| | ● | | following the Closing and before the second anniversary of the date of the Closing, Investcorp will purchase 680,985 shares of the Company’s common stock in open market transactions (the “Open Market Stock Purchases”); and |
| | ● | | prior to the Closing, Investcorp will submit to the Board for its review and approval a Rule10b5-1 plan (the “Trading Plan”) to be entered into with a reputable third-party brokerage firm pursuant to which Investcorp will commit to make the Open Market Stock Purchases; if Investcorp does not own at least 10% of the Company’s common stock before the second anniversary of the date of the Closing, Investcorp has agreed to purchase from the Company, and the Company has agreed to issue and sell, the remaining balance at a price per share equal to the greater of the then-current net asset value per share and the market price of the Company’s common stock on NASDAQ. |
Closing
The Closing will be no later than three (3) business days after the satisfaction or waiver of the latest to occur of the conditions set forth in the SPA, unless extended by mutual agreement of the parties.
Representations, Warranties and Covenants
The SPA contains representations and warranties that the Company and Investcorp have made as of specific dates. Except for its status as a contractual document that establishes and governs the legal relations among the parties with respect to the transactions described therein, the SPA is not intended to be a source of factual, business or operational information about the parties. The representations and warranties contained in the SPA were made only for purposes of the SPA and as of specific dates, may be subject to a contractual standard of materiality different from what an investor or a stockholder might view as material, may have been used for purposes of allocating risk between the parties rather than establishing matters as facts, and may have been qualified by certain disclosures not reflected in the SPA that were made to the other party in connection with the negotiation of the SPA and generally were solely for the benefit of the parties to that agreement. Investors or stockholders should read the SPA together with the other information concerning the Company that it files in reports and statements with the Securities and Exchange Commission (the “SEC”).
Under the SPA, the parties have made a number of customary representations and warranties to each other, and the Company has agreed to a number of covenants regarding operating in the ordinary course between signing and Closing. In addition, the Company and Investcorp have agreed to certain other customary covenants regarding the making of regulatory filings, seeking regulatory approvals, cooperation generally and using their respective reasonable best efforts to consummate the transactions contemplated by the SPA, as well as the following covenants with respect to the special meeting of stockholders, the recommendation of the Board, andnon-solicitation of alternative proposals.
The Company agreed to convene and hold a special meeting of the Company’s stockholders for purposes of obtaining approval of the New Advisory Agreement, and is obligated to use its reasonable best efforts to solicit from Company stockholders proxies in favor of approval of the New Advisory Agreement and take all other action necessary or advisable to secure that approval as promptly as practicable after the date of the SPA. In addition, subject to certain limited exceptions, the Board has agreed to (i) recommend that the stockholders vote “FOR” the approval of the New Advisory Agreement (the “Board Recommendation”), (ii) include its recommendation in the proxy statement and (iii) publicly reaffirm its recommendation within 24 hours after any reasonable request to do so by Investcorp (which such request will not be made more than twice in any consecutiveten-day period).
Subject to certain exceptions described in the SPA, the Company has agreed to (and will cause its subsidiaries and representatives to) immediately cease and cause to be terminated any existing solicitation of, or discussions or negotiations with, any person relating to any “alternative proposal”, as defined in the SPA, and will take other actions designed to protect the Company’s confidential information. In addition, between the date of the SPA and the date of the special stockholder meeting to approve the New Advisory Agreement, subject to certain exceptions, the Company may not initiate, solicit, facilitate, negotiate with respect to, provide information for the purpose of, enter into an agreement with respect to, or take other similar actions with respect to, any alternative proposal.
Notwithstanding the foregoing, in the event the Company receives an unsolicited alternative proposal that did not result from a breach of the SPA by the Company, the Company may, subject to satisfying certain procedural requirements, engage in negotiations with, and provide information and access to, the person making the proposal if the Board determines in good faith (after consultation with its outside financial advisors and outside legal counsel) that such alternative proposal is bona fide and was made in good faith; constitutes, or is reasonably likely to lead to, a “superior proposal,” as defined in the SPA, and the failure to engage in negotiations with, or furnish information or access to, the person submitting the alternative proposal would be inconsistent with its duties under applicable law.
Termination
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