UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Introductory Note
This Current Report on Form 8-K is being filed in connection with the completion of the previously announced Merger (as described below) pursuant to that certain Agreement and Plan of Merger, dated as of August 8, 2022 (the “Merger Agreement”), by and among Avalara, Inc., a Washington corporation (“Avalara” or the “Company”), Lava Intermediate, Inc., a Delaware corporation (“Parent”) and Lava Merger Sub, Inc., a Washington corporation and a wholly owned subsidiary of Parent (“Merger Sub”).
On October 19, 2022 (the “Closing Date”), pursuant to the Merger Agreement, Merger Sub merged with and into the Company (the “Merger”), with the Company surviving the Merger as a wholly owned subsidiary of Parent. Parent and Merger Sub were formed by affiliates of funds advised by Vista Equity Partners (the “Vista Funds”). Capitalized terms used herein but not otherwise defined have the meaning set forth in the Merger Agreement.
Item 1.01 | Entry into a Material Definitive Agreement. |
The information set forth in the Introductory Note of this Current Report on Form 8-K is incorporated by reference into this Item 1.01.
New Credit Agreement
On the Closing Date, Merger Sub, as the initial borrower, and the Company, after giving effect to the Merger, as the borrower, entered into that certain Credit Agreement with Owl Rock Core Income Corp., as administrative agent and collateral agent, the lenders from time to time party thereto and the guarantors from time to time party thereto (the “Credit Agreement”), which provides for (i) a term loan facility in an aggregate principal amount equal to $2.5 billion and (ii) a revolving loan facility in an aggregate principal amount equal to $250 million. The Company is the borrower, and certain of its subsidiaries are guarantors, under the Credit Agreement. The obligations under the Credit Agreement are secured on a first priority basis by substantially all assets of the borrowers and the guarantors (subject to certain exclusions and exceptions). The Credit Agreement includes representations and warranties, covenants, events of default and other provisions that are customary for facilities of their respective types.
Existing 2026 Senior Notes
On the Closing Date, the Company and The Bank of New York Mellon Trust Company, N.A., a national banking association, as trustee under the Indenture, dated as of August 13, 2021 (the “Indenture”) governing the Company’s 0.25% Convertible Senior Notes due 2026 entered into a supplemental indenture (the “Supplemental Indenture”) to the Indenture, providing that, at and after the Closing Date, conversions pursuant to the conversion rights under the Indenture are changed to the right to receive the Per Share Merger Consideration in an amount calculated pursuant to the terms of the Indenture.
The foregoing summary description of the Supplemental Indenture does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Supplemental Indenture, which is attached as Exhibit 4.1 hereto, and which is incorporated herein by reference.
Item 1.02 | Termination of a Material Definitive Agreement. |
The information set forth in the Introductory Note of this Current Report on Form 8-K is incorporated by reference into this Item 2.01.
Item 2.01 | Completion of Acquisition or Disposition of Assets. |
The information set forth in the Introductory Note of this Current Report on Form 8-K is incorporated by reference into this Item 2.01.
At the Effective Time:
(i) | each share of common stock of Avalara (“Common Stock”), par value $0.0001 per share, issued and outstanding as of immediately prior to the Effective Time (other than (A) shares of Common Stock owned by Parent, Merger Sub, any other wholly owned subsidiary of Parent and Avalara (including shares held in treasury) (which were cancelled without payment of any consideration), (B) shares owned by any wholly owned subsidiary of Avalara and (C) shares of Common Stock for which dissenters’ rights have been properly exercised and not withdrawn) automatically converted into the right to receive cash in an amount equal to $93.50, without interest thereon, and subject to any required withholding of taxes (the “Per Share Merger Consideration”); |
(ii) | each outstanding Avalara option to purchase shares of Common Stock (a “Company Option”), whether vested or unvested, was automatically cancelled and converted into the right to receive an amount in cash (without interest and less any applicable withholding taxes) equal to (A) the total number of shares of Common Stock subject to such Company Option, multiplied by (B) the excess, if any, of the Per Share Merger Consideration over the applicable per share exercise price of such Company Option. Each Company Option, if any, with an exercise price per share greater than or equal to the Per Share Merger Consideration was cancelled automatically at the Effective Time for no consideration; |
(iii) | each outstanding Avalara restricted stock unit that was vested (but not yet settled) as of immediately prior to the Effective Time or that vested as a result of the consummation of the Merger Agreement (a “Vested Company RSU”) was automatically cancelled and converted into the right to receive an amount in cash (without interest and less any applicable withholding taxes) equal to (A) the total number of shares of Common Stock subject to such Vested Company RSU immediately prior to the Effective Time, multiplied by (B) the Per Share Merger Consideration; |
(iv) | each outstanding Avalara restricted stock unit that was not a Vested Company RSU (an “Unvested Company RSU”) was automatically cancelled and converted into the contingent right to receive from Parent or Avalara an aggregate amount in cash (without interest and less any applicable withholding taxes) (each, a “Converted Cash Award”) equal to (A) the total number of shares of Common Stock subject to such Unvested Company RSU immediately prior to the Effective Time, multiplied by (B) the Per Share Merger Consideration. Each such Converted Cash Award shall continue to have, and be subject to, the same vesting terms and conditions (including acceleration provisions upon a qualifying termination of employment, if any) that applied to the corresponding Unvested Company RSU immediately prior to the Effective Time, except for certain individuals set forth on the disclosure schedules to the Merger Agreement whose Converted Cash Awards shall automatically accelerate upon a Qualifying Termination (as defined in the disclosure schedules to the Merger Agreement); and |
(v) | each outstanding Avalara performance stock unit that was not a vested company performance stock unit immediately prior to the Effective Time (an “Unvested Company PSU”) was automatically cancelled and converted into a Converted Cash Award equal to (A) the total number of shares of Common Stock subject to such Unvested Company PSU immediately prior to the Effective Time (as determined in accordance with the disclosure schedules to the Merger Agreement), multiplied by (B) the Per Share Merger Consideration. For purposes of the foregoing, (1) the number of shares subject to each Unvested Company PSU with an initial performance period commencing on January 1, 2021 was calculated assuming performance was achieved at 220% of target, and (2) the number of shares subject to each Unvested Company PSU with an initial performance period commencing on January 1, 2022 was calculated assuming performance was achieved at 147.5% of target, in each case, subject to reducing such calculated number of shares by the number of vested performance stock units earned for a previously completed performance period. Each such Converted Cash Award is subject to the time-vesting terms and conditions following a “change in control” set forth in the award agreement that applied to the corresponding Unvested Company PSU and shall automatically accelerate upon a qualifying termination of employment (as described in the award agreement that applied to the corresponding Unvested Company PSU). |
There were no vested (but not yet settled) Avalara performance stock units outstanding as of immediately prior to the Effective Time.
The foregoing description of the Merger and 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, a copy of which was filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission (the “SEC”) on August 8, 2022, which is incorporated herein by reference.
Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant |
The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.
Item 3.01 | Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing. |
The Information set forth in the Introductory Note and under Item 2.01 is incorporated herein by reference.
In connection with the closing of the Merger, the Company notified The New York Stock Exchange (“NYSE”) on October 19, 2022 that each outstanding share of Common Stock (except as described in Item 2.01 hereof) was converted into a right to receive the Per Share Merger Consideration pursuant to the Merger Agreement as described under Item 2.01, and the Company requested that NYSE file a Form 25 with the SEC to remove the Common Stock from listing on NYSE and deregister the Common Stock pursuant to Section 12(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
The Common Stock ceased trading on the NYSE effective prior to the opening of trading on October 19, 2022. After effectiveness of the Form 25, the Company intends to file with the SEC a certification and notice of termination on Form 15 to terminate the registration of the Common Stock under the Exchange Act and suspend the Company’s reporting obligations under Section 13 and Section 15(d) of the Exchange Act.
Item 3.03 | Material Modification to Rights of Security Holders. |
The Information set forth in the Introductory Note and under Items 2.01, 3.01 and 5.03 of this Current Report on Form 8-K is incorporated herein by reference.
Pursuant to the Merger Agreement and in connection with the consummation of the Merger, each outstanding share of Common Stock that was issued and outstanding immediately prior to the Effective Time (except as described in Item 2.01 hereof) was converted, at the Effective Time, into the right to receive the Per Share Merger Consideration. Accordingly, at the Effective Time, the holders of such shares of Common Stock ceased to have any rights as stockholders of the Company, other than the right to receive the Per Share Merger Consideration.
Item 5.01 | Change in Control of Registrant. |
The Information set forth in the Introductory Note and under Items 2.01 and 3.01 is incorporated herein by reference.
As a result of the Merger, a change in control of the Company occurred, and the Company became a wholly-owned subsidiary of Parent. The total amount of consideration payable to the Company’s equityholders in connection with the Merger was approximately $8.4 billion. The funds used by Parent to consummate the Merger and complete the related transactions came from equity contributions from the Vista Funds, a syndicate of co-Underwriters and Vista-managed co-investment vehicles, the Company’s cash on hand, and the proceeds received in connection with debt
financing pursuant to a $2.5 billion term loan under the Credit Agreement, dated as of October 19, 2022, by and among Parent, Merger Sub, the Company, certain domestic subsidiaries of the Company, as guarantors, the lenders from time to time party thereto, and Owl Rock Core Income Corp., as administrative agent and collateral agent.
Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangement. |
The information set forth in the Introductory Note and under Item 2.01 is incorporated herein by reference.
In accordance with the terms of the Merger Agreement, effective upon completion of the Merger, the following persons became directors of the Company: Maneet S. Saroya, Adrian R. Alonso, Chad Martin and Nicholas Prickel (among whom, Nicholas Prickel was a director of Merger Sub). Scott McFarlane, who was a director of the Company immediately prior to the Merger, will continue to be a director of the Company. The following persons, who were directors of the Company immediately prior to the completion of the Merger, voluntarily resigned from the board of directors of the Company (the “Board”) and the committees of the Board on which they served, if any, at the Effective Time: Srinivas Tallapragada, Tami L. Reller, Edward A. Gilhuly, Bruce Crawford, Brian Sharples, William D. Ingram, Marcela Martin, Kathleen M. Zwickert, Rajeev Singh, and Marion R. Foote.
Effective upon completion of the Merger, the following persons, who were the officers of Merger Sub, became officers of the Company: Maneet S. Saroya, Adrian Alonso and Nicholas Prickel. Scott McFarlane, Ross Tennenbaum and Alesia Pinney, who were officers of the Company immediately prior to the Merger, will continue to be officers of the Company. Amit Mathradas, who was an officer of the Company immediately prior to the Merger, will not continue to be an officer of the Company.
Item 5.03 | Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. |
The information set forth in the Introductory Note and under Item 2.01 is incorporated herein by reference.
Effective upon completion of the Merger, the certificate of incorporation of the Company, as in effect immediately prior to the Merger, was amended and restated to be in the form of the certificate of incorporation attached as Exhibit 3.1 hereto, which is incorporated herein by reference.
Effective upon completion of the Merger, the bylaws of the Company were amended and restated to be in the form of the bylaws attached as Exhibit 3.2 hereto, which is incorporated herein by reference.
Item 8.01 | Other Events. |
On October 19, 2022, the Company issued a press release announcing the completion of the Merger. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Item 9.01. | Financial Statements and Exhibits. |
* | Certain exhibits and schedules to the Agreement and Plan of Merger have been omitted from this filing pursuant to Item 601(a)(5) of Regulation S-K. Registrant will furnish copies of such schedules to the Securities and Exchange Commission upon request by the Commission. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
AVALARA, INC. | ||
By: | /s/ Alesia L. Pinney | |
Alesia L. Pinney | ||
Executive Vice President, Chief Legal Officer, and Secretary |
Date: October 19, 2022
Exhibit 3.1
SEVENTEENTH AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
AVALARA, INC.
ARTICLE I
The name of the corporation (the Corporation) is Avalara, Inc.
ARTICLE II
The Corporation is authorized to issue only one class of stock, consisting of Common Stock, par value of $0.0001 per share. The total number of shares of Common Stock which the Corporation is authorized to issue is one thousand (1,000).
ARTICLE III
The registered agent of the Corporation and the address of its registered office are as follows:
C T Corporation System
711 Capitol Way S, Suite 204
Olympia, WA 98501-1267
ARTICLE IV
Subject to the requirements set forth herein, the number of directors of the Corporation shall be determined in the manner provided by the Corporations bylaws and may be increased or decreased from time to time in the manner provided therein.
ARTICLE V
(a) To the fullest extent that the Washington Business Corporation Act, as it exists on the date hereof or may hereafter be amended, permits the limitation or elimination of the liability of directors, a director of the Corporation shall not be liable to the Corporation or the Corporations shareholders for monetary damages for conduct as a director.
(b) The Corporation shall, to the maximum extent permitted by applicable law, indemnify any individual made a party to a proceeding because that individual is or was a director of the Corporation and
shall advance or reimburse the reasonable expenses incurred by such individual in advance of final disposition of the proceeding, without regard to the limitations in RCW 23B.08.510 through 23B.08.550 of the Washington Business Corporation Act, or any other limitation which may hereafter be enacted to the extent such limitation may be disregarded if authorized by this Seventeenth Amended and Restated Articles of Incorporation of the Corporation.
(c) Any amendments to or repeal of this ARTICLE V shall not adversely affect any right or protection of a director of the Corporation for or with respect to any acts or omissions of such director occurring before such amendment or repeal. Additionally, any amendment to the Washington Business Corporation Act that serves to limit the applicability of paragraph (a) or paragraph (b) of this ARTICLE V shall not operate as any such limitation with respect to acts or omissions, or alleged acts or omissions of a director prior to the date of such amendment.
Exhibit 3.2
SECOND AMENDED AND RESTATED BYLAWS
OF
AVALARA, INC.
Adopted on October 19, 2022
TABLE OF CONTENTS
Page | ||||||
SECTION 1. OFFICES |
1 | |||||
SECTION 2. SHAREHOLDERS |
1 | |||||
2.1 |
ANNUAL MEETING |
1 | ||||
2.2 |
SPECIAL MEETINGS |
1 | ||||
2.3 |
MEETINGS BY COMMUNICATION EQUIPMENT |
1 | ||||
2.4 |
DATE, TIME AND PLACE OF MEETING |
1 | ||||
2.5 |
NOTICE OF MEETING |
1 | ||||
2.6 |
WAIVER OF NOTICE |
2 | ||||
2.7 |
FIXING OF RECORD DATE FOR DETERMINING SHAREHOLDERS |
2 | ||||
2.8 |
VOTING RECORD |
2 | ||||
2.9 |
QUORUM |
2 | ||||
2.10 |
MANNER OF ACTING |
3 | ||||
2.11 |
PROXIES |
3 | ||||
2.12 |
VOTING OF SHARES |
3 | ||||
2.13 |
VOTING FOR DIRECTORS |
3 | ||||
2.14 |
ACTION BY SHAREHOLDERS WITHOUT A MEETING |
3 | ||||
SECTION 3. BOARD OF DIRECTORS |
4 | |||||
3.1 |
GENERAL POWERS |
4 | ||||
3.2 |
NUMBER AND TENURE |
4 | ||||
3.3 |
ANNUAL AND REGULAR MEETINGS |
4 | ||||
3.4 |
SPECIAL MEETINGS |
4 | ||||
3.5 |
MEETINGS BY COMMUNICATIONS EQUIPMENT |
4 | ||||
3.6 |
NOTICE OF SPECIAL MEETINGS |
4 | ||||
3.7 |
WAIVER OF NOTICE |
5 |
i.
3.8 |
QUORUM |
6 | ||||
3.9 |
MANNER OF ACTING |
6 | ||||
3.10 |
PRESUMPTION OF ASSENT |
6 | ||||
3.11 |
ACTION BY BOARD OR COMMITTEES WITHOUT A MEETING |
6 | ||||
3.12 |
RESIGNATION |
6 | ||||
3.13 |
REMOVAL |
6 | ||||
3.14 |
VACANCIES |
7 | ||||
3.15 |
EXECUTIVE AND OTHER COMMITTEES |
7 | ||||
3.16 |
COMPENSATION |
8 | ||||
SECTION 4. OFFICERS |
8 | |||||
4.1 |
APPOINTMENT AND TERM |
8 | ||||
4.2 |
RESIGNATION |
8 | ||||
4.3 |
REMOVAL |
8 | ||||
4.4 |
CONTRACT RIGHTS OF OFFICERS |
8 | ||||
4.5 |
CHAIRMAN OF THE BOARD |
9 | ||||
4.6 |
CHIEF EXECUTIVE OFFICER |
9 | ||||
4.7 |
VICE PRESIDENT |
9 | ||||
4.8 |
SECRETARY |
9 | ||||
4.9 |
TREASURER |
9 | ||||
4.10 |
SALARIES |
10 | ||||
SECTION 5. CONTRACTS, LOANS, CHECKS AND DEPOSITS |
10 | |||||
5.1 |
CONTRACTS |
10 | ||||
5.2 |
LOANS TO THE CORPORATION |
10 | ||||
5.3 |
CHECKS, DRAFTS, ETC. |
10 | ||||
5.4 |
DEPOSITS |
10 | ||||
SECTION 6. CERTIFICATES FOR SHARES AND THEIR TRANSFER |
10 | |||||
6.1 |
ISSUANCE OF SHARES |
10 |
ii.
6.2 |
CERTIFICATES FOR SHARES |
10 | ||||
6.3 |
STOCK RECORDS |
10 | ||||
6.4 |
LOST OR DESTROYED CERTIFICATES |
11 | ||||
SECTION 7. BOOKS AND RECORDS |
11 | |||||
SECTION 8. ACCOUNTING YEAR |
12 | |||||
SECTION 9. SEAL |
12 | |||||
SECTION 10. INDEMNIFICATION |
12 | |||||
10.1 |
RIGHT TO INDEMNIFICATION |
12 | ||||
10.2 |
RESTRICTIONS ON INDEMNIFICATION |
12 | ||||
10.3 |
ADVANCEMENT OF EXPENSES |
12 | ||||
10.4 |
RIGHT OF INDEMNITEE TO BRING SUIT |
13 | ||||
10.5 |
PROCEDURES EXCLUSIVE |
13 | ||||
10.6 |
NONEXCLUSIVITY OF RIGHTS |
13 | ||||
10.7 |
INSURANCE, CONTRACTS AND FUNDING |
13 | ||||
10.8 |
INDEMNIFICATION OF EMPLOYEES AND AGENTS OF THE CORPORATION |
13 | ||||
10.9 |
PERSONS SERVING OTHER ENTITIES |
14 | ||||
SECTION 11. AMENDMENTS |
14 |
iii.
SECOND AMENDED AND RESTATED BYLAWS
OF
AVALARA, INC.
SECTION 1. OFFICES
The principal office of the corporation shall be located at the principal place of business or such other place as the Board of Directors (Board) may designate. The corporation may have such other offices, either within or without the State of Washington, as the Board may designate or as the business of the corporation may require from time to time.
SECTION 2. SHAREHOLDERS
2.1 | ANNUAL MEETING |
The annual meeting of the shareholders shall be held on such date, time and place, either within or without the State of Washington, as may be designated by resolution of the Board of Directors each year. At the meeting, directors shall be elected and any other proper business may be transacted.
2.2 | SPECIAL MEETINGS |
The Chairman of the Board, the Chief Executive Officer or the Board may call special meetings of the shareholders for any purpose. Further, a special meeting of the shareholders shall be held if the holders of not less than twenty-five percent (25%) of all the votes entitled to be cast on any issue proposed to be considered at such special meeting have dated, signed and delivered to the Secretary one or more written demands for such meeting, describing the purpose or purposes for which it is to be held.
2.3 | MEETINGS BY COMMUNICATION EQUIPMENT |
Shareholders may participate in any meeting of the shareholders by any means of communication by which all persons participating in the meeting can hear each other during the meeting. Participation by such means shall constitute presence in person at a meeting.
2.4 | DATE, TIME AND PLACE OF MEETING |
Except as otherwise provided herein, all meetings of shareholders, including those held pursuant to demand by shareholders as provided herein, shall be held on such date and at such time and place, within or without the State of Washington, designated by or at the direction of the Board.
2.5 | NOTICE OF MEETING |
Written notice stating the place, day and hour of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called shall be given by or at the direction of the Board, the Chairman of the Board, the Chief Executive Officer or the Secretary to each shareholder entitled to notice of or to vote at the meeting not less than ten (10) nor more than sixty (60) days before the meeting, except that notice of a meeting to act on an amendment to the Articles of Incorporation, a plan of merger or share exchange, the sale, lease, exchange or other disposition of all or substantially all of the corporations assets other than in the regular course of business or the dissolution of the corporation shall be given not less than twenty (20) nor more than sixty (60) days before such meeting. Such notice may be
transmitted by mail, private carrier, personal delivery, telegraph, teletype or communications equipment which transmits a facsimile of the notice to like equipment which receives and reproduces such notice. If these forms of written notice are impractical in the view of the Board, the Chairman of the Board, the Chief Executive Officer or the Secretary, written notice may be transmitted by an advertisement in a newspaper of general circulation in the area of the corporations principal office. If such notice is mailed, it shall be deemed effective when deposited in the official government mail, first-class postage prepaid, properly addressed to the shareholder at such shareholders address as it appears in the corporations current record of shareholders. Notice given in any other manner shall be deemed effective when dispatched to the shareholders address, telephone number or other number appearing on the records of the corporation. Any notice given by publication as herein provided shall be deemed effective five (5) days after first publication.
2.6 | WAIVER OF NOTICE |
Whenever any notice is required to be given to any shareholder under the provisions of these Bylaws, the Articles of Incorporation or the Washington Business Corporation Act, a waiver thereof in writing, signed by the person or persons entitled to such notice and delivered to the corporation, whether before or after the date and time of the meeting, shall be deemed equivalent to the giving of such notice. Further, notice of the time, place and purpose of any meeting will be deemed to be waived by any shareholder by attendance thereat in person or by proxy, unless such shareholder at the beginning of the meeting objects to holding the meeting or transacting business at the meeting.
2.7 | FIXING OF RECORD DATE FOR DETERMINING SHAREHOLDERS |
For the purpose of determining shareholders entitled (a) to notice of or to vote at any meeting of shareholders or any adjournment thereof, (b) to demand a special meeting, or (c) to receive payment of any dividend, or in order to make a determination of shareholders for any other purpose, the Board may fix a future date as the record date for any such determination. Such record date shall be not more than seventy (70) days, and in case of a meeting of shareholders not less than ten (10) days prior to the date on which the particular action requiring such determination is to be taken. If no record date is fixed for the determination of shareholders entitled to notice of or to vote at a meeting, the record date shall be the day immediately preceding the date on which notice of the meeting is first given to shareholders. Such a determination shall apply to any adjournment of the meeting unless the Board fixes a new record date, which it shall do if the meeting is adjourned to a date more than one hundred twenty (120) days after the date fixed for the original meeting. If no record date is set for the determination of shareholders entitled to receive payment of any stock dividend or distribution (other than one involving a purchase, redemption, or other acquisition of the corporations shares), the record date shall be the date the Board authorizes the stock dividend or distribution.
2.8 | VOTING RECORD |
At least ten (10) days before each meeting of shareholders, an alphabetical list of the shareholders entitled to notice of such meeting shall be made, arranged by voting group and by each class or series of shares therein, with the address of and number of shares held by each shareholder. This record shall be kept at the principal office of the corporation for ten (10) days prior to such meeting, and shall be kept open at such meeting, for the inspection of any shareholder or any shareholders agent.
2.9 | QUORUM |
A majority of the votes entitled to be cast on a matter by the holders of shares that, pursuant to the Articles of Incorporation or the Washington Business Corporation Act, are entitled to vote and be counted collectively upon such matter, represented in person or by proxy, shall constitute a quorum of such shares
2.
at a meeting of shareholders. If less than a majority of such votes are represented at a meeting, a majority of the votes so represented may adjourn the meeting from time to time without further notice if the new date, time or place is announced at the meeting before adjournment. Any business may be transacted at a reconvened meeting that might have been transacted at the meeting as originally called, provided a quorum is present or represented thereat. Once a share is represented for any purpose at a meeting other than solely to object to holding the meeting or transacting business thereat, it is deemed present for quorum purposes for the remainder of the meeting and any adjournment thereof (unless a new record date is or must be set for the adjourned meeting) notwithstanding the withdrawal of enough shareholders to leave less than a quorum.
2.10 | MANNER OF ACTING |
If a quorum is present, action on a matter other than the election of Directors shall be approved if the votes cast in favor of the action by the shares entitled to vote and be counted collectively upon such matter exceed the votes cast against such action by the shares entitled to vote and be counted collectively thereon, unless the Articles of Incorporation or the Washington Business Corporation Act requires a greater number of affirmative votes.
2.11 | PROXIES |
A shareholder may vote by proxy executed in writing by the shareholder or by his or her attorney- in-fact or agent. Such proxy shall be effective when received by the Secretary or other officer or agent authorized to tabulate votes. A proxy shall become invalid eleven (11) months after the date of its execution, unless otherwise provided in the proxy. A proxy with respect to a specified meeting shall entitle the holder thereof to vote at any reconvened meeting following adjournment of such meeting but shall not be valid after the final adjournment thereof.
2.12 | VOTING OF SHARES |
Except as provided in the Articles of Incorporation or in Section 2.13 hereof, each outstanding share entitled to vote with respect to a matter submitted to a meeting of shareholders shall be entitled to one vote upon such matter.
2.13 | VOTING FOR DIRECTORS |
Each shareholder entitled to vote at an election of Directors may vote, in person or by proxy, the number of shares owned by such shareholder for as many persons as there are Directors to be elected and for whose election such shareholder has a right to vote, or (unless otherwise provided in the Articles of Incorporation) each such shareholder may cumulate such shareholders votes by distributing among one or more candidates as many votes as are equal to the number of such Directors multiplied by the number of such shareholders shares. Unless otherwise provided in the Articles of Incorporation, the candidates elected shall be those receiving the largest number of votes cast, up to the number of Directors to be elected.
2.14 | ACTION BY SHAREHOLDERS WITHOUT A MEETING |
Any action which could be taken at a meeting of the shareholders may be taken without a meeting or a vote if the action is taken by shareholders holding of record or otherwise entitled to vote in the aggregate not less than the minimum number of votes necessary to authorize or take such action at a meeting at which all shares entitled to vote on the action were present and voted. The taking of action by shareholders without a meeting or vote must be evidenced by one or more written consents describing the action taken, signed by shareholders holding of record or otherwise entitled to vote in the aggregate not less than the minimum number of votes necessary in order to take such action by written consent.
3.
SECTION 3. BOARD OF DIRECTORS
3.1 | GENERAL POWERS |
All corporate powers shall be exercised by or under the authority of, and the business and affairs of the corporation shall be managed under the direction of, the Board, except as may be otherwise provided in these Bylaws, the Articles of Incorporation or the Washington Business Corporation Act.
3.2 | NUMBER AND TENURE |
The Board shall be composed of five (5) Directors, and thereafter, the specific number shall be set by resolution of the Board. The number of Directors may be changed from time to time by amendment to these Bylaws, but no decrease in the number of Directors shall have the effect of shortening the term of any incumbent Director. Unless a Director dies, resigns, or is removed, his or her term of office shall expire at the next annual meeting of shareholders; provided, however, that a Director shall continue to serve until his or her successor is elected or until there is a decrease in the authorized number of Directors. Directors need not be shareholders of the corporation or residents of the State of Washington and need not meet any other qualifications.
3.3 | ANNUAL AND REGULAR MEETINGS |
An annual Board meeting shall be held without notice immediately after and at the same place as the annual meeting of shareholders. By resolution the Board, or any committee thereof, may specify the time and place either within or without the State of Washington for holding regular meetings thereof without notice other than such resolution.
3.4 | SPECIAL MEETINGS |
Special meetings of the Board or any committee designated by the Board may be called by or at the request of the Chairman of the Board, the Chief Executive Officer, the Secretary or, in the case of special Board meetings, any Director and, in the case of any special meeting of any committee designated by the Board, by the Chairman thereof. The person or persons authorized to call special meetings may fix any place either within or without the State of Washington as the place for holding any special Board or committee meeting called by them.
3.5 | MEETINGS BY COMMUNICATIONS EQUIPMENT |
Members of the Board or any committee designated by the Board may participate in a meeting of such Board or committee by, or conduct the meeting through the use of, any means of communication by which all Directors participating in the meeting can hear each other during the meeting. Participation by such means shall constitute presence in person at a meeting.
3.6 | NOTICE OF SPECIAL MEETINGS |
Notice of a special Board or committee meeting stating the place, day and hour of the meeting shall be given to a Director in writing or orally. Neither the business to be transacted at, nor the purpose of, any special meeting need be specified in the notice of such meeting.
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3.6.1 | Personal Delivery |
If notice is given by personal delivery, the notice shall be effective if delivered to a Director at least two (2) days before the meeting.
3.6.2 | Delivery by Mail |
If notice is delivered by mail, the notice shall be deemed effective if deposited in the official government mail at least five (5) days before the meeting, properly addressed to a Director at his or her address shown on the records of the corporation, with postage thereon prepaid.
3.6.3 | Delivery by Private Carrier |
If notice is given by private carrier, the notice shall be deemed effective when dispatched to a Director at his or her address shown on the records of the corporation at least three (3) days before the meeting.
3.6.4 | Facsimile Notice |
If notice is delivered by wire or wireless equipment which transmits a facsimile of the notice, the notice shall be deemed effective when dispatched at least two (2) days before the meeting to a Director at his or her telephone number or other number appearing on the records of the corporation.
3.6.5 | Delivery by Telegraph |
If notice is delivered by telegraph, the notice shall be deemed effective if the content thereof is delivered to the telegraph company for delivery to a Director at his or her address shown on the records of the corporation at least three (3) days before the meeting.
3.6.6 | Oral Notice |
If notice is delivered orally, by telephone or in person, the notice shall be deemed effective if personally given to the Director at least two (2) days before the meeting.
3.7 | WAIVER OF NOTICE |
3.7.1 | In Writing |
Whenever any notice is required to be given to any Director under the provisions of these Bylaws, the Articles of Incorporation or the Washington Business Corporation Act, a waiver thereof in writing, signed by the person or persons entitled to such notice and delivered to the corporation, whether before or after the date and time of the meeting, shall be deemed equivalent to the giving of such notice. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board or any committee designated by the Board need be specified in the waiver of notice of such meeting.
3.7.2 | By Attendance |
A Directors attendance at or participation in a Board or committee meeting shall constitute a waiver of notice of such meeting, unless the Director at the beginning of the meeting, or promptly upon his or her arrival, objects to holding the meeting or transacting business thereat and does not thereafter vote for or assent to action taken at the meeting.
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3.8 | QUORUM |
A majority of the number of Directors fixed by or in the manner provided in these Bylaws shall constitute a quorum for the transaction of business at any Board meeting but, if less than a majority are present at a meeting, a majority of the Directors present may adjourn the meeting from time to time without further notice.
3.9 | MANNER OF ACTING |
If a quorum is present when the vote is taken, the act of the majority of the Directors present at a Board meeting shall be the act of the Board, unless the vote of a greater number is required by these Bylaws, the Articles of Incorporation or the Washington Business Corporation Act.
3.10 | PRESUMPTION OF ASSENT |
A Director of the corporation who is present at a Board or committee meeting at which any action is taken shall be deemed to have assented to the action taken unless (a) the Director objects at the beginning of the meeting, or promptly upon the Directors arrival, to holding the meeting or transacting any business thereat, (b) the Directors dissent or abstention from the action taken is entered in the minutes of the meeting, or (c) the Director delivers written notice of the Directors dissent or abstention to the presiding officer of the meeting before its adjournment or to the corporation within a reasonable time after adjournment of the meeting. The right of dissent or abstention is not available to a Director who votes in favor of the action taken.
3.11 | ACTION BY BOARD OR COMMITTEES WITHOUT A MEETING |
Any action which could be taken at a meeting of the Board or of any committee created by the Board may be taken without a meeting if one or more written consents setting forth the action so taken are signed by each of the Directors or by each committee member either before or after the action is taken and delivered to the corporation. Action taken by written consent of Directors without a meeting is effective when the last Director signs the consent, unless the consent specifies a later effective date. Any such written consent shall be inserted in the minute book as if it were the minutes of a Board or a committee meeting.
3.12 | RESIGNATION |
Any Director may resign at any time by delivering written notice to the Chairman of the Board, the Chief Executive Officer, the Secretary or the Board. Any such resignation is effective upon delivery thereof unless the notice of resignation specifies a later effective date and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.
3.13 | REMOVAL |
At a meeting of shareholders called expressly for that purpose, one or more members of the Board, including the entire Board, may be removed with or without cause (unless the Articles of Incorporation permit removal for cause only) by the holders of the shares entitled to elect the Director or Directors whose removal is sought if the number of votes cast to remove the Director exceeds the number of votes cast not to remove the Director. If the Articles of Incorporation permit cumulative voting in the election of Directors, then a Director may not be removed if the number of votes sufficient to elect such Director if then cumulatively voted at an election of the entire Board or, if there are classes of Directors, at an election of the class of Directors of which such Director is a part, is voted against the Directors removal.
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3.14 | VACANCIES |
Unless the Articles of Incorporation provide otherwise, any vacancy occurring on the Board may be filled by the shareholders, the Board or, if the Directors in office constitute fewer than a quorum, by the affirmative vote of a majority of the remaining Directors. Any vacant office held by a Director elected by the holders of one or more classes or series of shares entitled to vote and be counted collectively thereon shall be filled only by the vote of the holders of such class or series of shares. A Director elected to fill a vacancy shall serve only until the next election of Directors by the shareholders.
3.15 | EXECUTIVE AND OTHER COMMITTEES |
3.15.1 | Creation of Committees |
The Board, by resolution adopted by the greater of a majority of the Directors then in office and the number of Directors required to take action in accordance with these Bylaws, may create standing or temporary committees, including an Executive Committee, and appoint members thereto from its own number and invest such committees with such powers as it may see fit, subject to such conditions as may be prescribed by the Board, these Bylaws and applicable law. Each committee must have two or more members, who shall serve at the pleasure of the Board.
3.15.2 | Authority of Committees |
Each committee shall have and may exercise all of the authority of the Board to the extent provided in the resolution of the Board creating the committee and any subsequent resolutions pertaining thereto and adopted in like manner, except that no such committee shall have the authority to: (a) authorize or approve a distribution except according to a general formula or method prescribed by the Board, (b) approve or propose to shareholders actions or proposals required by the Washington Business Corporation Act to be approved by shareholders, (c) fill vacancies on the Board or any committee thereof, (d) adopt, amend or repeal Bylaws, (e) amend the Articles of Incorporation pursuant to RCW 23B.10.020, (f) approve a plan of merger not requiring shareholder approval, or (g) authorize or approve the issuance or sale or contract for sale of shares, or determine the designation and relative rights, preferences and limitations of a class or series of shares except that the Board may authorize a committee or a senior executive officer of the corporation to do so within limits specifically prescribed by the Board.
3.15.3 | Quorum and Manner of Acting |
A majority of the number of Directors composing any committee of the Board, as established and fixed by resolution of the Board, shall constitute a quorum for the transaction of business at any meeting of such committee but, if less than a majority are present at a meeting, a majority of such Directors present may adjourn the meeting from time to time without further notice. Except as may be otherwise provided in the Washington Business Corporation Act, if a quorum is present when the vote is taken the act of a majority of the members present shall be the act of the committee.
3.15.4 | Minutes of Meetings |
All committees shall keep regular minutes of their meetings and shall cause them to be recorded in books kept for that purpose.
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3.15.5 | Resignation |
Any member of any committee may resign at any time by delivering written notice thereof to the Chairman of the Board, the Chief Executive Officer, the Secretary or the Board. Any such resignation is effective upon delivery thereof, unless the notice of resignation specifies a later effective date, and the acceptance of such resignation shall not be necessary to make it effective.
3.15.6 | Removal |
The Board may remove any member of any committee elected or appointed by it but only by the affirmative vote of the greater of a majority of the Directors then in office and the number of Directors required to take action in accordance with these Bylaws.
3.16 | COMPENSATION |
By Board resolution, Directors and committee members may be paid their expenses, if any, of attendance at each Board or committee meeting, or a fixed sum for attendance at each Board or committee meeting, or a stated salary as Director or a committee member, or a combination of the foregoing. No such payment shall preclude any Director or committee member from serving the corporation in any other capacity and receiving compensation therefor.
SECTION 4. OFFICERS
4.1 | APPOINTMENT AND TERM |
The officers of the corporation shall be those officers appointed from time to time by the Board or by any other officer empowered to do so. The Board shall have sole power and authority to appoint executive officers. As used herein, the term executive officer shall mean the Chief Executive Officer or any other officer who performs a policy-making function. The Board may appoint such other officers and assistant officers to hold office for such period, have such authority and perform such duties as may be prescribed. The Board may delegate to any other officer the power to appoint any subordinate officers and to prescribe their respective terms of office, authority and duties. Any two or more offices may be held by the same person. Unless an officer dies, resigns or is removed from office, he or she shall hold office until his or her successor is appointed.
4.2 | RESIGNATION |
Any officer may resign at any time by delivering written notice thereof to the corporation. Any such resignation is effective upon delivery thereof, unless the notice of resignation specifies a later effective date, and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.
4.3 | REMOVAL |
Any officer may be removed by the Board at any time, with or without cause. An officer or assistant officer, if appointed by another officer, may be removed by any officer authorized to appoint officers or assistant officers.
4.4 | CONTRACT RIGHTS OF OFFICERS |
The appointment of an officer does not itself create contract rights.
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4.5 | CHAIRMAN OF THE BOARD |
If appointed, the Chairman of the Board shall perform such duties as shall be assigned to him or her by the Board from time to time and shall preside over meetings of the Board and shareholders unless another officer is appointed or designated by the Board as Chairman of such meetings.
4.6 | CHIEF EXECUTIVE OFFICER |
If appointed, the Chief Executive Officer shall be the chief executive officer of the corporation, shall preside over meetings of the Board and shareholders in the absence of a Chairperson of the Board, and, subject to the Boards control, shall supervise and control all of the assets, business and affairs of the corporation. The Chief Executive Officer may sign, with the Secretary or an Assistant Secretary or with the Treasurer or an Assistant Treasurer, certificates for shares of the corporation, deeds, mortgages, bonds, contracts or other instruments, except when the signing and execution thereof have been expressly delegated by the Board or by these Bylaws to some other officer or agent of the corporation or are required by law to be otherwise signed or executed by some other officer or in some other manner. In general, the Chief Executive Officer shall perform all duties incident to the office of Chief Executive Officer and such other duties as are prescribed by the Board from time to time.
4.7 | VICE PRESIDENT |
In the event of the death of the Chief Executive Officer or a vacancy in the office of the Chief Executive Officer, or his or her inability to act, the Vice President shall, if appointed, perform the duties of the Chief Executive Officer, except as may be limited by resolution of the Board, with all the powers of and subject to all the restrictions upon the Chief Executive Officer. If there is more than one Vice President, the Vice President who was designated by the Board as the successor to the Chief Executive Officer, or if no Vice President is so designated, the Vice President first elected to the office of Vice President, shall perform the duties of the Chief Executive Officer, except as may be limited by resolution of the Board, with all the powers of and subject to all the restrictions upon the Chief Executive Officer. Any Vice President may sign, with the Secretary of an Assistant Secretary or with the Treasurer or an Assistant Treasurer, certificates for shares of the corporation. Vice Presidents shall perform other duties as from time to time may be assigned to them by the Chief Executive Officer or by or at the direction of the Board.
4.8 | SECRETARY |
If appointed, the Secretary shall be responsible for preparation of minutes of the meetings of the Board and shareholders, maintenance of the corporation records and stock registers, and authentication of the corporations records and shall in general perform all duties incident to the office of Secretary and such other duties as from time to time may be assigned to him or her by the Chief Executive Officer or by or at the direction of the Board. In the absence of the Secretary, an Assistant Secretary may perform the duties of the Secretary.
4.9 | TREASURER |
If appointed, the Treasurer shall have charge and custody of and be responsible for all funds and securities of the corporation, receive and give receipts for funds due and payable to the corporation from any source whatsoever, and deposit funds in the name of the corporation in banks, trust companies or other depositories selected in accordance with the provisions of these Bylaws, and in general shall perform all duties incident to the office of Treasurer and other duties as from time to time may be assigned to him or her by the Chief Executive Officer or by or at the direction of the Board. In the absence of the Treasurer, an Assistant Treasurer may perform the duties of the Treasurer.
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4.10 | SALARIES |
The salaries of the officers shall be fixed from time to time by the Board or by any person or persons to whom the Board has delegated such authority. No officer shall be prevented from receiving such salary by reason of the fact that he or she is also a Director of the corporation.
SECTION 5. CONTRACTS, LOANS, CHECKS AND DEPOSITS
5.1 | CONTRACTS |
The Board may authorize any officer or officers, or agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the corporation. Such authority may be general or confined to specific instances.
5.2 | LOANS TO THE CORPORATION |
No loans shall be contracted on behalf of the corporation and no evidences of indebtedness shall be issued in its name unless authorized by a resolution of the Board. Such authority may be general or confined to specific instances.
5.3 | CHECKS, DRAFTS, ETC. |
All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the corporation shall be signed by such officer or officers, or agent or agents, of the corporation and in such manner as is from time to time determined by resolution of the Board.
5.4 | DEPOSITS |
All funds of the corporation not otherwise employed shall be deposited from time to time to the credit of the corporation in such banks, trust companies or other depositories as the Board may select.
SECTION 6. CERTIFICATES FOR SHARES AND THEIR TRANSFER
6.1 | ISSUANCE OF SHARES |
No shares of the corporation shall be issued unless authorized by the Board, or by a committee designated by the Board to the extent such committee is empowered to do so.
6.2 | CERTIFICATES FOR SHARES |
Shares may, but need not, be represented by certificates. If certificated, certificates representing shares of the corporation shall be signed, either manually or in facsimile, by any two (2) duly appointed officers of the corporation and shall include on their face written notice of any restrictions which may be imposed on the transferability of such shares. All certificates shall be consecutively numbered or otherwise identified.
6.3 | STOCK RECORDS |
The stock transfer books shall be kept at the principal office of the corporation or at the office of the corporations transfer agent or registrar. The name and address of each person to whom certificates for shares are issued, together with the class and number of shares represented by each such certificate and the date of issue thereof, shall be entered on the stock transfer books of the corporation. The person in whose name shares stand on the books of the corporation shall be deemed by the corporation to be the owner thereof for all purposes.
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6.4 | LOST OR DESTROYED CERTIFICATES |
In the case of a lost, destroyed or mutilated certificate, a new certificate may be issued therefor upon such terms and indemnity to the corporation as the Board may prescribe.
SECTION 7. BOOKS AND RECORDS
The corporation shall:
(a) Keep as permanent records minutes of all meetings of its shareholders and the Board, a record of all actions taken by the shareholders or the Board without a meeting, and a record of all actions taken by a committee of the Board exercising the authority of the Board on behalf of the corporation.
(b) Maintain appropriate accounting records.
(c) Maintain a record of its shareholders, in a form that permits preparation of a list of the names and addresses of all shareholders, in alphabetical order by class of shares showing the number and class of shares held by each; provided, however, such record may be maintained by an agent of the corporation.
(d) Maintain its records in written form or in another form capable of conversion into written form within a reasonable time.
(e) Keep a copy of the following records at its principal office:
(i) the Articles of Incorporation and all amendments thereto as currently in effect;
(ii) the Bylaws and all amendments thereto as currently in effect;
(iii) the minutes of all meetings of shareholders and records of all action taken by shareholders without a meeting, for the past three (3) years;
(iv) the financial statements described in Section 23B.16.200(1) of the Washington Business Corporation Act, for the past three (3) years;
(v) all written communications to shareholders generally within the past three (3) years;
(vi) a list of the names and business addresses of the current Directors and officers; and
(vii) the most recent annual report delivered to the Washington Secretary of State.
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SECTION 8. ACCOUNTING YEAR
The accounting year of the corporation shall be the calendar year, provided that if a different accounting year is at any time selected by the Board for purposes of federal income taxes, or any other purpose, the accounting year shall be the year so selected.
SECTION 9. SEAL
The Board may provide for a corporate seal which shall consist of the name of the corporation, the state of its incorporation and the year of its incorporation.
SECTION 10. INDEMNIFICATION
10.1 | RIGHT TO INDEMNIFICATION |
Each person who was, is or is threatened to be made a named party to or is otherwise involved (including, without limitation, as a witness) in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative and whether formal or informal (hereinafter a proceeding), by reason of the fact that he or she is or was a Director or officer of the corporation or, that being or having been such a Director or officer or an employee of the corporation, he or she is or was serving at the request of an executive officer of the corporation as a Director, officer, partner, trustee, employee or agent of another corporation or of a partnership, joint venture, trust, employee benefit plan or other enterprise (hereinafter an indemnitee), whether the basis of a proceeding is alleged action in an official capacity as such a Director, officer, partner, trustee, employee or agent or in any other capacity while serving as such a Director, officer, partner, trustee, employee or agent, shall be indemnified and held harmless by the corporation against all expense, liability and loss (including counsel fees, judgments, fines, ERISA excise taxes or penalties and amounts to be paid in settlement) actually and reasonably incurred or suffered by such indemnitee in connection therewith, and such indemnification shall continue as to an indemnitee who has ceased to be a Director, officer, partner, trustee, employee or agent and shall inure to the benefit of the indemnitees heirs, executors and administrators. Except as provided in Section 10.4 of this Section with respect to proceedings seeking to enforce rights to indemnification, the corporation shall indemnify any such indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if a proceeding (or part thereof) was authorized or ratified by the Board. The right to indemnification conferred in this Section shall be a contract right.
10.2 | RESTRICTIONS ON INDEMNIFICATION |
No indemnification shall be provided to any such indemnitee for acts or omissions of the indemnitee finally adjudged to be intentional misconduct or a knowing violation of law, for conduct of the indemnitee finally adjudged to be in violation of Section 23B.08.310 of the Washington Business Corporation Act, for any transaction with respect to which it was finally adjudged that such indemnitee personally received a benefit in money, property or services to which the indemnitee was not legally entitled or if the corporation is otherwise prohibited by applicable law from paying such indemnification, except that if Section 23B.08.560 or any successor provision of the Washington Business Corporation Act is hereafter amended, the restrictions on indemnification set forth in this Section 10.2 shall be as set forth in such amended statutory provision.
10.3 | ADVANCEMENT OF EXPENSES |
The right to indemnification conferred in this Section 10.3 shall include the right to be paid by the corporation the expenses incurred in defending any proceeding in advance of its final disposition
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(hereinafter an advancement of expenses). An advancement of expenses shall be made upon delivery to the corporation of an undertaking (hereinafter an undertaking), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal that such indemnitee is not entitled to be indemnified for such expenses under this Section 10.3.
10.4 | RIGHT OF INDEMNITEE TO BRING SUIT |
If a claim under Section 10.1 or 10.3 of this Section is not paid in full by the corporation within sixty (60) days after a written claim has been received by the corporation, except in the case of a claim for an advancement of expenses, in which case the applicable period shall be twenty (20) days, the indemnitee may at any time thereafter bring suit against the corporation to recover the unpaid amount of the claim. If successful in whole or in part, in any such suit or in a suit brought by the corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. The indemnitee shall be presumed to be entitled to indemnification under this Section 10.4 upon submission of a written claim (and, in an action brought to enforce a claim for an advancement of expenses, where the required undertaking has been tendered to the corporation) and thereafter the corporation shall have the burden of proof to overcome the presumption that the indemnitee is so entitled.
10.5 | PROCEDURES EXCLUSIVE |
Pursuant to Section 23B.08.560(2) or any successor provision of the Washington Business Corporation Act, the procedures for indemnification and advancement of expenses set forth in this Section 10.5 are in lieu of the procedures required by Section 23B.08.550 or any successor provision of the Washington Business Corporation Act.
10.6 | NONEXCLUSIVITY OF RIGHTS |
The right to indemnification and the advancement of expenses conferred in this Section 10.6 shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of the Articles of Incorporation or Bylaws of the corporation, general or specific action of the Board, contract or otherwise.
10.7 | INSURANCE, CONTRACTS AND FUNDING |
The corporation may maintain insurance, at its expense, to protect itself and any Director, officer, partner, trustee, employee or agent of the corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the corporation would have the power to indemnify such person against such expense, liability or loss under the Washington Business Corporation Act. The corporation may enter into contracts with any Director, officer, partner, trustee, employee or agent of the corporation in furtherance of the provisions of this Section and may create a trust fund, grant a security interest or use other means (including, without limitation, a letter of credit) to ensure the payment of such amounts as may be necessary to effect indemnification as provided in this Section.
10.8 | INDEMNIFICATION OF EMPLOYEES AND AGENTS OF THE CORPORATION |
The corporation may, by action of the Board, grant rights to indemnification and advancement of expenses to employees and agents or any class or group of employees and agents of the corporation (a) with the same scope and effect as the provisions of this Section with respect to the indemnification and advancement of expenses of Directors and officers of the corporation; (b) pursuant to rights granted pursuant to, or provided by, the Washington Business Corporation Act; or (c) as are otherwise consistent with law.
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10.9 | PERSONS SERVING OTHER ENTITIES |
Any person who, while a Director, officer or employee of the corporation, is or was serving (a) as a Director or officer of another foreign or domestic corporation of which a majority of the shares entitled to vote in the election of its Directors is held by the corporation or (b) as a partner, trustee or otherwise in an executive or management capacity in a partnership, joint venture, trust or other enterprise of which the corporation or a wholly owned subsidiary of the corporation is a general partner or has a majority ownership shall be deemed to be so serving at the request of an executive officer of the corporation and entitled to indemnification and advancement of expenses under Sections 10.1 and 10.3 of this section.
SECTION 11. AMENDMENTS
These Bylaws may be altered, amended or repealed and new Bylaws may be adopted by the Board, except that the Board may not repeal or amend any Bylaw that the shareholders have expressly provided, in amending or repealing such Bylaw, may not be amended or repealed by the Board. The shareholders may also alter, amend and repeal these Bylaws or adopt new Bylaws. All Bylaws adopted by the Board may be amended, repealed, altered or modified by the shareholders.
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Exhibit 4.1
FIRST SUPPLEMENTAL INDENTURE
THIS FIRST SUPPLEMENTAL INDENTURE (this First Supplemental Indenture) dated as of October 19, 2022 between Avalara, Inc., a Washington corporation, as issuer (the Company) and The Bank of New York Mellon Trust Company, N.A., a national banking association, as trustee (the Trustee).
W I T N E S S E T H :
WHEREAS, the Company and the Trustee are parties to an Indenture, dated as of August 13, 2021 (the Indenture), relating to the Companys 0.25% Convertible Senior Notes due 2026 (the Notes);
WHEREAS, the Company entered into that certain Agreement and Plan of Merger, dated as of August 8, 2022 (the Merger Agreement), by and among the Company, Lava Intermediate, Inc., a Delaware corporation (Parent), and Lava Merger Sub, Inc., a Washington corporation and a wholly owned subsidiary of Parent (Merger Sub), pursuant to which, on the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into Avalara (the Merger), with Avalara continuing as the surviving corporation in the Merger and as a wholly owned subsidiary of Parent;
WHEREAS, subject to the Merger Agreement and the terms and conditions contained therein, at the effective time of the Merger (the Effective Time) each share of common stock of Avalara, $0.0001 par value per share (each a Share and, collectively, the Shares), issued and outstanding immediately prior to the Effective Time (other than certain shares as set forth in the Merger Agreement) will be converted into the right to receive $93.50 in cash (the Merger Consideration);
WHEREAS, the Merger will constitute a Merger Event under the Indenture;
WHEREAS, in connection with the foregoing, Section 14.07(a) of the Indenture provides that the Company shall execute a supplemental indenture providing that each Note shall, without the consent of any Holders, become convertible into Reference Property (as defined below);
WHEREAS, pursuant to Section 10.01(g) of the Indenture, the parties hereto are authorized to execute and deliver this First Supplemental Indenture;
WHEREAS, in connection with the execution and delivery of this First Supplemental Indenture, the Trustee has received an Officers Certificate and an Opinion of Counsel as contemplated by Sections 10.05, 11.03, 14.07(b) and 17.05 of the Indenture; and
WHEREAS, the Company has requested that the Trustee execute and deliver this First Supplemental Indenture and has satisfied all requirements necessary to make this First Supplemental Indenture a valid instrument in accordance with its terms.
NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Company and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders as follows:
ARTICLE I
Defined Terms
Section 1.01. Defined Terms. A term defined in the Indenture has the same meaning when used in this First Supplemental Indenture unless such term is otherwise defined herein or amended or supplemented pursuant to this First Supplemental Indenture. The words herein, hereof, hereunder, and words of similar import refer to this First Supplemental Indenture as a whole and not to any particular Article, Section or other subdivision. The terms defined in this Article include the plural as well as the singular.
ARTICLE II
Effect of Merger
Section 2.01. Conversion of Notes. In accordance with Section 14.07(a) of the Indenture, at and after the effective time of the Merger, the right to convert each $1,000 principal amount of the Notes shall be changed into a right to convert such principal amount of Notes into cash (the Reference Property) in an amount equal to $392.14, which is (x) the Conversion Rate in effect immediately prior to the Merger, multiplied by (y) the Merger Consideration, rounded to the nearest cent. For the avoidance of doubt, a unit of Reference Property, as such phrase is used in the Indenture, shall mean $93.50 in cash. The provisions of the Indenture, as modified herein, shall continue to apply, mutatis mutandis, to the Holders right to convert the Notes into the Reference Property.
Section 2.02. Effectiveness. This First Supplemental Indenture shall become effective upon its execution and delivery by the Company and the Trustee and as of the date hereof. The Trustee accepts the Indenture, as supplemented hereby, and agrees to perform the same upon the terms and conditions set forth herein, as supplemented hereby.
ARTICLE III
Miscellaneous
Section 3.01. Provisions Binding on Companys Successors. All the covenants, stipulations, promises and agreements of the Company contained in this First Supplemental Indenture shall bind its successors and assigns whether so expressed or not.
Section 3.02. Official Acts by Successor Corporation. Any act or proceeding by any provision of this First Supplemental Indenture authorized or required to be done or performed by any board, committee or Officer of the Company shall and may be done and performed with like force and effect by the like board, committee or officer of any corporation or other entity that shall at the time be the lawful sole successor of the Company.
Section 3.03. Waiver of Jury Trial. EACH OF THE COMPANY, THE HOLDERS AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS FIRST SUPPLEMENTAL INDENTURE, THE NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 3.04. Governing Law; Jurisdiction. THIS FIRST SUPPLEMENTAL INDENTURE, THE INDENTURE AND EACH NOTE, AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS FIRST SUPPLEMENTAL INDENTURE, THE INDENTURE AND EACH NOTE, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
The Company irrevocably consents and agrees, for the benefit of the Holders from time to time of the Notes and the Trustee, that any legal action, suit or proceeding against it with respect to obligations, liabilities or any other matter arising out of or in connection with this First Supplemental Indenture or the Indenture may be brought in the courts of the State of New York or the courts of the United States located in the Borough of Manhattan, New York City, New York and, until amounts due and to become due in respect of the Notes have been paid, hereby irrevocably consents and submits to the non-exclusive jurisdiction of each such court in personam, generally and unconditionally with respect to any action, suit or proceeding for itself in respect of its properties, assets and revenues.
The Company irrevocably and unconditionally waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions, suits or proceedings arising out of or in connection with this First Supplemental Indenture or the Indenture brought in the courts of the State of New York or the courts of the United States located in the Borough of Manhattan, New York City, New York and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.
Section 3.05. Ratification of Indenture; Supplemental Indentures Part of Indenture. Except as supplemented hereby, the Indenture, as amended and supplemented by this First Supplemental Indenture, is in all respects ratified and confirmed, and this First Supplemental Indenture shall be deemed part of the Indenture in the manner and to the extent herein and therein provided.
Section 3.06. Benefits of First Supplemental Indenture. Nothing in this First Supplemental Indenture, expressed or implied, shall give to any Person, other than the Holders, the parties hereto, any Paying Agent, any Conversion Agent, any authenticating agent, any Note Registrar and their successors hereunder, any benefit or any legal or equitable right, remedy or claim under this First Supplemental Indenture or the Indenture or any provision herein or therein contained.
Section 3.07. Counterparts. This First Supplemental Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument. The exchange of copies of this First Supplemental Indenture and of signature pages by facsimile or PDF transmission shall constitute effective execution and delivery of this First Supplemental Indenture as to the parties hereto and may be used in lieu of the original First Supplemental Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes. In furtherance of the foregoing, the words execution, signed, signature, delivery and words of like import in or relating to any document to be signed in connection with this First Supplemental Indenture and the transactions contemplated hereby or thereby shall be deemed to include Electronic Signatures, deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act; provided that, notwithstanding anything herein to the contrary, the Trustee is not under any obligation to agree to accept electronic signatures in any form or in any format unless expressly agreed to by the Trustee, pursuant to procedures approved by the Trustee. As used herein, Electronic Signature means an electronic sound, symbol, or process attached to, or associated with, a contract or other record and adopted by a Person with the intent to sign, authenticate or accept such contract or other record.
Section 3.08. Trustee Matters. In entering into this First Supplemental Indenture, the Trustee shall be entitled to the benefit of every provision of the Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee, whether or not elsewhere herein so provided. The Trustee makes no representations as to the validity, execution or sufficiency of this First Supplemental Indenture other than as to the validity of its execution and delivery by the Trustee. The Trustee assumes no responsibility for the correctness of the recitals contained herein, which shall be taken as a statement of the Company.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental Indenture to be duly executed as of the date first written above.
AVALARA, Inc. | ||
By: | /s/ Ross Tennenbaum | |
Name: Ross Tennenbaum | ||
Title: Chief Financial Officer and Treasurer |
(Signature Page to First Supplemental Indenture)
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee | ||
By: | /s/ Ann M. Dolezal | |
Name: Ann M. Dolezal | ||
Title: Vice President |
(Signature Page to First Supplemental Indenture)
Exhibit 99.1
Vista Equity Partners Completes Acquisition of Avalara
SEATTLE, October 19, 2022 Avalara, Inc., a leading provider of tax compliance automation for businesses of all sizes, today announced the completion of its acquisition by Vista Equity Partners (Vista), a leading global investment firm focused exclusively on enterprise software, data and technology-enabled businesses, in partnership with institutional co-investors, for $93.50 per share in cash.
Today marks an exciting new chapter for Avalara. We thank our employees, customers, partners, and shareholders for their trust during this process, and we are excited to begin our work alongside Vista, said Scott McFarlane, co-founder and CEO of Avalara. As the leading enterprise software investor, Vista knows what it takes to pursue and achieve excellence. We look forward to partnering with their experienced team to advance our mission to become the global cloud compliance platform and provide even greater value for our customers and partners.
The criticality of Avalaras software platform combined with its commitment to driving innovation and serving its extensive partner network provides a strong foundation for growth, added Monti Saroya, Co-Head of the Vista Flagship Fund and Senior Managing Director. We look forward to working with Scott and the Avalara team and welcome them to the Vista portfolio and ecosystem as they continue to execute on their vision to automate global compliance.
With the completion of the transaction, Avalara shares have ceased trading and are no longer listed on the New York Stock Exchange.
Goldman Sachs & Co. LLC served as exclusive financial advisor to Avalara, and Simpson Thacher & Bartlett LLP and Perkins Coie LLP acted as legal counsel.
BofA Securities served as financial advisor to Vista and Kirkland & Ellis LLP acted as legal counsel.
About Avalara
Avalara helps businesses of all sizes get tax compliance right. In partnership with leading ERP, accounting, ecommerce, and other financial management system providers, Avalara delivers cloud-based compliance solutions for various transaction taxes, including sales and use, VAT, GST, excise, communications, lodging, and other indirect tax types. Headquartered in Seattle, Avalara has offices across the U.S. and around the world in Brazil, Europe, and India. More information at avalara.com.
About Vista Equity Partners
Vista is a leading global investment firm with $94 billion in assets under management as of June 30, 2022. The firm exclusively invests in enterprise software, data and technology-enabled organizations across private equity, permanent capital, credit and public equity strategies, bringing an approach that prioritizes creating enduring market value for the benefit of its global ecosystem of investors, companies, customers
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and employees. Vistas investments are anchored by a sizable long-term capital base, experience in structuring technology-oriented transactions and proven, flexible management techniques that drive sustainable growth. Vista believes the transformative power of technology is the key to an even better future a healthier planet, a smarter economy, a diverse and inclusive community and a broader path to prosperity. Further information is available at vistaequitypartners.com. Follow Vista on LinkedIn, @Vista Equity Partners, and on Twitter, @Vista_Equity.
Contacts
For media inquiries, contact:
Brian W. Steel
media@vistaequitypartners.com
+1-212-804-9170
Jesse Hamlin
media@avalara.com
+1-518-281-0631
For investor inquiries, contact:
Jennifer Gianola
jennifer.gianola@avalara.com
650-499-9837
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Document and Entity Information |
Oct. 19, 2022 |
---|---|
Cover [Abstract] | |
Amendment Flag | false |
Entity Central Index Key | 0001348036 |
Current Fiscal Year End Date | --12-31 |
Document Type | 8-K |
Document Period End Date | Oct. 19, 2022 |
Entity Registrant Name | AVALARA, INC. |
Entity Incorporation State Country Code | WA |
Entity File Number | 001-38525 |
Entity Tax Identification Number | 91-1995935 |
Entity Address, Address Line One | 255 South King Street |
Entity Address, Address Line Two | Suite 1800 |
Entity Address, City or Town | Seattle |
Entity Address, State or Province | WA |
Entity Address, Postal Zip Code | 98104 |
City Area Code | (206) |
Local Phone Number | 826-4900 |
Written Communications | false |
Soliciting Material | false |
Pre Commencement Tender Offer | false |
Pre Commencement Issuer Tender Offer | false |
Security 12b Title | Common Stock, Par Value $0.0001 Per Share |
Trading Symbol | AVLR |
Security Exchange Name | NYSE |
Entity Emerging Growth Company | false |
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