at the Closing, will be cancelled and converted into an award to receive an amount in cash equal to the number of earned Shares underlying such Company performance-based restricted stock unit multiplied by the Offer Price upon the earlier of (a) the date on which each such Company performance-based restricted stock unit is scheduled to vest (subject to achievement of the vesting conditions) and (b) the first anniversary of the Closing subject to continued employment through such date.
The Merger Agreement provides that the Merger will be governed by Section 251(h) of the Delaware General Corporation Law, which permits completion of the Merger upon the Minimum Tender Condition being satisfied without a meeting of the Company’s stockholders, and further provides that the Merger should be effected as soon as practicable following the consummation of the Offer.
The Merger Agreement contains representations, warranties and covenants of the parties customary for a transaction of this nature, including an agreement that, subject to certain exceptions, the parties will use reasonable best efforts to cause the Offer and the Merger to be consummated. Additionally, the Company has agreed not to solicit or initiate discussions with third parties regarding other proposals to acquire the Company and to certain restrictions on its ability to respond to any such proposals. Until the earlier of the termination of the Merger Agreement and the Effective Time, the Company has agreed to operate its business in the ordinary course of business and has agreed to certain other negative operating covenants, as set forth more fully in the Merger Agreement.
The Merger Agreement also includes termination provisions for both Parent and the Company, and provides that, in connection with the termination of the Merger Agreement by Parent or the Company in the event the Company’s board of directors makes a change in its recommendation of the Merger, if the change of recommendation is made in connection with a superior proposal, the Company will pay Parent a termination fee of $900,000, and if the change of recommendation is made in connection with an intervening event, the Company will pay Parent a termination fee of $400,000.
The foregoing description of the Merger Agreement does not purport to be complete, and is qualified in its entirety by reference to the full text of the Merger Agreement, which is attached hereto as Exhibit 2.1 and incorporated by reference herein.
A copy of the Merger Agreement has been included to provide the Company’s stockholders and other security holders with information regarding its terms and is not intended to provide any factual information about the Parent and the Company. The representations, warranties and covenants contained in the Merger Agreement have been made solely for the purposes of the Merger Agreement and as of specific dates; were solely for the benefit of the parties to the Merger Agreement; are not intended as statements of fact to be relied upon by Parent stockholders or other security holders, but rather as a way of allocating the risk between the parties to the Merger Agreement in the event the statements therein prove to be inaccurate; have been modified or qualified by certain confidential disclosures that were made between the parties in connection with the negotiation of the Merger Agreement, which disclosures are not reflected in the Merger Agreement itself; may no longer be true as of a given date; and may apply standards of materiality in a way that is different from what may be viewed as material by Parent stockholders or other security holders. Parent stockholders or other security holders are not third-party beneficiaries under the Merger Agreement and should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of Parent, Merger Sub or the Company. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures.
Support Agreement
On September 28, 2018, in connection with the Merger Agreement, certain stockholders of the Company (the “Stockholders”) who collectively hold approximately 51% of the outstanding stock of CafePress, solely in their respective capacities as stockholders of the Company, entered into a Support Agreement with Parent and Merger Sub (the “Support Agreement”). This agreement provides, among other things, that the Stockholders will not sell or dispose of their Shares except to participate in the Offer and to tender their shares within 10 business days of the commencement of the Offer.
The foregoing description of the Support Agreement is qualified in its entirety by the full text of the Support Agreement, the form of which is attached hereto as Exhibit 99.1, and is incorporated by reference herein.
