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Item 1.01
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Entry into a Material Definitive Agreement.
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On February 14, 2022, Resonant Inc., a Delaware
corporation (“Resonant” or the “Company”), entered into an Agreement and Plan of Merger
(the “Merger Agreement”) by and among the Company, Murata Electronics North America, Inc., a Texas corporation
(“Murata”), and PJ Cosmos Acquisition Company, Inc., a Delaware corporation and wholly owned subsidiary of Murata
(“Purchaser”). Murata is a wholly-owned subsidiary of Murata
Manufacturing Co., Ltd., of Kyoto, Japan.
Pursuant to the terms
and subject to the conditions set forth in the Merger Agreement, Purchaser will commence a cash tender offer (the
“Offer”) to purchase all of the outstanding shares of the Company’s common stock, par value $0.001
per share (the “Shares”), at a purchase price of $4.50 per Share, net to the tendering stockholder in
cash, without interest and less any required withholding taxes (the “Per Share Amount”). Upon successful
completion of the Offer, and subject to the terms and conditions of the Merger Agreement, Purchaser will be merged with and into the
Company (the “Merger”), and the Company will survive the Merger as a wholly-owned subsidiary of Murata. At
the effective time of the Merger (the “Effective Time”), each outstanding Share (other than Shares held by
(i) the Company, Murata or their respective subsidiaries immediately prior to the Effective Time and (ii) stockholders of the
Company who have properly and validly perfected their statutory appraisal rights under the Delaware General Corporation Law
(“DGCL”)) will automatically be converted into the right to receive the Per Share Amount on the terms and
subject to the conditions set forth in the Merger Agreement. Consummation of the Offer and the Merger is not conditional on
Murata’s receipt of financing.
Purchaser has agreed to
commence the Offer as promptly as reasonably practicable but no later than March 1, 2022, and the Offer will remain open for at
least 20 business days. The Offer is subject to the satisfaction of customary conditions, including, among others, that
(i) at least that number of Shares validly tendered and not withdrawn (other than Shares tendered by guaranteed delivery where
actual delivery has not occurred), when added to any Shares already owned by Murata or any of its controlled subsidiaries, if any,
equal a majority of the outstanding Shares as of immediately prior to the time at which Purchaser first accepts for payment the
Shares tendered in the Offer, (ii) the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, and (iii) the other conditions set forth in Annex A to the Merger Agreement
have been satisfied or waived.
The Merger Agreement contemplates that the Merger
will be effected pursuant to Section 251(h) of the DGCL, which permits completion of the Merger upon the collective ownership by Murata,
Purchaser and any other subsidiary of Murata of one share more than 50% of the number of Shares that are then issued and outstanding,
and if the Merger is so effected pursuant to Section 251(h) of the DGCL, no stockholder vote will be required to consummate the Merger.
The board of directors of the Company has unanimously: (i) determined that the transactions contemplated by the Merger Agreement, including
the Offer and the Merger, are fair to, and in the best interests of, the Company and its stockholders; (ii) approved, adopted and declared
advisable the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger; (iii) resolved that the
Merger shall be effected as soon as practicable following the completion of the Offer without a vote of the Company’s stockholders
pursuant to Section 251(h) of the DGCL; and (iv) subject to the terms of the Merger Agreement, resolved and agreed to recommend that holders
of Shares accept the Offer and tender their Shares pursuant to the Offer.
The Company, Murata and Purchaser have made customary
representations and warranties in the Merger Agreement and agreed to certain customary covenants, including covenants regarding the operation
of the Company’s business prior to the closing of the Merger.
The Company has agreed not to solicit, initiate
or knowingly facilitate, or engage in discussions concerning, alternative proposals for the acquisition of the Company. However, subject
to the satisfaction of certain conditions, the Company and its board of directors (the “Board”), as applicable,
are permitted to take certain actions which may, as more fully described in the Merger Agreement, include terminating the Merger Agreement,
or changing the Board’s recommendation, following receipt of an unsolicited proposal, if the Board concludes in good faith after
consultation with its advisors that failure to do so would be inconsistent with its fiduciary duties.
The Merger Agreement contains certain termination
rights for each of the Company and Murata and further provides that upon termination of the Merger Agreement under specified circumstances
the Company may be required to pay Murata a termination fee of $11.2 million. The Merger Agreement also provides that upon termination
of the Merger Agreement under specified circumstances Murata may be required to pay the Company a termination fee of $15.0 million. In
addition, upon termination of the Merger Agreement under specified circumstances, the Company may be required to reimburse Murata for
up to $3.0 million of expenses. Any expenses the Company reimburses Murata would be offset against and reduce the amount of the termination
fee otherwise payable by the Company to Murata.
The foregoing summary of the Merger Agreement and
the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by, the full text
of the Merger Agreement filed as Exhibit 2.1 to this Current Report on Form 8-K, which is incorporated herein by reference. The Merger
Agreement has been attached to provide investors with information regarding its terms. It is not intended to provide any other factual
information about the Company, Murata or Purchaser. In particular, the assertions embodied in the representations and warranties contained
in the Merger Agreement are qualified by information in confidential disclosure schedules provided by the parties thereto in connection
with the signing of the Merger Agreement. These disclosure schedules contain information that modifies, qualifies and creates exceptions
to the representations and warranties set forth in the Merger Agreement. Moreover, certain representations and warranties in the Merger
Agreement were used for the purpose of allocating risk between the Company, Murata and Purchaser, rather than establishing matters of
fact. Any inaccuracies in such representations and warranties are subject to waiver by the parties in accordance with the Merger Agreement
without notice or liability to any other person. Any information concerning the subject matter of such representations and warranties
may have changed, and may continue to change, since the date of the Merger Agreement, and such subsequent information may or may not be
fully reflected in the Company’s public reports. Accordingly, the representations and warranties in the Merger Agreement may not
constitute the actual state of facts about the Company, Murata or Purchaser. The Company’s stockholders are not third-party beneficiaries
of 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 conditions of the Company, Parent, Purchaser or any of their respective subsidiaries or affiliates.