Treatment of Warrant Upon Acquisition of Company Upon the closing of any Acquisition, without limiting or prejudicing Holder’s right to convert this Warrant under Section 1.3 or exercise its “put” rights under Section 1.8 (in each case with respect to the Warrant Stock that may then be converted or put) the surviving entity shall, as a condition to the Acquisition, either (i) assume the obligations under this Warrant, then this Warrant shall be convertible into the same securities as would be payable for the shares of Warrant Stock issuable upon conversion of the unconverted portion of this Warrant as if such shares of Warrant Stock were outstanding on the record date for the Acquisition (and the Exchange Price and/or number of shares of Warrant Stock shall be adjusted accordingly); or (ii) the Company or other surviving entity in such Acquisition shall, upon initial closing of such Acquisition purchase this Warrant at its “Fair Value” (the “Purchase Price”). For purposes hereof, “Fair Value” means that value determined by the parties using a Black-Scholes Option-Pricing Model (the “Black-Scholes Calculation”) with the following assumptions: (A) a risk-free interest rate equal to the risk-free interest rate at the time of the closing of the Acquisition (or as close thereto as practicable), (B) a contractual life of the Warrant equal to the remaining term of this Warrant as of the date of the announcement of the Acquisition, (C) an annual dividend yield equal to dividends payable or declared on the underlying shares of Warrant Stock (including securities into which the shares of Warrant Stock may be convertible) during the term of this Warrant (calculated on an annual basis), and (D) a volatility factor of the expected market price of the Company’s Shares comprised of: (1) if the Company is publicly traded on a national securities exchange, its volatility over the one year period ending on the day prior to the announcement of the Acquisition, (2) if the Shares are traded over-the-counter, its volatility over the one year period ending on the day prior to the announcement of the Acquisition, or (3) if the Company is a non-public company, the volatility, over the one year period prior to the Acquisition, of an average of publicly-traded companies in the same or similar industry to the Company with such companies having similar revenues. The Purchase Price determined in accordance with the above shall be paid upon the initial closing of the Acquisition and shall not be subject to any post-Acquisition closing contingencies or adjustments; provided, however, the parties may take such post-Acquisition closing contingencies or adjustments into account in determining the Purchase Price, and if the parties take any post-Acquisition closing contingencies or adjustments into account, then upon the partial or complete removal of those post-Acquisition closing contingencies or adjustments, a new Black-Scholes Calculation would be made using all of the same inputs except for the value of the Company’s Shares (as determined under subclause (D)), and any increase in Fair Value (and, correspondingly, Purchase Price), including, without limitation, as a result of any earn-out or escrowed consideration, would be paid in full to Holder immediately after those post-Acquisition closing contingencies or adjustments can be determined or achieved.
Conversion of Company Shares As of the Effective Time, by virtue of the Merger and without any action on the part of the holder of any Company Share or Acquiror Share, each Company Share issued and outstanding immediately prior to the Effective Time (other than (a) shares to be cancelled in accordance with Section 3.2 and (b) Dissenting Shares) shall be converted into the right to receive in cash from Acquiror, without interest, an amount equal to $16.00 (the "Merger Consideration").
Company Option Plans At the Effective Time, all options (the "Company Options") then outstanding, whether or not vested and exercisable, under the Company's 1992 Stock Option Plan, 1996 Equity Incentive Plan, 1996 Directors Stock Option Plan and 1996 Employee Stock Purchase Plan, in each case as amended (collectively, the "Company Option Plans"), shall be assumed by Parent. Each Company Option assumed by Parent other than Company Options issued pursuant to the Company 1996 Employee Stock Purchase Plan shall be subject to, and exercisable upon, the same terms and conditions as under the applicable Company Option Plan and the applicable option agreement issued thereunder, except that (a) each assumed Company Option shall be exercisable for, and represent the right to acquire, that number of shares of Parent Common Stock (rounded down to the nearest whole share) equal to (i) the number of shares of Company Common Stock subject to such Company Option immediately prior to the Effective Time multiplied by (ii) the Exchange Ratio; and (b) the option price per share of Parent Common Stock subject to each assumed Company Option shall be an amount equal to (i) the option price per share of Company Common Stock subject to such Company Option in effect immediately prior to the Effective Time divided by (ii) the Exchange Ratio (rounded up to the nearest whole cent). The Company represents and warrants that each of the foregoing actions may be taken and effected by the Company without the consent of any holder of Company Options. Each assumed purchase right under the Company 1996 Employee Stock Purchase Plan shall continue to have, and be subject to, the terms and conditions set forth in the Company 1996 Employee Stock Purchase Plan and the documents governing the assumed purchase right, except that the purchase price of such shares of Parent Common Stock for each respective purchase date under each assumed purchase right shall be the lower of (i) the quotient determined by dividing eighty-five percent (85%) of the fair market value of Company Common Stock on the offering date of each assumed offering period by the Exchange Ratio or (ii) eighty-five percent (85%) of the fair market value of the Parent Common Stock on each purchase date of each assumed offering period occurring after the Effective Time (with the number of shares rounded to the nearest whole share and the purchase price rounded to the nearest whole cent). The assumed purchase rights shall be exercised at such times following the Effective Time as set forth in the Company 1996 Employee Stock Purchase Plan and each participant shall, accordingly, be issued shares of Parent Common Stock at such times pursuant to the Company 1996 Employee Stock Purchase Plan. The Company 1996 Employee Stock Purchase Plan shall terminate with the exercise of the last assumed purchase right, and no additional purchase rights shall be granted under the Company Employee Stock Purchase Plan following the Effective Time. Parent agrees that from and after the Effective Time, employees of the Surviving Corporation may participate in Parent's employee stock purchase plan, subject to the terms and conditions of such plan. The adjustment provided herein with respect to stock options shall be and is intended to be effected in a manner which is consistent with Section 424(a) of the Internal Revenue Code of 1986, as amended (the "Code"). The duration, vesting schedule, exercisability and other terms of each option immediately after the Effective Time shall be the same as the corresponding terms in effect immediately before the Effective Time, except that all references to Company in the Company Option Plans (and the corresponding references in the option agreement documenting such option) shall be deemed to be references to Parent. Except as set forth in Section 3.2(d) of the Disclosure Schedule (as defined in Article III hereof), vesting of Company Options shall not be accelerated as a result of the Merger. Continuous employment with the Company or its Subsidiaries shall be credited to the optionee for purposes of determining the vesting of all assumed Company Options after the Effective Time. As soon as reasonably practicable, but in no event later than 30 days after the Effective Time, Parent will issue to each holder of an assumed Company Option notice of the foregoing assumption by Parent. Parent shall file with the SEC, no later than ten business days after the Effective Time, a Registration Statement on Form S-8 relating to the shares of Parent Common Stock issuable with respect to the Company Options assumed by Parent in accordance with this Section 2.6.
Consolidation, Merger, Sale or Purchase of Assets, etc Holdings and the Borrower will not, and will not permit any of their respective Subsidiaries to, wind up, liquidate or dissolve its affairs or enter into any transaction of merger or consolidation, or convey, sell, lease or otherwise dispose of (or agree to do any of the foregoing at any future time) all or any part of its property or assets (other than inventory in the ordinary course of business, including sales of inventory on consignment in the ordinary course of business), or enter into any partnerships, joint ventures or sale-leaseback transactions, or purchase or otherwise acquire (in one or a series of related transactions) any part of the property or assets (other than purchases or other acquisitions of inventory, materials and equipment in the ordinary course of business) of any Person, except that the following shall be permitted:
(a) Holdings and its Subsidiaries may, as lessee or lessor, enter into operating leases in the ordinary course of business with respect to real or personal property;
(b) Capital Expenditures by Holdings and its Subsidiaries to the extent not in violation of Section 9.07;
(c) the advances, investments and loans permitted pursuant to Section 9.05;
(d) Holdings and its Subsidiaries may sell or discount, in each case without recourse, accounts receivable arising in the ordinary course of business, but only in connection with the compromise or collection thereof;
(e) Holdings and its Subsidiaries may sell or exchange specific items of machinery or equipment, so long as the proceeds of each such sale or exchange is used to acquire (and results within 180 days of such sale or exchange in the acquisition of) replacement items of machinery or equipment which are the functional equivalent of the item of equipment so sold or exchanged;
(f) Holdings and its Subsidiaries may, in the ordinary course of business, license, as licensor or licensee, patents, trademarks, copyrights and know-how to third Persons and to one another, so long as any such license by Holdings or its Subsidiaries in its capacity as licensor is permitted to be assigned pursuant to the Security Agreement (to the extent that a security interest in such patents, trademarks, copyrights and know- how is granted thereunder) and does not otherwise prohibit the granting of a Lien by Holdings or any of its Subsidiaries pursuant to the Security Agreement in the intellectual property covered by such license;
(g) any Wholly Owned Subsidiary of the Borrower may transfer assets to the Borrower or to any other Wholly Owned Subsidiary of the Borrower, so long as (i) if the transferee is a Subsidiary, such Subsidiary is a Guarantor and (ii) the security interests granted to the Collateral Agent for the benefit of the Secured Creditors pursuant to the Security Documents in the assets so transferred shall remain in full force and effect and perfected (to at least the same extent as in effect immediately prior to such transfer);
(h) any Wholly Owned Subsidiary of the Borrower may merge with and into, or be dissolved or liquidated into, the Borrower so long as (i) the Borrower is the surviving corporation of any such merger, dissolution or liquidation and (ii) the security interests granted to the Collateral Agent for the benefit of the Secured Creditors pursuant to the Security Documents in the assets of such Wholly Owned Subsidiary shall remain in full force and effect and perfected (to at least the same extent as in effect immediately prior to such merger, dissolution or liquidation);
(i) any Wholly Owned Subsidiary of the Borrower may merge with and into, or be dissolved or liquidated into, any Wholly Owned Subsidiary of the Borrower so long as (i) such Wholly Owned Subsidiary is a Guarantor and is the surviving corporation of any such merger, dissolution or liquidation and (ii) the security interests granted to the Collateral Agent for the benefit of the Secured Creditors pursuant to the Security Documents in the assets of such Wholly Owned Subsidiary shall remain in full force and effect and perfected (to at least the same extent as in effect immediately prior to such merger, dissolution or liquidation);
(j) so long as no Default or Event of Default then exists or would result therefrom (including giving pro forma effect to such acquisition and --- ----- any additional Indebtedness resulting therefrom or incurred or assumed in connection therewith as if such acquisition had occurred and such Indebtedness had been incurred as of the first day of the most recently completed Test Period (including any other Permitted Acquisition that occurred, and related Indebtedness that was incurred, during or subsequent to such Test Period)), Holdings or any of its Wholly Owned Subsidiaries may consummate a Permitted Acquisition; provided that (i) Holdings shall have -------- delivered to the Administrative Agent, at the time of delivery of the Permitted Acquisition Notice, a certificate of the Chief Financial Officer of Holdings showing compliance (in reasonable detail as to pro forma calculations) with all of the provisions of this paragraph (j), and (ii) Holdings or the Borrower shall have given the Agents and the Banks at least 30 days prior notice of any Permitted Acquisition (each such notice a "Permitted Acquisition Notice"); -----------------------------
(k) leases or subleases granted by Holdings or any of its Subsidiaries to third Persons not interfering in any material respect with the business of Holdings or any of its Subsidiaries;
Treatment of Company Warrants Effective as of the First Merger Effective Time, each Company Warrant that is outstanding immediately prior to the First Merger Effective Time shall cease to represent a right to acquire Company Common Stock and shall be converted automatically into a warrant representing a right to acquire Parent Common Stock, on substantially the same terms and conditions as applied to such Company Warrant immediately prior to the First Merger Effective Time, except that: (i) the number of shares of Parent Common Stock subject to each assumed Company Warrant shall be determined by multiplying: (A) the number of shares of Company Common Stock that were subject to such Company Warrant immediately prior to the First Merger Effective Time; by (B) the Exchange Ratio, and rounding the resulting number down to the nearest whole number of shares of Parent Common Stock, with any fractional share of Parent Common Stock resulting from such rounding converted into a right to receive a cash payment (rounded up to the nearest whole cent), without interest and subject to any required Tax withholding, determined by multiplying such fractional share of Parent Common Stock by the closing price of a share of Parent Common Stock on the New York Stock Exchange on the trading day immediately prior to the First Merger Effective Time (after aggregating all fractional shares of Parent Common Stock issuable to such holder); and (ii) the strike price shall not be modified; provided, however, that (1) the Parent Board or a committee thereof shall succeed to the authority and responsibility of the Company Board or any committee thereof with respect to each such assumed Company Warrant, and (2) Parent shall, as promptly as practicable following the First Merger Effective Time, provide notice of such conversion, together with all material terms thereof (including the number and type of the securities issuable upon exercise) to the applicable warrant agent and the holders of the Company Warrants. Parent shall reserve for issuance a number of shares of Parent Common Stock at least equal to the number of shares of Parent Common Stock that will be subject to the Company Warrants as a result of the actions contemplated by this Section 1.10. In connection with the consummation of the Contemplated Transactions, Parent will reasonably cooperate with the Company with respect to the notification and related requirements under the agreements governing the Company Warrants.
Adjustment of Exercise Price, Number of Shares of Common Stock or Number of the Company Warrants The Exercise Price, the number of shares covered by each Warrant and the number of Warrants outstanding are subject to adjustment from time to time as provided in Section 3 of the Warrant Certificate. In the event that at any time, as a result of an adjustment made pursuant to Section 3 of the Warrant Certificate, the Holder of any Warrant thereafter exercised shall become entitled to receive any shares of capital stock of the Company other than shares of Common Stock, thereafter the number of such other shares so receivable upon exercise of any Warrant shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the shares contained in Section 3 of the Warrant Certificate and the provisions of Sections 7, 11 and 12 of this Agreement with respect to the shares of Common Stock shall apply on like terms to any such other shares. All Warrants originally issued by the Company subsequent to any adjustment made to the Exercise Price pursuant to the Warrant Certificate shall evidence the right to purchase, at the adjusted Exercise Price, the number of shares of Common Stock purchasable from time to time hereunder upon exercise of the Warrants, all subject to further adjustment as provided herein.
Conversion of Company Securities At the Effective Time, by virtue of the Merger and without any action on the part of any Party or the holder of any of the following securities:
(a) Each share of common stock, par value $0.001 per share, of the Company (“Company Common Stock”) and of each series of preferred stock, par value $0.001 per share, of the Company (“Company Preferred Stock” and, together with the Company Common Stock, the “Company Stock”) issued and outstanding immediately prior to the Effective Time (other than any Company Stock owned beneficially by the Parent or the Acquisition Subsidiary and other than Dissenting Shares (as defined below)), shall be converted into and represent the right to receive (subject to the provisions of Section 1.6) such number of shares of Parent Common Stock as is equal to the applicable “Conversion Ratio” specified with respect to such class or series on Schedule 1.5(a) hereto (the “Applicable Conversion Ratio”). An aggregate of 22,700,649 shares of Parent Common Stock (including Indemnification Escrow Shares (as defined below) and Dissenting Shares), subject to adjustment as necessary due to rounding as set forth in Section 1.5(b), shall be issuable to the stockholders of record of the Company immediately prior to the Effective Time (the “Company Stockholders”) in connection with the Merger. The shares of Parent Common Stock into which the shares of Company Common Stock are converted pursuant to this Section shall be referred to herein as the “Merger Shares.”
(b) Notwithstanding the foregoing, as of the Closing Date, the Company Stockholders shall be entitled to receive immediately only 98% of the shares of Parent Common Stock into which their shares of Company Stock were converted pursuant to Section 1.5(a) (the “Initial Shares”), pro rata in accordance with their respective holdings of Company Stock immediately prior to the Closing; and the remaining 2% of the shares of Parent Common Stock into which their shares of Company Stock were converted pursuant to Section 1.5(a), rounded up or down to the nearest whole number (with 0.5 shares rounded upward to the nearest whole number) (the “Indemnification Escrow Shares”), shall be deposited in escrow pursuant to the Indemnification Escrow Agreement and shall be held and released in accordance with the terms of the Indemnification Escrow Agreement.
(c) The Parent shall deliver certificates for the Initial Shares to each Company Stockholder entitled thereto who shall have presented a certificate that immediately prior to the Effective Time represented Company Stock to be converted into Merger Shares pursuant to this Section 1.5 (the “Company Stock Certificates”) to the Parent or the Surviving Corporation or the Parent’s transfer agent.
(d) Each issued and outstanding share of common stock, par value $.001 per share, of the Acquisition Subsidiary shall be converted into one validly issued, fully paid and nonassessable share of common stock of the Surviving Corporation.
Company Options (a) At the Effective Time, each Company Option, whether vested or unvested, will be assumed by NetRatings as contemplated by this Section 5.7. Section 5.7 of the Company Disclosure Schedule hereto sets forth a true and complete list as of the date of this Agreement of all holders of outstanding Company Options, including the number of shares of Company Common Stock subject to each such option, the exercise or vesting schedule, the exercise price per share and the term of each such Company Option. On the Closing Date, the Company shall deliver to NetRatings an updated Section 5.7 of the Company Disclosure Schedule hereto current as of such date. Each such Company Option so assumed by NetRatings under this Agreement shall continue to have, and be subject to, the same terms and conditions set forth in the Company Option Plan and any other document governing such Company Option immediately prior to the Effective Time, except that (i) such Company Option will be exercisable for that number of whole shares of NetRatings Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such Company Option immediately prior to the Effective Time multiplied by the Common Exchange Ratio and rounded down to the nearest whole number of shares of NetRatings Common Stock, (ii) the per share exercise price for the shares of NetRatings Common Stock issuable upon exercise of such assumed option will be equal to the quotient determined by dividing the exercise price per share at which such Company Option was exercisable immediately prior to the Effective Time by the Common Exchange Ratio, rounded up to the nearest whole tenth of a cent, and (iii) the term, vesting schedule and other provisions of such Company Option shall remain unchanged, provided that all outstanding Options shall be exercisable as of the Effective Time to the extent vested as of the Effective Time and will continue to become exercisable as they vest after the Effective Time. Consistent with the terms of the Company Option Plan and the documents governing the outstanding Company Options, the Merger will not result in the termination of any of the outstanding Company Options or, except as contemplated by the preceding sentence, the acceleration of the exercisability or vesting of such Company Options upon NetRatings' assumption of the Company Options in the Merger. Within 20 business days after the Effective Time, NetRatings will issue to each person who, immediately prior to the Effective Time, was a holder of an outstanding Company Option a document in form and substance reasonably satisfactory to ACN evidencing the foregoing assumption of such Company Option by NetRatings.
(b) As soon as practicable after the Effective Time, but in any event within 30 days thereafter, NetRatings shall file a registration statement on Form S-8 (or any successor or other appropriate forms), with respect to the shares of NetRatings Common Stock subject to the Company Options assumed by NetRatings and shall use its best efforts to maintain the effectiveness of such registration statement or registration statements (and maintain the current status of the prospectus or prospectuses in connection therewith) for so long as the assumed Company Options remain outstanding.
Certain Repurchases of Common Stock In case the Company effects a Pro Rata Repurchase of Common Stock, then the Exercise Price shall be reduced to the price determined by multiplying the Exercise Price in effect immediately prior to the Effective Date of such Pro Rata Repurchase by a fraction of which the numerator shall be (i) the product of (x) the number of shares of Common Stock outstanding immediately before such Pro Rata Repurchase and (y) the Market Price of a share of Common Stock on the trading day immediately preceding the first public announcement by the Company or any of its Affiliates of the intent to effect such Pro Rata Repurchase, minus (ii) the aggregate purchase price of the Pro Rata Repurchase, and of which the denominator shall be the product of (i) the number of shares of Common Stock outstanding immediately prior to such Pro Rata Repurchase minus the number of shares of Common Stock so repurchased and (ii) the Market Price per share of Common Stock on the trading day immediately preceding the first public announcement by the Company or any of its Affiliates of the intent to effect such Pro Rata Repurchase. In such event, the number of shares of Common Stock issuable upon the exercise of this Warrant shall be increased to the number obtained by dividing (x) the product of (1) the number of Shares issuable upon the exercise of this Warrant before such adjustment, and (2) the Exercise Price in effect immediately prior to the Pro Rata Repurchase giving rise to this adjustment by (y) the new Exercise Price determined in accordance with the immediately preceding sentence. For the avoidance of doubt, no increase to the Exercise Price or decrease in the number of Shares issuable upon exercise of this Warrant shall be made pursuant to this Section 13(D).
Company Warrants (i) All Company Warrants that pursuant to their terms do not provide for assumption of such Company Warrants in connection with the Merger shall be cancelled at the Closing. Prior to the Effective Time, the Company shall take all actions necessary to effect the transactions anticipated by this Section 2.6(d) under all Company Warrant agreements, including delivering all notices required thereby. Within five (5) Business Days following the Effective Date, the Company shall notify the holders of such Company Warrants, which such notice shall be in compliance with the terms of such Company Warrants and shall specify the vested and unvested portions thereof, that such Company Warrants will be cancelled at the Closing. Materials to be submitted to the holders of Company Warrants in connection with the notice required under this Section 2.6(d) shall be subject to review and reasonable approval by Parent.
(ii) All Company Warrants that pursuant to their terms provide for assumption of such warrant in connection with the Merger (the “Assumed Warrants”) shall be assumed by Parent and converted into a warrant to purchase Parent Common Stock. Each Assumed Company Warrant will continue to have, and be subject to, the same terms and conditions (including with respect to vesting), except that (A) each Assumed Company Warrant shall be exercisable (or will become exercisable in accordance with its terms) for that number of whole shares of Parent Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such Company Warrant immediately prior to the Effective Time multiplied by the Exchange Ratio (rounded down to the nearest whole share) and (B) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such Assumed Company Warrant shall be equal to the quotient determined by dividing the exercise price per share of Company Common Stock at which such Company Warrant was exercisable immediately prior to the Effective Time by the Exchange Ratio (rounded up to the nearest whole cent); provided, however, that the terms of each of the Company Warrants will provide (x) for an equitable adjustment in the event that any Escrow Shares are delivered by the Escrow Agent to a Parent Indemnified Party so that the holder of such Company Warrant will bear a pro rata portion (relative to the Total Outstanding Shares) of the aggregate indemnifiable Damages giving rise to such delivery of Escrow Shares and (y) upon exercise of such Company Warrant, a portion of the Company Stock issued upon such exercise (equal to the portion of Escrow Shares then held in the Escrow Account relative to the number of shares of Parent Common Stock previously delivered to the Company Stockholders pursuant to this Agreement) will be retained by Parent in escrow and transferred to either Parent or the holder of such Company Warrant, as applicable, at the same time and in the same relative proportion as the Escrow Shares are transferred out of the Escrow Account.
