of the Company at the address
noted above. The Secretary must receive such notice not less
than sixty (60) days nor more than ninety (90) days
prior to the 2010 Annual Meeting; provided that, in the event
that less than sixty (60) days notice or prior public
disclosure of the date of the 2010 Annual Meeting is given or
made, notice by the stockholder must be received not later than
the close of business on the tenth (10th) day following the date
on which such notice of the date of the meeting was mailed or
such public disclosure was made, whichever occurs first. If the
presiding officer determines that such stockholder proposal was
not made in accordance with the terms of Companys Bylaws,
he or she shall so declare at the Annual Meeting and such
proposal shall not be acted upon at such Annual Meeting.
HOUSEHOLDING
OF SPECIAL MEETING MATERIALS
Some banks, brokers and other nominee record holders may be
participating in the practice of householding proxy
statements and annual reports. This means that only one copy of
our proxy statement or annual report may have been sent to
multiple stockholders in your household. We will promptly
deliver a separate copy of either document to you if you call or
write us at the following address or phone number AMICAS, Inc.,
Attn: Investor Relations, 20 Guest Street, Suite 400,
Boston, Massachusetts 02135,
(617) 779-7878.
If you want to receive separate copies of the annual report and
proxy statement in the future, or if you are receiving multiple
copies and would like to receive only one copy for your
household, you should contact your bank, broker, or other
nominee record holder, or you may contact us at the above
address and phone number.
WHERE YOU
CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements
and other information with the SEC. You may read and copy any
document we file at the SECs public reference room located
at 100 F Street, N.E., Room 1580,
Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330
for further information on the public reference room. Our SEC
filings are also available to the public at the SECs
website at
http://www.sec.gov.
You also may obtain free copies of the documents AMICAS, Inc.
files with the SEC by going to the Investors
Relations section of our website at
http://www.amicas.com/investorrelations/.
Our website address is provided as an inactive textual reference
only. The information provided on our website is not part of
this proxy statement, and therefore is not incorporated by
reference.
Any person, including any beneficial owner, to whom this proxy
statement is delivered may request copies of this proxy
statement or other information concerning us, without charge, by
written or telephonic request directed to AMICAS, Inc., Investor
Relations, 20 Guest Street, Boston, Massachusetts 02135,
telephone
56
(617) 779-7878,
on the Companys website at
http://www.amicas.com/investorrelations/,
from the SEC through the SECs website at the address
provided above or from our proxy solicitor,
Innisfree M&A Incorporated
501 Madison Avenue,
20
th
Floor
New York, NY 10022
Stockholders may call toll-free: (888)
750-5834
Banks and Brokers may call collect: (212
750-5833
THIS PROXY STATEMENT DOES NOT CONSTITUTE THE SOLICITATION OF A
PROXY IN ANY JURISDICTION TO OR FROM ANY PERSON TO WHOM OR FROM
WHOM IT IS UNLAWFUL TO MAKE SUCH PROXY SOLICITATION IN THAT
JURISDICTION. YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED
OR INCORPORATED BY REFERENCE IN THIS PROXY STATEMENT TO VOTE
YOUR SHARES AT THE SPECIAL MEETING. WE HAVE NOT AUTHORIZED
ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT FROM
WHAT IS CONTAINED IN THIS PROXY STATEMENT. THIS PROXY STATEMENT
IS DATED JANUARY 15, 2010. YOU SHOULD NOT ASSUME THAT THE
INFORMATION CONTAINED IN THIS PROXY STATEMENT IS ACCURATE AS OF
ANY DATE OTHER THAN THAT DATE, AND THE MAILING OF THIS PROXY
STATEMENT TO STOCKHOLDERS DOES NOT CREATE ANY IMPLICATION TO THE
CONTRARY.
57
Annex A
AGREEMENT
AND PLAN OF MERGER
BY AND
AMONG
AMICAS,
INC.,
PROJECT
ALTA MERGER CORP.
AND
PROJECT
ALTA HOLDINGS CORP.
Dated
as of December 24, 2009
A-1
TABLE
OF CONTENTS
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Page
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ARTICLE I THE MERGER
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A-6
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|
Section
1.1
|
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The Merger
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A-6
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|
Section
1.2
|
|
Closing
|
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A-6
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|
Section
1.3
|
|
Effective Time
|
|
|
A-6
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|
Section
1.4
|
|
Conversion of the Shares
|
|
|
A-6
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|
Section
1.5
|
|
Organizational Documents
|
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A-7
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|
Section
1.6
|
|
Directors and Officers of the Surviving Corporation
|
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A-7
|
|
Section
1.7
|
|
Company Options and Stock-Based Awards
|
|
|
A-7
|
|
Section
1.8
|
|
Dissenter Shares
|
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A-8
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ARTICLE II EXCHANGE OF CERTIFICATES
|
|
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A-8
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|
Section
2.1
|
|
Paying Agent
|
|
|
A-8
|
|
Section
2.2
|
|
Exchange Procedures
|
|
|
A-9
|
|
Section
2.3
|
|
Further Rights in Company Common Stock
|
|
|
A-9
|
|
Section
2.4
|
|
Termination of Exchange Fund
|
|
|
A-9
|
|
Section
2.5
|
|
No Liability
|
|
|
A-10
|
|
Section
2.6
|
|
Lost, Stolen or Destroyed Certificates
|
|
|
A-10
|
|
Section
2.7
|
|
No Further Dividends
|
|
|
A-10
|
|
Section
2.8
|
|
Withholding of Tax
|
|
|
A-10
|
|
|
|
|
|
|
|
|
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY
|
|
|
A-10
|
|
Section
3.1
|
|
Organization and Good Standing; Charter Documents
|
|
|
A-10
|
|
Section
3.2
|
|
Authority for Agreement
|
|
|
A-11
|
|
Section
3.3
|
|
Capitalization
|
|
|
A-11
|
|
Section
3.4
|
|
Company Subsidiaries
|
|
|
A-12
|
|
Section
3.5
|
|
No Conflict; Required Filings and Consents
|
|
|
A-12
|
|
Section
3.6
|
|
Compliance
|
|
|
A-13
|
|
Section
3.7
|
|
Litigation
|
|
|
A-15
|
|
Section
3.8
|
|
Company Reports; Financial Statements
|
|
|
A-15
|
|
Section
3.9
|
|
Absence of Certain Changes or Events
|
|
|
A-17
|
|
Section
3.10
|
|
Taxes
|
|
|
A-17
|
|
Section
3.11
|
|
Title to Personal Properties; Real Property
|
|
|
A-18
|
|
Section
3.12
|
|
Officers, Directors, Employees and Affiliates
|
|
|
A-19
|
|
Section
3.13
|
|
Employee Benefit Plans
|
|
|
A-20
|
|
Section
3.14
|
|
Labor Relations
|
|
|
A-21
|
|
Section
3.15
|
|
Contracts and Commitments
|
|
|
A-21
|
|
Section
3.16
|
|
Intellectual Property
|
|
|
A-23
|
|
Section
3.17
|
|
Insurance Policies
|
|
|
A-26
|
|
Section
3.18
|
|
Brokers
|
|
|
A-26
|
|
Section
3.19
|
|
Company Financial Advisor Opinion
|
|
|
A-26
|
|
Section
3.20
|
|
Rights Agreement; Anti-Takeover Provisions
|
|
|
A-26
|
|
Section
3.21
|
|
Environmental Matters
|
|
|
A-26
|
|
Section
3.22
|
|
Information Supplied
|
|
|
A-27
|
|
Section
3.23
|
|
Product Warranties
|
|
|
A-27
|
|
A-2
|
|
|
|
|
|
|
|
|
|
|
Page
|
|
|
|
|
|
|
|
|
|
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND
MERGER SUB
|
|
|
A-27
|
|
Section
4.1
|
|
Organization and Good Standing
|
|
|
A-27
|
|
Section
4.2
|
|
Authority for Agreement
|
|
|
A-27
|
|
Section
4.3
|
|
No Conflict; Required Filings and Consents
|
|
|
A-28
|
|
Section
4.4
|
|
Litigation
|
|
|
A-28
|
|
Section
4.5
|
|
Availability of Funds
|
|
|
A-28
|
|
Section
4.6
|
|
Guarantees
|
|
|
A-29
|
|
Section
4.7
|
|
Brokers
|
|
|
A-29
|
|
Section
4.8
|
|
Merger Sub
|
|
|
A-29
|
|
Section
4.9
|
|
Information Supplied
|
|
|
A-29
|
|
Section
4.10
|
|
Management Arrangements
|
|
|
A-29
|
|
Section
4.11
|
|
Solvency
|
|
|
A-29
|
|
Section
4.12
|
|
Section 203 of the DGCL
|
|
|
A-30
|
|
|
|
|
|
|
|
|
ARTICLE V COVENANTS
|
|
|
A-30
|
|
Section
5.1
|
|
Conduct of Business by the Company Pending the Merger
|
|
|
A-30
|
|
Section
5.2
|
|
Access to Information and Employees
|
|
|
A-32
|
|
Section
5.3
|
|
Reasonable Best Efforts; Notification
|
|
|
A-32
|
|
Section
5.4
|
|
Proxy
|
|
|
A-33
|
|
Section
5.5
|
|
Company Stockholders Meeting
|
|
|
A-35
|
|
Section
5.6
|
|
No Solicitation of Transactions
|
|
|
A-35
|
|
Section
5.7
|
|
Public Announcements
|
|
|
A-38
|
|
Section
5.8
|
|
Litigation
|
|
|
A-38
|
|
Section
5.9
|
|
Directors and Officers Indemnification and Insurance
|
|
|
A-38
|
|
Section
5.10
|
|
Conveyance Taxes
|
|
|
A-39
|
|
Section
5.11
|
|
Delisting
|
|
|
A-39
|
|
Section
5.12
|
|
Financing
|
|
|
A-40
|
|
Section
5.13
|
|
Employee Matters
|
|
|
A-40
|
|
Section
5.14
|
|
Release of Liens
|
|
|
A-41
|
|
|
|
|
|
|
|
|
ARTICLE VI CONDITIONS PRECEDENT
|
|
|
A-41
|
|
Section
6.1
|
|
Conditions to Each Partys Obligation to Effect the Merger
|
|
|
A-41
|
|
Section
6.2
|
|
Additional Conditions to Obligations of Parent and Merger Sub
|
|
|
A-41
|
|
Section
6.3
|
|
Additional Conditions to Obligation of the Company
|
|
|
A-42
|
|
Section
6.4
|
|
Frustration of Closing Conditions
|
|
|
A-42
|
|
|
|
|
|
|
|
|
ARTICLE VII TERMINATION, AMENDMENT AND WAIVER
|
|
|
A-42
|
|
Section
7.1
|
|
Termination
|
|
|
A-42
|
|
Section
7.2
|
|
Expenses; Company Termination Fee
|
|
|
A-44
|
|
Section
7.3
|
|
Effect of Termination
|
|
|
A-45
|
|
Section
7.4
|
|
Amendment
|
|
|
A-45
|
|
Section
7.5
|
|
Extension; Waiver
|
|
|
A-45
|
|
|
|
|
|
|
|
|
ARTICLE VIII GENERAL PROVISIONS
|
|
|
A-45
|
|
Section
8.1
|
|
Nonsurvival of Representations and Warranties
|
|
|
A-45
|
|
Section
8.2
|
|
Notices
|
|
|
A-45
|
|
Section
8.3
|
|
Interpretation
|
|
|
A-46
|
|
A-3
|
|
|
|
|
|
|
|
|
|
|
Page
|
|
|
Section
8.4
|
|
Counterparts
|
|
|
A-46
|
|
Section
8.5
|
|
Entire Agreement; No Third-Party Beneficiaries
|
|
|
A-46
|
|
Section
8.6
|
|
Governing Law
|
|
|
A-46
|
|
Section
8.7
|
|
Assignment
|
|
|
A-47
|
|
Section
8.8
|
|
Enforcement
|
|
|
A-47
|
|
Section
8.9
|
|
Severability
|
|
|
A-47
|
|
Section
8.10
|
|
Consent to Jurisdiction; Venue
|
|
|
A-47
|
|
Section
8.11
|
|
Waiver of Trial by Jury
|
|
|
A-47
|
|
|
|
|
|
|
|
|
ARTICLE IX CERTAIN DEFINITIONS
|
|
|
A-48
|
|
EXHIBITS
A. Form of Voting Agreement
B. Equity Commitment Letters
C. Guarantees
D. FIRPTA Certificate
E. Amended and Restated Certificate of Incorporation
A-4
AGREEMENT
AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (together with all annexes,
letters, schedules and exhibits hereto, this
Agreement
), dated as of December 24,
2009, is by and among Project Alta Holdings Corp., a Delaware
corporation (
Parent
), Project Alta Merger
Corp., a Delaware corporation and wholly-owned direct subsidiary
of Parent (
Merger Sub
), and AMICAS, Inc., a
Delaware corporation (the
Company
). Certain
capitalized terms used in this Agreement are defined in
Article IX
, and
Article IX
includes an
index of all capitalized terms used in this Agreement.
RECITALS
WHEREAS, the Company and Merger Sub each have determined that it
is advisable, fair to and in the best interests of its
stockholders to effect a merger (the
Merger
)
of Merger Sub with and into the Company pursuant to the Delaware
General Corporation Law (the
DGCL
) upon the
terms and subject to the conditions set forth in this Agreement,
pursuant to which each outstanding share of common stock, par
value $0.001 per share, of the Company (the
Company
Common Stock
), shall be converted into the right to
receive cash, as set forth herein, all upon the terms and
subject to the conditions of this Agreement.
WHEREAS, the board of directors of the Company (the
Company Board of Directors
) has unanimously
(i) approved this Agreement, the Merger and the other
transactions contemplated hereby, (ii) determined that the
Merger and the other transactions contemplated hereby, taken
together, are at a price and on terms that are fair to,
advisable and in the best interests of the Company and its
stockholders (the
Company Common
Stockholders
), (iii) approved this Agreement and
recommended the approval of this Agreement by the Company Common
Stockholders and (iv) taken all necessary action to render
the Companys Rights Agreement, dated as of
December 5, 2002, between the Company (f/k/a VitalWorks,
Inc.) and StockTrans, Inc. as rights agent (the
Rights
Plan
) and the rights to purchase Series B Junior
Preferred Stock (each, a
Right
) outstanding
thereunder, inapplicable to this Agreement, the Merger and the
other transactions contemplated hereby.
WHEREAS, the board of directors of Parent and Merger Sub have
unanimously (i) approved this Agreement, the Merger and the
other transactions contemplated hereby, (ii) determined
that the Merger and the other transactions contemplated hereby
are advisable and in the best interests of Merger Sub and its
sole stockholder and (iii) approved this Agreement and
recommended the approval of this Agreement by Merger Subs
sole stockholder.
WHEREAS, simultaneously with the execution and delivery of this
Agreement, certain Company Common Stockholders have entered into
voting agreements in the form attached hereto as
Exhibit A
(the
Voting
Agreements
), dated as of the date hereof, with Parent.
WHEREAS, as a condition to the willingness of the Company to
enter into this Agreement, concurrently with the execution and
delivery of this Agreement, the Sponsors have issued the Equity
Commitment Letters attached as
Exhibit B
hereto (the
Equity Commitment Letters
) to Parent and
entered into Guarantees, dated as of the date hereof (the
Guarantees
), in the form attached as
Exhibit C
hereto, pursuant to which the Sponsors are
guaranteeing certain obligations of Parent and Merger Sub in
connection with this Agreement, on the terms and subject to the
conditions set forth therein.
A-5
AGREEMENT
NOW THEREFORE, in consideration of the representations,
warranties, covenants and agreements contained in this
Agreement, the parties hereby agree as follows:
ARTICLE I
THE MERGER
Section
1.1
The
Merger
.
Subject to the terms and conditions
of this Agreement, at the Effective Time: (a) Merger Sub
shall be merged with and into the Company and the separate
corporate existence of Merger Sub shall thereupon cease,
(b) the Company shall be the successor or surviving
corporation in the Merger and shall continue to be governed by
the laws of the State of Delaware, and (c) the separate
corporate existence of the Company with all its rights,
privileges, immunities, powers and franchises shall continue
unaffected by the Merger. The Merger shall have the effects set
forth in the DGCL.
Section
1.2
Closing
.
Subject
to the terms and conditions of this Agreement, the Closing will
take place at 10:00 a.m., local time, as promptly as
practicable but in no event later than the second Business Day
after the satisfaction or waiver of the conditions (other than
those conditions that by their nature are to be satisfied at the
Closing, but subject to the fulfillment or waiver of those
conditions) set forth in
Article VI
(the
Closing Date
), at the offices of
Kirkland & Ellis LLP, 300 N. LaSalle Drive,
Chicago, Illinois 60654, unless another time, date or place is
agreed to in writing by the parties.
Section
1.3
Effective
Time
.
On the Closing Date and subject to the
terms and conditions hereof, the Certificate of Merger shall be
delivered for filing with the Delaware Secretary. The Merger
shall become effective at the Effective Time. If the Delaware
Secretary requires any changes in the Certificate of Merger as a
condition to filing or issuing a certificate to the effect that
the Merger is effective, the Company shall execute any necessary
revisions incorporating such changes, provided such changes are
not inconsistent with and do not result in any material change
in the terms of this Agreement.
Section
1.4
Conversion
of the Shares
.
At the Effective Time, by
virtue of the Merger and without any action on the part of
Parent, Merger Sub, the Company or the holders of any of the
following securities:
(a) Except as provided in
Section 1.4(d)
, each
share of Company Common Stock issued and outstanding immediately
prior to the Effective Time (excluding Dissenter Shares) shall
by virtue of the Merger and without any action on the part of
the holder thereof be converted automatically into the right to
receive $5.35 in cash, without interest (the
Merger
Consideration
). All such shares of Company Common
Stock, when so converted, shall no longer be outstanding and
each holder of a certificate theretofore representing such
shares of Company Common Stock shall cease to have any rights
with respect thereto, except the right to receive the Merger
Consideration into which such shares of Company Common Stock
have been converted, as provided herein.
(b) Each share of Company Common Stock that is owned by the
Company (or any Subsidiary of the Company) as treasury stock or
otherwise and each share of Company Common Stock owned by Parent
shall be canceled and retired and cease to exist and no payment
or distribution shall be made with respect thereto.
(c) Each share of common stock of Merger Sub issued and
outstanding immediately prior to the Effective Time shall be
converted into and become one validly issued, fully paid and
nonassessable share of common stock, par value $0.01 per share,
of the Surviving Corporation.
(d) If between the date of this Agreement and the Effective
Time the outstanding shares of Company Common Stock shall have
been changed into a different number of shares or a different
class, solely by reason of any stock dividend, subdivision,
reclassification, recapitalization, split, reverse split,
combination or exchange of shares or any other similar
transaction, the Merger Consideration shall be correspondingly
adjusted to reflect such stock dividend, subdivision,
reclassification, recapitalization, split, reverse split,
combination or exchange of shares or any other similar
transaction and to provide to the holders of
A-6
Company Common Stock the same economic effect as contemplated by
this Agreement prior to such action.
Section
1.5
Organizational
Documents
.
(a) At the Effective Time, the Certificate of Incorporation
of the Company shall be amended in its entirety to read as set
forth on
Exhibit E
hereto and as so amended shall be
the Certificate of Incorporation of the Surviving Corporation
until thereafter amended in accordance with its terms and as
provided by Law.
(b) At the Effective Time, the Bylaws of Merger Sub as in
effect immediately prior to the Effective Time shall be the
Bylaws of the Surviving Corporation (except that all references
to Merger Sub in the Bylaws of the Surviving Corporation shall
be amended to refer to AMICAS, Inc.). Thereafter, as
so amended, the Bylaws of the Surviving Corporation may be
amended or repealed in accordance with their terms and the
Certificate of Incorporation of the Surviving Corporation and as
provided by Law.
Section
1.6
Directors
and Officers of the Surviving
Corporation
.
The Company shall cause to be
delivered to Parent, at Closing, resignations of all the
directors of the Company to be effective upon the consummation
of the Merger. At the Effective Time, the directors and officers
of Merger Sub shall be the directors and officers of the
Surviving Corporation, and such directors and officers shall
hold office in accordance with and subject to the Certificate of
Incorporation and Bylaws of the Surviving Corporation.
Section
1.7
Company
Options and Stock-Based Awards
.
(a)
Equity Award Waivers.
Prior to
the Effective Time, the Company shall use its best efforts to
obtain all necessary waivers, consents or releases, in form and
substance reasonably satisfactory to Parent, from holders of
Company Common Stock Options and other equity awards under the
Company Option Plans and take all such other action, without
incurring any liabilities in connection therewith, as Parent may
deem to be necessary to give effect to the transactions
contemplated by this
Section 1.7
, including, but not
limited to, satisfaction of the requirements of
Rule 16b-3(e)
under the Exchange Act. Prior to the Effective Time, the Company
Board of Directors (or, if appropriate, any committee thereof
administering the Company Option Plans) shall adopt such
resolutions or take such other actions as are required to give
effect to the transactions contemplated by this
Section 1.7.
(b)
Termination of Company Option
Plans.
Except as otherwise agreed to by the
parties, (i) the Company Option Plans shall terminate as of
the Effective Time and the provisions in any other plan, program
or arrangement providing for the issuance or grant of any other
interest in respect of the capital stock of the Company or any
Subsidiary thereof shall be canceled as of the Effective Time
and (ii) the Company shall ensure that following the
Effective Time no participant in the Company Option Plans or
other plans, programs or arrangements shall have any right
thereunder to acquire any equity securities of the Company, the
Surviving Corporation or any Subsidiary thereof.
(c)
Company Common Stock
Options
.
At the Effective Time, each
then-outstanding Company Common Stock Option, whether vested or
unvested, shall be cancelled in accordance with the terms of the
applicable Company Option Plan. It is the intent of the parties
that the cancellation of a Company Common Stock Option as
provided in the immediately preceding sentence shall be deemed a
full and complete satisfaction of any and all rights the holder
thereof had or may have had in respect of such Company Common
Stock Option. Prior to the Effective Time, the Company shall
deliver to the holders of Company Common Stock Options notices,
in form and substance reasonably acceptable to Parent, setting
forth such holders rights pursuant to this Agreement.
(d)
Employee Stock Purchase
Plan
.
As soon as practicable following the
date of this Agreement, the Company Board of Directors (or, if
appropriate, any committee administering the Companys 2007
Employee Stock Purchase Plan, dated as of August 1, 2007
(the
ESPP
)) shall adopt such resolutions or
take such other actions as may be required to provide that, with
respect to the ESPP: (i) each individual participating in
the Offering (as defined in the ESPP) in progress as of the date
of this Agreement (the
Final Offering
) shall
not be permitted (x) to increase the amount of his or her
rate of payroll contributions thereunder from the rate in effect
when the Final Offering commenced, or (y) to make separate
non-payroll contributions to the ESPP on
A-7
or following the date of this Agreement; (ii) no individual
who is not participating in the ESPP as of the date of this
Agreement may commence participation in the ESPP following the
date of this Agreement; (iii) the Final Offering shall end
on the earlier to occur of January 31, 2010 and a date that
is ten (10) calendar days prior to the Effective Time;
(iv) each ESPP participants accumulated contributions
under the ESPP shall be used to purchase shares of Company
Common Stock in accordance with the terms of the ESPP as of the
end of the Final Offering; and (v) the ESPP shall terminate
immediately following the end of the Final Offering and no
further rights shall be granted or exercised under the ESPP
thereafter. All shares of Company Common Stock purchased in the
Final Offering shall be cancelled at the Effective Time and
converted into the right to receive the Merger Consideration in
accordance with the terms and conditions of this Agreement.
(e)
Company Restricted Stock
.
At
the Effective Time, each share of Company Restricted Stock,
whether vested or unvested, that is outstanding immediately
prior thereto shall become fully vested and all restrictions and
repurchase rights thereon shall lapse and shall be converted
automatically into the right to receive at the Effective Time an
amount in cash in U.S. dollars equal to the product of
(a) the total number of such shares of Company Restricted
Stock and (b) the Merger Consideration.
Section
1.8
Dissenter
Shares
.
Notwithstanding anything in this
Agreement to the contrary, if any Dissenting Stockholder shall
demand to be paid the fair value of its Dissenter
Shares, as provided in Section 262 of the DGCL, such
Dissenter Shares shall not be converted into or exchangeable for
the right to receive the Merger Consideration (except as
provided in this
Section 1.8
) and shall entitle such
Dissenting Stockholder only to payment of the fair value of such
Dissenter Shares, in accordance with Section 262 of the
DGCL, unless and until such Dissenting Stockholder withdraws (in
accordance with Section 262(k) of the DGCL) or effectively
loses the right to dissent. The Company shall not, except with
the prior written consent of Parent, voluntarily make (or cause
or permit to be made on its behalf) any payment with respect to,
or settle or offer to settle, any such demand for payment of
fair value of Dissenter Shares prior to the Effective Time. The
Company shall give Parent prompt notice of any such demands
prior to the Effective Time and Parent shall have the right to
participate in all negotiations and proceedings with respect to
any such demands. If any Dissenting Stockholder shall have
effectively withdrawn (in accordance with Section 262(k) of
the DGCL) or lost the right to dissent, then as of the later of
the Effective Time or the occurrence of such event, the
Dissenter Shares held by such Dissenting Stockholder shall be
converted into and represent the right to receive the Merger
Consideration pursuant to
Section 1.8
.
ARTICLE II
EXCHANGE OF
CERTIFICATES
Section
2.1
Paying
Agent
.
At the Closing, Parent shall deposit,
or shall cause to be deposited, with a bank or trust company
designated by Parent and reasonably satisfactory to the Company
(the
Paying Agent
), for the benefit of the
holders of shares of Company Common Stock, for exchange in
accordance with this
Article II
, through the Paying
Agent, cash in U.S. dollars in an amount sufficient to pay
the aggregate amount of the Merger Consideration (such cash
being hereinafter referred to as the
Exchange
Fund
) payable pursuant to
Article I
in
exchange for outstanding shares of Company Common Stock (but
not, for the avoidance of doubt, for payments in respect of
Company Common Stock Options, which Parent shall pay, or cause
the Surviving Corporation to pay through its payroll system, to
the holders of Company Common Stock Options in accordance with
Section 1.7(c)
). In the event that the Surviving
Corporation has insufficient cash to make such payments for the
Company Common Stock Options, Parent shall pay such amounts or
provide to the Surviving Corporation sufficient cash to pay such
amounts. The Paying Agent shall deliver the Merger Consideration
contemplated to be paid pursuant to
Article I
in
exchange for outstanding shares of Company Common Stock out of
the Exchange Fund. The Exchange Fund shall be invested by the
Paying Agent as directed by Parent;
provided
,
however
, that: (i) no such investment or losses
thereon shall affect the Merger Consideration payable to the
holders of Company Common Stock; and (ii) 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, in
commercial paper obligations rated
A-1
or
P-1
or
better by Moodys Investors Service, Inc. or
Standard & Poors Corporation, respectively, or
in
A-8
certificates of deposit, bank repurchase agreements or
bankers acceptances of commercial banks with capital
exceeding $1 billion (based on the most recent financial
statements of such bank that are then publicly available). Any
net profit resulting from, or interest or income produced by,
such investments shall be payable to the Surviving Corporation
or Parent, and any amounts in excess of the amounts payable
pursuant to
Article I
shall be promptly returned to
the Surviving Corporation or Parent, in each case as directed by
Parent. The Exchange Fund shall not be used for any other
purpose.
Section
2.2
Exchange
Procedures
.
(a)
Exchange of
Certificates
.
Promptly following the
Effective Time (but in no event later than three
(3) Business Days following the Effective Time), Parent
shall cause the Paying Agent to mail to each holder of record of
a Certificate or Certificates which immediately prior to the
Effective Time represented outstanding shares of Company Common
Stock (the
Certificates
, it being understood
that any references herein to
Certificates
shall be deemed to include references to book-entry account
statements relating to the ownership of shares of Company Common
Stock) and whose shares of Company Common Stock have been
converted into the right to receive Merger Consideration
pursuant to
Article I
(i) a letter of
transmittal in customary form (which shall specify that delivery
shall be effected, and risk of loss and title to the
Certificates shall pass, only upon proper delivery of the
Certificates, or appropriate affidavits of loss in lieu thereof
as provided below, to the Paying Agent) and
(ii) instructions for use in effecting the surrender of the
Certificates in exchange for the Merger Consideration. Upon
surrender of a Certificate for cancellation (or, subject to
Section 2.6
below, an appropriate affidavit of loss
in lieu thereof) to the Paying Agent together with such letter
of transmittal, properly completed and duly executed, and such
other documents as may be reasonably required pursuant to such
instructions (or, if such shares are held in book-entry or other
uncertificated form, upon the entry through a book-entry
transfer agent of the surrender of such shares on a book-entry
account statement), the holder of such Certificate shall be
entitled to receive in exchange therefor the Merger
Consideration which such holder has the right to receive in
respect of the shares of Company Common Stock formerly
represented by such Certificate, and the Certificate so
surrendered shall forthwith be cancelled. No interest will be
paid or accrued on any Merger Consideration payable to holders
of Certificates. In the event of a transfer of ownership of
shares of Company Common Stock which is not registered in the
transfer records of the Company, the Merger Consideration may be
issued to a transferee if the Certificate representing such
shares of Company Common Stock is presented to the Paying Agent,
accompanied by all documents required to evidence and effect
such transfer and by evidence that any applicable stock transfer
Taxes have been paid. Until surrendered as contemplated by this
Article II
, each Certificate shall be deemed at any
time after the Effective Time to represent only the right to
receive upon such surrender the Merger Consideration or the
right to demand to be paid the fair value of the
shares represented thereby as contemplated by
Article I
.
(b)
Special Payment Procedures for
DTC
.
Prior to the Effective Time, Parent and
the Company shall cooperate to establish procedures with the
Paying Agent and the Depository Trust Company
(
DTC
) to ensure that (x) if the Closing
occurs at or prior to 11:30 am (New York time) on the Closing
Date, the Paying Agent will transmit to DTC or its nominee on
the Closing Date an amount in cash in immediately available
funds equal to number of Shares held of record by DTC or such
nominee immediately prior to the Effective Time multiplied by
the Per Share Merger Consideration (such amount, the
DTC Payment
), and (y) if the Closing
occurs after 11:30 am (New York time) on the Closing Date, the
Paying Agent will transmit to DTC or its nominee on the first
business day after the Closing Date an amount in cash in
immediately available funds equal to the DTC Payment.
Section
2.3
Further
Rights in Company Common Stock
.
All Merger
Consideration paid in accordance with the terms hereof shall be
deemed to have been issued in full satisfaction of all rights
pertaining to such shares of Company Common Stock.
Section
2.4
Termination
of Exchange Fund
.
Any portion of the Exchange
Fund which remains undistributed to the former holders of
Company Common Stock twelve (12) months after the Effective
Time shall be delivered to the Surviving Corporation upon
demand, and any former holders of Company Common Stock who have
not theretofore complied with this
Article II
shall
thereafter look only to the Surviving Corporation for the Merger
Consideration, without any interest thereon.
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Section
2.5
No
Liability
.
None of Parent, the Company or the
Surviving Corporation shall be liable to any holder of shares of
Company Common Stock for any cash from the Exchange Fund
required to be delivered, to the extent so delivered, to a
public official pursuant to any abandoned property, escheat or
similar Law.
Section
2.6
Lost,
Stolen or Destroyed Certificates
.
If any
Certificate shall have been lost, stolen or destroyed, upon the
making of an affidavit of that fact by the Person claiming such
Certificate to be lost, stolen or destroyed and, if required by
Parent, the posting by such Person of a bond, in reasonable and
customary amount, as indemnity against any claim that may be
made against it with respect to such lost, stolen or destroyed
Certificate, the Paying Agent will issue in exchange for such
lost, stolen or destroyed Certificate the Merger Consideration
without any interest thereon.
Section
2.7
No
Further Dividends
.
No dividends or other
distributions with respect to capital stock of the Surviving
Corporation with a record date on or after the Effective Time
shall be paid to the holder of any unsurrendered Certificates.
Section
2.8
Withholding
of Tax
.
Parent, the Surviving Corporation,
any Affiliate thereof or the Paying Agent shall be entitled to
deduct and withhold from the consideration otherwise payable to
pursuant to this Agreement to any holder of shares of Company
Common Stock and or Company Common Stock Options such amount as
Parent, the Surviving Corporation, any Affiliate thereof or the
Paying Agent is required to deduct and withhold with respect to
the making of such payment under the Code or any provision of
state, local or foreign Tax Law. To the extent that amounts are
so withheld by the Surviving Corporation or the Paying Agent,
such withheld amounts shall be (a) paid over to the
applicable Governmental Entity in accordance with applicable Law
or Order and (b) treated for all purposes of this Agreement
as having been paid to the former holder of a Certificate or
Company Common Stock Option in respect of which such deduction
and withholding was made.
ARTICLE III
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
Except as disclosed in the Company Disclosure Letter delivered
by the Company to Parent prior to the execution of this
Agreement (as to which a disclosure in one section of the
Company Disclosure Letter shall be deemed disclosed in each
other section where it is reasonably apparent on its face that
the matter disclosed is responsive to the representations and
warranties in such section), and except as set forth in the
filed Company Reports (to the extent it is reasonably apparent
that any such disclosure set forth in the filed Company Reports
would qualify the representations and warranties contained
herein and other than, in each case, any matters required to be
listed for purposes of Section 3.3 (Capitalization),
Section 3.13 (Employee Benefit Plans) and Section 3.16
(Intellectual Property) of this Agreement which matters shall be
specifically listed in Sections 3.3, 3.13 and 3.16 of the
Company Disclosure Letter, respectively, and further excluding
from the Company Reports (1) any items included therein
that are incorporated by reference to Company Reports filed
prior to December 31, 2007 and (2) any risk factor
disclosures or other similarly generic cautionary, predictive or
forward-looking disclosures contained therein), the Company
represents and warrants to each of the other parties hereto as
follows:
Section
3.1
Organization
and Good Standing; Charter Documents
.
(a) The Company and each of its Subsidiaries (i) is a
corporation or other entity duly organized, validly existing and
in corporate or other entity good standing (with respect to
jurisdictions that recognize such concept) under the Laws of its
jurisdiction of incorporation, (ii) has full corporate (or,
in the case of any Subsidiary that is not a corporation, other)
power and authority to own, lease and operate its properties and
assets and to conduct its business as presently conducted, and
(iii) is duly qualified or licensed to do business as a
foreign corporation or other entity and is in corporate or other
entity good standing (with respect to jurisdictions that
recognize such concept) in each jurisdiction where the character
of the properties owned, leased or operated by it or the nature
of its business makes such qualification or licensing necessary,
except
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where the failure to be so qualified or licensed would not
reasonably be expected to have a Company Material Adverse Effect.
(b) The Company has made available to Parent (or included
as an exhibit to the Company
10-K)
complete and correct copies of the Company Certificate of
Incorporation and the Company Bylaws, each as amended to date,
and each as so made available or included is in full force and
effect. Except as would not reasonably be expected to have a
Company Material Adverse Effect, the Company has made available
to Parent (or included as an exhibit to the Company
10-K)
complete and correct copies of the certificate of incorporation
and by-laws (or similar organizational documents) of each of the
Companys Subsidiaries, each as amended to date, and each
as so made available or included is in full force and effect.
The Company is not in violation in any material respect of any
of the provisions of the Company Certificate of Incorporation or
the Company Bylaws. The Company has made available to Parent
true and complete copies of the minute books of the Company from
January 1, 2006 and through the date of this Agreement
(except for minutes and consents of the Company Board of
Directors or any committee thereof relating to the evaluation of
the transactions contemplated hereby and the consideration of
strategic alternatives relating to the Company), and such copies
are true and correct in all material respects.
Section
3.2
Authority
for Agreement
.
The Company has all necessary
corporate power and authority to execute and deliver this
Agreement and, subject to the adoption of this Agreement by the
Company Common Stockholders, to perform its obligations
hereunder and to consummate the Merger and the other
transactions contemplated by this Agreement. This Agreement has
been duly executed and delivered by the Company and, assuming
the due authorization, execution and delivery by Parent and
Merger Sub, constitutes a legal, valid and binding obligation of
the Company enforceable against the Company in accordance with
its terms, except as enforcement thereof may be limited against
the Company by (i) bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and other Laws of general
application relating to or affecting the enforcement of
creditors rights, general equitable principles or remedies
in general as from time to time in effect or (ii) the
exercise by courts of equity powers (the
Bankruptcy and
Equity Exception
).
Section
3.3
Capitalization
.
(a) The authorized capital stock of the Company consists of
200,000,000 shares of Company Common Stock and
2,000,000 shares of preferred stock. As of the date hereof,
(i) no shares of Series A Preferred, (ii) no
shares of Series B Preferred,
(iii) 36,211,373 shares of Company Common Stock
including shares of Company Restricted Stock (but excluding
shares held the Companys treasury), are issued and
outstanding and (iv) 16,357,854 shares of Company
Common Stock and no shares of the Companys preferred stock
are held in the Companys treasury. The maximum number of
shares of Company Common Stock issued pursuant to the ESPP with
respect to the Final Offering Period will not exceed
90,000 shares. All outstanding shares of Company Common
Stock are, and any additional shares of Company Common Stock
issued after the date hereof and prior to the Effective Time
will be, duly authorized and validly issued, fully paid and
nonassessable, free of any Encumbrances imposed upon the holder
thereof by the Company, and issued in compliance in all material
respects with all applicable federal and state securities Laws.
(b)
Section 3.3(b)
of the Company Disclosure
Letter sets forth a list of the holders of Company Common Stock
Options
and/or
Company Common Stock-Based Awards as of the date hereof,
including (to the extent applicable) the date on which each such
Company Common Stock Option or Company Common Stock-Based Award
was granted, the number of shares of Company Common Stock
subject to such Company Common Stock Option or Company Common
Stock-Based Award, the expiration date of such Company Common
Stock Option or Company Common Stock-Based Award and the price
at which such Company Common Stock Option or Company Common
Stock-Based Award may be exercised (if any). All shares of
Company Common Stock subject to issuance as aforesaid, upon
issuance on the terms and conditions specified in the
instruments pursuant to which they are issuable, will be duly
authorized, validly issued, fully paid and nonassessable and
issued in compliance in all material respects with all
applicable federal and state securities Laws. There has not been
any illegal backdating of any Company Common Stock Options.
Except as set forth above and other than the Rights, as of the
date of this Agreement, there are no Company Common Stock
Rights. The copies of
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the Company Option Plans that are filed as exhibits to the
Company
10-K
or incorporated by reference therein are complete and correct
copies thereof in all material respects as in effect on the date
hereof.
(c) Except as set forth in
Sections 3.3(a)
and
3.3(b)
and except for the Rights that have been issued
pursuant to the Rights Plan, there are no options, warrants or
other rights, agreements, arrangements or commitments of any
character to which the Company or any of its Subsidiaries is a
party or by which the Company or any of its Subsidiaries is
bound relating to the issued or unissued Equity Interests of the
Company, or securities convertible into or exchangeable for such
Equity Interests, or obligating the Company to issue or sell any
shares of its capital stock or other Equity Interests, or
securities convertible into or exchangeable for such capital
stock of, or other Equity Interests in, the Company. Except as
set forth in
Sections 3.3(a)
and
3.3(b)
,
there are no outstanding contractual obligations of the Company
or any of its Subsidiaries affecting the voting rights of or
requiring the repurchase, redemption, issuance, creation or
disposition of, any Equity Interests in the Company. There are
no outstanding bonds, debentures, notes or other Indebtedness of
the Company having the right to vote (or convertible into, or
exchangeable for, securities having the right to vote) on any
matter on which the Companys stockholders may vote.
(d) Except as set forth above, there are no outstanding
contractual obligations of the Company to repurchase, redeem or
otherwise acquire any shares of Company Common Stock or to pay
any dividend or make any other distribution in respect thereof.
As of the date hereof, except for the Voting Agreements, there
are no stockholder agreements, voting trusts, proxies or other
agreements or understandings to which the Company is a party or
by which it is bound with respect to the voting or registration
of Company Common Stock or capital stock of any its Subsidiaries
or preemptive rights with respect thereto.
(e) There are no accrued and unpaid dividends with respect
to any outstanding shares of capital stock of the Company or any
of its Subsidiaries.
(f) There are no Company-granted preemptive rights of first
refusal, co-sale rights, drag-along rights or
registration rights granted by the Company with respect to the
Companys capital stock and in effect as of the date hereof.
(g) Except for the Companys repurchase rights with
respect to unvested shares issued under the Company Option Plans
and with respect to Company Restricted Stock, there are no
rights or obligations, contingent or otherwise (including rights
of first refusal in favor of the Company), of the Company or any
of its Subsidiaries, to repurchase, redeem or otherwise acquire
any shares of capital stock of the Company or any of its
Subsidiaries or to provide funds to or make any investment (in
the form of a loan, capital contribution or otherwise) in any
such Subsidiary or any other Person.
Section
3.4
Company
Subsidiaries
.
Section 3.4 of the Company
Disclosure Letter contains a correct and complete list of all of
the Subsidiaries of the Company and the ownership interest of
the Company (or one or more of its other Subsidiaries) in each
Subsidiary. The Company or one of its Subsidiaries is the record
and beneficial owner of all outstanding shares of capital stock
(or similar equity or voting interest), of each Subsidiary of
the Company and all such shares are duly authorized, validly
issued, fully paid and nonassessable. All of the outstanding
shares of capital stock of each Subsidiary of the Company are
owned by the Company free and clear of all Encumbrances. Except
for the capital stock of, or other equity or voting interests
in, the Subsidiaries set forth on Section 3.4 of the
Company Disclosure Letter, the Company does not own or have the
right or obligation to acquire, directly or indirectly, any
Equity Interest in, any Person.
Section
3.5
No
Conflict; Required Filings and Consents
.
(a) The execution and delivery of this Agreement by the
Company do not, and the performance of this Agreement by the
Company and the consummation of the Merger (subject to the
approval of this Agreement by the Company Required Vote) and the
other transactions contemplated by this Agreement will not,
(i) conflict with or violate any provision of the Company
Certificate of Incorporation or Company Bylaws, or the
equivalent charter documents of any Subsidiary of the Company,
(ii) assuming that the applicable waiting period, and any
extension thereof, under the HSR Act shall have expired or been
terminated, conflict with or violate any Law applicable to the
Company or its Subsidiaries or by which any property or asset of
the Company or any of its Subsidiaries is bound or affected, or
(iii) subject to the receipt of the consents set forth
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on Section 3.5 of the Company Disclosure Letter, result in
a breach of or constitute a default (or an event that with
notice or lapse of time or both would become a default) under,
give to others (immediately or with notice or lapse of time or
both) any right of termination, consent, amendment, acceleration
or cancellation of, result (immediately or with notice or lapse
of time or both) in triggering any payment or other obligations,
or result (immediately or with notice or lapse of time or both)
in the creation of an Encumbrance (other than Permitted
Encumbrances) on any property or asset of the Company or its
Subsidiaries pursuant to, any Company Material Contract, except
in the case of clauses (ii) and (iii) above for any
that would not reasonably be expected to have a Company Material
Adverse Effect.
(b) Assuming the accuracy of the representations and
warranties set forth in Section 4.12 below, the affirmative
vote of the holders of a majority of the outstanding shares of
Company Common Stock as of the record date to be established for
the Company Common Stockholders Meeting, voting as a single
class, at the Company Common Stockholders Meeting, in favor of
approving this Agreement is the only corporate proceeding or
vote of the holders of any class or series of the Companys
capital stock necessary to approve and adopt this Agreement, the
Merger and the other transactions contemplated hereby, other
than the completed actions set forth in
Section 3.5(c)
below.
(c) The Company Board of Directors has unanimously
(i) approved this Agreement, the Merger and the other
transactions contemplated hereby, (ii) determined that the
Merger and the other transactions contemplated hereby, taken
together, are advisable, fair to and in the best interests of
the Company and the Company Common Stockholders,
(iii) amended the Rights Plan so that (A) neither the
execution, delivery or performance of this Agreement nor the
consummation of the Merger will cause the Rights to become
exercisable and (B) the Rights will expire immediately
prior to the Effective Time without any payment being made or
shares of the Companys capital stock being issued in
respect thereof, and (iv) resolved to recommend the
approval and adoption of this Agreement by the Company Common
Stockholders (the
Company Recommendation
)
except as otherwise permitted by this Agreement.
(d) No consent, approval, Order or authorization of, or
registration, declaration or filing with, or notice to, any
Governmental Entity, is required to be made or obtained by the
Company or any of its Subsidiaries in connection with the
execution and delivery of this Agreement by the Company or the
consummation by the Company of the transactions contemplated
hereby or compliance with the provisions hereof, except for (A)
(i) the filing of a premerger notification and report form
by the Company under the HSR Act, and any applicable filings and
approvals under any other Antitrust Law, (ii) the filing
with the SEC of the Proxy Statement and compliance with federal
and state securities laws, as may be required in connection with
this Agreement, the Merger and the other transactions
contemplated hereby, (iii) any filings or notifications
required under the rules and regulations of Nasdaq of the
transactions contemplated hereby, and (iv) the filing of
the Certificate of Merger with the Delaware Secretary and
appropriate documents with the relevant authorities of other
states in which the Company or any of its Subsidiaries is
qualified to do business and (B) where the failure to
obtain such consents, approvals, authorizations or permits, or
to make such filings or notifications would not prevent or
materially delay the Merger or reasonably be expected to be,
individually or in the aggregate, material and adverse to the
Company.
Section
3.6
Compliance
.
(a)
Compliance with Laws;
Permits
.
The Company and its Subsidiaries
hold all Company Permits, except where the failure to hold such
Company Permits would not reasonably be expected to have a
Company Material Adverse Effect. All such Company Permits are in
full force and effect and the Company and its Subsidiaries are
in compliance with the terms of the Company Permits and all
applicable Laws, except where the failure to so maintain such
Company Permits or to so comply would not be reasonably expected
to have a Company Material Adverse Effect. The Company and its
Subsidiaries have been and are in compliance in all material
respects with all applicable Laws or Orders and applicable
listing, corporate governance and other rules and regulations of
the Nasdaq. The Company has not received any written (or, to the
Companys Knowledge, oral) notice to the effect that the
Company or any of its Subsidiaries is not in material compliance
with the terms of such Company Permits or any such Laws. No
material Company Permit shall cease to be effective as a result
of the transactions contemplated by this Agreement. To the
Knowledge of the Company,
A-13
no investigation or review by any Governmental Entity with
respect to the Company or any of its Subsidiaries or their
respective businesses is pending or threatened.
(b)
Prohibited Payments
.
Except
for matters that, individually or in the aggregate, would not
have a Company Material Adverse Effect, neither the Company, any
Subsidiary of the Company, nor, to the Knowledge of the Company,
any director, officer, agent, employee or other Person acting on
behalf of the Company or any Subsidiary of the Company has, in
the course of its actions for, or on behalf of, any of them
(i) used any corporate funds for any unlawful contribution,
gift, entertainment or other unlawful expenses relating to
political activity; (ii) made any direct or indirect
unlawful payment to any foreign or domestic government official
or employee from corporate funds; (iii) violated any
provision of the U.S. Foreign Corrupt Practices Act of
1977, as amended (including the rules and regulations
promulgated thereunder, the
FCPA
); or
(iv) made any unlawful bribe, rebate, payoff, influence
payment, kickback or other unlawful payment to any foreign or
domestic government official or employee. During the last three
(3) years, neither the Company nor any Subsidiary of the
Company has received any written (or, to the Knowledge of the
Company, oral) communication that alleges that the Company or
any Subsidiary of the Company, or any Representative thereof is
in violation of, or has any material liability under, the FCPA
which has not been resolved.
(c)
FDA Compliance
.
The Company
and its Subsidiaries are not now subject (and have not been
subject during the previous five years) to any adverse
inspection finding, recall, investigation, penalty assessment,
audit or other compliance or enforcement action by the
U.S. Food & Drug Administration
(
FDA
) or any other Governmental Entity having
responsibility for the regulation of the Companys and its
Subsidiaries current
and/or
proposed products, except for such matters as would not be
reasonably likely to have a Company Material Adverse Effect. The
Company and its Subsidiaries have obtained all material
necessary approvals and authorizations from the FDA and other
authorities for their current and past business activities. The
Company and its Subsidiaries have not made any material false
statements or material false omissions in their applications or
other submissions to the FDA or other authorities and the
Company and its Subsidiaries have not made or offered any
payments, gratuities, or other things of value that are
prohibited by any law or regulation to personnel of the FDA or
other authorities. The Company and its Subsidiaries are in
compliance with all regulations and requirements of the FDA and
other authorities, including but not limited to any applicable
labeling requirements, testing requirements and protocols,
record keeping and reporting requirements, monitoring
requirements, except as would not be reasonably likely to have a
Company Material Adverse Effect.
(d)
Import/Export
Compliance
.
Except as would not have a
Company Material Adverse Effect, the Company and each of its
Subsidiaries has at all times conducted its export transactions
in accordance with (a) all applicable U.S. export and
reexport controls, including the United States Export
Administration Act and Regulations and Foreign Assets Control
Regulations and (b) all other applicable import/export
controls in other countries in which the Company conducts
business, except for any instances of noncompliance that would
not have a Company Material Adverse Effect. Without limiting the
foregoing and except in each case as would not have a Company
Material Adverse Effect: (i) the Company and each of its
Subsidiaries have obtained all material export licenses, license
exceptions and other consents, notices, waivers, approvals,
orders, authorizations, registrations, declarations,
classifications and filings with any Governmental Entity
required for (y) the export and reexport of products,
services, software and technologies and (z) releases of
technologies and software to foreign nationals located in the
United States and abroad (
Export Approvals
);
(ii) the Company and each of its Subsidiaries are in
compliance with the terms of all applicable Export Approvals;
(iii) there are no pending or, to the Companys
Knowledge, threatened claims against the Company or any
Subsidiary with respect to such Export Approvals; (iv) to
the Companys Knowledge, there are no actions, conditions
or circumstances pertaining to the Companys or any
Subsidiarys export transactions that may give rise to any
future claims; and (v) no Export Approvals for the transfer
of export licenses to Parent or the Surviving Corporation are
required, or such Export Approvals can be obtained expeditiously
without material cost.
(e)
Privacy
.
The Company complies
in all material respects with all relevant laws and its own
policies with respect to the privacy of all users and customers
(and customers or patients of customers), and any of their
personally identifiable information, except for such
non-compliance as would not have a Company
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Material Adverse Effect, and no claims have been asserted or, to
the Companys Knowledge, threatened against the Company by
any Person alleging a material violation of any of the foregoing.
Section
3.7
Litigation
.
There are no claims, actions, suits, or proceedings (each an
Action
), and to the Knowledge of the Company
no governmental investigations, inquiries or subpoenas pending
against the Company or any of its Subsidiaries, or to the
Knowledge of the Company any current or former supervisory
employee of the Company or any of its Subsidiaries with respect
to any acts or omissions in connection with their employment
with the Company or any of its Subsidiaries, or any properties
or assets of the Company or of any of its Subsidiaries, and, to
the Knowledge of the Company, there are no threatened Actions
against the Company or any of its Subsidiaries, or any current
or former supervisory employee of the Company or any of its
Subsidiaries with respect to any acts or omissions in connection
with their employment with the Company or any of its
Subsidiaries, or any properties or assets of the Company or of
any of its Subsidiaries. Neither the Company nor any Subsidiary
of the Company is subject to any material outstanding Order
naming the Company or any material FDA Order binding upon the
Company.
There is not currently any material internal investigation or
inquiry being conducted by the Company, the Company Board of
Directors or, to the Knowledge of the Company, any third party
or Governmental Entity at the request of any of the foregoing
concerning any financial, accounting, Tax, conflict of interest,
self dealing, fraudulent or deceptive conduct or other
misfeasance or malfeasance issues.
Section
3.8
Company
Reports; Financial Statements
.
(a) The Company has timely filed all Company Reports
required to be filed with the SEC on or prior to the date hereof
and will (subject to any extensions permitted pursuant to, and
in compliance with,
Rule 12b-25
of the Exchange Act) timely file all Company Reports required to
be filed with the SEC after the date hereof and prior to the
Effective Time. No Subsidiary of the Company is subject to the
reporting requirements of Section 13(a) or 15(d) of the
Exchange Act. As of their respective dates, or, if amended or
restated, as of the date of the last such amendment or
restatement, the Company Reports complied or will comply in all
material respects with the requirements of the Securities Act or
the Exchange Act, as the case may be, and the applicable rules
and regulations promulgated thereunder, and none of the Company
Reports at the time they were filed, or if such Company Reports
were amended or restated, at the time of the last such amendment
or restatement, contained or will contain any untrue statement
of a material fact or omitted or omits or will omit, as the case
may be, to state a material fact required to be stated or
incorporated by reference therein or necessary to make the
statements therein, in the light of the circumstances under
which they were or are made, not misleading.
(b) Each of the Chief Executive Officer and Chief Financial
Officer has made all certifications required by
Rules 13a-14
and
15d-14
under the Exchange Act and Sections 302 and 906 of the
Sarbanes-Oxley Act with respect to the applicable Company
Reports filed prior to the date hereof (collectively, the
Certifications
) and the statements contained
in such Certifications are accurate in all material respects as
of the filing thereof.
(c) The Company has made available (including via the
SECs EDGAR system, as applicable) to Parent all of the
Company Financial Statements and all material correspondence (if
such correspondence has occurred since December 31,
2006) between the SEC on the one hand, and the Company and
any of the Companys Subsidiaries, on the other hand
(provided that with respect to the Companys Subsidiaries,
the Company has only made available such correspondence as has
been determined to be responsive after reasonable inquiry
(provided further that there is no correspondence between the
SEC and any of the Companys Subsidiaries that has not been
made available to Parent that describes any matter that could
reasonably be expected to cause a Company Material Adverse
Effect)). As of the date hereof, there are no outstanding or
unresolved comments in comment letters from the SEC staff with
respect to any of the Company Reports. To the Knowledge of the
Company, as of the date hereof, none of the Company Reports is
the subject of ongoing SEC review, outstanding SEC comment or
outstanding SEC investigation. All of the Company Financial
Statements comply in all material respects with applicable
requirements of the Exchange Act and have been prepared in
accordance with GAAP (except, in the case of the unaudited
statements, as permitted by the rules of the SEC
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for quarterly statements on
Form 10-Q)
applied on a consistent basis throughout the periods involved
(except as may be indicated in the notes thereto) and fairly
present in all material respects the consolidated financial
position of the Company at the respective dates thereof and the
consolidated results of its operations and changes in cash flows
for the periods indicated (subject, in the case of unaudited
statements, to normal year end audit adjustments consistent with
GAAP). As of the date hereof, the books and records of Company
and its Subsidiaries have been maintained in all material
respects in accordance with GAAP (and any other applicable legal
and accounting requirements). As of the date hereof, BDO Seidman
LLP has not resigned or been dismissed as independent public
accountants of Company as a result of or in connection with any
disagreements with Company on a matter of accounting principles
or practices, financial statement disclosure or auditing scope
or procedure.
(d) The Company and its Subsidiaries have implemented and
maintain a system of internal accounting controls sufficient to
provide reasonable assurances regarding the reliability of
financial reporting and the preparation of financial statements
in accordance with GAAP. Such internal controls are sufficient
to provide reasonable assurance regarding the reliability of the
Companys financial reporting and the preparation of
Company financial statements for external purposes in accordance
with GAAP. Since January 1, 2006 and through the period
ended on September 30, 2009, the Companys Chief
Executive Officer and its Chief Financial Officer have disclosed
to the Companys auditors and the audit committee of the
Company Board of Directors all known significant deficiencies
and material weaknesses in the design or operation of internal
controls over financial reporting that are reasonably likely to
adversely affect the Companys ability to record, process,
summarize and report financial information, and the Company has
provided to Parent copies of, or access to, any material written
materials relating to the foregoing. Since January 1, 2006,
the Companys Chief Executive Officer and its Chief
Financial Officer have disclosed to the Companys auditors
and the audit committee of the Company Board of Directors any
known fraud, whether or not material, that involves management
or other employees who have a significant role in the
Companys internal controls over financial reporting, and
the Company has provided to Parent copies of, or access to, any
material written materials relating to the foregoing. The
Company has implemented and maintains disclosure controls and
procedures (as defined in
Rule 13a-15(e)
of the Exchange Act) designed in all material respects to ensure
that information relating to the Company, including its
consolidated Subsidiaries, required to be disclosed in the
reports the Company files or submits under the Exchange Act is
made known to the Chief Executive Officer and the Chief
Financial Officer of the Company by others within those
entities. The Chief Executive Officer and the Chief Financial
Officer of the Company have concluded that such disclosure
controls and procedures are effective at the reasonable
assurance level in timely alerting the Companys Chief
Executive Officer and its Chief Financial Officer to material
information required to be included in the Companys
periodic reports required under the Exchange Act.
(e) The records, systems, controls, data and information of
Company and its Subsidiaries are recorded, stored, maintained
and operated under means (including any electronic, mechanical
or photographic process, whether computerized or not) that are
under the exclusive ownership and direct control of Company or
its Subsidiaries or their accountants (including all means of
access thereto and therefrom), except for any non-exclusive
ownership and non-direct control that would not have a material
adverse effect on Companys system of internal accounting
controls.
(f) The Company is, and since enactment of the
Sarbanes-Oxley Act has been, in compliance in all material
respects with the applicable provisions of the Sarbanes-Oxley
Act.
(g) The Company has adopted a code of ethics, as defined by
Item 406(b) of
Regulation S-K
promulgated under the Exchange Act, for senior financial
officers, applicable to its principal financial officer,
comptroller or principal accounting officer, or persons
performing similar functions. The Company has disclosed, by
filing a
Form 8-K,
any change in or waiver of the Companys code of ethics, to
the extent required by Section 406(b) of Sarbanes-Oxley
Act. To the Knowledge of the Company, there have been no
material violations of provisions of the Companys code of
ethics.
(h) There are no Liabilities of the Company or any of its
Subsidiaries that are material to the Company, are required by
GAAP to be set forth on the Company Financial Statements and are
not set forth on the
A-16
Company Financial Statements, other than (i) Liabilities
incurred on behalf of the Company under this Agreement and
(ii) Liabilities incurred in the ordinary course of
business consistent with past practice since December 31,
2008, none of which would reasonably be expected to have a
Company Material Adverse Effect.
Section
3.9
Absence
of Certain Changes or Events
.
Since
September 30, 2009, except as disclosed in the Company
Reports since September 30, 2009 through to the date of
this Agreement, and except as specifically contemplated by, or
as disclosed in, this Agreement, the Company and its
Subsidiaries have conducted their businesses in the ordinary
course consistent with past practice and, since such date, there
has not been, with respect to either the Company or any of its
Subsidiaries, (i) any action that, if taken during the
period from the date of this Agreement through the Effective
Time, would constitute a breach of
Section 5.1
or
(ii) any Company Material Adverse Effect.
Section
3.10
Taxes
.
(a) The Company and each of its Subsidiaries has timely
filed and will timely file with the appropriate Governmental
Entities all income and other Tax Returns that are required to
be filed by it prior to the Effective Time. All such Tax Returns
were correct and complete in all material respects and, in the
case of Tax Returns to be filed, will be correct and complete in
all material respects. All income and other Taxes due and owing
by the Company and each of its Subsidiaries (whether or not
shown on such Tax Returns) have been timely paid and, in the
case of Tax Returns to be filed, will be timely paid. Neither
the Company nor any of its Subsidiaries currently is the
beneficiary of any extension of time within which to file any
Tax Return. No claim has ever been made in writing by an
authority in a jurisdiction where the Company does not file Tax
Returns that the Company or any of its Subsidiaries is or may be
subject to material taxation in that jurisdiction except as
would not be material to the Company. There are no security
interests or other liens on any of the assets of the Company or
its Subsidiaries that arose in connection with any failure (or
alleged failure) to pay any Tax, other than liens for Taxes not
yet due and payable.
(b) The Company and its Subsidiaries have in all material
respects timely withheld and paid to the appropriate
Governmental Entity all income and other Taxes required to have
been withheld and paid in connection with amounts paid or owing
to any employee, independent contractor, creditor, shareholder
or other Third Party.
(c) There is no material dispute concerning any Tax
Liability of the Company or any of its Subsidiaries raised by
any Governmental Entity in writing to the Company or any of its
Subsidiaries that remains unpaid, and neither the Company nor
any of its Subsidiaries has received written notice of any
threatened audits or investigations relating to any Taxes or
otherwise has any Knowledge of any material threatened audits or
investigations relating to any Taxes, in each case for which the
Company or any of its Subsidiaries may become directly or
indirectly liable.
(d) Neither the Company nor any of its Subsidiaries has
waived any statute of limitations in respect of material Taxes
or agreed to, or requested, any extension of time with respect
to a material Tax assessment or deficiency.
(e) The unpaid Taxes of the Company and its Subsidiaries
did not, as of December 31, 2008, exceed in any material
respect the reserve for Tax Liability (rather than any reserve
for deferred Taxes established to reflect timing differences
between book and Tax income) set forth on the face of the
balance sheet set forth in the Company Financial Statements as
of such date (disregarding any notes thereto). Neither the
Company nor any of its Subsidiaries has incurred any material
Tax Liability since December 31, 2008 other than a Tax
Liability incurred in the ordinary course of business.
(f) The Company has made available to Parent complete and
accurate copies of all Tax Returns filed by the Company and any
of its Subsidiaries on or prior to the date hereof for all tax
periods beginning on or after December 31, 2006.
(g) There are no agreements relating to the allocating or
sharing of Taxes to which the Company or any of its Subsidiaries
is a party.
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(h) Neither the Company nor any of its Subsidiaries has
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 provision of law to which the Company or any of
its Subsidiaries may be subject, other than the affiliated group
of which the Company is the common parent.
(i) Neither the Company nor any of its Subsidiaries has
constituted either a distributing corporation or a
controlled corporation within the meaning of
Section 355(a)(1)(A) of the Code. Neither the Company nor
any of its Subsidiaries has been a United States real property
holding corporation within the meaning of Section 897(c)(2)
of the Code at any time during the applicable period specified
in Section 897(c)(1)(A)(ii) of the Code, and Parent is not
required to withhold tax on the purchase of the Company by
reason of Section 1445 of the Code. Neither the Company nor
any of its Subsidiaries has constituted either an
expatriated entity within the meaning of
Section 7874(a)(2)(A) of the Code or a surrogate
foreign corporation within the meaning of
Section 7874(a)(2)(B) of the Code.
(j) Neither the Company nor any of its Subsidiaries has
agreed, or is required, to make any material adjustments
pursuant to Section 481(a) of the Code or any similar
provision of state, local or foreign law by reason of a change
in accounting method initiated by it or any other relevant
party, and the IRS has not proposed any such adjustment or
change in accounting method in writing nor, to the Knowledge of
the Company, otherwise proposed any material adjustment or
change in accounting method, nor does the Company or any of its
Subsidiaries have any application pending with any Governmental
Entity requesting permission for any changes in accounting
methods that relate to the business or assets of the Company or
any of its Subsidiaries.
(k) No closing agreement pursuant to Section 7121 of
the Code (or any predecessor provision) or any similar provision
of any state, local or foreign Tax Law has been entered into by
or with respect to the Company or any of its Subsidiaries.
(l) Neither the Company nor any of its Subsidiaries has
participated in a reportable transaction within the
meaning of Treasury
Regulation Section 1.6011-4(b)(1).
(m) Neither the Company nor any of its Subsidiaries is a
party to any agreement, contract, arrangement or plan that has
resulted or would result, separately or in the aggregate, in the
payment of any excess parachute payment within the
meaning of Section 280G of the Code (or any corresponding
provision of state, local or foreign Tax law) arising out of the
transactions contemplated by this Agreement.
Section
3.11
Title
to Personal Properties; Real Property
.
(a) Each of the Company and its Subsidiaries has good and
marketable title to, or a valid leasehold interest in, all of
its tangible personal properties and assets reflected in the
Company
10-K
or acquired after December 31, 2008 (other than assets
disposed of since December 31, 2008 in the ordinary course
of business consistent with past practice), in each case free
and clear of all Encumbrances, except Permitted Encumbrances.
The tangible personal property and assets of the Company and its
Subsidiaries are in good operating condition and in a state of
good maintenance and repair, ordinary wear and tear excepted,
except as would not reasonably be expected to have a Company
Material Adverse Effect. Each of the Company and its
Subsidiaries either owns, or has valid leasehold interests in,
all tangible personal properties and assets used by it in the
conduct of its business, except where the absence of such
ownership or leasehold interest would not reasonably be expected
to have a Company Material Adverse Effect. Neither the Company
nor any of its Subsidiaries has any legal obligation, absolute
or contingent, to any other Person to sell or otherwise dispose
of any of its tangible personal properties or assets (other than
the sale of the Companys products and services in the
ordinary course of business and other than equipment to be
returned under equipment leases) with an individual value in
excess of $250,000 or an aggregate value in excess of $500,000.
For the avoidance of doubt, the term tangible personal
property as used herein shall not include Intellectual
Property, Software or Information Systems (other than hardware).
(b)
Section 3.11
of the Company Disclosure
Letter sets forth the address and description of each Owned Real
Property. Except for matters that, individually or in the
aggregate, would not have a Company Material Adverse Effect,
with respect to each Owned Real Property: (i) the Company
or one of its Subsidiaries (as the
A-18
case may be) has good and marketable title to such Owned Real
Property, free and clear of all Encumbrances, except for
Permitted Encumbrances, (ii) except as set forth in
Section 3.11
of the Company Disclosure Letter,
neither the Company nor any of its Subsidiaries has leased or
otherwise granted to any Person the right to use or occupy such
Owned Real Property or any material portion thereof,
(iii) other than the right of Parent and Merger Sub
pursuant to this Agreement, there are no outstanding options,
rights of first offer or rights of first refusal to purchase
such Owned Real Property or any portion thereof or interest
therein. Neither the Company nor any of its Subsidiaries is a
party to any agreement or option to purchase any real property
or interest therein.
(c) The leased real property (the
Leased
Property
), collectively with the Owned Real Property
identified pursuant to
Section 3.11(b)
, and subject
to the leases (the
Leases
) identified in
Section 3.11 of the Company Disclosure Letter, comprise all
of the real property used in the Companys business, and is
occupied by the Company pursuant to the Leases. Each of the
Company and its Subsidiaries has complied in all material
respects with the terms of all Leases, and all Leases are in
full force and effect, except for such non-compliances or
failures to be in full force and effect that, individually or in
the aggregate, could not reasonably be expected to have a
Company Material Adverse Effect. The Company has made available
to Parent and Merger Sub a true and complete copy of each Lease
document. The Companys or its applicable Subsidiarys
possession and quiet enjoyment of the Leased Property has not
been disturbed in any material respect and, to the Knowledge of
the Company, there are no disputes with respect to such Leases
that could have or reasonably be expected to have a Company
Material Adverse Effect. No material security deposit or portion
thereof deposited with respect any Lease has been applied in
respect of a breach or default under any Lease which has not
been redeposited in full. The other party to each of the Leases
is not an Affiliate of, and otherwise does not have any economic
interest in, the Company or any of its Subsidiaries.
(d)
Section 3.11
of the Company Disclosure
Letter sets forth a true and complete list of all Leased Real
Property Subleases (including all amendments, extensions,
renewals, guaranties and other agreements with respect thereto)
(collectively, the
Landlord Leases
),
including the date and name of the parties to such Landlord
Lease. The Company has delivered to Parent a true and complete
copy of each such Landlord Lease and, in the case of any oral
agreement, a written summary of the material terms of such
agreement. Except for matters that, individually or in the
aggregate, would not have a Company Material Adverse Effect,
with respect to each of the Landlord Leases: (i) such
Landlord Lease is legal, valid, binding, enforceable and in full
force and effect, (ii) neither the Company or any of its
Subsidiaries nor, to the Knowledge of the Company, any other
party to such Landlord Lease is in breach or default thereunder,
and to the Knowledge of the Company no event has occurred or
circumstance exists which, with the delivery of notice, the
passage of time or both, would constitute such a breach or
default thereunder, (iii) no material security deposit or
portion thereof deposited with respect such Landlord Lease has
been applied in respect of a breach or default under such
Landlord Lease which has not been redeposited in full,
(iv) neither the Company nor any Company Subsidiary owes,
or will owe in the future, any material brokerage commissions or
finders fees with respect to such Landlord Lease,
(v) the other party to such Landlord Lease is not an
Affiliate of, and otherwise does not have any economic interest
in, the Company or any Company Subsidiary, (vi) to the
Knowledge of the Company the other party to such Landlord Lease
has not subleased, licensed or otherwise granted any Person the
right to use or occupy, the premises demised thereunder or any
portion thereof, (vii) the other party to such Landlord
Lease has not collaterally assigned or granted any other
security interest in such Landlord Lease, and (viii) there
are no Encumbrances, other than Permitted Encumbrances, on the
estate or interest created by Company with respect to such
Landlord Lease.
Section
3.12
Officers,
Directors, Employees and Affiliates
.
(a) Neither the Company nor any of its Subsidiaries is a
party to or bound by any Employment Agreement and, except as
required by applicable law or as otherwise contemplated by
Section 1.7
, no severance or other payment will
become due or benefits or compensation increase or accelerate as
a result of the transactions contemplated by this Agreement,
solely or together with any other event, including a subsequent
termination of employment.
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(b) Except for compensation and benefits received in the
ordinary course of business as an employee or director of the
Company or its Subsidiaries, no director, officer or other
Affiliate or Associate of the Company or any entity in which, to
the Knowledge of the Company, any such director, officer or
other Affiliate or Associate owns any beneficial interest (other
than a beneficial interest in a publicly held corporation whose
stock is traded on a national securities exchange or in the
over-the-counter market and less than 5% of the stock of which
is beneficially owned by any such Persons) is currently a party
to or has any interest in (i) any partnership, joint
venture, contract, arrangement or understanding with, or
relating to, the business or operations of the Company or its
Subsidiaries in which the amount involved exceeds $100,000 per
annum, (ii) any agreement or contract for or relating to
Indebtedness of the Company or its Subsidiaries, or
(iii) any property (real, personal or mixed), tangible or
intangible, used or currently intended to be used in the
business or operations of the Company or its Subsidiaries. To
the Knowledge of the Company, there are no transactions, or
series of related transactions, agreements, arrangements or
understandings, nor are there any currently proposed
transactions, or series of related transactions, that would be
required to be disclosed under Item 404 of
Regulation S-K
promulgated under the Securities Act that have not been
disclosed in the Company Reports filed prior to the date hereof.
Section
3.13
Employee
Benefit Plans
.
(a)
Section 3.13(a)
of the Company Disclosure
Letter sets forth a true and complete list of each Company
Benefit Plan.
(b) With respect to each Company Benefit Plan, a complete
and correct copy of each of the following documents (if
applicable) has been made available to Parent: (i) the most
recent plan documents and all amendments thereto and all related
trust agreements or documentation pertaining to other funding
vehicles; (ii) the most recent summary plan description,
and all related summaries of material modifications thereto;
(iii) the IRS Forms 5500 (including schedules and
attachments) and financial statements as filed for the past
three (3) years; and (iv) the most recent IRS
determination or opinion letter.
(c) None of the Company or any of its Subsidiaries
maintains, sponsors, contributes to or is required to contribute
to or has any Liability under or with respect to any
(i) multiemployer plan as defined in
Section 3(37) of ERISA, (ii) employee pension
benefit plan (as such term is defined in Section 3(2)
of ERISA) subject to the funding requirements of
Section 412 of the Code or Title IV of ERISA,
(iii) multiple employer plan (within the
meaning of Section 210 of ERISA or Section 413(c) of
the Code), (iv) multiple employer welfare
arrangement (as such term is defined in Section 3(40)
of ERISA), or (v) plan, program, arrangement or agreement
that provides for post-retirement or post-termination health,
life insurance or other welfare-type benefits other than as
required by Subtitle B of Title I of ERISA,
Section 4980B of the Code or any similar state Law.
(d) Each Company Benefit Plan that is intended to qualify
under Section 401 of the Code has received a current
favorable determination or opinion letter from the IRS and
nothing has occurred that is reasonably likely to adversely
affect the qualification of such Company Benefit Plan.
(e) The Company Benefit Plans have been maintained, funded
and administered in accordance with their terms and applicable
Laws in all material respects. With respect to each Company
Benefit Plan, all material required or recommended payments,
premiums, contributions, distributions, reimbursements or
accruals for all periods (or partial periods) through the date
hereof have been made or accrued in accordance with GAAP.
(f) There have been no material prohibited
transactions (as defined in Section 406 of ERISA and
Section 4975 of the Code) with respect to any Company
Benefit Plan. None of the Company, any of its Subsidiaries, or
to the Knowledge of the Company any other fiduciary
(as defined in Section 3(21) of ERISA) has any material
Liability for breach of fiduciary duty or any other failure to
act or comply in connection with the administration or
investment of the assets of any Company Benefit Plan. There are
no pending or, to the Knowledge of the Company, threatened
suits, actions, disputes, claims (other than routine claims for
benefits), arbitrations, audits, investigations, administrative
or other proceedings relating to any Company Benefit Plan and,
to the Knowledge of the Company, there is no basis for any such
suit, action, dispute, claim, arbitration, audit, investigation,
administrative or other proceeding.
A-20
(g) The Company and its Subsidiaries have complied in all
material respects with the health care continuation requirements
of Part 6 of Subtitle B of Title I of ERISA,
Section 4980B of the Code and any similar state Law in all
material respects. Except as set forth on Section 3.13(g)
of the Company Disclosure Letter or Section 1.7 of this
Agreement, the transactions contemplated by this Agreement will
not cause the acceleration of vesting in, or payment of, any
benefits or compensation under any Company Benefit Plan and will
not otherwise accelerate or increase any Liability under any
Company Benefit Plan.
Section
3.14
Labor
Relations
.
(a) The Company and its Subsidiaries are in compliance in
all material respects with all applicable Laws and Orders
governing or concerning conditions of employment, employment
discrimination and harassment, wages, hours or occupational
safety and health, including the Labor Laws, except where the
failure to so comply would not reasonably be expected to have a
Company Material Adverse Effect.
(b) The employees of the Company and its Subsidiaries
currently are not represented by a labor organization or group
that was either certified or voluntarily recognized by any labor
relations board, including the NLRB, or certified or voluntarily
recognized by any other Governmental Entity and there is not, to
the Knowledge of the Company, any attempt to organize any
employees of the Company or its Subsidiaries. There currently
does not exist nor, to the Knowledge of the Company, is there
threatened, any material strike, slowdown, picketing or work
stoppage by the employees of the Company or its Subsidiaries.
(c) No claim, complaint, charge or investigation for unpaid
wages, bonuses, commissions, employment withholding taxes,
penalties, overtime or other compensation, benefits, child labor
or record-keeping violations, which could reasonably be expected
to have a Company Material Adverse Effect, is pending or, to the
Knowledge of the Company, has been filed or threatened against
the Company or any of its Subsidiaries under the FLSA, the
Davis-Bacon Act, the Walsh-Healey Act or the Service Contract
Act, or any other applicable Law. No discrimination, illegal
harassment
and/or
retaliation claim, complaint, charge or investigation, which
could reasonably be expected to have a Company Material Adverse
Effect, is pending or, to the Knowledge of the Company, has been
filed or threatened against the Company or Company Subsidiary
under the 1964 Civil Rights Acts, the Equal Pay Act, the ADEA,
the ADA, the FMLA, the FLSA, ERISA or any other federal Law or
comparable state fair employment practices act or foreign Law,
including any provincial Law regulating discrimination in the
workplace. No wrongful discharge, retaliation, libel, slander or
other claim, complaint, charge or investigation that arises out
of the employment relationship between the Company and its
Subsidiaries and its and their respective employees, which could
reasonably be expected to have a Company Material Adverse
Effect, is pending or, to the Knowledge of the Company, has been
filed or threatened against the Company or any of its
Subsidiaries under any applicable Law. To the Knowledge of the
Company, no employee of the Company or any of its Subsidiaries
is in violation, in any material respect, of any term of any
lawful employment contract, non-disclosure agreement, non-
competition agreement, or any restrictive covenant to a former
employer relating to the right of any such employee to be
employed by the Company or any of its Subsidiaries because of
the nature of the business conducted or presently proposed to be
conducted by the Company or any of its Subsidiaries. Neither the
Company nor any of its Subsidiaries has engaged in any unfair
labor practices within the meaning of the National Labor
Relations Act that could reasonably be expected to have a
Company Material Adverse Effect.
Section
3.15
Contracts
and Commitments
.
(a) Neither the Company nor any of its Subsidiaries is a
party to, is bound or affected by, or receives any benefits
under, any agreement, contract or legally binding understanding,
whether oral or written: (i) except for those referenced in
clause (viii) below, providing for (A) aggregate
noncontingent payments by or to the Company or any of its
Subsidiaries in excess of $500,000 annually or
(B) potential payments by or to the Company or any of its
Subsidiaries reasonably expected to exceed $500,000 annually;
(ii) limiting the freedom of the Company to engage in any
material line of business or sell, supply or distribute any
service or product, or to compete with any entity or to conduct
business in any geography; (iii) that after the Effective
Time would have the effect of limiting in any material respect
the freedom of Parent or any of its Subsidiaries (other than the
Company and its Subsidiaries) to engage in any material line of
business or sell, supply or distribute any service or product,
or to compete with any entity or to conduct business in any
geography; (iv) involving
A-21
any joint venture, partnership or similar arrangement for the
sharing of profits
and/or
losses; (v) involving the creation, incurrence, or
assumption of material Indebtedness; (vi) containing
material severance or termination pay Liabilities related to
termination of employment; (vii) involving procurement of
goods or services (except for any Company contracts in which
either the aggregate noncontingent payments to or by the Company
are not in excess of $500,000 annually or the potential payments
to or by the Company are not expected to exceed $500,000
annually); (viii) relating to the acquisition, transfer,
in-bound licensing, out-bound licensing, development,
co-development, or sharing of any Intellectual Property material
to the operations of the Company or any other agreement material
to the operations of the Company or any of its Subsidiaries
(except for: (1) any Company contracts pursuant to which
any Company Software is licensed by the Company or any of its
Subsidiaries in the ordinary course of business;(2) any third
party software license generally available to the public
(excluding the Open Source Software required to be disclosed
pursuant to
Section 3.16(g)
) for which the aggregate
noncontingent payments by the Company are not in excess of
$200,000 annually or the potential payment by the Company is not
expected to be in excess of $200,000 annually;
(3) non-negotiated licenses of third party Intellectual
Property embedded in equipment or fixtures that are used by the
Company or any of its Subsidiaries for internal purposes only);
(ix) which provide for indemnification by the Company of
any officer, director or employee of the Company;
(x) pursuant to which the Company or any Subsidiary of the
Company has any obligations or liabilities as guarantor, surety,
co signer, endorser, or co maker in respect of any obligation of
any Person, or any capital maintenance, keep well or similar
agreements or arrangements in any such case which, individually
is in excess of $250,000 annually; (xiii) involving the
lease of real property with aggregate annual rent payments in
excess of $250,000 annually; (xiv) would prohibit or
materially delay the consummation of the Merger or otherwise
materially impair the ability of the Company to perform its
obligations hereunder; (xvi) prohibits the payment of
dividends or distributions in respect of the capital stock of
the Company or any of the Company Subsidiaries, prohibits the
pledging of the capital stock of the Company or any of its
Subsidiaries or prohibits the issuance of guarantees by any of
the Companys Subsidiaries; (xiv) relates to any
acquisition of another business by the Company or its
Subsidiaries pursuant to which the Company or any of its
Subsidiaries has continuing indemnification,
earn-out or other contingent payment or guarantee
obligations in excess of $500,000 ; (xv) involves any
directors, executive officers (as such term is defined in the
Exchange Act) or 5% stockholders of the Company or any of their
Affiliates (other than the Company or any of its Subsidiaries)
or immediate family members; (xvi) contains any covenant
granting most favored nation status that, following
the Merger, would apply to or be affected by actions taken by
Parent, the Surviving Corporation
and/or
their
respective Subsidiaries or Affiliates; (xvii) involves any
exchange-traded or over-the-counter swap, forward, future,
option, cap, floor or collar financial contract, or any other
interest-rate, commodity price, equity value or foreign currency
protection contract; (xviii) contains a put, call or
similar right pursuant to which the Company or any of its
Subsidiaries could be required to purchase or sell, as
applicable, any Equity Interests of any Person or assets; or
(xix) is otherwise required to be filed as an exhibit to an
Annual Report on Form 10 K, as provided by Rule 601 of
Regulation S K promulgated under the Exchange Act. Each
contract of the type described in the immediately preceding
sentence is referred to herein as a Company Material
Contract. The Company has heretofore made available to
Parent a complete and correct copy of each Company Material
Contract, including any amendments or modifications thereto.
(b) Each Company Material Contract is valid and binding on
the Company or its Subsidiary party thereto and, to the
Knowledge of the Company, each other party thereto, and is in
full force and effect, and is enforceable against the Company in
accordance with its terms and, to the Knowledge of the Company,
against each other party thereto (in each case, subject to the
Bankruptcy and Equity Exception), and the Company and each of
its Subsidiaries have performed in all material respects all
obligations required to be performed by them under each Company
Material Contract and, to the Knowledge of the Company, each
other party to each Company Material Contract has performed in
all material respects all obligations required to be performed
by it under such Company Material Contract, except, in each
case, as would not reasonably be expected to have a Company
Material Adverse Effect. Neither the Company nor any of its
Subsidiaries knows of, or has received notice of, any violation
or default under (or any condition that with the passage of time
or the giving of notice, or both, would cause such a violation
of or default under) any Company Material Contract or any other
A-22
agreement or contract to which it is a party or by which it or
any of its properties or assets is bound, except for violations
or defaults that would not reasonably be expected to have a
Company Material Adverse Effect.
(c) To the Knowledge of the Company, no event has occurred,
and no circumstance or condition exists, that (with or without
notice or lapse of time), would reasonably be expected to:
(i) result in a material violation or breach of any
provision of any Company Material Contract; (ii) give any
Person the right to declare a default or exercise any remedy
under any Company Material Contract; (iii) give any person
the right to receive or require a material rebate, chargeback,
penalty or change in delivery schedule under any Company
Material Contract; (iv) give any Person the right to
accelerate the maturity or performance of any Company Material
Contract; or (v) give any Person the right to cancel
terminate or modify any Company Material Contract, in each case,
in a manner that would reasonably be expected to have a Company
Material Adverse Effect.
Section
3.16
Intellectual
Property
.
The representations and warranties
made in Section 3.11 are not intended to cover Software,
Intellectual Property and Information Systems (other than
hardware). The representations and warranties in this
Section 3.16, and in clauses (b) and (c) of
Section 3.15, shall control over any other representations
and warranties elsewhere in the Agreement, to the extent that
any of such other representations and warranties, or any part of
any of them, are inconsistent with or contradict the
representations and warranties in this Section 3.16 and in
clauses (b) and (c) of Section 3.15, or any part
of any of them.
(a) The Company or the relevant Subsidiary owns, has a
license to, or otherwise possesses sufficient rights to, the
Intellectual Property used by the Company or such Subsidiary, as
the case may be, to conduct its respective business as currently
conducted in all material respects.
(b)
Section 3.16(b)
of the Company Disclosure
Letter sets forth a complete and correct list of: (i) all
patented or registered Company Intellectual Property;
(ii) all pending patent applications, all trademark
applications, or other applications for registration of Company
Intellectual Property; (iii) all material unregistered
trademarks, trade names and service marks, all registered
copyrights, and all material domain names owned by the Company,
including, to the extent applicable for registered or issued
Intellectual Property, the jurisdictions in which each such
Company Intellectual Property has been issued or registered or
in which any application for such issuance and registration has
been filed; and (iv) major releases of all Software owned
by the Company and any Subsidiary of the Company marketed or
supported by the Company or any Subsidiary of the Company. All
registration, maintenance and renewal fees in connection with
the material registered Company Intellectual Property which have
come due have been paid and, to the Knowledge of the Company,
all necessary documents and certificates in connection with the
foregoing have been filed with the relevant patent, copyright,
trademark or other authorities in the United States or foreign
jurisdictions, as the case may be, for the purposes of
perfecting, prosecuting, and maintaining the foregoing. To the
Knowledge of the Company, there are no actions that are required
to be taken by Company within 120 days of the date of this
Agreement with respect to any of the foregoing, except as set
out in
Section 3.16(b)
of the Company Disclosure
Letter.
Section 3.16(b)
of the Company Disclosure
Letter lists all License Agreements under which the Company is
the licensee of third party Software that is embedded,
integrated, bundled with, or otherwise distributed with the
Company products or is used to provide the Company products on a
software-as-a-service, web-based application, or service basis,
that: (i) requires aggregate noncontingent payments by the
Company in excess of $200,000 annually or potentially requires
payment by the Company expected to be in excess of $200,000
annually; or (ii) (A) is not generally available to the
public, or (B) has no functional equivalent that is
generally commercially available, in each case the absence of
which would materially impair the Companys products or
services (
Material Embedded Software
).
Neither the Company nor any of its Subsidiaries nor, to the
Knowledge of the Company, any Third Party, is in material
violation of any license, sublicense or agreement for Material
Embedded Software. Except as otherwise described in
Section 3.16(b)
of the Company Disclosure Letter,
the execution and delivery of this Agreement by the Company and
the consummation by the Company of the merger contemplated
hereby will not: (A) cause the Company or any of its
Subsidiaries to be in material violation or material default
under any material license, sublicense or agreement for either
Company Intellectual Property or Material Embedded Software;
(B) result in the termination or modification of, or
entitle any other party to, any material license, sublicense or
agreement for Company Intellectual Property or Material Embedded
Software to terminate or modify such license, sublicense or
agreement for
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Company Intellectual Property or Material Embedded Software; or
(C) entitle any Third Party to claim any right to use or
practice under any material Company Intellectual Property. The
Company is the owner of all right, title and interest in and to
the Company Intellectual Property free and clear of all
Encumbrances other than Permitted Encumbrances and, has sole and
exclusive rights to the use thereof (subject to fair use
exceptions) in connection with the services or products in
respect of which the material Company Intellectual Property is
being used by the Company or any of its Subsidiaries, subject to
any license agree ments to which the Company or any of its
Subsidiaries is a party pursuant to which the Company or any of
its Subsidiaries licenses others to use any such Company
Intellectual Property in the ordinary course of business. The
foregoing representations are subject to ownership and use
rights in third parties relating to unregistered Company
Intellectual Property (except copyrights) where the third party
has without infringing or misappropriating any rights of the
Company or any of its Subsidiaries developed or obtained such
Intellectual Property independently.
(c) To the Knowledge of the Company, there is no
unauthorized use, disclosure, infringement or misappropriation
of any Company Intellectual Property rights by any Third Party,
including any employee or former employee of the Company or any
of its Subsidiaries. Neither the Company nor any of its
Subsidiaries has entered into any agreement to indemnify any
other Person against any charge of infringement of any
Intellectual Property, other than indemnification obligations
arising in the ordinary course of business.
(d) All issued patents and registered trademarks and
service marks held by the Company or any of its Subsidiaries are
valid, and existing. To the Knowledge of the Company, there is
no material loss or expiration of any of the Company
Intellectual Property threatened or pending, except for the
expiration dates of patents and with respect to trademarks and
service marks which are not being used. To the Knowledge of the
Company, there is no assertion or claim pending challenging the
ownership, use, validity or enforceability of any Company
Intellectual Property. Neither the Company nor any of its
Subsidiaries is a party to any suit, action or proceeding that
involves a claim of infringement or misappropriation by the
Company or any of its Subsidiaries of any Intellectual Property
of any Third Party nor, to the Knowledge of the Company has any
such suit, action or proceeding been threatened against the
Company or any of its Subsidiaries nor, to the Knowledge of the
Company, has the Company or any of it Subsidiaries received any
demands or unsolicited offers to license any Intellectual
Property from any Third Party. The conduct of the business of
the Company and each of its Subsidiaries has not infringed or
misappropriated and is not infringing or misappropriating any
Intellectual Property of any Third Party in a manner which would
reasonably be expected to have a Company Material Adverse
Effect. No Third Party has notified the Company that it is
challenging the ownership or use by the Company or any of its
Subsidiaries, or the validity of, any of the Company
Intellectual Property in a manner which would reasonably be
expected to have a Company Material Adverse Effect. Neither the
Company nor any of its Subsidiaries has brought or is bringing
or has threatened any action, suit or proceeding for
infringement or misappropriation of the Company Intellectual
Property or breach of any license or agreement involving Company
Intellectual Property against any Third Party. To the Knowledge
of the Company, there are no pending or threatened interference,
re-examinations, or oppositions involving any material patents,
patent applications, or trademarks of the Company or any of its
Subsidiaries.
(e) The Company or its Subsidiaries have taken commercially
reasonable steps to protect and preserve the confidentiality of
all Trade Secrets and confidential information deemed material
by the Company or its Subsidiaries. Without limiting the
foregoing, each of the Company and its Subsidiaries have
instituted policies requiring each employee, consultant and
independent contractor exposed to Trade Secrets or such
Confidential Information to execute proprietary information and
confidentiality agreements substantially in the Companys
standard forms, which forms have been made available to Parent.
(f)
Except as set forth in Section 3.16(f)
of
the Company Disclosure Letter, the material Intellectual
Property owned by the Company in Software used in the
Companys products or any of its Subsidiaries was:
(i) developed by employees of the Company or its
Subsidiaries within the scope of their employment:
(ii) developed by independent contractors who have assigned
their rights (including Intellectual Property rights) to the
Company or its Subsidiaries pursuant to written agreements; or
(iii) otherwise acquired by the Company or its Subsidiaries
from a Third Party pursuant to written agreements.
A-24
(g)
Section 3.16(g)
of the Company Disclosure
Letter lists all material Open Source Software that is
incorporated into, combined with, distributed with, or made
available with, any Company product whether distributed or
provided on a software-as-a-service, web-based application, or
other service basis. Neither the Company nor any of Subsidiaries
have modified any of the Open Source Software identified in
Section 3.16(g)
of the Company Disclosure Letter.
Neither the Company nor any of its Subsidiaries have used any
Open Source Software in a manner that would require the Company
or any of its Subsidiaries to disclose source code for any
Company products, grants rights to redistribute the
Companys products to any Third Party, grant patent
non-asserts or patent licenses to any Third Party, or otherwise
grant any right not specifically granted in the Companys
or any of its Subsidiarys license agreement with any Third
Party.
(h) Except as set forth in Section 3.16(h) of the
Company Disclosure Letter, neither the Company nor any of its
Subsidiaries has disclosed or delivered to any Third Party,
agreed to disclose or deliver to any Third Party, or permitted
the disclosure or delivery to any escrow agent of, any source
code that is Company Intellectual Property and the
confidentiality of which is material to the Company. No event
has occurred, and no circumstance or condition exists, that
(with or without notice or lapse of time, or both) will, or
would reasonably be expected to, result in a requirement that
any such source code be disclosed or delivered to any Third
Party by the Company, any of its Subsidiaries or any person
acting on their behalf.
(i) All products of the Company and its Subsidiaries are
free of any material third party disabling codes or
instructions, timer, copy protection device, clock, counter or
other limiting design or routing and any back door,
time bomb, Trojan horse,
worm, drop dead device,
virus or other similar programs, software routines
or hardware components that permit unauthorized access or the
unauthorized disablement or erasure of such Company product (or
any part thereof) or data or other Software of users or
otherwise cause them to be incapable of being used in the full
manner for which they were designed, in each case except as
would reasonably be expected not to have a Company Material
Adverse Effect.
(j) The computer Software, computer firmware, computer
hardware (whether general purpose or special purpose),
electronic data processing, information, record keeping,
communications, telecommunications, third party Software,
networks, peripherals and computer systems, including any
outsourced systems and processes, and other similar or related
items of automated, computerized
and/or
Software systems that are used or relied on by the Company and
its Subsidiaries (collectively,
Information
Systems
), have, together with other Company assets and
personnel, generated the results reflected in the financial
statements of the Company and the Company and its Subsidiaries
have purchased a sufficient number of license seats for all
Software used by the Company and its Subsidiaries in such
operations.
(k) With respect to the Information Systems: (i) to
the Knowledge of the Company there have been no successful
unauthorized intrusions or breaches of the security of the
Information Systems; (ii) there has not been any material
malfunction that has not been remedied or replaced in all
material respects or any unplanned downtime or service
interruption lasting more than 60 minutes in the period
beginning twenty-four (24) months prior to the date hereof
through the date hereof; (iii) the Company and its
Subsidiaries have implemented or are in the process of
implementing (or in the exercise of reasonable business judgment
have determined that implementation is not yet in the best
interest of the Company and its Subsidiaries) in a timely manner
any and all security patches or security upgrades that are
generally available for the Companys and its
Subsidiaries Information Systems; and (iv) no Third
Party providing services to the Company and its Subsidiaries has
failed to meet any service obligations in any material respect.
(l) Except as set forth in Section 3.16(l) of the
Company Disclosure Letter, no government funding, facilities or
resources of a university, college, other educational
institution or research center or funding from third parties was
used in the development of any material Company Intellectual
Property and no governmental entity, university, college, other
educational institution or research center has any claim or
right in or to such material Company Intellectual Property. To
the Companys Knowledge, no current or former employee,
consultant or independent contractor of the Company or any of
its Subsidiaries who was involved in, or who contributed to, the
creation or Intellectual Property owned or used by the Company
or its Subsidiaries, has performed services for the government,
a university, college or other educational institution, or a
research
A-25
center, during a period of time during which such employee,
consultant or independent contractor was also performing
services for the Company or any of its Subsidiaries.
(m) The Company and its Subsidiaries are in possession of
the source code and object code for all material elements of the
Software owned by the Company or any of its Subsidiaries.
Section
3.17
Insurance
Policies
.
Section 3.17
of the
Company Disclosure Letter sets forth a list of all material
insurance policies maintained by the Company and its
Subsidiaries. All such insurance policies and bonds with respect
to the business and assets of the Company and its Subsidiaries
are in full force and effect (and were in full force and effect
during the periods of time such insurance policies were
purported to be in effect) and will be maintained by the Company
and its Subsidiaries in full force and effect as they apply to
any matter, action or event relating to the Company or its
Subsidiaries occurring through the Effective Time, and the
Company and its Subsidiaries have not reached or exceeded their
policy limits for any insurance policies in effect at any time
during the past five years. Neither the Company nor any Company
Subsidiary is in breach or default of any of such insurance
policies, and neither the Company nor any Company Subsidiary has
taken any action or failed to take any action which, with notice
or the lapse of time, would constitute such a material breach or
default or permit termination or modification of any of such
insurance policies. Since December 31, 2008, the Company
has not received any written notice or to the Knowledge of the
Company any other written communication regarding any actual or
threatened: (a) cancellation or invalidation of any
insurance policy; (b) refusal or denial of any material
coverage, material reservation of rights or rejection of any
material claim under any insurance policy; or (c) material
adjustment in the amount of the premiums payable with respect to
any insurance policy.
Section
3.18
Brokers
.
No
broker, finder or investment banker (other than the Company
Financial Advisor whose brokerage, investment banking, finders
and financial advisory fees shall be paid by the Company) is
entitled to any brokerage, finders or other fee or
commission in connection with this Agreement, the Merger or the
other transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Company or any of its
Subsidiaries.
Section
3.19
Company
Financial Advisor Opinion
.
The Company
Financial Advisor has delivered to the Company Board of
Directors its opinion to the effect that, as of the date of such
opinion, the Merger Consideration to be received by the holders
(other than Parent and its Affiliates) of shares of Company
Common Stock pursuant to the Merger Agreement is fair, from a
financial point of view, to such holders. The Company shall
provide a complete and correct signed copy of such opinion to
Parent solely for informational purposes as soon as practicable
after the date of this Agreement.
Section
3.20
Rights
Agreement; Anti-Takeover Provisions
.
(a) The entering into of this Agreement and the Voting
Agreements, and the consummation of the transactions
contemplated hereby and thereby, do not and will not,
(i) result in any Person being deemed to have become an
Acquiring Person (as defined in the Rights Plan),
(ii) result in the ability of any Person to exercise any
Rights under the Rights Plan, (iii) enable or require the
Rights to separate from the shares of Company Common Stock to
which they are attached or to be triggered or become exercisable
or (iv) enable the Company to exchange any Rights for
shares of the Companys capital stock, pursuant to the
Rights Plan. No triggering or similar event has occurred or will
occur by reason of (1) the adoption, approval, execution or
delivery of this Agreement and the Voting Agreements,
(2) the public announcement of such adoption, approval,
execution or delivery or (3) the consummation of the
transactions contemplated hereby and thereby.
(b) Assuming the truth of the representation set forth in
Section 4.12
, the Company Board of Directors has
taken all other necessary action so that the restrictions in
Section 203 of the DGCL and any other takeover,
anti-takeover, moratorium, fair price, control
share, or similar Law applicable to the Company do not,
and will not, apply to this Agreement, the Merger or the other
transactions contemplated hereby.
Section
3.21
Environmental
Matters
.
Except for such matters that
individually or in the aggregate have not had and could not
reasonably be expected to have a Company Material Adverse
Effect: (a) each of the Company and its Subsidiaries is
and, to the Knowledge of the Company, has been in compliance
with all applicable Environmental Laws and possesses and is and,
to the Knowledge of the Company, has been in
A-26
compliance with all required Environmental Permits; (b) to
the Knowledge of the Company, there are no Environmental Claims
pending or threatened against the Company or any of its
Subsidiaries, (c) none of the Company or any of its
Subsidiaries or any of their predecessors has caused any Release
or threatened Release of Hazardous Materials at any property
currently owned or operated by the Company or any of its
Subsidiaries, which could reasonably be expected to result in an
Environmental Claim and (d) neither the Company nor any
Company Subsidiary has received any written (or, to the
Knowledge of the Company, oral) claim or notice of violation
from any Governmental Entity alleging that the Company or any
Company Subsidiary is in violation of, or liable under, any
Environmental Law, or regarding any Hazardous Materials. All
environmental reports, assessments and audits in the possession
or control of the Company or any of its Subsidiaries, containing
information that could reasonably be expected to be material to
the Company or any of its Subsidiaries, have been made available
to the Parent. The representations and warranties made in this
Section 3.21
are the exclusive representations and
warranties of the Company relating to environmental matters.
Section
3.22
Information
Supplied
.
Neither the written information
supplied, or to be supplied, by or on behalf of the Company for
inclusion in the Proxy Statement or any other documents to be
filed by Parent, Merger Sub or the Company with the SEC or any
other Governmental Entity in connection with the Merger and the
other transactions contemplated hereby, will, on the date of its
filing or, in the case of the Proxy Statement, at the date it is
first mailed to the Company Common Stockholders and at the time
of the Company Common Stockholders Meeting, contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which
they were made, not misleading. Notwithstanding the foregoing,
the Company makes no representation or warranty with respect to
any information supplied by Parent or Merger Sub that is
contained in any of the foregoing documents.
Section
3.23
Product
Warranties
.
There are no pending or, to the
Companys Knowledge, threatened Actions against either the
Company or any Subsidiary in respect of injury to person or
property of its employees or any third parties, arising from or
relating to the sale or license of any product or performance of
any service by the Company or any Subsidiary, including claims
arising out of the defective or unsafe nature of the products or
services.
ARTICLE IV
REPRESENTATIONS
AND WARRANTIES OF PARENT AND MERGER SUB
Subject to such exceptions as are disclosed in the Parent
Disclosure Letter delivered by Parent to the Company prior to
the execution of this Agreement, Parent and Merger Sub jointly
and severally represent and warrant to the Company as follows:
Section
4.1
Organization
and Good Standing
.
Each of Parent and Merger
Sub is a corporation duly organized, validly existing and in
good standing (with respect to jurisdictions that recognize such
concept) under the Laws of its jurisdiction of incorporation.
Section
4.2
Authority
for Agreement
.
Each of Parent and Merger Sub
has all necessary corporate power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and
to consummate the Merger and the other transactions contemplated
by this Agreement. The execution, delivery and performance by
Parent and Merger Sub of this Agreement, and the consummation by
Parent and Merger Sub of the Merger and the other transactions
contemplated by this Agreement, have been duly authorized by all
necessary corporate action and no other corporate proceedings on
the part of Parent or Merger Sub, and no other votes or
approvals of any class or series of capital stock of Parent or
Merger Sub, are necessary to authorize this Agreement or to
consummate the Merger or the other transactions contemplated
hereby. This Agreement has been duly executed and delivered by
Parent and Merger Sub and, assuming the due authorization,
execution and delivery by the Company, constitutes a legal,
valid and binding obligation of Parent and Merger Sub
enforceable against Parent and Merger Sub in accordance with its
terms, subject the Bankruptcy and Equity Exception.
A-27
Section
4.3
No
Conflict; Required Filings and Consents
.
(a) The execution and delivery of this Agreement by Parent
and Merger Sub do not, and the performance of this Agreement by
Parent and Merger Sub and the consummation of the Merger and the
other transactions contemplated by this Agreement will not,
(i) conflict with or violate Parents Amended and
Restated Certificate of Incorporation or Parent Bylaws, or the
equivalent charter documents of Merger Sub, (ii) conflict
with or violate any Law applicable to Parent or its Subsidiaries
or by which any material property or asset of Parent or any of
its Subsidiaries is bound or affected, or (iii) result in a
breach of or constitute a default (or an event that with notice
or lapse of time or both would become a default) under, give to
others (immediately or with notice or lapse of time or both) any
right of termination, amendment, acceleration or cancellation
of, result (immediately or with notice or lapse of time or both)
in triggering any payment or other obligations, or result
(immediately or with notice or lapse of time or both) in the
creation of an Encumbrance, other than Permitted Encumbrances,
on any material property or asset of Parent or its Subsidiaries
pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument
or obligation to which Parent or any of its Subsidiaries is a
party or by which Parent or any of its Subsidiaries, or any
material property or asset of Parent or any of its Subsidiaries,
is bound or affected, except in the case of clauses (ii)
and (iii) above for any such conflicts, violations,
breaches, defaults or other occurrences that would not
reasonably be expected to have a Parent Material Adverse Effect.
(b) The execution and delivery of this Agreement by Parent
and Merger Sub do not, and the performance of this Agreement by
Parent and Merger Sub will not, require any consent, approval,
authorization or permit of, or filing with or notification to,
or registration or qualification with, any Governmental Entity,
except for applicable requirements, if any, of the Securities
Act, the Exchange Act, or state securities laws or blue
sky laws and the HSR Act.
Section
4.4
Litigation
.
There
are no suits, actions or proceedings pending or, to the
knowledge of Parent, threatened against Parent or any of its
Subsidiaries, including Merger Sub, that would reasonably be
expected to have a Parent Material Adverse Effect.
Section
4.5
Availability
of Funds
.
(a) Parent has provided the Company with true and complete
copies of (i) the commitment letter, dated as of the date
hereof, from Wells Fargo Foothill, LLC and Bank of Montreal (the
Debt Financing Commitment
), regarding the
amounts set forth therein for the purposes of financing the
Merger and the other transactions contemplated by this Agreement
and related fees and expenses (the
Debt
Financing
), (ii) the Equity Commitment Letters
(together with the Debt Financing Commitment, the
Financing Commitments
), regarding the
proposed equity investments set forth therein (the
Equity Financing
and together with the Debt
Financing, the
Financing
). The Financing
Commitments are in full force and effect as of the date hereof
and are the legal, valid and binding obligations of Parent and
Merger Sub and, to the Knowledge of Parent, of the other parties
thereto, in accordance with the terms and conditions thereof,
subject to the Bankruptcy and Equity Exception. Assuming only
that the Equity Financing is funded, Parent and Merger Sub will
have at and after the Closing funds sufficient to pay all of the
amounts payable under
Article I
of this Agreement or
otherwise in connection with or as a result of the Merger and
the other transactions contemplated hereby and all fees and
expenses associated therewith. Each Equity Commitment Letter has
not been amended or modified, and the commitments set forth in
each Equity Commitment Letter has not been withdrawn or
rescinded in any respect. Each Equity Commitment Letter, in the
form so delivered to the Company on the date hereof, is in full
force and effect. There are no conditions precedent or other
contingencies related to the funding of the full amount of the
Equity Financing at Closing hereunder other than the conditions
to Closing set forth herein. No event has occurred which, with
or without notice, lapse of time or both, would constitute a
default or breach on the part of Parent or Merger Sub under any
term or condition of the Financing Commitments. Neither Parent
nor Merger Sub has any reason to believe that any of the
conditions to the Equity Financing will not be satisfied or that
the Equity Financing will not be available to Parent and Merger
Sub on the date of the Closing. Parent has fully paid any and
all commitment and other fees that have been incurred and are
due and payable on or prior to the date hereof in connection
with each Equity Commitment Letter. Notwithstanding anything to
the contrary contained herein, Parents obligation to
consummate the
A-28
transactions contemplated hereby is not contingent on
Parents ability to obtain any financing prior to
consummating the Merger.
(b) The following provision is not intended to imply that
the Debt Financing is a condition to consummation of the
transactions contemplated hereby. The Debt Financing Commitment
may, in accordance with the provisions of this Agreement, be
superseded at the option of Parent after the date of this
Agreement but prior to the Effective Time by instruments (the
Alternative Financing Commitments
) replacing
the then existing Debt Financing Commitment, provided that any
Alternative Financing Commitment shall be on terms that are no
less favorable, in the aggregate, to Parent (as determined in
the reasonable judgment of Parent) than the terms of the Debt
Financing Commitment such Alternative Financing Commitment is
replacing. In such event, (x) the term
Financing
Commitments
as used herein shall be deemed to include
the Financing Commitments that are not so superseded at the time
in question and the Alternative Financing Commitments to the
extent then in effect, and (y) the term
Debt
Financing
as used herein shall mean the debt financing
contemplated by the Financing Commitments as modified pursuant
to the foregoing clause (x).
Section
4.6
Guarantees
.
The
Sponsors have delivered the Guarantees to the Company. Each
Guarantee is in full force and effect and no event has occurred
which, with or without notice, lapse of time or both, would
constitute a default or breach on the part of either Parent or a
Sponsor under any term or condition of any Guarantee.
Section
4.7
Brokers
.
No
broker, finder or investment banker is entitled to any
brokerage, finders or other fee or commission in
connection with this Agreement, the Merger or the other
transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Parent or Merger Sub or any
of their respective directors, officers or employees, for which
the Company may become liable.
Section
4.8
Merger
Sub
.
Merger Sub was formed solely for the
purpose of engaging in the transactions contemplated by this
Agreement, is wholly-owned directly and beneficially by Parent
and, prior to the Effective Time, Merger Sub will have engaged
in no business and have no Liabilities or obligations other than
in connection with the transactions contemplated by this
Agreement.
Section
4.9
Information
Supplied
.
Neither the written information
supplied, or to be supplied, by or on behalf of Parent or Merger
Sub for inclusion in the Proxy Statement or any other documents
to be filed by Parent, Merger Sub or the Company with the SEC or
any other Governmental Entity in connection with the Merger and
the other transactions contemplated hereby, will, on the date of
its filing or, in the case of the Proxy Statement, at the date
it is mailed to Company Common Stockholders and at the time of
the Company Common Stockholders Meeting, contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which
they were made, not misleading. If at any time prior to the
Effective Time any event with respect to Parent or Merger Sub
shall occur which is required to be described in the Proxy
Statement, Parent shall promptly disclose such event to the
Company. Notwithstanding the foregoing, Parent makes no
representation or warranty with respect to any information
supplied by the Company that is contained in any of the
foregoing documents.
Section
4.10
Management
Arrangements
.
As of the date hereof, except
as previously disclosed to the Company Board, there are no
contracts or any other binding arrangements between Parent,
Merger Sub or any of their respective Affiliates, on the one
hand, and any director or officer of the Company, on the other
hand, relating to this Agreement, the Merger or any other
transactions contemplated by this Agreement (including as to any
investments to be made in, or contributions to be made to,
Parent or Merger Sub), or to the Surviving Corporation or any of
its Subsidiaries, businesses or operations (including as to
continuing employment) from and after the Closing.
Section
4.11
Solvency
.
As
of the Effective Time and immediately after giving effect to all
of the transactions contemplated by this Agreement, including
the Merger and all payments contemplated by this Agreement in
connection with the Merger (including payment of all amounts
payable under Article I of this Agreement in connection
with or as a result of the Merger) and payment of all related
fees and expenses of Parent, Merger Sub, the Company and their
respective Subsidiaries in connection therewith, and assuming
the
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accuracy as of the Effective Time in all material respects of
those representations and warranties of the Company set forth in
Article III
that relate to the subject matter of
clauses (i) through (iii) of this
Section 4.11
(including
Section 3.8
):
(i) the amount of the fair saleable value of
the assets of each of the Surviving Corporation and its
Subsidiaries will exceed (A) the value of all liabilities
of the Surviving Corporation and such Subsidiaries, including
contingent and other liabilities, and (B) the amount that
will be required to pay the probable liabilities of the
Surviving Corporation and such Subsidiaries on their existing
debts as such debts become absolute and matured, (ii) each
of the Surviving Corporation and its Subsidiaries will not have
an unreasonably small amount of capital for the operation of the
businesses in which it is engaged or proposed to be engaged, and
(iii) each of the Surviving Corporation and its
Subsidiaries will be able to pay its liabilities, including
contingent and other liabilities, as they mature. For purposes
of the foregoing, not have an unreasonably small amount of
capital for the operation of the businesses in which it is
engaged or proposed to be engaged and able to pay
its liabilities, including contingent and other liabilities, as
they mature means that such Person will be able to
generate enough cash from operations, asset dispositions or
refinancing, or a combination thereof, to meet its obligations
as they become due.
Section
4.12
Section 203
of the DGCL
.
As of the date hereof, neither
Parent nor Merger Sub nor any of their affiliates or
associates is, and at no time during the last three
years has been, an interested stockholder of the
Company as defined in Section 203 of the DGCL, and neither
Parent nor Merger Sub owns any shares of capital
stock of the Company as defined in Section 203 of the DGCL.
ARTICLE V
COVENANTS
Section
5.1
Conduct
of Business by the Company Pending the Merger
.
(a) The Company covenants and agrees that between the date
of this Agreement and the Effective Time, unless Parent shall
otherwise consent in writing, which consent shall not be
unreasonably withheld, delayed or conditioned (and except as set
forth in
Section 5.1
of the Company Disclosure
Letter or as otherwise expressly contemplated, permitted or
required by this Agreement), the Company shall and shall cause
each of its Subsidiaries to, (i) maintain its existence in
good standing under applicable Law, (ii) subject to the
restrictions and exceptions set forth in
Section 5.1(b)
or elsewhere in this Agreement,
conduct its business and operations only in the ordinary and
usual course of business and in a manner consistent with prior
practice, and (iii) use commercially reasonable efforts to
(A) preserve intact its assets, properties, contracts or
other legally binding understandings, licenses and business
organizations, (B) generally keep available the services of
its current officers and key employees as determined by the
Companys Chief Executive Officer in consultation with
Parent and (C) preserve the current relationships of the
Company and its Subsidiaries with customers, suppliers,
distributors, lessors, licensors, licensees, creditors,
employees, contractors and other Persons with which the Company
or any of its Subsidiaries has business relations.
(b) Without limiting the foregoing, the Company covenants
and agrees that between the date of this Agreement and the
Effective Time, the Company shall not and shall cause each of
its Subsidiaries not to (except as expressly contemplated,
permitted or required by this Agreement, including
Section 1.7 hereof, as set forth on the applicable
subsection of
Schedule 5.1(b)
of the Company
Disclosure Letter or with the prior written approval of Parent,
which approval shall not be unreasonably withheld, delayed or
conditioned (other than, with respect to such approval being not
unreasonably withheld, delayed or conditioned, in the case of
clauses (i), (ii) and (iii) below): (i) declare,
set aside, establish a record date for, make or pay any
dividends or other distributions (whether in cash, stock or
property) in respect of any of its capital stock or, except as
permitted by
Section 5.6
, enter into any agreement
with respect to the voting of its capital stock;
(ii) adjust, split, combine or reclassify any of its
capital stock or that of its Subsidiaries 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
that of its Subsidiaries; (iii) repurchase, redeem or
otherwise acquire, directly or indirectly, any shares of its or
its Subsidiaries capital stock or any Company Common Stock
Rights or Subsidiary Stock Rights (except pursuant to restricted
stock award agreements outstanding on the date hereof);
(iv) issue, deliver or sell, pledge or encumber any shares
of its or its Subsidiaries capital stock, or any Company
Common Stock Rights (other
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than the issuance of shares of Company Common Stock upon the
exercise of Company Common Stock Options or pursuant to the ESPP
solely with respect to the Final Offering Period) (v) take
any action the intended and actual result of which is to prevent
the Company from consummating the Merger in accordance with the
terms hereof other than any action otherwise required or
permitted to be taken hereunder; (vi) amend the Company
Certificate of Incorporation or Company Bylaws or equivalent
organizational documents of the Companys Subsidiaries;
(vii) incur, create, assume or otherwise become liable for
any Indebtedness or assume, guaranty, endorse or otherwise
become liable or responsible for the Indebtedness of any other
Person; (viii) make any loans, advances or capital
contributions to or investments in any other Person (other than
loans, advances, capital contributions, or investments made to
the Companys Subsidiaries or loans or advances made to
other Persons, including customer financing and installment
payment arrangements, in the ordinary course of business
consistent with past practice); (ix) merge or consolidate
with any other entity or adopt a plan of complete or partial
liquidation, dissolution, recapitalization or other
reorganization or otherwise permit its corporate existence to be
suspended, lapsed or revoked; (x) change its Tax accounting
methods, principles or practices, except as required by GAAP or
applicable Laws; (xi) alter, amend or create any
obligations with respect to compensation, severance, benefits,
change of control payments or any other payments to present or
former employees, directors or Affiliates of the Company, other
than alterations or amendments (A) made with respect to
non-officers and
non-directors
in the ordinary course of business consistent with past practice
that, in the aggregate, do not result in a material increase in
benefits or compensation expense to the Company, (B) as
expressly contemplated by
Section 1.7
of this
Agreement or (C) required under applicable Laws;
(xii) hire any new employees other than non-officer
employees in the ordinary course of business consistent with
past practice; (xiii) sell, license, mortgage, transfer,
lease, pledge or otherwise subject to any Encumbrance, other
than Permitted Encumbrances, or otherwise dispose of any
material properties or assets (including stock or other
ownership interests of its Subsidiaries), other than in the
ordinary course of business consistent with prior practice;
(xiv) acquire any material business, assets or securities
other than in the ordinary course of business consistent with
past practice; (xv) make any Tax election not consistent
with prior practice or settle or compromise any material income
Tax Liability or fail to file any material Tax Return when due
or fail to cause such Tax Returns when filed to be complete and
accurate in all material respects or file any materially amended
Tax Return; (xvi) incur or commit to incur any unbudgeted
capital expenditures, or any obligations or liabilities in
connection therewith that individually or in the aggregate, are
in excess of $250,000, except in the ordinary course of business
consistent with past practices or materially delay any material
capital expenditures; (xvii) pay, discharge, settle or
satisfy any Liabilities, other than the payment, discharge or
satisfaction of Liabilities in the ordinary course of business,
consistent with past practice, as required by any applicable
Law, as accrued for in the Company Financial Statements or as
required by the terms of any contract of the Company, as in
effect on the date of this Agreement; (xviii) waive,
release, grant or transfer any right of material value, other
than in the ordinary course of business, consistent with past
practice, or waive any material benefits of, or agree to modify
in any material adverse respect, or, subject to the terms
hereof, fail to enforce, or consent to any material matter with
respect to which its consent is required under, any material
confidentiality, standstill or similar agreement to which the
Company or any of its Subsidiaries is a party (other than to
permit a Person to present an Acquisition Proposal or take any
other action permitted under
Section 5.6
);
(xix) enter into, modify, amend or terminate (A) any
contract which if so entered into, modified, amended or
terminated could be reasonably likely to (x) have a Company
Material Adverse Effect, (y) impair in any material respect
the ability of the Company to perform its obligations under this
Agreement or (z) prevent or materially delay the
consummation of the transactions contemplated by this Agreement
or (B) except in the ordinary course of business, any
Company Material Contract; (xx) terminate any officer or
key employee of the Company except as determined by the
Companys Chief Executive Officer in consultation with
Parent; (xxi) maintain insurance at less than current
levels or otherwise in a manner inconsistent with past practice;
(xxii) except as required by GAAP, revalue any of its
material assets or make any changes in accounting methods,
principles or practices; (xxiii) enter into any transaction
that could give rise to a disclosure obligation as a
reportable transaction under Section 6011 of
the Code and the regulations thereunder; (xxiv) engage in
any transaction with, or enter into any agreement, arrangement
or understanding with any Affiliate of the Company or other
Person covered by Item 404 of
Regulation S-K
promulgated under the Exchange Act that would be required to be
disclosed under such Item 404; (xxv) compromise,
release, waive or settle any Action (A) directly relating
to or affecting the Companys Intellectual Property,
(B) having
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a value or in an amount in excess of $250,000 or (C) that
is brought by any current, former or purported holder of any
capital stock or debt securities of the Company or any of its
Subsidiaries relating to the transactions contemplated by this
Agreement; (xxvi) effectuate a plant closing or
mass layoff, as those terms are defined in WARN,
affecting in whole or in part any site of employment, facility,
operating unit or employee of the Company or any of its
Subsidiaries; (xxvii) grant any material refunds, credits,
rebates or other allowances by the Company to any end user,
customer, reseller or distributor, in each case, other than in
the ordinary course of business; (xxviii) abandon or allow
to lapse or expire any registration or application for material
Company Intellectual Property; (xxix) enter into any new
line of business outside of its existing business segments;
(xxx) engage in Company-wide communication with employees
of the Company or any of its Subsidiaries regarding the
compensation, benefits or other treatment that they will receive
in connection with the Merger, unless any such communications
are substantially consistent with prior directives, guidelines
or other documentation provided to the Company by Parent; or
(xxxi) except as permitted by Section 5.6 hereof,
agree to take or enter into any letter of intent or similar
agreement or arrangement with respect to any of the actions
described in this
Section 5.1(b)
.
(c) Nothing contained in this Agreement is intended to give
Parent, directly or indirectly, the right to control or direct
the operations of the Company or any of its Subsidiaries prior
to the Effective Time. Prior to the Effective Time, each of
Parent and Company shall exercise, consistent with the terms and
conditions of this Agreement, complete control and supervision
over its and its Subsidiaries respective operations.
Section
5.2
Access
to Information and Employees
.
(a) From the date hereof to the Effective Time, the Company
shall, and shall cause the Representatives of the Company to,
afford the Representatives of Parent and Merger Sub reasonable
access during normal business hours to the officers, employees,
agents (including outside accountants), properties, offices and
other facilities, books and records of the Company and, during
such period, the Company shall, and shall cause each of its
Subsidiaries to, furnish, to the extent prepared by the Company
in the ordinary course of business, for the period beginning
after the date of this Agreement and ending at the Effective
Time, as soon as practicable after the end of each month, a copy
of the monthly internally prepared financial statements of the
Company, including statements of financial condition, results of
operations, and statements of cash flow, and all other
information concerning its business, properties and personnel as
Parent may reasonably request.
(b) During the period between the date hereof and the
Effective Time, the Company shall provide, and shall cause its
Subsidiaries and its and their Representatives to provide, to
Parent and to the Representatives of Parent, reasonable
cooperation that may be reasonably requested by Parent in
connection with the Financing to be incurred by Parent in order
to consummate the transactions contemplated hereby, including
but not limited to using commercially reasonable efforts to
cause its advisors to provide financial statements and comfort
letters that may be reasonably requested and are otherwise
customary for such Financing.
(c) No investigation pursuant to this
Section 5.2
shall affect any representation or
warranty in this Agreement of any party hereto or any condition
to the obligations of the parties hereto.
(d) The Company acknowledges that, prior to the Effective
Time, Parent or its Representatives may make available to the
Company or its Representatives certain information that is
confidential, proprietary or otherwise not publicly available
including analyses, forecasts, plans, summaries
and/or
studies and that all such confidential material given by or on
behalf of Parent to the Company will not be disclosed,
reproduced, disseminated, quoted or referred by the Company or
any of its Subsidiaries or Representatives to any Person.
Section
5.3
Reasonable
Best Efforts; Notification
.
(a) Subject to the conditions set forth in this Agreement,
each of Parent, Merger Sub and the Company agrees to use its
reasonable best efforts to take, or cause to be taken, all
actions and to do, or cause to be done, and to assist and
cooperate with the other parties in doing, all things necessary,
proper or advisable to fulfill all conditions applicable to such
party pursuant to this Agreement and to consummate and make
effective, in the most expeditious manner practicable, the
Merger and the other transactions contemplated by the
Transaction Documents, including (i) the taking of all
commercially reasonable acts necessary to cause the conditions
set forth in
Article VI
to be satisfied,
(ii) obtaining all necessary, proper or advisable actions
or
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non-actions, waivers, consents, qualifications and approvals
from Governmental Entities and making all necessary, proper or
advisable registrations, filings and notices and taking all
reasonable steps as may be necessary to obtain an approval,
waiver or exemption from any Governmental Entity (including,
without limitation, under the HSR Act); (iii) obtaining all
necessary, proper or advisable consents, qualifications,
approvals, waivers or exemptions from the non-governmental Third
Parties; and (iv) executing and delivering any additional
documents or instruments necessary, proper or advisable to
consummate the transactions contemplated by, and to fully carry
out the purposes of, the Transaction Documents.
(b) Without limiting the foregoing, (i) each of the
Company, Parent and Merger Sub shall use its commercially
reasonable efforts to make promptly any required submissions
under the HSR Act and any other Antitrust Laws which the Company
or Parent determines should be made, in each case with respect
to the Merger and the transactions contemplated hereby and
(ii) Parent, Merger Sub and the Company shall cooperate
with one another (A) in promptly determining whether any
filings are required to be or should be made or consents,
approvals, permits or authorizations are required to be or
should be obtained under any other federal, state or foreign Law
or regulation or whether any consents, approvals or waivers are
required to be or should be obtained from other parties to loan
agreements or other contracts or instruments material to the
Companys business in connection with the consummation of
the transactions contemplated by this Agreement and (B) in
promptly making any such filings, furnishing information
required in connection therewith and seeking to obtain timely
any such consents, permits, authorizations, approvals or
waivers. Each of the Company and Parent shall (1) give the
other party prompt notice of the commencement or threat of
commencement of any suit, claim, action, investigation or
proceeding by or before any Governmental Entity with respect to
the Merger or any of the other transactions contemplated by this
Agreement, (2) keep the other party informed as to the
status of any such suit, claim, action, investigation,
proceeding or threat, (3) promptly inform the other party
of any material communication concerning the HSR Act or other
Antitrust Laws to or from any Governmental Entity regarding the
Merger and (4) furnish to the other party such information
and assistance as the other may reasonably request in connection
with any filing or other act undertaken in compliance with the
HSR Act and any other Antitrust Laws. Except as may be
prohibited by any Governmental Entity, the Company and Parent
will consult and cooperate with one another, and will consider
in good faith the views of one another, in connection with any
analysis, appearance, presentation, memorandum, brief, argument,
opinion or proposal made or submitted in connection with any
suit, claim, action, investigation or proceeding under or
relating to the HSR Act or any other Antitrust Law. Each of the
Company and Parent will permit authorized Representatives of the
other party to be present at each meeting or conference relating
to any such legal proceeding and to have access to and be
consulted in connection with any document, opinion or proposal
made or submitted to any Governmental Entity in connection with
any such legal proceeding.
(c) Each of the Company, on the one hand, and Parent and
Merger Sub, on the other, shall promptly (and in any event
within five (5) Business Days) notify the other party in
writing if it believes that such party has breached any
representation, warranty, covenant or agreement contained in
this Agreement that could, individually or in the aggregate,
result in a failure of a condition set forth in
Section 6.2
or
Section 6.3
if continuing
on the Closing Date.
(d) If any Antitakeover Laws are or may become applicable
to the Merger or any of the other transactions contemplated by
this Agreement, the Company and the Company Board of Directors
shall promptly grant such approvals and use commercially
reasonable efforts to take such other lawful actions as are
necessary so that such transactions may be consummated as
promptly as practicable on the terms contemplated by this
Agreement or the Merger, as the case may be, and otherwise take
such other commercially reasonable and lawful actions to
eliminate or minimize the effects of such statute, and any
regulations promulgated thereunder, on such transactions.
Section
5.4
Proxy
.
(a)
Proxy Statement
.
As promptly
as practicable after the date hereof, the Company shall prepare
preliminary proxy materials which shall constitute the Proxy
Statement and the Company shall cause such Proxy Statement to be
filed with the SEC as soon as practicable after the date hereof,
and shall use its reasonable best efforts to cause such filing
to occur no later than the date that is ten (10) Business
Days
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following the date hereof. Parent and Merger Sub shall furnish
all information as the Company may reasonably request in
connection with such actions and the preparation of the Proxy
Statement. Subject to and without limiting the rights of the
Company Board of Directors pursuant to
Section 5.6
,
the Proxy Statement shall include the Company Recommendation.
(b)
SEC Comments
.
As promptly as
practicable after comments are received from the SEC thereon and
after the furnishing by the Company and Parent of all
information required to be contained therein, the Company shall,
in consultation with the Parent, prepare and the Company shall
file any required amendments to, and the definitive, Proxy
Statement with the SEC. The Company will advise Parent, promptly
after it receives notice thereof, of any request by the SEC for
amendment of the Proxy Statement or comments thereon and
responses thereto or requests by the SEC for additional
information and will promptly supply Parent with copies of all
correspondence between the Company or any of the Company
Representatives, on the one hand, and the SEC or its staff, on
the other hand, with respect to the Proxy Statement. Prior to
filing or mailing the Proxy Statement or filing any other
required filings (or, in each case, any amendment or supplement
thereto) or responding to any comments of the SEC with respect
thereto, the Company shall provide Parent with an opportunity to
review and comment on such document or response and shall give
due consideration to including in such document or response
comments reasonably and timely proposed by Parent. As promptly
as practicable after the clearance of the Proxy Statement by the
SEC (the
SEC Clearance Date
), the Company
shall mail the Proxy Statement and all other proxy materials to
the holders of shares of Company Common Stock and, if necessary
in order to comply with applicable securities Laws, after the
Proxy Statement shall have been so mailed, promptly circulate
amended, supplemental or supplemented proxy material, and, if
required in connection therewith, re-solicit proxies. If the SEC
has failed to affirmatively notify the Company within ten
(10) days after the filing of the Proxy Statement with the
SEC that it will not be reviewing the Proxy Statement, then the
Company shall use its reasonable best efforts to obtain such
affirmative clearance of the Proxy Statement from the SEC and
the date on which the Company receives such affirmative
clearance shall be the
SEC Clearance Date
.
(c)
Information Supplied
.
Each of
Parent, Merger Sub and the Company agrees, as to it and its
Affiliates, directors, officers, employees, agents or
Representatives, that none of the information supplied or to be
supplied by Parent, Merger Sub or the Company, as applicable,
expressly for inclusion or incorporation by reference in the
Proxy Statement or any other documents filed or to be filed with
the SEC in connection with the transactions contemplated hereby,
will, as of the time such documents (or any amendment thereof or
supplement thereto) are mailed to the holders of shares of
Company Common Stock and at the time of the Company Stockholders
Meeting, contain any untrue statement of a material fact, or
omit to state any material fact required to be stated therein in
order to make the statements therein, in light of the
circumstances under which they were made, not misleading. Each
of Parent, Merger Sub and the Company further agrees that all
documents that such Party is responsible for filing with the SEC
in connection with the Merger will comply as to form and
substance in all material respects with the applicable
requirements of the Exchange Act and any other applicable Laws
and will not contain any untrue statement of a material fact, or
omit to state any material fact required to be stated therein in
order to make the statements therein, in light of the
circumstances under which they were made, not misleading. If at
any time prior to the Effective Time, any event or circumstance
relating to Parent or Merger Sub, or their respective officers
or directors, should be discovered by Parent or Merger Sub which
should be set forth in an amendment or a supplement to the Proxy
Statement so that the Proxy Statement, would not include any
misstatement of a material fact or omit to state any material
fact required to be stated therein in order to make the
statements therein, in light of the circumstances under which
they were made, not misleading, Parent shall promptly notify the
Company and, to the extent required by the Exchange Act and any
other applicable Laws, the Company shall amend or supplement the
Proxy Statement promptly to disclose such event or circumstance.
If at any time prior to the Effective Time, any event or
circumstance relating to the Company or any Company Subsidiary,
or their respective officers or directors, should be discovered
by the Company which should be set forth in an amendment or a
supplement to the Proxy Statement so that the Proxy Statement,
would not include any misstatement of a material fact or omit to
state any material fact required to be stated therein in order
to make the statements therein, in light of the circumstances
under which they were made, not misleading, the Company shall
promptly notify Parent
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and, to the extent required by the Exchange Act and any other
applicable Laws, the Company shall amend or supplement the Proxy
Statement promptly to disclose such event or circumstance.
Section
5.5
Company
Stockholders Meeting
.
(a) Subject to the Companys right to terminate this
Agreement pursuant to
Section 5.6
and
Article VII
hereof, the Company shall duly call,
give notice of and hold a meeting of its stockholders for the
purpose of considering and voting upon the adoption of this
Agreement (the
Company Stockholders Meeting
)
as promptly as practicable following the date on which the Proxy
Statement is mailed to the Companys stockholders;
provided
, that without the prior written consent of
Parent, (i) the Company shall use its reasonable best
efforts to cause the Company Stockholders Meeting to be held not
later than thirty (30) calendar days after the SEC
Clearance Date, and (ii) the Company may not adjourn or
postpone the Company Stockholders Meeting;
provided
,
further
, that notwithstanding the foregoing, the Company
may delay mailing the Proxy Statement or scheduling or holding
the Company Stockholders Meeting if the Company Board of
Directors determines that a decision not to so delay such
mailing, scheduling or holding would, in the absence of any
contractual obligations limiting or restricting the
Companys ability to effect such a delay, constitute a
breach of the fiduciary duties of the directors.
(b) The Company shall establish a record date for purposes
of determining stockholders entitled to notice of and vote at
the Company Stockholders Meeting (the
Record
Date
). Once the Company has established the Record
Date, the Company shall consult with Parent prior to changing
the Record Date or establishing a different record date for the
Company Stockholders Meeting, unless required to do so by
applicable Law.
(c) Subject to
Section 5.6
and
Article VII
, at the Company Stockholders Meeting,
the Company shall, through the Company Board of Directors, make
the Company Recommendation unless there has been a Company
Adverse Recommendation Change. Prior to any Company Adverse
Recommendation Change, the Company shall take all reasonable
lawful action to solicit the Company Required Vote.
Notwithstanding any Company Adverse Recommendation Change,
unless this Agreement is validly terminated pursuant to, and in
accordance with
Article VII
, this Agreement shall be
submitted to the Companys stockholders for the purpose of
obtaining the Company Required Vote. The Company shall, upon the
reasonable request of Parent, use its reasonable best efforts to
advise Parent during the last ten (10) Business Days prior
to the date of the Company Stockholders Meeting, as to the
aggregate tally of the proxies received by the Company with
respect to the Company Required Vote. Without the prior written
consent of Parent, the adoption of this Agreement and the
transactions contemplated hereby (including the Merger) shall be
the only matter (other than procedure matters) which the Company
shall propose to be acted on by the stockholders of the Company
at the Company Stockholders Meeting.
Section
5.6
No
Solicitation of Transactions
.
(a) Notwithstanding any other provision of this Agreement,
during the period beginning on the date of this Agreement and
continuing until 12:01 a.m., Eastern Standard Time, on
February 7, 2010 (the
No-Shop Period Start
Date
), the Company and its Representatives shall have
the right to: (i) solicit written Acquisition Proposals
from no more than fifteen (15) Persons, subject to the
terms and conditions of this
Section 5.6
; and (ii)
respond to any Person that makes a written Acquisition Proposal,
subject to the terms and conditions of this
Section 5.6
;
provided
that, in either case,
prior to engaging in substantive discussions or negotiations
with a Person submitting such an Acquisition Proposal, the
Company, after consultation with its Representatives shall make
a determination that to the best of the Companys
Knowledge: (x) such Person is reasonably likely to have
adequate sources of financing or adequate funds to consummate
such Acquisition Proposal, (y) such Person has stated in
writing that it does not propose obtaining financing as a
condition to its obligation to consummate such Acquisition
Proposal and (z) it is reasonably possible that such
discussions could lead to a Superior Proposal. The Company shall
not provide any such Person with access to non-public
information until the preceding criteria are satisfied and the
applicable Person has executed an Acceptable Confidentiality
Agreement;
provided
that the Company shall promptly make
available to Parent any material non-public information
concerning the Company and its Subsidiaries that is provided to
any Person given such access which was not previously made
available to Parent. The Company shall require any Person
submitting an Acquisition Proposal to include any proposed
changes to the terms of this Agreement.
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(b) Except as expressly permitted by this
Section 5.6
, the Company and its officers and
directors shall, and the Company shall instruct and cause its
Representatives and Subsidiaries and their Representatives to,
from the No-Shop Period Start Date until the Effective Time or,
if earlier, the termination of this Agreement in accordance with
Article VII
, not (other than in connection with the
continuation of negotiations commenced prior to the No-Shop
Period Start Date):
(i) initiate, solicit, propose, encourage (including by
providing information) or take any action to facilitate any
inquiries or the making of any proposal or offer that
constitutes, or may reasonably be expected to lead to, an
Acquisition Proposal;
(ii) engage in or otherwise participate in any discussions
or negotiations regarding, or provide any information or data
concerning the Company or any of its Subsidiaries to any Person
relating to, any Acquisition Proposal or any proposal or offer
that could reasonably be expected to lead to an Acquisition
Proposal, or provide any information or data concerning the
Company or any of its Subsidiaries to any Person pursuant to any
commercial arrangement, joint venture arrangement, or other
existing agreement or arrangement if it is reasonably likely
that the Person receiving the confidential information could use
such information for purposes of evaluating or developing an
Acquisition Proposal;
(iii) grant any waiver, amendment or release under any
standstill or confidentiality agreement, the Rights Agreement or
Takeover Statutes;
(iv) approve, endorse, recommend, or execute or enter into
any letter of intent, agreement in principle, merger agreement,
acquisition agreement or other similar agreement relating to an
Acquisition Proposal or any proposal or offer that could
reasonably be expected to lead to an Acquisition Proposal, or
that contradicts this Agreement or requires the Company to
abandon this Agreement; or
(v) resolve, propose or agree to do any of the foregoing.
(c) Notwithstanding anything to the contrary contained in
Section 5.6(b)
or elsewhere in this Agreement, but
subject to the penultimate sentence of this
Section 5.6(c)
, at any time following the No-Shop
Period Start Date and prior to, but not after, the receipt of
the Company Required Vote, the Company may, subject to
compliance with this
Section 5.6
:
(i) provide information in response to a request therefor
to a Person who has made an unsolicited written Acquisition
Proposal after the date of this Agreement if and only if, prior
to providing such information, the Company has received from the
Person so requesting such information an executed Acceptable
Confidentiality Agreement,
provided
that the Company
shall promptly make available to Parent any material information
concerning the Company and its Subsidiaries that is provided to
any Person making such Acquisition Proposal that is given such
access and that was not previously made available to Parent or
the Parent Representatives; or
(ii) engage or participate in any discussions or
negotiations with any Person who has made such an unsolicited
written Acquisition Proposal;
provided
, that prior to taking any action described in
Section 5.6(c)(i)
or
Section 5.6(c)(ii)
above, (A) the Company Board of Directors shall have
determined in good faith, after consultation with outside legal
counsel, that failure to take such action would violate the
directors fiduciary duties under applicable Laws, and
(B) the Company Board of Directors shall have determined in
good faith, based on the information then available and after
consultation with its independent financial advisor and outside
legal counsel, that such Acquisition Proposal either constitutes
a Superior Proposal or is reasonably likely to result in a
Superior Proposal. Without modifying the generality of the
foregoing, prior to engaging in substantive discussions or
negotiations with a Person submitting an unsolicited written
Acquisition Proposal, the Company, after consultation with its
Representatives shall make a determination that, to the best of
the Companys Knowledge: (x) such Person is reasonably
likely to have adequate sources of financing or adequate funds
to consummate such Acquisition Proposal and (y) such Person
has stated in writing that it does not propose obtaining
financing as a condition to its obligation to consummate such
Acquisition Proposal. The Company shall not provide any such
Person with access to non-public information until the preceding
criteria are satisfied. The Company shall require any
A-36
Person submitting an unsolicited Acquisition Proposal to include
any proposed changes to the terms of this Agreement.
(d) Except as expressly provided by
Section 5.6(e)
, at any time after the date hereof
(whether before or after the No-Shop Period Start Date), neither
the Company Board of Directors nor any committee thereof shall:
(i) (A) withhold, withdraw (or not continue to make),
qualify or modify (or publicly propose or resolve to withhold,
withdraw (or not continue to make), qualify or modify), in a
manner adverse to Parent or the Merger Sub, the Company
Recommendation with respect to the Merger, (B) adopt,
approve or recommend or propose to adopt, approve or recommend
(publicly or otherwise) an Acquisition Proposal, (C) fail
to publicly reaffirm the Company Recommendation within ten
(10) Business Days after Parent so requests in writing
(provided that Parent may make such request no more than two
(2) times) except that no such reaffirmation need be made
prior to the No-Shop Period Start Date (it being understood that
a valid request made within ten (10) Business Days of the
No-Shop Period Start Date shall be acted upon on or following
the No-Shop Period Start Date unless the following exception
applies) or at a time when an Acquisition Proposal has been made
and not withdrawn, (D) fail to recommend against any
Acquisition Proposal subject to Regulation 14D under the
Exchange Act in a Solicitation/Recommendation Statement on
Schedule 14D-9
within twenty (20) Business Days after the commencement of
such Acquisition Proposal or (E) fail to include the
Company Recommendation in the Proxy Statement (any action
described in clauses (A) through (E), a
Company
Adverse Recommendation Change
); or
(ii) cause or permit the Company or any of its Subsidiaries
to enter into any Acquisition Agreement relating to any
Acquisition Proposal.
(e) Notwithstanding anything to the contrary set forth in
this Agreement, at any time prior to obtaining the Company
Required Vote, (i) the Company Board (or any committee
thereof) may effect a Company Adverse Recommendation Change if
the Company Board determines in good faith, after consultation
with its outside legal counsel, that the failure to do so is
reasonably likely to violate the directors fiduciary
duties under applicable laws, and (ii) if the Company has
received a written Acquisition Proposal from any Person that is
not withdrawn and that the Company Board of Directors concludes
constitutes a Superior Proposal, the Company Board of Directors
may authorize the Company to terminate this Agreement to enter
into an Acquisition Agreement with respect to such Superior
Proposal, provided, however, that the Company may take the
action provided for in this clause (ii), if and only if:
(A) the Company shall have complied with its obligations
under this
Section 5.6
in all material respects;
(B) the Company shall have provided prior written notice to
Parent at least five (5) Business Days in advance (the
Notice Period
), to the effect that the
Company Board has received a written Acquisition Proposal that
is not withdrawn and that the Company Board of Directors
concludes constitutes a Superior Proposal and, absent any
revision to the terms and conditions of this Agreement, the
Company Board of Directors has resolved to terminate this
Agreement pursuant to this
Section 5.6(e)
, which
notice shall specify the basis for such Company Adverse
Recommendation Change or termination, including the identity of
the party making the Superior Proposal and the material terms
thereof; and
(C) prior to effecting such termination, the Company shall,
and shall cause their financial and legal advisors to, during
the Notice Period, negotiate with Parent and the Parent
Representatives in good faith (to the extent Parent desires to
negotiate) to make such adjustments in the terms and conditions
of this Agreement, so that such Acquisition Proposal would cease
to constitute a Superior Proposal;
provided
, that in the
event of any material revisions to the Acquisition Proposal that
the Company Board of Directors has determined to be a Superior
Proposal, the Company shall be required to deliver a new written
notice to Parent and to comply with the requirements of this
Section 5.6
(including this
Section 5.6(e
)) with respect to such new written
notice;
provided
,
further
, that if (x) the
Notice Period with respect to an Acquisition Proposal commences
five (5) or more Business Days prior to the No-Shop
A-37
Period Start Date and (y) the Company is unable to validly
terminate this Agreement in accordance with
Section 7.1(e)
prior to the No-Shop Period Start
Date in order to enter into an Acquisition Agreement with
respect to such Acquisition Proposal due to the requirement in
this
Section 5.6(e)
to deliver one or more new
written notices to Parent due to material revisions to such
Acquisition Proposal (including revisions in response to changes
in this Agreement proposed by Parent), then solely for purposes
of determining the amount of the Company Termination Fee payable
under
Section 7.2(b)
, the Company shall be deemed to
have entered into the Acquisition Agreement with respect to such
Acquisition Proposal prior to the No-Shop Period Start Date.
(f) Nothing contained in this
Section 5.6
shall
be deemed to prohibit the Company or the Company Board of
Directors from (i) complying with its disclosure
obligations under U.S. federal or state Law with regard to
an Acquisition Proposal, including taking and disclosing to its
shareholders a position contemplated by
Rule 14d-9
or
Rule 14e-2(a)
under the Exchange Act (or any similar communication to
stockholders), or (ii) making any
stop-look-and-listen communication or similar
communication of the type contemplated by
Rule 14d-9(f)
under the Exchange Act.
(g) From and after the No-Shop Period Start Date, the
Company agrees that it will promptly (and, in any event, within
two days) notify Parent if any proposals or offers with respect
to an Acquisition Proposal (including any material amendments
thereto) are received by, any non-public information is
requested from, or any discussions or negotiations are sought to
be initiated or continued with, the Company or any of its
Representatives indicating, in connection with such notice, the
identity of the Person or group of Persons making such offer or
proposal and the material terms and conditions of any proposals
or offers (subject to any pre-existing confidentiality
agreements binding upon the Company). Neither Parent, Merger Sub
nor any Sponsor shall communicate with any Person who has made
an Acquisition Proposal with respect to such Acquisition
Proposal or any related matter during the term of this Agreement.
(h) The Company agrees that in the event any of its
Representatives takes any action which, if taken by the Company,
would constitute a breach of this
Section 5.6
, then
the Company shall be deemed to be in breach of this
Section 5.6.
Section
5.7
Public
Announcements
.
The Company and Parent shall
consult with each other before issuing any press release or
otherwise making any public statements with respect to this
Agreement or any of the transactions contemplated by the
Transaction Documents and shall not issue any such press release
or make any such public statement without the prior consent of
the other party, which consent shall not be unreasonably
withheld or delayed; provided, however, that a party may,
without the prior consent of the other party, issue such press
release or make such public statement as may be required by Law
or Order or the applicable rules of Nasdaq or any listing
agreement if it has used its commercially reasonable efforts to
consult with the other party and to obtain such partys
consent but has been unable to do so prior to the time such
press release or public statement is so required to be issued or
made.
Section
5.8
Litigation
.
Each
of Parent, Merger Sub and the Company agrees to use its
commercially reasonable efforts to defend any lawsuits or other
legal proceedings, whether judicial or administrative,
challenging, or seeking damages or other relief as a result of,
the Merger, this Agreement or the transactions contemplated by
the Transaction Documents, including seeking to have any Order
adversely affecting the ability of the parties to consummate the
transactions contemplated by the Transaction Documents entered
by any court or other Governmental Entity promptly vacated or
reversed.
Section
5.9
Directors
and Officers Indemnification and Insurance
.
(a) For a period of six years from and after the Effective
Time, Parent and the Surviving Corporation shall indemnify,
advance expenses to, and hold harmless all past and present
officers and directors of the Company (
Indemnified
Persons
) to the fullest extent permitted by law and
the same extent and in the same manner such persons are
indemnified as of the date of this Agreement by the Company
pursuant to the DGCL, the Company Certificate of Incorporation
and the Company Bylaws for acts or omissions occurring at or
prior to the Effective Time; provided, however, in the case of
advancement of expenses, any person to whom expenses are
advanced provides an undertaking, to the extent required by the
DGCL, to repay such advance if
A-38
it is ultimately determined that such person is not entitled to
indemnification. The Certificate of Incorporation and the Bylaws
of the Surviving Corporation will contain provisions with
respect to exculpation, advancement and indemnification that are
at least as favorable to the Indemnified Persons as those
contained in the Company Certificate of Incorporation and the
Company Bylaws as in effect on the date hereof, which provisions
will not be amended, repealed or otherwise modified for a period
of not less than six years from the Effective Time in any manner
that would adversely affect the rights thereunder of individuals
who, immediately prior to the Effective Time, were directors,
officers, employees or agents of the Company, unless such a
modification is required by Law.
(b) The Company shall negotiate and purchase
tail insurance coverage from the Companys
existing directors and officers liability insurers, or from
other insurers, that provides for a period of six (6) years
that is no less favorable in both amount and terms and
conditions of coverage than the Companys existing
directors and officers liability insurance programs, or if
substantially equivalent insurance coverage is not available,
the best available coverage (
D&O
Insurance
); provided however that the aggregate cost
for the purchase of such D&O Insurance (for the entire six
(6) year tail coverage period) shall not exceed more than
250% of the aggregate premium paid by the Company for the
existing directors and officers liability and fiduciary
liability insurance program, provided, further, that should the
cost of D&O Insurance exceed the 250% cap, the Company
shall instead purchase the best available coverage for 250% of
the aggregate premium paid by the Company for the existing
directors and officers liability and fiduciary liability
insurance program.
(c) If the Surviving Corporation or any of its successors
or assigns shall (i) 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
(ii) transfer all or substantially all of its properties
and assets to any Person, then, and in each such case, proper
provisions shall be made so that the successors and assigns of
the Surviving Corporation shall assume all of the obligations of
the Surviving Corporation set forth in this Section 5.9.
(d) The obligations set forth in this
Section 5.9
shall not be terminated, amended or
otherwise modified in any manner that adversely affects any
Indemnified Person or any other person who is a beneficiary
under the D&O Insurance (and their heirs and
representatives) without the prior written consent of such
affected Indemnified Person or other person who is a beneficiary
under the D&O Insurance (and their heirs and
representatives). Each of the Indemnified Persons or other
persons who are beneficiaries under the D&O Insurance (and
their heirs and representatives) are intended to be third party
beneficiaries of this
Section 5.9
, with full rights
of enforcement against the Surviving Corporation and Parent as
if a party thereto. The rights of the Indemnified Persons and
other persons who are beneficiaries under the D&O Insurance
(and their heirs and representatives) under this
Section 5.9
shall be in addition to, and not in
substitution for, any other rights that such persons may have
under the charters, bylaws or other equivalent organizational
documents, any and all indemnification agreements of or entered
into by the Company or any of its Subsidiaries, or applicable
law (whether at law or in equity).
(e) Nothing in this Agreement is intended to, shall be
construed to or shall release, waive or impair any rights to
directors and officers insurance claims under any
policy that is or has been in existence with respect to the
Company or any of its Subsidiaries for any of their respective
directors, officers or other employees, it being understood and
agreed that the indemnification provided for in this
Section 5.9
is not prior to or in substitution for
any such claims under such policies.
Section
5.10
Conveyance
Taxes
.
The Company and Parent shall cooperate
in the preparation, execution and filing of all returns,
questionnaires, applications or other documents regarding any
real property transfer or gains, sales, use, transfer, value
added, stock transfer and stamp taxes, any transfer, recording,
registration and other fees, and any similar taxes which become
payable in connection with the transactions contemplated by this
Agreement that are required or permitted to be filed on or
before the Effective Time.
Section
5.11
Delisting
.
Each
of the parties agrees to cooperate with each other in taking, or
causing to be taken, all actions necessary to delist the Company
Common Stock from Nasdaq and terminate registration under the
Exchange Act, provided that such delisting and termination shall
not be effective until or after the Effective Time.
A-39
Section
5.12
Financing
.
(a) Parent shall use its reasonable best efforts to
(a) negotiate definitive agreements with respect to the
Debt Financing on the terms and conditions contemplated by the
Financing Commitments or, to the extent the Debt Financing
contemplated by the Financing Commitments is not available to
Parent, on other terms not materially less favorable, in the
aggregate, to Parent (as determined in the reasonable judgment
of Parent) and (b) satisfy on a timely basis all conditions
set forth in such Debt Financing Commitments applicable to
Parent and Merger Sub that are within their control. If any
portion of the Debt Financing becomes unavailable on the terms
and conditions contemplated in the Debt Financing Commitments,
Parent shall use its reasonable best efforts to arrange to
obtain alternative financing from alternative sources on terms
not materially less favorable, in the aggregate, to Parent (as
determined in the reasonable judgment of Parent) as promptly as
practicable following the occurrence of such event; provided
that consummating the Debt Financing is not a condition to
closing and Parent shall drawdown each Equity Commitment in full
and without condition in order to close the transactions
contemplated hereby if the Debt Financing is not available.
Parent shall give the Company prompt notice of any material
breach by any party to the Financing Commitments, of which
Parent becomes aware, or any termination of the Debt Financing
Commitment. The Company shall use commercially reasonable
efforts to cooperate, and to cause its Subsidiaries and
Representatives to cooperate, with Parent and Representatives of
Parent in connection with the Financing.
(b) Parent and Merger Sub shall take (or cause to be taken)
all actions, and do (or cause to be done) all things necessary
or advisable to obtain the Equity Financing contemplated by each
Equity Commitment and to fully enforce each Equity Commitment,
including but not limited to (i) maintaining in effect each
Equity Commitment without any amendment, alteration, or waiver,
(ii) satisfying on a timely basis all conditions applicable
to Parent and Merger Sub set forth in each Equity Commitments
and (iii) consummating the Equity Financing contemplated by
each Equity Commitment Letter at or prior to the Closing (and in
any event prior to the Outside Termination Date).
Section
5.13
Employee
Matters
.
(a) After the Effective Time and through the end of the
fiscal year of the Company in which the Effective Time occurs,
the Surviving Corporation shall provide to Company Employees
employee benefits (other than any bonus or incentive plans, and
individual employment agreements) that will, in the aggregate,
be substantially similar to those provided by the Company and
its Subsidiaries to its employees as of the Effective Time.
(b) With respect to the benefit plans in which the
Companys employees participate following the Effective
Time (other than any bonus or incentive plans, and individual
employment agreements), Parent agrees that it shall
(i) recognize all service performed for the Company prior
to the Effective Time for eligibility and vesting purposes,
(ii) waive any pre-existing condition exclusions (other
than pre-existing conditions that, as of the Effective Time,
have not been satisfied under any Company Benefit Plan) and
(iii) provide that any deductible, coinsurance or
out-of-pocket expenses incurred on or before the Effective Time
during the plan year in which the Effective Time occurs under
any applicable Company Benefit Plan providing health benefits
will be taken into account for purposes of satisfying applicable
deductible, coinsurance and maximum out-of-pocket provisions.
(c) Nothing in this
Section 5.13
or any other
provision of this Agreement shall create any third-party
beneficiary right for the benefit of any Person other than the
parties to this Agreement, or any right to employment or
continued employment or to a particular term or condition of
employment with Parent, the Surviving Corporation or any of
their respective Subsidiaries or Affiliates. Nothing in this
Section 5.13
or any other provision of this
Agreement (i) shall be construed to establish, amend, or
modify any benefit or compensation plan, program, agreement or
arrangement, or (ii) shall limit the ability of Parent or
any of its Affiliates (including, following the Closing, the
Surviving Corporation or any of its Subsidiaries) to amend,
modify or terminate any benefit or compensation plan, program,
agreement or arrangement at any time assumed, established,
sponsored or maintained by any of them.
A-40
(d) Between the Effective Date and the Closing Date, the
Company shall use reasonable efforts to cause any employee
involved in product development at the Company or at any of its
Subsidiaries who has not executed an Intellectual Property
assignment and confidentiality agreement to execute such an
agreement in the form reasonably approved by the Parent.
Section
5.14
Release
of Liens
.
Between the Effective Date and the
Closing Date, upon the request of Parent the Company shall use
its reasonable best efforts to obtain the release of any liens
on its tangible or intangible assets.
ARTICLE VI
CONDITIONS
PRECEDENT
Section
6.1
Conditions
to Each Partys Obligation to Effect the
Merger
.
The obligations of the parties to
effect the Merger on the Closing Date are subject to the
satisfaction or waiver on or prior to the Closing Date of the
following conditions:
(a)
Company Common Stockholder
Approval
.
The Company Required Vote shall
have been obtained.
(b)
No Order
.
No
Governmental Entity of competent jurisdiction shall have
(i) enacted a law that is in effect and renders the Merger
illegal in the United States or any State thereof, or
(ii) formally issued an injunction that is in effect and
prohibits the Merger in the United States or any State thereof.
(c)
HSR Act
.
The applicable
waiting periods, together with any extensions thereof, under the
HSR Act shall have expired or been terminated.
Section
6.2
Additional
Conditions to Obligations of Parent and Merger
Sub
.
The obligations of Parent and Merger Sub
to effect the Merger on the Closing Date are also subject to the
satisfaction or waiver on or prior to the Closing Date of the
following conditions:
(a)
Representations and
Warranties
.
(i) Other than the
representations and warranties set forth in
Sections 3.1(a)
,
3.2
,
3.3
and
3.20
, the representations and warranties of the Company
set forth in this Agreement shall be true and correct (without
giving effect to any materiality or Company Material Adverse
Effect qualifications set forth therein) as of the Closing Date
as if made at and as of the Closing Date (except to the extent
that any such representation and warranty expressly speaks as of
an earlier date, in which case such representation and warranty
shall be true and correct as of such earlier date), except for
such failures to be true and correct which, individually or in
the aggregate, have not and would not have a Company Material
Adverse Effect, (ii) the representations and warranties set
forth in
Sections 3.1(a)
,
3.2
,
3.3
and
3.20
shall be true and correct in all material respects
as of the Closing Date as if made at and as of the Closing Date
(except to the extent that any such representation and warranty
expressly speaks as of an earlier date, in which case such
representation and warranty shall be true and correct in all
material respects as of such earlier date); provided that with
respect to the representations and warranties set forth in
Section
3.3(a)
,
(b)
and
(d)
, the aggregate
number of shares of Company Common Stock outstanding or issuable
upon exercise or conversion of any outstanding Company Common
Stock Rights as of the date hereof, taken together, shall not be
understated by more than 50,000 shares of Company Common
Stock (with each Company Common Stock Right being counted as a
fraction of a share of Company Common Stock equal to the result
obtained by
dividing
the excess, if any, of the per share
Merger Consideration over the exercise price of such Company
Common Stock Right
by
the per share Merger Consideration)
plus
an additional number of shares equal to (w) the
amount of any cash reduction in the transaction Bonus Pool
disclosed by the Company on
Section 3.13(a)
of the
Company Disclosure Letter divided by (x) the per share
Merger Consideration;
plus
an additional number of shares
equal to (y) the amount, if any, by which Company Closing
Cash exceeds Minimum Closing Cash
divided by
(z) the
per share Merger Consideration. Parent shall have received a
certificate of an executive officer of the Company on its behalf
to the foregoing effect.
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(b)
Agreements and Covenants
.
The
Company shall have performed or complied in all material
respects with all agreements and covenants required by this
Agreement to be performed or complied with by it on or prior to
the Effective Time. Parent shall have received a certificate of
an executive officer of the Company on its behalf to the
foregoing effect.
(c)
Maintenance of Cash
Position
.
The Company Closing Cash will be in
an amount at least equal to the Minimum Closing Cash.
(d)
FIRPTA
.
Parent shall have
received a certificate from the Company, in the form attached
hereto as
Exhibit D
, to the effect that the Company
is not a U.S. real property holding company.
(e)
No Material Adverse
Effect
.
There shall not have occurred a
Company Material Adverse Effect that is continuing.
(f)
Company Reports
.
The Company
shall have filed all Company Reports required to be filed with
the SEC prior to the Effective Time.
(g)
Lien Releases
.
The Company
shall have delivered to Parent evidence of the release of all
the liens in and to the assets of the Company and its
Subsidiaries that are reasonably requested by Parent and
evidence of termination of all financing statements filed with
respect to such liens.
Section
6.3
Additional
Conditions to Obligation of the Company
.
The
obligation of the Company to effect the Merger on the Closing
Date is also subject to the following conditions:
(a)
Representations and
Warranties
.
The representations and
warranties of Parent and Merger Sub set forth in this Agreement
shall be true and correct in all material respects as of the
date of this Agreement and as of the Closing Date as if made at
and as of the Closing Date (except to the extent that any such
representation and warranty expressly speaks as of an earlier
date, in which case such representation and warranty shall be
true and correct as of such earlier date), except for such
failures to be true and correct which, individually or in the
aggregate, have not and would not prevent, materially delay or
materially impede the performance by Parent or Merger Sub of its
obligations under this Agreement. The Company shall have
received a certificate signed by an executive officer of Parent
on its behalf to the foregoing effect.
(b)
Agreements and
Covenants
.
Parent shall have performed or
complied in all material respects with all agreements and
covenants required by this Agreement to be performed or complied
with by it on or prior to the Effective Time. The Company shall
have received a certificate of an executive officer of Parent to
that effect.
Section
6.4
Frustration
of Closing Conditions
.
None of the Company,
Parent or Merger Sub may rely upon the failure of any condition
set forth in
Sections 6.1
,
6.2
or
6.3
,
as the case may be, to be satisfied if such failure was caused,
or materially contributed to, by such partys breach of any
provision of this Agreement or by such partys failure to
use reasonable best efforts to consummate the transactions
contemplated by this Agreement.
ARTICLE VII
TERMINATION,
AMENDMENT AND WAIVER
Section
7.1
Termination
.
This
Agreement may be terminated and the Merger (and the other
transactions contemplated by the Transaction Documents) may be
abandoned at any time prior to the Effective Time
(notwithstanding if the Company Required Vote has been obtained
or Parent has adopted this Agreement as the sole stockholder of
Merger Sub):
(a) by the mutual written consent of the Company and Parent;
(b) by the Company or Parent, in the event that any
Governmental Entity of competent jurisdiction shall have
(i) enacted a law that is in effect at the time of such
termination and renders the Merger illegal in the United States
or any State thereof at the time of such termination, or
(ii) formally issued a
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permanent, final and non-appealable injunction, ruling, decree
or order that prohibits the Merger in the United States or any
State thereof
;
provided
,
however
, that the
party seeking to terminate this Agreement pursuant to this
clause (b) shall not have initiated such proceeding or
taken any action in support of such proceeding;
(c) by either Parent or the Company, if at the Company
Common Stockholders Meeting (giving effect to any adjournment or
postponement thereof), the Company Required Vote shall not have
been obtained;
provided
,
however
, that the right
to terminate this Agreement under this
Section 7.1(c)
shall not be available to the Company
if the Company has materially breached any of its obligations
under
Section 5.6
;
(d) by the Company in order to enter into an Acquisition
Agreement for a Superior Proposal;
provided
,
however
, that this Agreement may not be so terminated
unless (i) the Company Board of Directors shall have
complied with the procedures set forth in
Sections 5.6
and (ii) contemporaneously the
payment required by
Section 7.2
has been made in
full to Parent;
(e) by Parent if (i) there shall have been a Company
Adverse Recommendation Change, (ii) the Company shall have
materially breached any of its obligations under
Section 5.6
, or (iii) any member of the Company
Board of Directors shall have issued a press release or other
writing broadly disseminated to the public stating that such
member opposes the Merger, or any member of the Company Board of
Directors shall have required the inclusion in the Proxy
Statement or any other filing made by the Company with the SEC a
statement to the effect that such director opposes the Merger;
(f) by either Parent or the Company, if the Merger shall
not have been consummated prior to (i) March
24
, 2010
in the
event the SEC does not review the Proxy Statement or
(ii) May 24
,
2010
in the event the SEC elects to review the Proxy
Statement (the applicable date, the
Outside Termination
Date
);
provided
,
however
, that
(i) the right to terminate this Agreement pursuant to this
Section 7.1(f)
shall not be available at any time
during which any Action is pending between the Company and
Parent (or any of its Affiliates) in connection with this
Agreement or any of the transactions contemplated hereby, and
(ii) the right to terminate this Agreement pursuant to this
Section 7.1(f)
shall not be available to any party
hereto whose actions or omissions have been the cause of, or
resulted in, either (A) the failure to satisfy the
conditions to the obligations of the terminating party to
consummate the Merger set forth in
Article VI
prior
to the Outside Termination Date, or (B) the failure of the
Effective Time to have occurred prior to the Outside Termination
Date;
(g) by Parent, by written notice to the Company, if there
shall have been any breach of any representation or warranty, or
any such representation and warranty shall have become untrue
and incapable of being cured prior to the Effective Time, or any
breach of any covenant or agreement of the Company hereunder,
such that a condition in
Section 6.2(a) or (b)
would
not be satisfied, and such breach or condition is not curable
or, if curable, shall not have been remedied within thirty
(30) days after receipt by the Company of notice in writing
from Parent, specifying the nature of such breach and requesting
that it be remedied or Parent shall not have received reasonable
assurance of a cure of such breach within such thirty
(30) day period; or
(h) by the Company, by written notice to Parent, if there
shall have been any breach of any representation or warranty, or
any such representation and warranty shall have become untrue
and incapable of being cured prior to the Effective Time, or any
breach of any covenant or agreement of Parent or the Merger Sub
hereunder or of any Sponsor under any Guarantee or any Sponsor
under any Commitment Letter, such that a condition in
Section 6.3(a) or (b)
would not be satisfied, and
such breach or condition is not curable or, if curable, shall
not have been remedied in all other instances, within thirty
(30) days after receipt by Parent of notice in writing from
the Company, specifying the nature of such breach and requesting
that it be remedied or the Company shall not have received
reasonable assurance of a cure of such breach within such thirty
(30) day period.
The party desiring to terminate this Agreement pursuant to
subsection
(b)
,
(c)
,
(d)
,
(e)
,
(f)
,
(g)
or
(h)
of this
Section 7.1
shall give written notice of such
termination to the other party in accordance with
Section 8.2
,
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specifying the provision or provisions hereof pursuant to which
such termination is effected. The right of any party hereto to
terminate this Agreement pursuant to this
Section 7.1
shall remain operative and in full force
and effect regardless of any investigation made by or on behalf
of any party hereto, or any of their respective Affiliates or
Representatives, whether prior to or after the execution of this
Agreement.
Section
7.2
Expenses;
Company Termination Fee
.
(a)
Expense Allocation
.
Except as
otherwise specified in this
Section 7.2
or agreed in
writing by the parties, all out-of-pocket costs and expenses
incurred in connection with the Transaction Documents, the
Merger and the other transactions contemplated hereby shall be
paid by the party incurring such cost or expense;
provided
,
however
, that Parent and the Company
shall share equally in the HSR filing fee.
(b)
Company Termination Fee
.
If
this Agreement is terminated (i) by the Company pursuant to
Section 7.1(d)
, (ii) by Parent pursuant to
Sections 7.1(e)(i)
or (iii) by Parent pursuant
to
Sections 7.1(c)
,
7.1(e)(ii)
,
7.1(e)(iii)
,
7.1(f)
(unless the actions or
omissions of Parent or Merger Sub have been the cause of, or
resulted in, either (A) the failure to satisfy the
conditions to the obligations of the Company to consummate the
Merger set forth in
Article VI
prior to the Outside
Termination Date, or (B) the failure of the Effective Time
to have occurred prior to the Outside Termination Date) or
7.1(g)
, the Company shall promptly, and in any event
within five (5) Business Days after the date of such
termination (except as provided in the proviso below), pay
Parent the Company Termination Fee (less the amount of any
Parent Expenses previously paid to Parent) by wire transfer of
immediately available funds;
provided
,
however
,
that in the case of a termination pursuant to clause (iii)
above such payment shall be made only if (A), in the case of
termination pursuant to
Sections 7.1(c)
,
7.1(f)
or
7.1(g)
, prior to such termination an
Acquisition Proposal is made to the Company and (B) the
Company consummates or enters into an Acquisition Agreement for
an Acquisition Proposal with a party other than Parent within
twelve (12) months following such termination, in which
case such payment shall be made promptly, but in no event later
than five (5) Business Days, after the consummation of the
transactions contemplated by such Acquisition Agreement. For the
avoidance of doubt, in no event shall the Company be obligated
to pay, or cause to be paid, the Company Termination Fee on more
than one occasion.
(c)
Expense Reimbursement
.
In the
event this Agreement is terminated pursuant to
Sections 7.1(c)
,
7.1(e)(iii)
or
7.1(g)
under circumstances in which the Company Termination Fee is not
then payable pursuant to
Section 7.2(b)
, then the
Company shall, following receipt of an invoice therefor,
promptly (in any event within two (2) Business Days) pay
all of Parents reasonably documented out-of-pocket fees
and expenses (including reasonable legal fees and expenses)
incurred by Parent and its Affiliates on or prior to the
termination of this Agreement in connection with the
transactions contemplated by this Agreement (including the
Financing) in an amount not to exceed $2,000,000 (the
Parent Expenses
), by wire transfer of same
day funds to one or more accounts designated by Parent;
provided
, that the existence of circumstances which could
require the Company Termination Fee to become subsequently
payable by the Company pursuant to
Section 7.2(b)
shall not relieve the Company of its obligations to pay the
Parent Expenses pursuant to this
Section 7.2(c)
;
provided
,
further
, that the payment by the Company
of Parent Expenses pursuant to this
Section 7.2(c)
shall not relieve the Company of any subsequent obligation to
pay the Company Termination Fee pursuant to
Section 7.2(b)
except to the extent indicated in
Section 7.2(b
); provided, further, that the Company
shall not be obligated to pay any Parent Expenses if as of the
date of termination any condition set forth in
Section 6.3(a) or (b)
would not be satisfied.
(d)
Acknowledgment
.
The parties
acknowledge that (i) the agreements contained in this
Section 7.2
are an integral part of the transactions
contemplated in this Agreement, (ii) the damages resulting
from termination of this Agreement under circumstances where a
Company Termination Fee is payable are uncertain and incapable
of accurate calculation and therefore, the amounts payable
pursuant to
Section 7.2(b)
are not a penalty but
rather constitute liquidated damages in a reasonable amount that
will compensate Parent for the efforts and resources expended
and opportunities foregone while negotiating this Agreement and
in reliance on this Agreement and on the expectation of the
consummation of the transactions contemplated hereby, and
(iii) without the agreements contained in this
Section 7.2
, the parties would not have entered into
this Agreement.
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Section
7.3
Effect
of Termination
.
In the event of termination
of this Agreement by either the Company or Parent as provided in
Section 7.1
, this Agreement shall forthwith become
void and have no effect, without any liability or obligation on
the part of Parent and Merger Sub or the Company, except that
(a) the provisions of
Section 7.1
,
Section 7.2
, this
Section 7.3
and
Article VIII
shall survive such termination and
(b) nothing herein shall relieve any party from liability
for specific performance or damages for any material breach of
this Agreement or for fraud in connection with this Agreement.
Section
7.4
Amendment
.
This
Agreement may be amended by the parties in writing at any time
before or after the Company Required Vote has been obtained and
prior to the filing of the Certificate of Merger with the
Delaware Secretary;
provided
,
however
, that, after
the Company Required Vote shall have been obtained, no such
amendment, modification or supplement shall be made which by Law
requires the further approval of the Company Common Stockholders
without such further approval. This Agreement may not be
amended, changed or supplemented or otherwise modified except by
an instrument in writing signed on behalf of all of the parties.
Section
7.5
Extension;
Waiver
.
At any time prior to the Effective
Time, each of the Company, Parent and Merger Sub may
(a) extend the time for the performance of any of the
obligations or other acts of the other party, (b) waive any
inaccuracies in the representations and warranties of the other
party contained in this Agreement or in any document delivered
pursuant to this Agreement, or (c) subject to the
provisions of
Section 7.4
, waive compliance with any
of the agreements or conditions of the other parties contained
in this Agreement. Any agreement on the part of a party to any
such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party. The
failure of any party to this Agreement to assert any of its
rights under this Agreement or otherwise shall not constitute a
waiver of those rights.
ARTICLE VIII
GENERAL
PROVISIONS
Section
8.1
Nonsurvival
of Representations and Warranties
.
None of
the representations and warranties in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive
the Effective Time. This
Section 8.1
shall not limit
any covenant or agreement of the parties in this Agreement that
by its terms contemplates performance after the Effective Time.
Section
8.2
Notices
.
All
notices, requests, claims, demands and other communications
under this Agreement shall be in writing (and made orally if so
required pursuant to any section of this Agreement) and shall be
deemed given (and duly received) if delivered personally, sent
by overnight courier (providing proof of delivery and
confirmation of receipt by telephonic notice to the applicable
contact person) to the parties or sent by fax (providing proof
of transmission and confirmation of transmission by telephonic
notice to the applicable contact person) at the following
addresses or fax numbers (or at such other address or fax number
for a party as shall be specified by like notice):
if to Parent, to
c/o Thoma
Bravo, LLC
600 Montgomery Street, 32nd Floor
San Francisco, CA 94111
Attn: Orlando Bravo
Seth Boro
Phone: (415) 263-3660
Fax: (415) 392-6480
with a copy to:
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Kirkland & Ellis LLP
300 N. LaSalle Street
Chicago, Illinois 60654
Attn: Gerald T. Nowak, P.C.
Jared
G. Jensen
Phone: (312) 862-2000
Fax: (312) 862-2200
if to the Company, to
AMICAS, Inc.
20 Guest Street, Suite 400
Boston, MA 02135
Facsimile No.:
(617) 779-7879
Attn: President and Chief Executive Officer
and Chief Financial Officer
with a copy to:
Mintz Levin Cohn Ferris Glovsky and Popeo, P.C.
One Financial Center
Boston, MA 02111
Telephone:
(617) 542-6000
Facsimile:
(617) 542-2241
Attention: John R. Pomerance, Esq.
Section
8.3
Interpretation
.
When
a reference is made in this Agreement to an Article or a
Section, such reference shall be to an Article or a Section of
this Agreement unless otherwise indicated. The table of
contents, headings and index of defined terms contained in this
Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.
Whenever the word include, includes or
including is used in this Agreement, it shall be
deemed to be followed by the words without
limitation. The words hereof,
herein and hereby refer to this
Agreement. The Company Disclosure Letter, as well as any
schedules thereto and any exhibits hereto, shall be deemed part
of this Agreement and included in any reference to this
Agreement. The phrases made available to Parent or
furnished to Parent or similar phrases as used in
this Agreement will mean that the subject documents were posted
to the on-line data room at the Uniform Resource Locator (URL)
set forth in Section 8.3 of the Company Disclosure Letter
prior to the date of this Agreement, or were available as
exhibits to any of the Company Reports filed after
December 31, 2007.
Section
8.4
Counterparts
.
This
Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same agreement and shall
become effective when one or more counterparts have been signed
by each of the parties and delivered to the other parties.
Section
8.5
Entire
Agreement; No Third-Party Beneficiaries
.
This
Agreement (including the documents and instruments referred to
herein, including the Confidentiality Agreement)
(a) constitutes the entire agreement, and supersedes all
prior agreements and understandings, both written and oral,
among the parties, or any of them, with respect to the subject
matter of this Agreement and (b) is not intended to and
does not confer upon any Person other than the parties hereto
any rights or remedies hereunder, other than the Indemnified
Persons intended to benefit from the provisions of
Section 5.9
, who shall have the right to enforce
such provisions directly.
Section
8.6
Governing
Law
.
THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE,
WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF.
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Section
8.7
Assignment
.
Neither
this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any of the parties (whether by
operation of law or otherwise) without the prior written consent
of the other parties hereto;
provided
,
however
,
that prior to the Closing, Parent and Merger Sub may assign this
Agreement (in whole but not in part) to Parent or any of its
Affiliates
and/or
to
any parties providing the Financing pursuant to the terms
thereof (including for purposes of creating a security interest
herein or otherwise assign as collateral in respect of such
Financing). No assignment by any Party shall relieve such Party
of any of its obligations hereunder. Subject to the foregoing,
this Agreement will be binding upon, inure to the benefit of and
be enforceable by the Parties and their respective successors
and permitted assigns.
Section
8.8
Enforcement
.
The
parties agree that irreparable damage would occur in the event
that any provision of this Agreement were not performed in
accordance with the terms hereof and that Company, Parent and
Merger Sub shall be entitled to specific performance of the
terms and provisions hereof (including the obligation to
consummate the Merger, subject in each case to the terms and
conditions of this Agreement), including an injunction or
injunctions to prevent breaches of this Agreement by the
Company, Parent or Merger Sub, in addition to any other remedy
at law or equity. The Company, Parent and Merger Sub each hereby
waive (i) any defenses in any action for specific
performance, including the defense that a remedy at law would be
adequate and (ii) any requirement under any Law to post a
bond or other security as a prerequisite to obtaining equitable
relief. If Company, Parent
and/or
Merger Sub brings any Action to enforce specifically the
performance of the terms and provisions hereof by the other
party(ies), the Outside Termination Date shall automatically be
extended by (x) the amount of time during which such Action
is pending, plus twenty (20) Business Days or (y) such
other time period established by the court presiding over such
Action.
Section
8.9
Severability
.
Any
term or provision of this Agreement that is invalid or
unenforceable shall not affect the validity or enforceability of
the remaining terms and provision hereof. If the final judgment
of a court of competent jurisdiction declares that any term or
provision hereof is invalid, illegal or unenforceable, the
parties hereto agree that the court making such determination
shall have the power to limit the term or provision, to delete
specific words or phrases, or to replace any invalid, illegal or
unenforceable term or provision with a term or provision that is
valid, legal and enforceable and that comes closest to
expressing the intention of the invalid, illegal or
unenforceable term or provision, and this Agreement shall be
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, illegal or
unenforceable term or provision with a valid, legal and
enforceable term or provision that will achieve, to the extent
possible, the economic, business and other purposes of such
invalid, illegal or unenforceable term.
Section
8.10
Consent
to Jurisdiction; Venue
.
(a) Each of the parties hereto irrevocably submits to the
exclusive jurisdiction of the Court of Chancery of the State of
Delaware and to the jurisdiction of the United States District
Court for the District of Delaware for the purpose of any action
arising out of or relating to this Agreement and the
Confidentiality Agreement, and each of the parties hereto
irrevocably agrees that all claims in respect to such action may
be heard and determined exclusively in the Court of Chancery of
the State of Delaware or any federal court sitting in the State
of Delaware. Each of the parties hereto agrees that a final
judgment in any action shall be conclusive and may be enforced
in other jurisdictions by suit on the judgment or in any other
manner provided by law.
(b) Each of the parties hereto irrevocably consents to the
service of any summons and complaint and any other process in
any other action relating to the Merger, on behalf of itself or
its property, by the personal delivery of copies of such process
to such party. Nothing in this
Section 8.9
shall
affect the right of any party hereto to serve legal process in
any other manner permitted by Law.
Section
8.11
Waiver
of Trial by Jury
.
EACH PARTY ACKNOWLEDGES AND
AGREES THAT ANY CONTROVERSY THAT MAY ARISE UNDER THIS AGREEMENT
IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION, DIRECTLY OR INDIRECTLY, ARISING OUT
OF OR RELATING TO
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THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT
(A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER, (B) EACH SUCH PARTY UNDERSTANDS AND HAS
CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) EACH SUCH
PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) EACH SUCH
PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG
OTHER THINGS, THE WAIVERS AND CERTIFICATIONS IN THIS
SECTION 8.11.
ARTICLE IX
CERTAIN
DEFINITIONS
Acceptable Confidentiality Agreement
shall
mean an agreement that is either (i) in effect as of the
execution and delivery of this Agreement or (ii) executed,
delivered and effective after the execution, delivery and
effectiveness of this Agreement, in either case containing
provisions no less favorable to the Company than the terms of
the Confidentiality Agreement; provided however that if the
terms of such Acceptable Confidentiality Agreement are less
favorable to the Company than the terms of the Confidentiality
Agreement, then notwithstanding the foregoing, such agreement
will be deemed an Acceptable Confidentiality
Agreement if the Company offers to amend the
Confidentiality Agreement so as to make the Confidentiality
Agreement no more restrictive to the Parent than the
confidentiality agreement signed by such counterparty(ies).
Acquisition Agreement
shall mean any letter
of intent, agreement in principle, merger agreement, stock
purchase agreement, asset purchase agreement, acquisition
agreement, option agreement or similar agreement relating to an
Acquisition Proposal.
Acquisition Proposal
shall mean any inquiry,
proposal or offer relating to (i) the acquisition of
twenty-five (25) percent or more of the Equity Interests in
the Company (by vote or by value) by any Person, (ii) any
merger, consolidation, business combination, reorganization,
share exchange, sale of assets, recapitalization, equity
investment, joint venture, liquidation, dissolution or other
transaction which would result in any Person acquiring assets
(including capital stock of or interest in any Subsidiary or
Affiliate of the Company) representing, directly or indirectly,
twenty-five (25) percent or more of the consolidated net
revenues, consolidated net income or consolidated assets of the
Company and its Subsidiaries, taken as a whole, (iii) the
acquisition (whether by merger, consolidation, equity
investment, share exchange, joint venture or otherwise) by any
Person, directly or indirectly, of any Equity Interest in any
entity that holds assets representing, directly or indirectly,
twenty-five (25) percent or more of the net revenues, net
income or assets of the Company and its Subsidiaries, taken as a
whole, (iv) any tender offer or exchange offer, as such
terms are defined under the Exchange Act, that, if consummated,
would result in any Person beneficially owning twenty-five
(25) percent or more of the outstanding shares of Company
Common Stock and any other voting securities of the Company, or
(v) any combination of the foregoing. For the purposes of
Section 7.2(b)
of this Agreement, the number
51 shall be substituted for 25 in this
definition.
ADA
shall mean the Americans with
Disabilities Act.
ADEA
shall mean the Age Discrimination
in Employment Act.
Affiliate
of any Person shall mean another
Person that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common
control with, such first Person.
Antitakeover Laws
shall mean any
moratorium, control share, fair
price, affiliate transaction, business
combination or other antitakeover laws and regulations of
any state or other jurisdiction, including the provisions of any
statute or regulation under the DGCL.
Antitrust Laws
shall mean any other
antitrust, unfair competition, merger or acquisition
notification, or merger or acquisition control Laws under any
applicable jurisdictions, whether federal, state or local.
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Associate
of any Person shall have the
meaning assigned thereto by
Rule 12b-2
under the Exchange Act.
Business Day
shall mean any day other than a
Saturday, Sunday or a day on which banking institutions in
San Francisco, California are authorized or obligated by
Law or executive order to be closed.
Certificate
shall mean each certificate
representing one or more shares of Company Common Stock or, in
the case of uncertificated shares of Company Common Stock, each
entry in the books of the Company representing uncertificated
shares of Company Common Stock.
Certificate of Merger
shall mean the
Certificate of merger with respect to the Merger, containing the
provisions required by, and executed in accordance with, the
DGCL.
Closing
shall mean the closing of the Merger,
as contemplated by
Section 1.2.
Code
shall mean the Internal Revenue Code of
1986, as amended.
Company Benefit Plan
shall mean each
employee benefit plan, as defined in
Section 3(3) of ERISA, and each other benefit or
compensation plan, policy, program, arrangement or agreement
sponsored, maintained or contributed or required to be
contributed to by the Company or any of its Subsidiaries or with
respect to which the Company or any of its Subsidiaries has any
Liability.
Company Bylaws
shall mean the Bylaws of the
Company, as in effect as of the date hereof, including any
amendments.
Company Certificate of Incorporation
shall
mean the Companys Certificate of Incorporation as in
effect as of the date hereof.
Company Closing Cash
shall mean, as of the
Closing Date, cash, cash equivalents and marketable securities
of the Company and its Subsidiaries (as such amounts are
calculated and reflected in the balance sheet line items
Cash and Cash Equivalents and Marketable
Securities presented in the Companys consolidated
audited financial statements included in the Company SEC
Reports).
Company Common Stock-Based Award
shall mean
each right of any kind to receive shares of Company Common Stock
or benefits measured by the value of a number of shares of
Company Common Stock, and each award of any kind consisting of
shares of Company Common Stock, granted under Company Common
Stock Plans (including stock appreciation rights, restricted
stock, restricted stock units, deferred stock units and dividend
equivalents), other than Company Common Stock Options.
Company Common Stock Option
shall mean each
outstanding option to purchase shares of Company Common Stock
under the Company Option Plans.
Company Common Stock Plans
shall mean all
employee and director stock plans of the Company and all
individual consultant, employee, director or other Contracts
that provide for any Company Common Stock-Based Award, in each
case set forth on Section 3.3(b) of the Company Disclosure
Letter.
Company Common Stock Rights
shall mean any
options, warrants, convertible securities, subscriptions, stock
appreciation rights, voting interest, phantom stock plans or
stock equivalents or other rights, agreements, arrangements or
commitments (contingent or otherwise) obligating the Company to
issue or sell any shares of capital stock of, or options,
warrants, convertible securities, subscriptions or other equity
interests in, the Company or which would otherwise alter the
capitalization of the Company.
Company Disclosure Letter
shall mean the
Company Disclosure Schedule dated the date hereof and delivered
by the Company to Parent prior to the execution of this
Agreement.
Company Employees
shall mean employees of the
Company who remain with the Surviving Corporation.
Company Financial Advisor
shall mean Raymond
James & Associates.
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Company Financial Statements
shall mean all
of the financial statements of the Company and its Subsidiaries
included in the Company Reports.
Company Intellectual Property
shall mean
Intellectual Property that is used in, or forms part of, the
business of the Company or any of its Subsidiaries as currently
conducted by the Company or any of its Subsidiaries in each case
as to which the Company or any of its Subsidiaries claims rights
by virtue of ownership of title to such Intellectual Property,
provided that the confidential and proprietary information
described in item (vi) in the definition of Intellectual
Property shall only be considered Company Intellectual Property
to the extent deemed material by the Company.
Company Knowledge Person
shall mean the
Persons set forth on
Schedule 9.1
to the Company
Disclosure Letter.
Company Material Adverse Effect
shall mean,
with respect to the Company, any effect, change, event,
occurrence, circumstance or development that is or would
reasonably be expected to become materially adverse to the
business, financial condition or results of operations of the
Company and its Subsidiaries, taken as a whole; provided,
however, that in no event shall any of the following, alone or
in combination, or any effect, change, event, occurrence,
circumstance or development to the extent any of the foregoing
directly or indirectly results from, arises out of, is
attributable to, or related to any of the following, be deemed
to constitute, or be taken into account in determining or
whether there has been or will be, a Company Material Adverse
Effect: (1) changes in the Companys stock price or
trading volume, in and of itself; (2) any failure by the
Company to meet published revenue or earnings projections, in
and of itself (provided, however, that the exception in this
clause and in clause (1) above shall not in any way prevent
or otherwise affect a determination that any change, event,
circumstance, development or effect underlying such changes has
resulted in, or contributed to, a Material Adverse Effect);
(3) changes in general economic conditions in the United
States or any other country or region in the world, or changes
in conditions in the global economy generally (to the extent
such changes in each case do not disproportionately affect the
Company relative to other companies in its industry);
(4) changes in conditions in the financial markets, credit
markets or capital markets in the United States or any other
country or region in the world, including (A) changes in
interest rates in the United States or any other country and
changes in exchange rates for the currencies of any countries
and (B) any suspension of trading in securities (whether
equity, debt, derivative or hybrid securities) generally on any
securities exchange or over-the-counter market operating in the
United States or any other country or region in the world;
(5) changes in conditions in the industries in which the
Company and its Subsidiaries conduct business, including changes
in conditions in the software industry generally or the
information security industry generally (to the extent such
changes in each case do not disproportionately affect the
Company relative to other companies in its industry);
(6) changes in political conditions in the United States or
any other country or region in the world; (7) acts of war,
sabotage or terrorism (including any escalation or general
worsening of any such acts of war, sabotage or terrorism) in the
United States or any other country or region in the world;
(8) earthquakes, hurricanes, tsunamis, tornadoes, floods,
mudslides, wild fires or other natural disasters or weather
conditions in the United States or any other country or region
in the world; (9) the announcement of this Agreement or the
pendency or consummation of the transactions contemplated
hereby; (10) compliance with the terms of, or the taking of
any action required or contemplated by, this Agreement, or the
failure to take any action prohibited by this Agreement;
(11) any actions taken, or failure to take action, in each
case, to which Parent has in writing expressly approved,
consented to or requested; (12) changes in law, regulation
or other legal or regulatory conditions (or the interpretation
thereof) (to the extent such changes do not disproportionately
affect the Company relative to other companies in its industry);
(13) changes in GAAP or other accounting standards (or the
interpretation thereof); (14) any legal proceedings made or
brought by any of the current or former stockholders of the
Company (on their own behalf or on behalf of the Company)
against the Company arising out of the Merger or in connection
with any other transactions contemplated by this Agreement; and
(15) any matters expressly set forth in the Company
Disclosure Letter;
provided
,
however
, that for
purposes of this clause (15) the mere inclusion of a list
of items such as contracts, option grants, customers, suppliers
or intellectual property shall not be deemed to be disclosure of
any issues under or liabilities with respect to the items on
such list.
A-50
Company Option Plans
shall mean the
Companys 1996 Stock Option Plan, 2000 Broad-Based Stock
Plan, Length-of-Service Nonqualified Stock Option Plan, 2006
Stock Incentive Plan, and Amended and Restated Directors Stock
Option Plan.
Company Permits
shall mean all
authorizations, licenses, permits, certificates, approvals and
orders of all Governmental Entities necessary for the lawful
conduct of the businesses of the Company and its Subsidiaries.
Company Reports
shall mean all forms,
reports, statements, information and other documents (as
supplemented and amended since the time of filing) filed or
required to be filed by the Company with the SEC since
December 31, 2005.
Company Required Vote
shall mean the
affirmative vote of the holders of a majority of the outstanding
shares of Company Common Stock entitled to vote on the approval
of this Agreement.
Company Restricted Stock
shall mean shares of
Company Common Stock issued pursuant to any Company Common Stock
Plan that are subject to specified vesting criteria.
Company Termination Fee
shall mean
(i) an amount in cash equal to $4,300,000 if the Company
Termination Fee becomes payable either in connection with an
Acquisition Agreement entered into with a Person prior to the
No-Shop Period Start Date (or deemed to have been entered into
prior to the No-Shop Period Start Date pursuant to
clause (C) of
Section 5.6(e)
) or in connection
with a Company Adverse Recommendation Change occuring prior to
the No-Shop Period Start Date (provided that the Company and the
Company Board of Directors shall have complied with their
respective obligations under
Section 5.6
in all
material respects) or (ii) an amount in cash equal to
$8,600,000 in all other circumstances.
Company
10-K
shall mean the Companys Annual Report on
Form 10-K
for the fiscal year ended December 31, 2008.
Confidentiality Agreement
shall mean the
Confidentiality Agreement between Thoma Bravo, LLC, acting on
behalf of itself and a private equity fund managed by it, and
the Company, dated September 1, 2009.
Delaware Secretary
shall mean the Secretary
of State of the State of Delaware.
Dissenter Shares
shall mean shares of Company
Common Stock issued and outstanding immediately prior to the
Effective Time that are held by Dissenting Stockholders.
Dissenting Stockholder
means any holder of
shares of Company Common Stock who has not voted such shares in
favor of the Merger and who is entitled to assert and properly
asserts appraisal rights with respect to such shares pursuant
to, and who complies in all respects with, the provisions of
Section 262 of the DGCL, and who has not effectively
withdrawn or lost the right to assert appraisal rights under the
provisions of Section 262 of the DGCL.
Effective Time
shall mean the effective time
of the Merger, which shall be the time the Certificate of Merger
is duly filed with the Delaware Secretary, or at such later time
as the parties hereto agree shall be specified in such
Certificate of Merger.
Employment Agreements
shall mean any
contracts, termination or severance agreements, change of
control agreements or any other agreements respecting the terms
and conditions of employment of any officer, employee or former
employee.
Encumbrance
shall mean any lien, mortgage,
pledge, deed of trust, security interest, charge, encumbrance or
other adverse claim or interest.
Environmental Claims
shall mean any and all
Actions, Orders, demands, directives, Encumbrances, proceedings
or notices of violation by any Governmental Entity or other
Person alleging potential responsibility or liability arising
out of, based on or related to (1) the presence, release or
threatened release of, any Hazardous Materials or
(2) circumstances forming the basis of any violation or
alleged violation of any Environmental Law.
A-51
Environmental Laws
shall mean all Laws
relating to pollution or protection of the environment or human
health.
Environmental Permits
shall mean all Permits
required to be obtained by the Company in connection with its
business under applicable Environmental Laws.
Equity Interest
shall mean any share, capital
stock, partnership, member or similar interest in any entity and
any option, warrant, right or security convertible, exchangeable
or exercisable therefor or other instrument or right the value
of which is based on any of the foregoing.
ERISA
shall mean the Employee Retirement
Income Security Act of 1974, as amended.
Exchange Act
shall mean the Securities
Exchange Act of 1934, as amended.
FLSA
shall mean the Fair Labor Standards Act.
FMLA
shall mean the Family and Medical Leave
Act.
GAAP
shall mean United States generally
accepted accounting principles.
Governmental Entity
shall mean any United
States federal, state or local government or any court of
competent jurisdiction, administrative or regulatory agency or
commission or other domestic governmental authority or agency.
Hazardous Materials
shall mean all hazardous,
toxic, explosive or radioactive substances, wastes or materials,
including petroleum or petroleum distillates, asbestos,
polychlorinated biphenyls and radon gas regulated pursuant to
any Environmental Law.
HIPAA
means the Health Insurance Portability
and Accountability Act of 1996, as the same may be amended,
modified or supplemented from time to time, any successor
statute thereto, any and all rules or regulations promulgated
from time to time thereunder, and any comparable state laws.
HIPAA Compliant
means that to the extent
applicable, the Company or any Subsidiary (A) is in
material compliance with any and all of the applicable
requirements of HIPAA and (B) is not subject to, and could
not reasonably be expected to become subject to, any civil or
criminal penalty or any investigation, claim or process that
could reasonably be expected to cause a Material Adverse Effect
in connection with any violation by the Company and its
Subsidiaries of the then effective requirements of HIPAA.
HSR Act
shall mean the
Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, and the rules
and regulations thereunder.
Indebtedness
means, with respect to any
Person, (a) any Liability of that Person (including any
principal, premium, accrued and unpaid interest, related
expenses, prepayment penalties, commitment and other fees,
reimbursements and all other amounts payable in connection
therewith): (i) for borrowed money, (ii) evidenced by
a note, debenture or similar instrument (including a purchase
money obligation) given in connection with the acquisition of
any property or assets, including securities, (iii) for the
deferred purchase price of property or services, except trade
accounts payable arising in the ordinary course of business,
(iv) under any lease or similar arrangement that would be
required to be accounted for by the lessee as a capital lease in
accordance with GAAP, (v) arising from cash/book
overdrafts, (vi) under conditional sale or other title
retention agreements, (vii) arising out of interest rate
and currency swap arrangements and any other arrangements
designed to provide protection against fluctuations in interest
or currency rates, (b) any guarantee by that Person of any
indebtedness of others described in the preceding clause (a);
(c) the maximum Liabilities of such person under any
Off Balance Sheet Arrangement (as defined in
Item 303(a)(4)(ii) of
Regulation S-K
promulgated under the Securities Act); and (d) all
Liabilities to reimburse any bank or other Person for amounts
paid under a letter of credit, surety bond, or bankers
acceptance.
Intellectual Property
shall mean all of the
following in any jurisdiction throughout the world: (i) all
trademarks, trademark registrations, trademark rights and
renewals thereof, trade names, trade name rights, trade dress,
corporate names, logos, slogans, all service marks, service mark
registrations and renewals thereof, service mark rights, and all
applications to register any of the foregoing, together with the
goodwill associated
A-52
with each of the foregoing; (ii) all issued patents, patent
rights, and patent applications; (iii) all registered and
unregistered copyrights, copyright registrations, renewals
thereof, and applications to register the same; (iv) all
Internet domain names; (vi) all confidential and
proprietary information including Trade Secrets; and
(vii) all other intellectual property recognized in the
jurisdictions where the Company or any of its Subsidiaries do
business.
IRS
shall mean the Internal Revenue Service.
Knowledge,
or any similar expression used
with respect to the Company, shall mean the actual knowledge of
any Company Knowledge Person.
Labor Laws
shall mean ERISA, the Immigration
Reform and Control Act of 1986, the National Labor Relations
Act, the Civil Rights Acts of 1866 and 1964, the Equal Pay Act,
ADEA, ADA, FMLA, WARN, the Occupational Safety and Health Act,
the Davis-Bacon Act, the Walsh-Healy Act, the Service Contract
Act, Executive Order 11246, FLSA and the Rehabilitation Act of
1973, and all regulations under such acts.
Law
shall mean any federal, state or local
statute, law, regulation, requirement, interpretation, rule,
ordinance, code, policy or rule of common law of any
Governmental Entity, including any judicial or administrative
interpretation thereof.
Leased Real Property Subleases
means all
subleases, licenses or other agreements pursuant to which the
Company or any of its Subsidiaries conveys or grants to any
Person a subleasehold estate in, or the right to use or occupy,
any Leased Property or portion thereof, including the right to
all security deposits and other amounts and instruments
deposited with or on behalf of the Company or any Subsidiary
thereunder.
Leasehold Improvements
means all buildings,
structures, improvements and fixtures located on any Leased Real
Property which are owned by Company or any of its Subsidiaries,
regardless of whether title to such buildings, structures,
improvements or fixtures are subject to reversion to the
landlord or other third party upon the expiration or termination
of the Lease for such Leased Real Property.
Liabilities
shall mean any and all debts,
liabilities and obligations of any nature whatsoever, whether
accrued or fixed, absolute or contingent, matured or unmatured
or determined or determinable, including those arising under any
Law, those arising under any contract, agreement, commitment,
instrument, permit, license, franchise or undertaking and those
arising as a result of any act or omission.
Minimum Closing Cash
shall mean $42,000,000
minus
all costs and expenses of every kind and nature
incurred or arising in connection with this transaction,
and
without duplication of the foregoing, minus
(A) (i) all
fees and expenses paid or payable to Raymond James &
Associates for its services rendered to the Company pursuant to
the engagement letter between such parties, (ii) all fees
and expenses paid or payable to the Companys outside
counsel, accountants and other third parties in connection with
the transactions contemplated by this Agreement, (iii) all
amounts paid or payable to Company employees in respect of stock
options in connection with the transactions contemplated hereby,
and all amounts paid or payable to Company employees in respect
of any and all change in control bonus, severance or other
similar obligations arising under Contracts between the Company
and any such employees set forth in the Company Disclosure
Letter, (iv) all amounts paid or payable by the Company in
respect of any D&O Insurance that the Company is permitted
to purchase pursuant to
Section 5.9(c)
,
(v) amounts payable to financial printers in connection
with the preparation, printing and mailing of the Proxy
Statement and holding the Company Stockholders Meeting,
(vi) all fees and expenses paid or payable by the Company
in respect of any and all regulatory filings and in connection
with the release of any and all liens in connection with this
Agreement and the consummation of the transactions contemplated
hereby, (vii) all costs and expenses of seeking to obtain
lien releases pursuant to Section 5.14, and
(viii) termination and severance amounts paid to employees
terminated in the discretion of the Chief Executive Officer as
disclosed to Parent
plus
(B) (i) the net cash
proceeds to the Company from the exercise of any Company Common
Stock Option occurring between the date hereof and the Closing
Date and (ii) the cash contributed by participants pursuant
to the ESPP (net of any portion of such amounts refunded to such
participants).
Nasdaq
shall mean The Nasdaq Capital Market,
f.k.a. the Nasdaq SmallCap Market.
A-53
NLRB
shall mean the United States National
Labor Relations Board.
Open Source Software
shall mean any Software
that is subject to any open source license including the GNU
General Public License (GPL), the Lesser GNU Public License
(LGPL), any copyleft license or any other license
that requires as a condition of use, modification or
distribution of such Software that such Software or other
Software combined or distributed with it be (i) disclosed
or distributed in source code form; (ii) licensed for the
purpose of making derivative works; (iii) redistributable
at no charge; or (iv) licensed subject to a patent
non-assert or royalty-free patent license.
Order
shall mean any writ, judgment,
injunction, consent, order, decree, stipulation, award or
executive order of or by any Governmental Entity.
Owned Real Property
means all land, together
with all buildings, structures, improvements and fixtures
located thereon, including, without limitation, all electrical,
mechanical, plumbing and other building systems; fire
protection, security and surveillance systems;
telecommunications, computer, wiring and cable installations;
utility installations; water distribution systems; and
landscaping and all easements and other rights and interests
appurtenant thereto, including, without limitation, air, oil,
gas, mineral and water rights currently owned by the Company or
any of its Subsidiaries, or owned by the Company or any of its
Subsidiaries at any time in the previous 10 years.
Parent Bylaws
shall mean Parents Bylaws
as in effect as of the date hereof.
Parent Group
shall mean, collectively,
Parent, the Sponsors or any of their respective former, current
or future directors, officers, employees, agents, general or
limited partners, managers, members, stockholders, Affiliates or
assignees or any former, current or future director, officer,
employee, agent, general or limited partner, manager, member,
stockholder, Affiliate or assignee of any of the foregoing.
Parent Material Adverse Effect
shall mean,
with respect to Parent, any Effect that, individually or taken
together with all other Effects that have occurred prior to the
date of determination of the occurrence of the Parent Material
Adverse Effect, is or would be reasonably likely to prevent or
materially delay the performance by Parent of any of its
obligations under this Agreement or the consummation of the
Merger or the other transactions contemplated by the Transaction
Documents.
Paying Agent
shall mean shall mean the
Companys transfer agent or any other paying agent mutually
acceptable to Parent and the Company.
Permitted Encumbrances
shall mean,
(i) any statutory liens for current Taxes not yet due and
payable, being contested in good faith by appropriate
proceedings and for which adequate accruals or reserves have
been established in accordance with GAAP, (ii) with respect
to any Real Property, such defects, imperfections or
irregularities in title, claims, liens, charges, security
interests, easements, covenants, restrictions and rights of way
(unrecorded and of record) and other similar matters or record
affecting title, if any, that do not and would not reasonably be
expected to, individually or in the aggregate, materially impair
the use or occupancy of such Real Property in the operation of
the business as presently conducted or contemplated to be
conducted thereon, (iii) liens imposed or promulgated by
Laws with respect to real property and improvements, including
zoning regulations and building or other similar codes or
restrictions which are imposed by a Governmental Authority
having jurisdiction over such Real Property and are not violated
by the current use or occupancy of such Real Property or the
operation of the business conducted thereon and which do not
adversely effect in any material respect the current use of the
applicable property owned, leased, used or held for use by the
Company or any of its subsidiaries or otherwise materially
impair the Companys or any of its subsidiaries
operation of their business, (iv) liens arising under
workers compensation, unemployment insurance, social
security, retirement and similar legislation, (v) purchase
money liens and statutory liens against the Companys
personal property securing rental payments under leases,
subleases and licenses, (iv) mechanics,
carriers, workmens, repairmens,
warehousemans, materialmens and similar statutory
Liens, incurred in the ordinary course of business for amounts
which are not due and payable, and (v) other liens which
are immaterial to the operation of the business and the value of
the Company and its Subsidiaries.
A-54
Person
shall mean any individual,
corporation, partnership (general or limited), limited liability
company, limited liability partnership, trust, joint venture,
joint-stock company, syndicate, association, entity,
unincorporated organization or government, or any political
subdivision, agency or instrumentality thereof.
Proxy Statement
shall mean a definitive proxy
statement, including the related preliminary proxy statement and
any amendment or supplement thereto, relating to the Merger and
this Agreement to be mailed to the Company Common Stockholders
in connection with the Company Common Stockholders Meeting.
Release
shall mean any spilling, leaking,
pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, dumping or disposing into the environment.
Representatives
shall mean officers,
directors, employees, auditors, attorneys and financial advisors
(including the Company Financial Advisor).
SEC
shall mean the Securities and Exchange
Commission.
Securities Act
shall mean the Securities Act
of 1933, as amended.
Software
shall mean: (A) any and all
computer programs, including any and all software
implementations of algorithms, models and methodologies, whether
in source code or object code; and (B) any databases and
compilations to the extent integrated into, or implemented with,
such computer programs.
Sponsors
means Thoma Bravo Fund IX,
L.P., a Delaware limited partnership, HarbourVest 2007 Direct
Associates L.P., a Delaware limited partnership, HarbourVest
Partners VIII-Buyout Fund L.P., a Delaware limited
partnership, Mesirow Financial Capital Partners IX, L.P., a
Delaware limited partnership, and Mesirow Financial Capital
Partners X, L.P., a Delaware limited partnership.
Subsidiary
of any Person shall mean any
corporation, partnership, limited liability company, joint
venture or other legal entity of which such Person (either
directly or through or together with another Subsidiary of such
Person) owns more than 50% of the voting stock or value of such
corporation, partnership, limited liability company, joint
venture or other legal entity.
Subsidiary Stock Rights
shall mean any
options, warrants, convertible securities, subscriptions, stock
appreciation rights, phantom stock plans or stock equivalents or
other rights, agreements, arrangements or commitments
(contingent or otherwise) of any character issued or authorized
by the Company or any Subsidiary of the Company relating to the
issued or unissued capital stock of the Subsidiaries of the
Company or obligating the Company or any of its Subsidiaries to
issue or sell any shares of capital stock of, or options,
warrants, convertible securities, subscriptions or other equity
interests in, any Subsidiary of the Company.
Superior Proposal
shall mean a written
Acquisition Proposal (with all of the percentages included in
the definition of Acquisition Proposal increased to 50%) and not
solicited in material violation of
Section 5.6
which
the Company Board of Directors determines in good faith, after
consultation with independent financial advisor and outside
legal counsel, (a) is for a price per share higher than the
Merger Consideration provided in this Agreement and
(b) would result in a transaction more favorable to the
stockholders of the Company after taking into account all
relevant factors including the form of the consideration,
capital commitments (if any), timing of the proposed
transaction, and risks of non-consummation.
Surviving Corporation
shall mean the
corporation surviving the Merger.
Tax
(and, with correlative meaning,
Taxes
) shall mean any federal, state, local
or foreign income, gross receipts, property, sales, use,
license, excise, franchise, employment, payroll, premium,
withholding, alternative or added minimum, ad valorem, transfer
or excise tax, or any other tax of any kind whatsoever, together
with any interest or penalty or addition thereto, whether
disputed or not, imposed by any Governmental Entity.
Tax Return
shall mean any return, report or
similar statement required to be filed with respect to any Tax
(including any attached schedules), including any information
return, claim for refund, amended return or declaration of
estimated Tax.
A-55
Third Party
shall mean any Person or group
(as defined in Section 13(d)(3) of the Exchange Act) other
than Company, Parent, Merger Sub or any Affiliates thereof.
Trade Secret
shall mean information which
gives the possessor of it a competitive advantage, which
advantage derives from the fact that such information is kept
confidential. through the use of reasonable security precautions.
Transaction Documents
shall mean this
Agreement, the Voting Agreements and all other agreements,
instruments and documents to be executed by Parent, Merger Sub
and the Company in connection with the transactions contemplated
by such agreements.
User Documentation
shall mean explanatory and
informational materials concerning the Company products, in
printed or electronic format, which the Company or any
Subsidiary has released for distribution to end users with such
Company products, which may include manuals, descriptions, user
and/or
installation instructions, diagrams, printouts, listings,
flow-charts and training materials, contained on visual media
such as paper or photographic film, or on other physical storage
media in machine readable form.
WARN
shall mean the United States Worker
Adjustment and Retraining Notification Act.
Index of
Terms Defined Elsewhere
|
|
|
Defined Term
|
|
Location
|
|
Action
|
|
Section 3.7 (a)
|
Agreement
|
|
Preamble
|
Alternative Financing Commitments
|
|
Section 4.5
|
Assessments
|
|
Section 3.6 (e)
|
Bankruptcy and Equity Exception
|
|
Section 3.2
|
Certificates
|
|
Section 2.2
|
Certifications
|
|
Section 3.8 (b)
|
Closing Date
|
|
Section 1.2
|
Company
|
|
Preamble
|
Company Adverse Recommendation Change
|
|
Section 5.6 (d)(i)
|
Company Board of Directors
|
|
Recitals
|
Company Common Stock
|
|
Recitals
|
Company Common Stockholders
|
|
Recitals
|
Company Material Contract
|
|
Section 3.15 (a)
|
Company Real Property
|
|
Section 3.11 (d)
|
Company Recommendation
|
|
Section 3.5 (a)
|
Company Stockholders Meeting
|
|
Section 5.5
|
Debt Financing
|
|
Section 4.5
|
Debt Financing Commitment
|
|
Section 4.5
|
DGCL
|
|
Recitals
|
Equity Financing
|
|
Section 4.5
|
Equity Financing Commitment
|
|
Section 4.5
|
ESPP
|
|
1.7 (d)
|
Exchange Fund
|
|
Section 2.1
|
Export Approvals
|
|
Section 3.6 (c)
|
FCPA
|
|
Section 3.6 (b)
|
FDA
|
|
Section 3.6 (c)
|
Final Offering Period
|
|
1.7 (d)
|
A-56
|
|
|
Defined Term
|
|
Location
|
|
Financing
|
|
Section 4.5
|
Indemnified Persons
|
|
Section 5.9
|
Information Systems
|
|
Section 3.16 (k)
|
Landlord Leases
|
|
Section 3.11 (e)
|
Leases
|
|
Section 3.11 (d)
|
Leased Property
|
|
Section 3.11 (d)
|
Guarantees
|
|
Section 4.6
|
Merger
|
|
Recitals
|
Merger Consideration
|
|
Section 1.4 (a)
|
Merger Sub
|
|
Preamble
|
No-Shop Period Start Date
|
|
Section 5.6 (a)
|
Notice Period
|
|
Section 5.6 (e)(iii)
|
Outside Termination Date
|
|
Section 7.1 (f)
|
Parent
|
|
Preamble
|
Parent Expenses
|
|
Section 7.2 (c)
|
Paying Agent
|
|
Section 2.1
|
Record Date
|
|
Section 5.5 (b)
|
Right
|
|
Recitals
|
Rights Plan
|
|
Recitals
|
SEC Clearance Date
|
|
Section 5.4 (b)
|
Voting Agreements
|
|
Recitals
|
*****
A-57
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be signed by their respective officers thereunto
duly authorized, all as of the date first written above.
PROJECT ALTA HOLDING CORP.
Name: Orlando Bravo
PROJECT ALTA MERGER CORP.
Name: Orlando Bravo
AMICAS, INC.
Name: Craig Newfield
Signature Page to Agreement and Plan of Merger
A-58
Annex B
FINANCIAL
ADVISOR OPINION
December 24, 2009
Board of Directors
AMICAS, Inc.
20 Guest Street, Suite 400
Boston, Massachussets 02135
Members of the Board:
You have requested our opinion as to the fairness, from a
financial point of view, to the Shareholders (as
hereinafter defined) of the outstanding common stock, par value
$0.001 per share (the Common Stock), of AMICAS, Inc.
(AMICAS or the Company) of the
consideration to be received by the Shareholders in connection
with the proposed merger (the Merger) of the Company
with Project Alta Merger Corp. (Merger Sub), a
subsidiary of Project Alta Holdings Corp. (Parent),
under the terms of an Agreement and Plan of Merger by and among
Parent, Merger Sub, and the Company dated December 24, 2009
(the Agreement). For the purposes of this letter and
our related analyses, the term Shareholders means all holders of
the outstanding shares of Common Stock excluding Parent and its
affiliates. Under and subject to the terms of the Agreement, the
consideration to be received by the Shareholders in exchange for
each outstanding share of Common Stock is $5.35 in cash.
In connection with our review of the proposed Merger and the
preparation of our opinion, we have, among other things:
1. reviewed the financial terms and conditions as stated in
the Agreement dated December 24, 2009;
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2.
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reviewed the Companys annual report filed on
Form 10-K
for the fiscal year ended December 31, 2008;
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3.
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reviewed the Companys quarterly reports filed on
Form 10-Q
for the quarters ended September 31, 2009, June 30,
2009, and March 31, 2009;
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4. reviewed certain other publicly available information on
the Company;
5. reviewed other Company financial and operating
information provided by the Company;
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6.
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discussed the Companys operations, historical financial
results, future prospects and performance, and certain other
information related to the aforementioned with the
Companys management team;
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7.
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reviewed the historical stock price and trading activity for the
shares of the Companys common stock;
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8.
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compared financial and stock market information for the Company
with similar information for certain other companies with
publicly-traded equity securities;
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9.
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reviewed the financial terms and conditions of certain recent
business combinations involving companies in businesses, or with
business segments, we deemed to be similar in certain respects
to those of the Company;
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10.
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reviewed certain historical information related to premiums paid
in acquisitions of publicly traded companies within a similar
size range;
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11.
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performed a discounted cash flow analysis based on management
projections for the five-year period ending December 31,
2014; and
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B-1
Board of Directors
AMICAS, Inc.
December 24, 2009
Page 2
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12.
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considered such other quantitative and qualitative factors that
we deemed to be relevant to our evaluation.
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With your consent, we have assumed and relied upon the accuracy
and completeness of all information supplied or otherwise made
available to us by AMICAS, or any other party, and we have
undertaken no duty or responsibility to verify independently any
of such information. We have not made or obtained an independent
appraisal for any of the assets or liabilities (contingent or
otherwise) of the Company. With respect to projections and
estimates provided to or otherwise reviewed by or discussed with
us, including management guidance, we have assumed, with your
consent, that such projections and estimates have been
reasonably prepared in good faith on bases reflecting the best
currently available estimates and judgments of management. We
express no view as to any such projections or estimates or the
bases and assumptions on which they were prepared. We have
relied upon each party to advise us promptly if any information
previously provided became inaccurate or was required to be
updated during the period of our review. We have not evaluated
or received any evaluations of the solvency or fair value of the
Company, Parent, or Merger Sub under any laws relating to
bankruptcy, insolvency, or similar matters. We have assumed that
the final form of the Agreement will be substantially similar to
the draft we have reviewed, and that the Merger will be
consummated in accordance with the terms of the Agreement
without waiver of any conditions thereof.
In arriving at this opinion, we did not attribute any particular
weight to any analysis or factor considered by us, but rather
made qualitative judgments as to the significance and relevance
of each analysis and factor. Accordingly, we believe that our
analyses must be considered as a whole and that selecting
portions of such analyses, without considering all analyses,
would create an incomplete view of the process underlying this
opinion.
We express no opinion as to the underlying business decision to
effect the Merger, the structure or tax consequences of the
Merger, or the availability or advisability of any alternatives
to the Merger. Our opinion is limited to the fairness, from a
financial point of view, of the consideration to be received by
the Shareholders. We express no opinion with respect to any
other reasons, legal, business, or otherwise, that may support
the decision of the Board of Directors to approve or consummate
the Merger. In formulating our opinion, we have considered only
the cash consideration for AMICAS common stock as is described
above. We have not considered, and this opinion does not
address, any compensation or other such payments that may be
made in connection with, or as a result of, the Merger to AMICAS
directors, officers, employees, or others in connection with the
Merger. The delivery of this opinion has been approved by our
Fairness Opinion Committee.
Raymond James & Associates Inc. (Raymond
James) is actively engaged in the investment banking
business and regularly undertakes the valuation of investment
securities in connection with public offerings, private
placements, business combinations, and similar transactions.
Raymond James will receive a customary fee from AMICAS upon the
delivery of this opinion. Raymond James also has been engaged to
render financial advisory services to AMICAS in connection with
the proposed Merger and will receive a separate customary fee
for such services; such fee is contingent upon consummation of
the Merger and is larger than the fee for the delivery of this
opinion. In addition, AMICAS has agreed to indemnify us against
certain liabilities arising out of our engagement.
In the ordinary course of our business, we may trade in the
securities of AMICAS for our own account or for the accounts of
our customers and, accordingly, may at any time hold a long or
short position in such securities.
B-2
Board of Directors
AMICAS, Inc.
December 24, 2009
Page 3
Our opinion is based upon market, economic, financial, and other
circumstances and conditions existing and disclosed to us as of
December 24, 2009 and any material change in such
circumstances and conditions would require a re-evaluation of
this opinion, which we are under no obligation to undertake.
It is understood that this letter is for the information of the
AMICAS Board of Directors in evaluating the proposed Merger and
does not constitute a recommendation to the AMICAS Board of
Directors, any holder of Common Stock, or any other person
regarding how to vote on or otherwise act in connection with the
proposed Merger. Furthermore, this letter should not be
construed as creating any fiduciary duty on the part of Raymond
James to any such party. This opinion is not to be quoted or
referred to, in whole or in part, without our prior written
consent.
Based upon and subject to the foregoing, it is our opinion that,
as of December 24, 2009, the consideration to be received
by the Shareholders pursuant to the Agreement is fair, from a
financial point of view, to such Shareholders.
Very truly yours,
/s/ RAYMOND
JAMES & ASSOCIATES, INC.
RAYMOND JAMES & ASSOCIATES, INC.
B-3
Annex C
GENERAL
CORPORATION LAW OF THE STATE OF DELAWARE
§
262. Appraisal rights.
(a) Any stockholder of a corporation of this State who
holds shares of stock on the date of the making of a demand
pursuant to subsection (d) of this section with respect to
such shares, who continuously holds such shares through the
effective date of the merger or consolidation, who has otherwise
complied with subsection (d) of this section and who has
neither voted in favor of the merger or consolidation nor
consented thereto in writing pursuant to § 228 of this
title shall be entitled to an appraisal by the Court of Chancery
of the fair value of the stockholders shares of stock
under the circumstances described in subsections (b) and
(c) of this section. As used in this section, the word
stockholder means a holder of record of stock in a
stock corporation and also a member of record of a nonstock
corporation; the words stock and share
mean and include what is ordinarily meant by those words and
also membership or membership interest of a member of a nonstock
corporation; and the words depository receipt mean a
receipt or other instrument issued by a depository representing
an interest in one or more shares, or fractions thereof, solely
of stock of a corporation, which stock is deposited with the
depository.
(b) Appraisal rights shall be available for the shares of
any class or series of stock of a constituent corporation in a
merger or consolidation to be effected pursuant to
§ 251 (other than a merger effected pursuant to
§ 251(g) of this title), § 252,
§ 254, § 257, § 258,
§ 263 or § 264 of this title:
(1) Provided, however, that no appraisal rights under this
section shall be available for the shares of any class or series
of stock, which stock, or depository receipts in respect
thereof, at the record date fixed to determine the stockholders
entitled to receive notice of the meeting of stockholders to act
upon the agreement of merger or consolidation, were either
(i) listed on a national securities exchange or
(ii) held of record by more than 2,000 holders; and further
provided that no appraisal rights shall be available for any
shares of stock of the constituent corporation surviving a
merger if the merger did not require for its approval the vote
of the stockholders of the surviving corporation as provided in
§ 251(f) of this title.
(2) Notwithstanding paragraph (1) of this subsection,
appraisal rights under this section shall be available for the
shares of any class or series of stock of a constituent
corporation if the holders thereof are required by the terms of
an agreement of merger or consolidation pursuant to
§§ 251, 252, 254, 257, 258, 263 and 264 of this
title to accept for such stock anything except:
a. Shares of stock of the corporation surviving or
resulting from such merger or consolidation, or depository
receipts in respect thereof;
b. Shares of stock of any other corporation, or depository
receipts in respect thereof, which shares of stock (or
depository receipts in respect thereof) or depository receipts
at the effective date of the merger or consolidation will be
either listed on a national securities exchange or held of
record by more than 2,000 holders;
c. Cash in lieu of fractional shares or fractional
depository receipts described in the foregoing subparagraphs a.
and b. of this paragraph; or
d. Any combination of the shares of stock, depository
receipts and cash in lieu of fractional shares or fractional
depository receipts described in the foregoing subparagraphs a.,
b. and c. of this paragraph.
(3) In the event all of the stock of a subsidiary Delaware
corporation party to a merger effected under § 253 of
this title is not owned by the parent corporation immediately
prior to the merger, appraisal rights shall be available for the
shares of the subsidiary Delaware corporation.
(c) Any corporation may provide in its certificate of
incorporation that appraisal rights under this section shall be
available for the shares of any class or series of its stock as
a result of an amendment to its certificate of incorporation,
any merger or consolidation in which the corporation is a
constituent corporation or the sale
C-1
of all or substantially all of the assets of the corporation. If
the certificate of incorporation contains such a provision, the
procedures of this section, including those set forth in
subsections (d) and (e) of this section, shall apply
as nearly as is practicable.
(d) Appraisal rights shall be perfected as follows:
(1) If a proposed merger or consolidation for which
appraisal rights are provided under this section is to be
submitted for approval at a meeting of stockholders, the
corporation, not less than 20 days prior to the meeting,
shall notify each of its stockholders who was such on the record
date for notice of such meeting with respect to shares for which
appraisal rights are available pursuant to subsection (b)
or (c) hereof of this section that appraisal rights are
available for any or all of the shares of the constituent
corporations, and shall include in such notice a copy of this
section. Each stockholder electing to demand the appraisal of
such stockholders shares shall deliver to the corporation,
before the taking of the vote on the merger or consolidation, a
written demand for appraisal of such stockholders shares.
Such demand will be sufficient if it reasonably informs the
corporation of the identity of the stockholder and that the
stockholder intends thereby to demand the appraisal of such
stockholders shares. A proxy or vote against the merger or
consolidation shall not constitute such a demand. A stockholder
electing to take such action must do so by a separate written
demand as herein provided. Within 10 days after the
effective date of such merger or consolidation, the surviving or
resulting corporation shall notify each stockholder of each
constituent corporation who has complied with this subsection
and has not voted in favor of or consented to the merger or
consolidation of the date that the merger or consolidation has
become effective; or
(2) If the merger or consolidation was approved pursuant to
§ 228 or § 253 of this title, then either a
constituent corporation before the effective date of the merger
or consolidation or the surviving or resulting corporation
within 10 days thereafter shall notify each of the holders
of any class or series of stock of such constituent corporation
who are entitled to appraisal rights of the approval of the
merger or consolidation and that appraisal rights are available
for any or all shares of such class or series of stock of such
constituent corporation, and shall include in such notice a copy
of this section. Such notice may, and, if given on or after the
effective date of the merger or consolidation, shall, also
notify such stockholders of the effective date of the merger or
consolidation. Any stockholder entitled to appraisal rights may,
within 20 days after the date of mailing of such notice,
demand in writing from the surviving or resulting corporation
the appraisal of such holders shares. Such demand will be
sufficient if it reasonably informs the corporation of the
identity of the stockholder and that the stockholder intends
thereby to demand the appraisal of such holders shares. If
such notice did not notify stockholders of the effective date of
the merger or consolidation, either (i) each such
constituent corporation shall send a second notice before the
effective date of the merger or consolidation notifying each of
the holders of any class or series of stock of such constituent
corporation that are entitled to appraisal rights of the
effective date of the merger or consolidation or (ii) the
surviving or resulting corporation shall send such a second
notice to all such holders on or within 10 days after such
effective date; provided, however, that if such second notice is
sent more than 20 days following the sending of the first
notice, such second notice need only be sent to each stockholder
who is entitled to appraisal rights and who has demanded
appraisal of such holders shares in accordance with this
subsection. An affidavit of the secretary or assistant secretary
or of the transfer agent of the corporation that is required to
give either notice that such notice has been given shall, in the
absence of fraud, be prima facie evidence of the facts stated
therein. For purposes of determining the stockholders entitled
to receive either notice, each constituent corporation may fix,
in advance, a record date that shall be not more than
10 days prior to the date the notice is given, provided,
that if the notice is given on or after the effective date of
the merger or consolidation, the record date shall be such
effective date. If no record date is fixed and the notice is
given prior to the effective date, the record date shall be the
close of business on the day next preceding the day on which the
notice is given.
(e) Within 120 days after the effective date of the
merger or consolidation, the surviving or resulting corporation
or any stockholder who has complied with subsections (a)
and (d) of this section hereof and who is otherwise
entitled to appraisal rights, may commence an appraisal
proceeding by filing a petition in the Court of Chancery
demanding a determination of the value of the stock of all such
stockholders.
C-2
Notwithstanding the foregoing, at any time within 60 days
after the effective date of the merger or consolidation, any
stockholder who has not commenced an appraisal proceeding or
joined that proceeding as a named party shall have the right to
withdraw such stockholders demand for appraisal and to
accept the terms offered upon the merger or consolidation.
Within 120 days after the effective date of the merger or
consolidation, any stockholder who has complied with the
requirements of subsections (a) and (d) of this
section hereof, upon written request, shall be entitled to
receive from the corporation surviving the merger or resulting
from the consolidation a statement setting forth the aggregate
number of shares not voted in favor of the merger or
consolidation and with respect to which demands for appraisal
have been received and the aggregate number of holders of such
shares. Such written statement shall be mailed to the
stockholder within 10 days after such stockholders
written request for such a statement is received by the
surviving or resulting corporation or within 10 days after
expiration of the period for delivery of demands for appraisal
under subsection (d) of this section hereof, whichever is
later. Notwithstanding subsection (a) of this section, a
person who is the beneficial owner of shares of such stock held
either in a voting trust or by a nominee on behalf of such
person may, in such persons own name, file a petition or
request from the corporation the statement described in this
subsection.
(f) Upon the filing of any such petition by a stockholder,
service of a copy thereof shall be made upon the surviving or
resulting corporation, which shall within 20 days after
such service file in the office of the Register in Chancery in
which the petition was filed a duly verified list containing the
names and addresses of all stockholders who have demanded
payment for their shares and with whom agreements as to the
value of their shares have not been reached by the surviving or
resulting corporation. If the petition shall be filed by the
surviving or resulting corporation, the petition shall be
accompanied by such a duly verified list. The Register in
Chancery, if so ordered by the Court, shall give notice of the
time and place fixed for the hearing of such petition by
registered or certified mail to the surviving or resulting
corporation and to the stockholders shown on the list at the
addresses therein stated. Such notice shall also be given by 1
or more publications at least 1 week before the day of the
hearing, in a newspaper of general circulation published in the
City of Wilmington, Delaware or such publication as the Court
deems advisable. The forms of the notices by mail and by
publication shall be approved by the Court, and the costs
thereof shall be borne by the surviving or resulting corporation.
(g) At the hearing on such petition, the Court shall
determine the stockholders who have complied with this section
and who have become entitled to appraisal rights. The Court may
require the stockholders who have demanded an appraisal for
their shares and who hold stock represented by certificates to
submit their certificates of stock to the Register in Chancery
for notation thereon of the pendency of the appraisal
proceedings; and if any stockholder fails to comply with such
direction, the Court may dismiss the proceedings as to such
stockholder.
(h) After the Court determines the stockholders entitled to
an appraisal, the appraisal proceeding shall be conducted in
accordance with the rules of the Court of Chancery, including
any rules specifically governing appraisal proceedings. Through
such proceeding the Court shall determine the fair value of the
shares exclusive of any element of value arising from the
accomplishment or expectation of the merger or consolidation,
together with interest, if any, to be paid upon the amount
determined to be the fair value. In determining such fair value,
the Court shall take into account all relevant factors. Unless
the Court in its discretion determines otherwise for good cause
shown, interest from the effective date of the merger through
the date of payment of the judgment shall be compounded
quarterly and shall accrue at 5% over the Federal Reserve
discount rate (including any surcharge) as established from time
to time during the period between the effective date of the
merger and the date of payment of the judgment. Upon application
by the surviving or resulting corporation or by any stockholder
entitled to participate in the appraisal proceeding, the Court
may, in its discretion, proceed to trial upon the appraisal
prior to the final determination of the stockholders entitled to
an appraisal. Any stockholder whose name appears on the list
filed by the surviving or resulting corporation pursuant to
subsection (f) of this section and who has submitted such
stockholders certificates of stock to the Register in
Chancery, if such is required, may participate fully in all
proceedings until it is finally determined that such stockholder
is not entitled to appraisal rights under this section.
C-3
(i) The Court shall direct the payment of the fair value of
the shares, together with interest, if any, by the surviving or
resulting corporation to the stockholders entitled thereto.
Payment shall be so made to each such stockholder, in the case
of holders of uncertificated stock forthwith, and the case of
holders of shares represented by certificates upon the surrender
to the corporation of the certificates representing such stock.
The Courts decree may be enforced as other decrees in the
Court of Chancery may be enforced, whether such surviving or
resulting corporation be a corporation of this State or of any
state.
(j) The costs of the proceeding may be determined by the
Court and taxed upon the parties as the Court deems equitable in
the circumstances. Upon application of a stockholder, the Court
may order all or a portion of the expenses incurred by any
stockholder in connection with the appraisal proceeding,
including, without limitation, reasonable attorneys fees
and the fees and expenses of experts, to be charged pro rata
against the value of all the shares entitled to an appraisal.
(k) From and after the effective date of the merger or
consolidation, no stockholder who has demanded appraisal rights
as provided in subsection (d) of this section shall be
entitled to vote such stock for any purpose or to receive
payment of dividends or other distributions on the stock (except
dividends or other distributions payable to stockholders of
record at a date which is prior to the effective date of the
merger or consolidation); provided, however, that if no petition
for an appraisal shall be filed within the time provided in
subsection (e) of this section, or if such stockholder
shall deliver to the surviving or resulting corporation a
written withdrawal of such stockholders demand for an
appraisal and an acceptance of the merger or consolidation,
either within 60 days after the effective date of the
merger or consolidation as provided in subsection (e) of
this section or thereafter with the written approval of the
corporation, then the right of such stockholder to an appraisal
shall cease. Notwithstanding the foregoing, no appraisal
proceeding in the Court of Chancery shall be dismissed as to any
stockholder without the approval of the Court, and such approval
may be conditioned upon such terms as the Court deems just;
provided, however that this provision shall not affect the right
of any stockholder who has not commenced an appraisal proceeding
or joined that proceeding as a named party to withdraw such
stockholders demand for appraisal and to accept the terms
offered upon the merger or consolidation within 60 days
after the effective date of the merger or consolidation, as set
forth in subsection (e) of this section.
(l) The shares of the surviving or resulting corporation to
which the shares of such objecting stockholders would have been
converted had they assented to the merger or consolidation shall
have the status of authorized and unissued shares of the
surviving or resulting corporation.
C-4
Annex D
AMICAS, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE
SPECIAL MEETING OF STOCKHOLDERS ON FEBRUARY 19, 2010
The undersigned hereby appoints STEPHEN N. KAHANE, KEVIN C. BURNS and CRAIG NEWFIELD, and each of
them, with full power of substitution and resubstitution, as proxy or proxies, for and in the name
of the undersigned, to represent and vote all shares of common stock of AMICAS, Inc., which the
undersigned would be entitled to vote if personally present at the Special Meeting of Stockholders
to be held on February 19, 2010 at 9:00 a.m. Eastern Standard Time, at the Companys offices at 20 Guest
Street, Suite 400, Boston, Massachusetts 02135, and at any adjournment or postponement thereof,
upon matters described in the Notice of Special Meeting of Stockholders and Proxy Statement
(receipt of which is hereby acknowledged) in the manner indicated on the reverse.
You are encouraged to specify your choices by marking the appropriate boxes.
PLEASE COMPLETE YOUR
VOTING SELECTION, DATE, SIGN AND MAIL YOUR PROXY CARD IN THE ENCLOSED POSTAGE PRE-PAID ENVELOPE AS
SOON AS POSSIBLE.
(Continued and to be signed below.)
The board of directors recommends a vote FOR Proposals 1 and 2.
Please mark the appropriate boxes.
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1.
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Proposal to consider and vote on a proposal to adopt the
Agreement and Plan of Merger, dated as of December
24, 2009, by and among Project Alta Holdings Corp.,
Project Alta Merger Corp. and the Company, as it may
be amended from time to time.
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FOR
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AGAINST
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ABSTAIN
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2.
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Proposal to consider and vote on a proposal to adjourn
the special meeting, if necessary or appropriate, to
solicit
additional proxies if there are insufficient votes at the
time of the meeting to approve proposal number 1.
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FOR
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AGAINST
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ABSTAIN
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THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED
STOCKHOLDER(S) OR, IF NO DIRECTION IS MADE,
FOR
PROPOSALS 1 AND 2 AND IN THE DISCRETION OF THE
PROXIES ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE SPECIAL MEETING.
THE PERSON(S) SIGNING THIS PROXY HEREBY REVOKES ANY PROXY PREVIOUSLY GIVEN.
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Date:
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Signature
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Signature (if held jointly)
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Please sign exactly as your name(s) appears
on Proxy. If held in joint tenancy, all persons
should sign. Trustees, administrators, etc.,
should include title and authority.
Corporations should provide full name of
corporation and title of authorized officer
signing the proxy.
LOGO
YOUR PROXY CONTROL NUMBER
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VOTE BY INTERNET:
Log-on to
www.votestock.com
Enter your control number printed to the left
Vote your proxy by checking the appropriate boxes
Click on Accept Vote
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VOTE BY TELEPHONE:
After you call the phone number
below, you will be asked to enter the control number at the left of
the page. You will need to respond to only a few simple prompts.
Your vote will be confirmed and cast as directed.
Call toll-free in the U.S. or Canada at
1-866-578-5350
on a touch-tone telephone
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VOTE BY MAIL:
If you do not wish to vote over the
Internet or by telephone, please complete, sign, date and
return the accompanying proxy card in the pre-paid
envelope provided.
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You may vote by Internet 24 hours a day, 7 days a week. Internet voting
is available through 11:59 p.m., prevailing time, on
February 18, 2010.
Your Internet vote authorizes the named proxies to vote in the same
manner as if you marked, signed and returned your proxy card.
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