AGREEMENT AND PLAN OF MERGER among C-COR Incorporated, ARRIS Group, Inc. and Air Merger Subsidiary, Inc.
Exhibit 2.1
Execution Copy
among
C-COR Incorporated,
ARRIS Group, Inc.
and
Air Merger Subsidiary, Inc.
TABLE OF CONTENTS
ARTICLE I THE MERGER |
1 | |||
SECTION 1.1 — The Merger |
1 | |||
SECTION 1.2 — Effective Time |
1 | |||
SECTION 1.3 — Effect of the Merger |
2 | |||
SECTION 1.4 — Subsequent Actions |
2 | |||
SECTION 1.5 — Certificate of Incorporation; Bylaws; Directors and Officers of Surviving Corporation |
2 | |||
ARTICLE II EFFECT ON STOCK OF THE SURVIVING CORPORATION AND THE MERGED CORPORATION |
3 | |||
SECTION 2.1 — Conversion of Securities |
3 | |||
SECTION 2.2 — Conversion of Shares |
3 | |||
SECTION 2.3 — Allocation of Merger Consideration |
4 | |||
SECTION 2.4 — Cancellation of Treasury Shares |
5 | |||
SECTION 2.5 — Election of Merger Consideration and Exchange of Shares |
6 | |||
SECTION 2.6 — Transfer Books |
8 | |||
SECTION 2.7 — No Fractional Share Certificates |
8 | |||
SECTION 2.8 — Options to Purchase C-COR Common Stock |
8 | |||
SECTION 2.9 — Restricted Stock |
9 | |||
SECTION 2.10 — Certain Adjustments |
10 | |||
SECTION 2.11 — Employee Stock Purchase Plans |
10 | |||
ARTICLE III CERTAIN CORPORATE MATTERS |
10 | |||
SECTION 3.1 — Directors of ARRIS |
10 | |||
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF C-COR |
10 | |||
SECTION 4.1 — Organization and Qualification; Subsidiaries |
10 | |||
SECTION 4.2 — Articles of Incorporation and Bylaws |
11 | |||
SECTION 4.3 — Capitalization |
11 | |||
SECTION 4.4 — Authority Relative to this Agreement |
12 | |||
SECTION 4.5 — No Conflict; Required Filings and Consents |
12 | |||
SECTION 4.6 — Compliance, Permits |
13 | |||
SECTION 4.7 — SEC Filings; Financial Statements |
13 | |||
SECTION 4.8 — Absence of Certain Changes or Events |
15 | |||
SECTION 4.9 — No Undisclosed Liabilities |
15 | |||
SECTION 4.10 — Absence of Litigation |
15 | |||
SECTION 4.11 — Joint Proxy Statement |
15 | |||
SECTION 4.12 — Employee Benefit Plans, Employment Agreements |
16 | |||
SECTION 4.13 — Labor Matters |
18 | |||
SECTION 4.14 — Restrictions on Business Activities |
18 | |||
SECTION 4.15 — Title to Property |
18 |
SECTION 4.16 — Customers |
18 | |||
SECTION 4.17 — Supplier Relations |
18 | |||
SECTION 4.18 — Inventory |
19 | |||
SECTION 4.19 — Taxes |
19 | |||
SECTION 4.20 — Environmental Matters |
20 | |||
SECTION 4.21 — Intellectual Property |
21 | |||
SECTION 4.22 — Product Warranty and Product Liability |
27 | |||
SECTION 4.23 — Insurance |
27 | |||
SECTION 4.24 — Import and Export Control Laws |
28 | |||
SECTION 4.25 — Foreign Corrupt Practices Act |
28 | |||
SECTION 4.26 — Board Recommendation; Required Vote |
29 | |||
SECTION 4.27 — Opinion of Financial Advisor |
29 | |||
SECTION 4.28 — Brokers |
29 | |||
SECTION 4.29 — Certain of Pennsylvania Law Not Applicable |
29 | |||
SECTION 4.30 — C-COR Rights Plan |
29 | |||
ARTICLE V REPRESENTATIONS AND WARRANTIES OF ARRIS AND THE MERGER SUBSIDIARY |
30 | |||
SECTION 5.1 — Organization and Qualification; Subsidiaries |
30 | |||
SECTION 5.2 — Certificate of Incorporation and By-laws |
31 | |||
SECTION 5.3 — Capitalization |
31 | |||
SECTION 5.4 — Authority Relative to this Agreement |
31 | |||
SECTION 5.5 — No Conflict, Required Filings and Consents |
32 | |||
SECTION 5.6 — Compliance, Permits |
33 | |||
SECTION 5.7 — SEC Filings; Financial Statements |
33 | |||
SECTION 5.8 — Absence of Certain Changes or Events |
34 | |||
SECTION 5.9 — No Undisclosed Liabilities |
35 | |||
SECTION 5.10 — Absence of Litigation |
35 | |||
SECTION 5.11 — Joint Proxy Statement |
35 | |||
SECTION 5.12 — Employee Benefit Plans, Employment Agreements |
35 | |||
SECTION 5.13 — Taxes |
36 | |||
SECTION 5.14 — Environmental Matters |
37 | |||
SECTION 5.15 — ARRIS Customers |
37 | |||
SECTION 5.16 — ARRIS Intellectual Property |
37 | |||
SECTION 5.17 — Foreign Corrupt Practices Act |
39 | |||
SECTION 5.18 — Opinion of Financial Advisor |
39 | |||
SECTION 5.19 — Brokers |
39 | |||
SECTION 5.20 — Financial Capability |
40 | |||
SECTION 5.21 — Board Recommendation; Required Vote |
40 | |||
SECTION 5.22 — ARRIS Rights Plan |
40 | |||
ARTICLE VI CONDUCT OF BUSINESS PENDING THE MERGER |
41 | |||
SECTION 6.1 — Conduct of Business by C-COR Pending the Merger |
41 | |||
SECTION 6.2 — No Solicitation by C-COR |
43 | |||
SECTION 6.3 — Conduct of Business by ARRIS Pending the Merger |
47 | |||
SECTION 6.4 — Recommendation of the Board of Directors of ARRIS |
48 |
ii
ARTICLE VII ADDITIONAL AGREEMENTS |
48 | |||
SECTION 7.1 — Joint Proxy Statement and the Registration Statement |
48 | |||
SECTION 7.2 — C-COR and ARRIS Stockholders’ Meetings and Consummation of the Merger |
48 | |||
SECTION 7.3 — Additional Agreements |
49 | |||
SECTION 7.4 — Notification of Certain Matters |
50 | |||
SECTION 7.5 — Access to Information |
50 | |||
SECTION 7.6 — Public Announcements |
50 | |||
SECTION 7.7 — Cooperation |
51 | |||
SECTION 7.8 — Indemnification, Directors, and Officers’ Insurance |
51 | |||
SECTION 7.9 — Employee Benefit Plans |
52 | |||
SECTION 7.10 — Stock Exchange Listing |
53 | |||
SECTION 7.11 — No Shelf Registration |
54 | |||
SECTION 7.12 — Affiliates |
54 | |||
SECTION 7.13 — Change in Control, Severance and Employment Agreements |
54 | |||
SECTION 7.14 —Tax-Free Reorganization |
54 | |||
SECTION 7.15 — Section 16 Matters |
55 | |||
SECTION 7.16 — C-COR Notes |
55 | |||
SECTION 7.17 — C-COR Incentive Plan |
55 | |||
SECTION 7.18 — C-COR Intellectual Property |
55 | |||
SECTION 7.19 — Change of Control Notifications |
55 | |||
ARTICLE VIII CONDITIONS TO THE MERGER |
56 | |||
SECTION 8.1 — Conditions to Obligations of Each Party to Effect the Merger |
56 | |||
SECTION 8.2 — Additional Conditions to Obligations of C-COR |
57 | |||
SECTION 8.3 — Additional Conditions to Obligations of ARRIS |
58 | |||
ARTICLE IX TERMINATION, AMENDMENT AND WAIVER |
59 | |||
SECTION 9.1 — Termination by Mutual Consent |
59 | |||
SECTION 9.2 — Termination by Either ARRIS or C-COR |
59 | |||
SECTION 9.3 — Termination by C-COR |
60 | |||
SECTION 9.4 — Termination by ARRIS |
60 | |||
SECTION 9.5 — Effect of Termination and Abandonment |
61 | |||
ARTICLE X GENERAL PROVISIONS |
64 | |||
SECTION 10.1 — Non-Survival of Representations, Warranties and Agreements |
64 | |||
SECTION 10.2 — Notices |
64 | |||
SECTION 10.3 — Expenses |
65 | |||
SECTION 10.4 — Certain Definitions |
65 | |||
SECTION 10.5 — Specific Performance |
67 | |||
SECTION 10.6 — Headings |
67 | |||
SECTION 10.7 — Severability |
67 | |||
SECTION 10.8 — Entire Agreement; No Third-Party Beneficiaries |
67 | |||
SECTION 10.9 — Assignment |
67 | |||
SECTION 10.10 — Governing Law; Jurisdiction and Venue |
68 | |||
SECTION 10.11 — Counterparts |
68 |
iii
AGREEMENT AND PLAN OF MERGER, dated as of September 23, 2007 (this “Agreement”), among
C-COR INCORPORATED, a Pennsylvania corporation (“C-COR” or the “Company”), ARRIS
GROUP, INC., a Delaware corporation (“ARRIS”), and AIR MERGER SUBSIDIARY, INC., a Delaware
corporation and wholly owned subsidiary of ARRIS (the “Merger Subsidiary”). C-COR, ARRIS,
and the Merger Subsidiary are herein referred to collectively as the “Parties” and each
individually as a “Party.”
W I T N E S S E T H
WHEREAS, the Boards of Directors of C-COR, ARRIS and the Merger Subsidiary have determined
that it is in the best interests of their respective stockholders that C-COR, ARRIS and the Merger
Subsidiary enter into a business combination under which C-COR will merge with and into the Merger
Subsidiary (the “Merger”) and, in connection therewith, to make certain representations,
warranties and agreements in connection with the Merger;
WHEREAS, the Boards of Directors of C-COR, ARRIS and the Merger Subsidiary have determined
that the Merger and the other transactions contemplated hereby are consistent with, and in
furtherance of, their respective business strategies and goals and have each adopted and approved
this Agreement and the Merger upon the terms and conditions set forth herein; and
WHEREAS, for federal income tax purposes, it is intended that the Merger shall constitute a
tax-free reorganization under Section 368 of the Internal Revenue Code of 1986, as amended and the
Treasury regulations promulgated thereunder (the “Code”);
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements
herein contained, the receipt and sufficiency of which are hereby acknowledged, and intending to be
legally bound hereby, the parties hereto hereby agree as follows:
ARTICLE I
THE MERGER
SECTION 1.1 — The Merger. At the Effective Time and subject to and upon the terms and
conditions of this Agreement, the Pennsylvania Business Corporation Law (“Pennsylvania
Law”) and the Delaware General Corporation Law (“Delaware Law”), the Merger shall be
consummated, whereby C-COR shall be merged with and into the Merger Subsidiary, the separate
corporate existence of C-COR shall cease, and the Merger Subsidiary shall continue as the surviving
corporation, which shall be a wholly owned subsidiary of ARRIS. The Merger Subsidiary as the
surviving corporation after the Merger is herein sometimes referred to as the “Surviving
Corporation,” and C-COR as the non-surviving corporation after the Merger is herein sometimes
referred to as the “Merged Corporation.”
SECTION 1.2 — Effective Time. As promptly as practicable after the satisfaction or waiver of
the conditions set forth in Article VIII hereof and the consummation of the Closing
referred to in Section 7.2(b) hereof, the Parties shall cause the Merger to be consummated by
filing (i) Articles of Merger (the “Articles of Merger”) with the Department of State of
the Commonwealth of Pennsylvania with respect to the Merger and (ii) a Certificate of Merger (the
“Certificate of Merger”) with the Secretary of State of the State of Delaware with respect
to the Merger, in such form as required by, and executed in accordance with, the relevant
provisions of Pennsylvania Law and Delaware Law, as applicable (the time of such filing being the
“Effective Time”).
SECTION 1.3 — Effect of the Merger. At the Effective Time, the effect of the Merger shall be
as provided in the applicable provisions of Pennsylvania Law and Delaware Law. Without limiting the
generality of the foregoing, and subject thereto, at the Effective Time, all the property, rights,
privileges, powers and franchises of C-COR and the Merger Subsidiary shall continue with, or vest
in, as the case may be, the Merger Subsidiary as the Surviving Corporation, and all debts,
liabilities and duties of C-COR and the Merger Subsidiary shall continue to be, or become, as the
case may be, the debts, liabilities and duties of the Merger Subsidiary as the Surviving
Corporation. As of the Effective Time, the Surviving Corporation shall be a direct wholly owned
subsidiary of ARRIS.
SECTION 1.4 — Subsequent Actions. If, at any time after the Effective Time, the Surviving
Corporation shall consider or be advised that any deeds, bills of sale, assignments, assurances or
any other actions or things are necessary or desirable to continue in, vest, perfect or confirm of
record or otherwise in the Surviving Corporation its right, title or interest in, to or under any
of the rights, properties, privileges, franchises or assets of either of its constituent
corporations acquired or to be acquired by the Surviving Corporation as a result of, or in
connection with, the Merger or otherwise to carry out this Agreement, the directors and officers of
the Surviving Corporation shall be directed and authorized to execute and deliver, in the name and
on behalf of either of such constituent corporations, all such deeds, bills of sale, assignments
and assurances and to take and do, in the name and on behalf of each of such corporations or
otherwise, all such other actions and things as may be necessary or desirable to vest, perfect or
confirm any and all right, title and interest in, to and under such rights, properties, privileges,
franchises or assets in the Surviving Corporation or otherwise to carry out this Agreement.
SECTION 1.5 — Certificate of Incorporation; Bylaws; Directors and Officers of Surviving
Corporation. Unless otherwise agreed by C-COR and ARRIS before the Effective Time, at the
Effective Time:
(a) the Certificate of Incorporation of the Merger Subsidiary immediately prior to the
Effective Time shall be the Certificate of Incorporation of the Merger Subsidiary as the Surviving
Corporation from and after the Effective Time, until thereafter amended as provided by Delaware Law
and such Certificate of Incorporation, except that the name of the Merger Subsidiary as the
Surviving Corporation shall be changed to “C-COR Incorporated;”
(b) the Bylaws of the Merger Subsidiary immediately prior to the Effective Time shall be the
Bylaws of the Merger Subsidiary as the Surviving Corporation from and after the Effective Time,
until thereafter amended as provided by Delaware Law, the Certificate of Incorporation and such
Bylaws; and
2
(c) the directors of the Merger Subsidiary immediately prior to the Effective Time shall
continue to serve as directors of the Surviving Corporation, and the officers of C-COR immediately
prior to the Effective Time shall continue to serve in their respective offices as officers of the
Surviving Corporation from and after the Effective Time, in each case until their successors are
elected or appointed or until their resignation or removal. If, at the Effective Time, a vacancy
shall exist in any office of the Surviving Corporation, such vacancy may thereafter be filled in
the manner provided by Delaware Law and the Bylaws of the Merger Subsidiary as the Surviving
Corporation.
ARTICLE II
EFFECT ON STOCK OF THE SURVIVING
CORPORATION AND THE MERGED CORPORATION
CORPORATION AND THE MERGED CORPORATION
SECTION 2.1 — Conversion of Securities. The manner and basis of converting the shares of
common stock of the Merged Corporation at the Effective Time, by virtue of the Merger and without
any action on the part of any of the Parties or the holder of any of such securities, shall be as
hereinafter set forth in this Article II.
SECTION 2.2 — Conversion of Shares.
(a) Subject to Section 2.3, each share of C-COR Common Stock (as defined herein) issued and
outstanding immediately before the Effective Time (excluding those held in the treasury of C-COR
and those owned by ARRIS, referred to herein as the “Excluded C-COR Shares”) and all rights
in respect thereof, shall at the Effective Time, without any action on the part of any holder
thereof, forthwith cease to exist and be converted into and become exchangeable, at the election of
the holder thereof: (i) for each share of C-COR Common Stock with respect to which an election to
receive cash has been effectively made and not revoked or lost pursuant to Section 2.5 (a “Cash
Election”), the right to receive in cash from ARRIS, without interest, an amount equal to
$13.75 (the “Cash Consideration”), (collectively, “Cash Election Shares”); (ii) for
each share of C-COR Common Stock with respect to which an election to receive ARRIS Common Stock
(as defined herein) has been effectively made and not revoked or lost pursuant to Section 2.5 (a
“Stock Election”), the right to receive from ARRIS a portion of a share of ARRIS Common
Stock equal to 0.9642 of a share, subject to adjustment as set forth in Section 2.2(b) below, (the
“Exchange Ratio”) of ARRIS Common Stock (the “Stock Consideration”), subject to
adjustment as provided in Section 2.2(b) (collectively, the “Stock Election Shares”); and
(iii) for each share of C-COR Common Stock other than shares as to which a Cash Election or a Stock
Election has been effectively made and not revoked or lost pursuant to Section 2.5
(“Non-Election Shares”), the right to receive from ARRIS such Stock Consideration and/or
Cash Consideration as is determined in accordance with Section 2.3(b). For purposes of this
Agreement, the term “Merger Consideration” with respect to a given share of C-COR Common
Stock shall mean either the Cash Consideration (with respect to a share of C-COR Common Stock
representing the right to receive the Cash Consideration) or the Stock Consideration (with respect
to a share of C-COR Common Stock representing the right to receive the Stock Consideration).
3
(b) In the event that the average closing price of the ARRIS Common Stock on the Nasdaq Global
Select Market (as reported in The Wall Street Journal) for the ten trading-day period ending the
third trading day prior to the anticipated Closing Date (the “Average Trading Price”) is
less than $12.83 (a “Decrease Event”) then ARRIS shall increase the amount of the Stock
Consideration, which increase in the Stock Consideration, at ARRIS’ election by notice to the
Exchange Agent and C-COR, may be paid as cash or additional shares of ARRIS Common Stock, such that
the value of the aggregate Merger Consideration paid per share of C-COR Common Stock for all
outstanding shares of C-COR Common Stock (other than Excluded C-COR Shares), calculated using the
Average Trading Price (solely for purposes of determining the value of the shares of ARRIS Common
Stock to be issued as Stock Consideration), equals $13.08. If the Average Trading Price is more
than $15.69 (an “Increase Event”), then ARRIS shall decrease the amount of the Stock
Consideration such that the value of the aggregate Merger Consideration paid per share of C-COR
Common Stock for all outstanding shares of C-COR Common Stock (other than Excluded C-COR Shares),
calculated using the Average Trading Price (solely for purposes of determining the value of the
shares of ARRIS Common Stock to be issued as Stock Consideration), equals $14.43. Notwithstanding
the foregoing, in making the adjustments to the Merger Consideration set forth in this Section
2.2(b), (i) ARRIS shall not be required to use an Average Trading Price of less than $11.41 or more
than $17.11, and (ii) in the event of a Decrease Event, ARRIS shall not elect to pay such increase
in cash to the extent that such increase in cash would result in counsel to C-COR or counsel to
ARRIS being unable to deliver its opinion contemplated by Sections 8.2(d) or 8.3(d), respectively.
(c) Commencing immediately after the Effective Time, each certificate that, immediately prior
to the Effective Time, represented issued and outstanding shares of C-COR Common Stock (“C-COR
Shares”) shall evidence the right to receive the Merger Consideration on the basis hereinbefore
set forth, but subject to the limitations set forth in this Article II.
(d) For all purposes of this Agreement, unless otherwise specified, all C-COR Shares held by
retirement plans of C-COR subject to the requirements under Section 401(a) of the Code and all
C-COR Shares held in non-qualified plans of C-COR (the “C-COR Retirement Plan Shares”) (i)
shall be deemed to be issued and outstanding, (ii) shall not be deemed to be held in the treasury
of C-COR and (iii) shall be converted into the right to receive the Merger Consideration in
accordance with Section 2.2(a); provided, however, that all such C-COR Retirement
Plan Shares shall be deemed Non-Election Shares for purposes of this Article II.
SECTION 2.3 — Allocation of Merger Consideration.
(a) Notwithstanding any other provision contained in this Agreement and subject to ARRIS’s
rights under Section 2.3(b) to increase the Stock Consideration by adding cash instead of ARRIS
Common Stock, (i) the number of shares of C-COR Common Stock to be converted into Stock
Consideration pursuant to Section 2.2(a) (the “Stock Conversion Number”) shall be equal to
the product obtained by multiplying (A) the number of shares of C-COR Common Stock outstanding
immediately prior to the Effective Time by (B) 0.4909 and (ii) all of the other shares of C-COR
Common Stock outstanding immediately prior to the Effective Time shall be converted into Cash
Consideration (in case of each of clauses (i) and (ii), excluding the Excluded C-COR Shares).
4
(b) As soon as practicable after the Election Deadline (as defined herein) and in any event no
more than five business days after the Closing Date (or such other date as C-COR and ARRIS shall
agree), ARRIS shall cause the Exchange Agent to effect the allocation among holders of C-COR Common
Stock (other than Excluded C-COR Shares) of rights to receive the Cash Consideration and the Stock
Consideration as follows:
(i) If the aggregate number of C-COR Shares with respect to which Stock Elections shall
have been made (the “Stock Election Number”) exceeds the Stock Conversion Number,
then all Cash Election Shares and all Non-Election Shares of each holder thereof shall be
converted into the right to receive the Cash Consideration and Stock Election Shares of each
holder thereof will be converted into the right to receive the Stock Consideration in
respect of that number of Stock Election Shares of such holder equal to the product obtained
by multiplying (A) the number of Stock Election Shares held by such holder by (B) a
fraction, the numerator of which is the Stock Conversion Number and the denominator of which
is the Stock Election Number, with the remaining number of such holder’s Stock Election
Shares being converted into the right to receive the Cash Consideration; and
(ii) If the Stock Election Number is less than the Stock Conversion Number (the amount
by which the Stock Conversion Number exceeds the Stock Election Number being referred to
herein as the “Shortfall Number”), then all Stock Election Shares shall be converted
into the right to receive the Stock Consideration and the Non-Election Shares and Cash
Election Shares shall be treated in the following manner: (A) if the Shortfall Number is
less than or equal to the number of Non-Election Shares, then all Cash Election Shares shall
be converted into the right to receive the Cash Consideration and the Non-Election Shares of
each holder thereof shall be converted into the right to receive the Stock Consideration in
respect of that number of Non-Election Shares equal to the product obtained by multiplying
(x) the number of Non-Election Shares held by such holder by (y) a fraction, the numerator
of which is the Shortfall Number and the denominator of which is the total number of
Non-Election Shares, with the remaining number of such holder’s Non-Election Shares being
converted into the right to receive the Cash Consideration; or (B) if the Shortfall Number
exceeds the number of Non-Election Shares, then all Non-Election Shares shall be converted
into the right to receive the Stock Consideration and Cash Election Shares of each holder
thereof shall be converted into the right to receive the Stock Consideration in respect of
that number of Cash Election Shares equal to the product obtained by multiplying (x) the
number of Cash Election Shares held by such holder by (y) a fraction, the numerator of which
is the amount by which the Shortfall Number exceeds the total number of Non-Election Shares
and the denominator of which is the total number of Cash Election Shares, with the remaining
number of such holder’s Cash Election Shares being converted into the right to receive the
Cash Consideration.
SECTION 2.4 — Cancellation of Treasury Shares. Except as provided in Section 2.2(d), at the
Effective Time, each share of C-COR Common Stock held in the treasury of C-COR or owned by ARRIS
immediately prior to the Effective Time shall be canceled and retired and no shares of stock or
other securities of ARRIS or the Surviving Corporation shall be issuable, and no payment or other
consideration shall be made, with respect thereto.
5
SECTION 2.5 — Election of Merger Consideration and Exchange of Shares. Each holder of record
of C-COR Common Stock (other than (i) Excluded C-COR Shares and (ii) C-COR Retirement Plan Shares)
shall have the right, subject to the limitations set forth in this Article II to submit an election
in accordance with the following procedures:
(a) Each holder may specify in a request made in accordance with the provisions of this
Section 2.5 (herein called an “Election”) (i) the number of C-COR Shares owned by such
holder with respect to which such holder desires to make a Stock Election and (ii) the number of
C-COR Shares owned by such holder with respect to which such holder desires to make a Cash
Election.
(b) Subject to the terms and conditions hereof, at or prior to the Effective Time, ARRIS and
C-COR shall jointly appoint an exchange agent to effect the exchange of C-COR Shares for the Merger
Consideration in accordance with the provisions of this Article II (the “Exchange Agent”).
Prior to the Effective Time, ARRIS shall deposit, or cause to be deposited, with the Exchange Agent
cash and certificates representing ARRIS Common Stock sufficient to pay all amounts for conversion
of C-COR Shares in accordance with the provisions of Section 2.2 hereof, it being understood that
any and all interest earned on funds deposited with the Exchange Agent shall be turned over to
ARRIS. Commencing immediately after the Effective Time and until the appointment of the Exchange
Agent shall be terminated, each holder of a certificate or certificates theretofore representing
C-COR Shares may surrender the same to the Exchange Agent, and, after the appointment of the
Exchange Agent shall be terminated, any such holder may surrender any such certificate to ARRIS.
Each holder shall be entitled upon such surrender to receive in exchange therefor the Cash
Consideration and a certificate or certificates representing the number of full shares of the Stock
Consideration into which the C-COR Shares theretofore represented by the certificate or
certificates so surrendered shall have been converted in accordance with the provisions of Section
2.2 hereof, together with a cash payment in lieu of fractional shares, if any, in accordance with
Section 2.7 hereof. All such shares of ARRIS Common Stock issued as Stock Consideration shall be
issued at the Effective Time. Until so surrendered and exchanged, each outstanding certificate
that, prior to the Effective Time, represented issued and outstanding C-COR Shares shall be for all
corporate purposes of ARRIS, other than the payment of dividends and other distributions, if any,
to evidence the right to receive the Merger Consideration. Unless and until any such certificate
theretofore representing C-COR Shares is so surrendered, no dividend or other distribution, if any,
payable to the holders of record of ARRIS Common Stock as of any date subsequent to the Effective
Time shall be paid to the holder of such certificate in respect thereof. Except as otherwise
provided in Section 2.6 hereof, upon the surrender of any such certificate theretofore representing
C-COR Shares, however, the record holder of the certificate or certificates representing shares of
ARRIS Common Stock issued in exchange therefor shall receive from the Exchange Agent or from ARRIS,
as the case may be, payment of the amount of dividends and other distributions, if any, that as of
any date subsequent to the Effective Time and until such surrender shall have become payable with
respect to such number of shares of ARRIS Common Stock (“Pre-Surrender Dividends”). No
interest shall be payable with respect to the payment of Pre-Surrender Dividends upon the surrender
of certificates theretofore representing C-COR Shares. After the appointment of the Exchange Agent
shall have been terminated, any holders of certificates representing C-COR Shares which have not
received payment of Pre-Surrender Dividends shall look only to ARRIS for payment thereof.
Notwithstanding the foregoing provisions of this
6
Section 2.5(b), neither the Exchange Agent nor any Party shall be liable to a holder of C-COR
Shares for any Cash Consideration, Stock Consideration, any dividends or distributions thereon or
any cash payment for fractional shares as contemplated by Section 2.7, delivered to a public
official pursuant to any applicable abandoned property, escheat or similar law or to a transferee.
(c) ARRIS shall cause the Exchange Agent to mail to the shareholders of C-COR entitled to vote
at the C-COR Stockholders’ Meeting (as defined herein), at the time that the Joint Proxy Statement
(as defined herein) is provided to the stockholders of C-COR, a form reasonably acceptable to C-COR
(the “Form of Election”) pursuant to which C-COR’s stockholders shall be entitled to
exercise their right to make an Election prior to the Election Deadline (as defined herein), and
shall cause the Exchange Agent to use all reasonable efforts to make available as promptly as
possible a Form of Election to any stockholder of C-COR who requests such Form of Election
following the initial mailing of the Form of Election and prior to the Election Deadline. In no
event shall the initial mailing of the Form of Election to C-COR’s stockholders be made less than
20 days prior to the Election Deadline.
(d) Any Election shall have been made properly only if the person authorized to receive
Elections and to act as Exchange Agent under this Agreement, shall have received, by 5:00 p.m. New
York City time on the date of the Election Deadline, a Form of Election properly completed and
signed. As used herein, “Election Deadline” means 5:00 p.m. New York City time on the date
that is the business day prior to the date of the C-COR Stockholders Meeting (or at such other date
and time as C-COR and ARRIS shall agree). ARRIS and C-COR shall cooperate to issue a press release
announcing the date of the Election Deadline not more than fifteen business days before, and at
least five business days prior to, the Election Deadline (and, if C-COR and ARRIS shall agree to
any extension thereof, C-COR and ARRIS shall make a public announcement of any such extension as
far as reasonably practicable prior to such new Election Deadline).
(e) If ARRIS shall determine in its reasonable discretion that any Election is not properly
made with respect to any C-COR Shares, such Election shall be deemed to be not in effect,
thereafter timely filed. Any stockholder of C-COR may, at any time prior to the Election Deadline,
change his, her or its Election by written notice received by the Exchange Agent prior to the
Election Deadline accompanied by a properly completed and signed, revised Form of Election. Any
stockholder of C-COR may, at any time prior to the Election Deadline, revoke his, her or its
Election by written notice received by the Exchange Agent prior to the Election Deadline.
(f) Each of the Exchange Agent, ARRIS and the Surviving Corporation will be entitled to deduct
and withhold from the Merger Consideration otherwise payable pursuant to this Agreement to any
holder of shares of C-COR Common Stock such amounts as it is required to deduct and withhold with
respect to the making of such payment under the Code, or any other applicable state, local or
foreign law related to Taxes. To the extent that amounts are so withheld by the Surviving
Corporation or ARRIS, as the case may be, such withheld amounts (i) will be remitted by ARRIS or
the Surviving Corporation, as the case may be, to the applicable governmental entity, and (ii) will
be treated for all purposes of this Agreement as having been paid to the holder of the share of
C-COR Common Stock in respect of which such deduction and withholding was made by the Surviving
Corporation or ARRIS, as the case may be.
7
(g) If any certificate formerly representing C-COR Shares shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming such certificate to
be lost, stolen or destroyed and, if required by ARRIS, the posting by such person of a bond, in
such reasonable amount as ARRIS may direct, as indemnity against any claim that may be made against
it with respect to such certificate, the Exchange Agent shall pay, in exchange for such lost,
stolen or destroyed certificate, the Merger Consideration to be paid in respect of C-COR Shares
represented by such certificate, as contemplated by this Section 2.5.
SECTION 2.6 — Transfer Books. The stock transfer books of C-COR shall be closed at the
Effective Time and no transfer of any C-COR Shares will thereafter be recorded on any of such stock
transfer books. In the event of a transfer of ownership of C-COR Shares that is not registered in
the stock transfer records of C-COR at the Effective Time, cash and a certificate or certificates
representing the number of full shares of ARRIS Common Stock into which such C-COR Shares shall
have been converted shall be issued to the transferee together with a cash payment in lieu of
fractional shares, if any, in accordance with Section 2.7 hereof, and a cash payment in the amount
of Pre-Surrender Dividends, if any, in accordance with Section 2.5(b) hereof, if the certificate or
certificates representing such C-COR Shares is or are surrendered as provided in Section 2.5
hereof, accompanied by all documents required to evidence and effect such transfer and by evidence
of payment of any applicable stock transfer tax.
SECTION 2.7 — No Fractional Share Certificates. Notwithstanding any other provision of this
Agreement, each holder of shares of C-COR Common Stock exchanged pursuant to the Merger who
otherwise would have been entitled to receive a fraction of a share of ARRIS Common Stock (after
taking into account all certificates delivered by such holder) shall receive, in lieu thereof, cash
(without interest) in an amount equal to such fractional part of a share of ARRIS Common Stock
multiplied by the Average Trading Price. No such holder will be entitled to dividends, voting
rights, or any other rights as a stockholder in respect of any fractional shares.
SECTION 2.8 — Options to Purchase C-COR Common Stock.
(a) At the Effective Time, each option granted by C-COR to purchase shares of C-COR Common
Stock that is outstanding and unexercised immediately prior to the Effective Time (the “Assumed
Equity Awards”), whether vested or unvested, shall be assumed by ARRIS and converted into an
option or warrant to purchase shares of ARRIS Common Stock in such amount and at such exercise
price as provided below and otherwise having the same terms, conditions and restrictions as are in
effect immediately prior to the Effective Time (except to the extent that such terms, conditions
and restrictions may be altered in accordance with their terms as a result of the transactions
contemplated hereby):
(i) the number of shares of ARRIS Common Stock to be subject to the new option or
warrant shall be equal to the product of (x) the number of shares of C-COR Common Stock
subject to the original option or warrant multiplied by (y) 0.9642 (the “Option Exchange
Ratio”), rounded down to the nearest whole share; provided, however,
that (A) in the event of a Decrease Event under Section 2.2(b), the Option Exchange Ratio
shall be the quotient obtained by dividing $13.08 by the Average Trading Price, and (B) in
the event of an Increase Event under Section 2.2(b), the Option Exchange
8
Ratio shall be the quotient obtained by dividing $14.43 by the Average Trading Price,
in the case of either (A) or (B), rounded down to the nearest whole share; provided,
further, that ARRIS shall not be required to use an Average Trading Price of less
than $11.41 or more than $17.11; and
(ii) the exercise price per share of ARRIS Common Stock under the new option or warrant
shall be equal to the result of (x) the exercise price per share of the C-COR Common Stock
under the original option or warrant divided by (y) the applicable Option Exchange Ratio,
rounded up to the nearest cent.
(b) For purposes of Section 4(b) of the C-COR Amended and Restated Incentive Plan (the
“Incentive Plan”), the provisions of Section 2.8(a) constitute an adjustment in the number
and option price of shares subject to, and the consideration to be issued upon the exercise of,
outstanding Options (as defined in the Incentive Plan), as determined appropriate by the Board of
Directors of C-COR, as of the Effective Time, and no further action or amendment of the Incentive
Plan shall be necessary to implement such adjustment.
(c) The adjustments provided herein shall, to the extent applicable, be effected in a manner
consistent with Section 409A of the Code so as not to be treated as new grants or awards or as a
change in the form of payment, and with respect to any options that are “incentive stock options”
(as defined in Section 422 of the Code) shall be effected in a manner consistent with Section
424(a) of the Code.
(d) ARRIS shall take all corporate actions necessary to reserve for issuance a sufficient
number of shares of ARRIS Common Stock for delivery upon exercise of the Assumed Equity Awards
assumed in accordance with this Section 2.8. Within ten (10) business days following the Effective
Time, ARRIS shall file a registration statement on Form S-8 (or any successor form) with respect to
ARRIS Common Stock subject to such Assumed Equity Awards and shall use its reasonable best efforts
to maintain the effectiveness of such registration statement or registration statements (and
maintain the current status of the prospectus or prospectuses contained therein) for so long as
such Assumed Equity Awards remain outstanding.
(e) As of the Effective Time, ARRIS shall assume the obligations and succeed to the rights of
C-COR under the Incentive Plan with respect to the Assumed Equity Awards.
(f) At the Effective Time, each warrant granted by C-COR to purchase shares of C-COR Common
Stock that is outstanding and unexercised immediately prior to the Effective Time, whether vested
or unvested, shall be canceled and no shares of stock or other securities of ARRIS or the Surviving
Corporation shall be issuable, and no payment or other consideration shall be made with respect
thereto. C-COR will take all steps reasonably necessary to notify the holders of such warrants of
the anticipated Effective Time as required by the applicable warrant agreements.
SECTION 2.9 — Restricted Stock. At the Effective Time, each share of C-COR Common Stock
awarded pursuant to any plan, arrangement or transaction, and outstanding immediately prior to the
Effective Time shall be treated as fully vested and shall be exchanged in accordance with Section
2.2 hereof with respect to such percentage of such award equal to the
9
percentage of the applicable restriction period for such award that has elapsed as of the
Effective Time.
SECTION 2.10 — Certain Adjustments. If between the date hereof and the Effective Time, the
outstanding shares of C-COR Common Stock or of ARRIS Common Stock shall be changed into a different
number of shares by reason of any reclassification, recapitalization, split-up, combination or
exchange of shares, or any dividend payable in stock or other securities shall be declared thereon
with a record date within such period, the Exchange Ratio and Option Exchange Ratio shall be
adjusted accordingly to provide to the holders of C-COR Common Stock and ARRIS Common Stock the
same economic effect as contemplated by this Agreement prior to such reclassification,
recapitalization, split-up, combination, exchange or dividend.
SECTION 2.11 — Employee Stock Purchase Plans. C-COR shall take all actions with respect to
the 1992 Stock Purchase Plan (the “1992 SPP”) as are necessary to assure that (i) the 1992
SPP shall be suspended as soon as permitted by the terms of the 1992 SPP and (ii) there shall not
be any additional Offering Period (as defined in the 1992 SPP) following the date of this
Agreement.
ARTICLE III
CERTAIN CORPORATE MATTERS
SECTION 3.1 — Directors of ARRIS. As soon as practicable after the Effective Time, ARRIS
shall take such steps as are reasonably necessary to ensure that a nominee to the Board of
Directors of ARRIS as selected by C-COR (and reasonably acceptable to ARRIS) is appointed to the
Board of Directors of ARRIS.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF C-COR
C-COR hereby represents and warrants to ARRIS and the Merger Subsidiary that, except as set
forth in the written disclosure schedule delivered on or prior to the date hereof by C-COR to ARRIS
and the Merger Subsidiary that is arranged in paragraphs corresponding to the numbered and lettered
paragraphs contained in this Article IV (the “C-COR Disclosure Schedule”) that the
statements contained in this Article IV are true and correct. The C-COR Disclosure Schedule shall
be arranged in paragraphs corresponding to the numbered and lettered paragraphs contained in this
Article IV. Unless otherwise stated therein, if the disclosure of any paragraph lists an item or
information in such a way as to make its relevance to the disclosure required in another paragraph
reasonably apparent on its face, such disclosure shall qualify and apply to the other paragraph.
SECTION 4.1 — Organization and Qualification; Subsidiaries. Each of C-COR and each of its
Subsidiaries (as defined herein) is an entity duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, and has the requisite corporate power and
authority and is in possession of all franchises, grants, authorizations, licenses, permits,
easements, consents, certificates, approvals and orders (“Approvals”) necessary to own,
lease and operate the properties it purports to own, operate or lease and to
10
carry on its business as it is now being conducted, except where the failure to be in good
standing or to have such Approvals would not have a Material Adverse Effect. Each of C-COR and
each of its Subsidiaries is duly qualified or licensed as a foreign entity to do business, and is
in good standing, in each jurisdiction where the character of its properties owned, leased or
operated by it or the nature of its activities makes such qualification or licensing necessary,
except for such failures to be so duly qualified or licensed and in good standing that would not
have a Material Adverse Effect. A true and complete list of all of C-COR’s Subsidiaries, together
with the jurisdiction of organization of each Subsidiary and the percentage of each Subsidiary’s
outstanding capital stock or ownership interests owned by C-COR or another Subsidiary, is set forth
in Section 4.1 of the C-COR Disclosure Schedule. Except as set forth in Section 4.1 of the C-COR
Disclosure Schedule, C-COR does not directly or indirectly own any equity or similar interest in,
or any interest convertible into or exchangeable or exercisable for, any equity or similar interest
in, any corporation, partnership, joint venture or other business association or entity, with
respect to which interest C-COR or any of its Subsidiaries has invested or is required to invest
$50,000 or more, excluding securities in any publicly traded company held for investment and
comprising less than five percent of the outstanding stock of such company.
SECTION 4.2 — Articles of Incorporation and Bylaws. C-COR has heretofore furnished to ARRIS a
complete and correct copy of its Articles of Incorporation and Bylaws as most recently restated and
subsequently amended to date, and has furnished or made available to ARRIS and the Merger
Subsidiary the Articles of Incorporation and Bylaws (or equivalent organizational documents) of
each of its Subsidiaries (the “Subsidiary Documents”). Such Articles of Incorporation,
Bylaws and Subsidiary Documents are in full force and effect. Neither C-COR nor any of its
Subsidiaries is in violation of any of the provisions of its Articles of Incorporation or Bylaws or
Subsidiary Documents, except for immaterial violations of the Subsidiary Documents that may exist.
SECTION 4.3 — Capitalization. The authorized capital stock of C-COR consists of (i)
100,000,000 shares of C-COR Common Stock and (ii) 2,000,000 shares of preferred stock, no par value
per share, none of which is issued and outstanding and none of which is reserved for issuance. As
of September 20, 2007, (i) 50,288,695 shares of C-COR Common Stock were issued and outstanding, all
of which are validly issued, fully paid and nonassessable, and 3,644,980 shares were held in
treasury, (ii) no shares of C-COR Common Stock were held by Subsidiaries of C-COR, (iii) 4,216,184
shares of C-COR Common Stock were reserved for future issuance pursuant to warrants or pursuant to
outstanding stock options or other similar rights granted under C-COR incentive plans and
agreements listed in Section 4.3 of the C-COR Disclosure Schedule (“C-COR’s Stock Option
Plans”), (iv) 2,838,168 shares reserved for future issuance upon the conversion of the 3.5%
Convertible Senior Unsecured Notes due 2009 (the “C-COR Notes”) and (v) 563,853 shares of
C-COR Common Stock were reserved for future issuance under C-COR’s 1992 Stock Purchase Plan.
Except as set forth in Section 4.3 or Section 4.12 of the C-COR Disclosure Schedule, and other than
the C-COR Notes, there are no options, warrants, convertible securities or other similar rights,
agreements, arrangements or commitments of any character relating to the issued or unissued capital
stock of C-COR or any of its Subsidiaries or obligating C-COR or any of its Subsidiaries to issue
or sell any shares of capital stock of, or other equity interests in, C-COR or any of its
Subsidiaries. All shares of C-COR Common Stock subject to issuance as aforesaid, upon issuance on
the terms and conditions
11
specified in the instruments pursuant to which they are issuable, shall be duly authorized,
validly issued, fully paid and nonassessable. Except as disclosed in Section 4.3 of the C-COR
Disclosure Schedule, there are no obligations, contingent or otherwise, of C-COR or any of its
Subsidiaries to repurchase, redeem or otherwise acquire any shares of C-COR Common Stock or the
capital stock of any Subsidiary or to provide funds to or make any investment (in the form of a
loan, capital contribution or otherwise) in any such Subsidiary or any other entity. There are no
preemptive rights with respect to the C-COR Common Stock. Except as set forth in Sections 4.1 and
4.3 of the C-COR Disclosure Schedule, all of the outstanding shares of capital stock of each of
C-COR’s Subsidiaries are duly authorized, validly issued, fully paid and nonassessable, and all
such shares are owned by C-COR or another Subsidiary of C-COR free and clear of all security
interests, liens, claims, pledges, agreements, limitations in C-COR’s voting rights, charges or
other encumbrances of any nature whatsoever.
SECTION 4.4 — Authority Relative to this Agreement. C-COR has all necessary corporate power
and authority to execute and deliver this Agreement and to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery of this Agreement by
C-COR and the consummation by C-COR of the transactions contemplated hereby have been duly and
validly authorized by all necessary corporate action, and no other corporate proceedings on the
part of C-COR are necessary to authorize this Agreement or to consummate the transactions so
contemplated (other than the adoption of this Agreement by the holders of at least a majority of
the votes cast at the C-COR Stockholders’ Meeting by the holders of all outstanding shares of C-COR
Common Stock entitled to vote in accordance with Pennsylvania Law and C-COR’s Articles of
Incorporation and Bylaws). The Board of Directors of C-COR has determined that the Merger upon the
terms and subject to the conditions of this Agreement is advisable and in the best interests of
C-COR’s stockholders. This Agreement has been duly and validly executed and delivered by C-COR
and, assuming the due authorization, execution and delivery by ARRIS and the Merger Subsidiary, as
applicable, constitutes a legal, valid and binding obligation of C-COR enforceable against C-COR in
accordance with its terms.
SECTION 4.5 — No Conflict; Required Filings and Consents.
(a) Section 4.5(a) of the C-COR Disclosure Schedule includes a list of all agreements to which
C-COR or any of its Subsidiaries is a party or by which any of them is bound that, as of the date
hereof: (i) are required to be filed as “material contracts” with the SEC pursuant to the
requirements of the Exchange Act (as defined herein); (ii) under which the consequences of a
default, nonrenewal, termination or reduction of purchases or sales thereunder could have a
Material Adverse Effect on C-COR; or (iii) pursuant to which payments might be required or
acceleration of benefits may be required upon a “change of control” of C-COR (collectively, the
“Material Contracts”).
(b) Except as set forth in Section 4.5(b) of the C-COR Disclosure Schedule, the execution and
delivery of this Agreement by C-COR does not, and the performance of this Agreement by C-COR will
not, (i) conflict with or violate the Articles of Incorporation, Bylaws or Subsidiary Documents of
C-COR or any of its Subsidiaries, (ii) conflict with or violate any law, rule, regulation, order,
judgment or decree applicable to C-COR or any of its Subsidiaries or by which its or any of their
respective properties is bound or affected, or (iii) result in any breach
12
of or constitute a default (or an event that with notice or lapse of time or both would become
a default) under, or impair C-COR’s or any of its Subsidiaries’ rights or alter the rights or
obligations of any third party under, or give to others any rights of termination, amendment,
acceleration or cancellation of any Material Contract, or result in the creation of a lien or
encumbrance on any of the properties or assets of C-COR or any of its Subsidiaries pursuant to any
note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which C-COR or any of its Subsidiaries is a party or by which C-COR or
any of its Subsidiaries or its or any of their respective properties is bound or affected, except
in such cases for any such conflicts, violations, breaches, defaults, liens or other occurrences
with respect to (ii) and (iii) above that would not have a Material Adverse Effect.
(c) Except as set forth in Section 4.5(c) of the C-COR Disclosure Schedule, the execution and
delivery of this Agreement by C-COR does not, and the performance of this Agreement by C-COR will
not, require any consent, approval, authorization or permit of, or filing with or notification to,
any governmental or regulatory authority, domestic or foreign, except (i) for applicable
requirements, if any, of the 1933 Act, the Exchange Act, the pre-merger notification requirements
of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (“HSR Act”), and
the filing of the Articles of Merger and the Certificate of Merger, and (ii) where the failure to
obtain such consents, approvals, authorizations or permits, or to make such filings or
notifications, would not prevent or delay consummation of the Merger, or otherwise prevent or delay
C-COR from performing its obligations under this Agreement, or would not otherwise have a Material
Adverse Effect.
SECTION 4.6 — Compliance, Permits.
(a) Except as disclosed in Section 4.6(a) of the C-COR Disclosure Schedule, neither C-COR nor
any of its Subsidiaries is in conflict with, or in default or violation of, (i) any law, rule,
regulation, order, judgment or decree applicable to C-COR or any of its Subsidiaries or by which
its or any of their respective properties is bound or affected or (ii) any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation
to which C-COR or any of its Subsidiaries is a party or by which C-COR or any of its Subsidiaries
or its or any of their respective properties is bound or affected, except for any such conflicts,
defaults or violations that would not have a Material Adverse Effect.
(b) Except as disclosed in Section 4.6(b) of the C-COR Disclosure Schedule, C-COR and its
Subsidiaries hold all permits, licenses, easements, variances, exemptions, consents, certificates,
orders and approvals from governmental authorities that are material to the operation of the
business of C-COR and its Subsidiaries taken as a whole as it is now being conducted (collectively,
the “C-COR Permits”), except where the failure to have such C-COR Permits would not have a
Material Adverse Effect. C-COR and its Subsidiaries are in compliance with the terms of the C-COR
Permits, except where the failure to so comply would not have a Material Adverse Effect.
SECTION 4.7 — SEC Filings; Financial Statements.
(a) C-COR has filed all forms, reports and documents required to be filed with the SEC and has
made available to ARRIS (i) its Annual Reports on Form 10-K for the fiscal years
13
ended June 24, 2005, June 30, 2006 and June 29, 2007, (ii) all proxy statements relating to
C-COR’s meetings of stockholders (whether annual or special) held since June 25, 2004, (iii) all
other reports or registration statements filed by C-COR with the Securities and Exchange Commission
(the “SEC”) since June 25, 2004, and (iv) all amendments and supplements to all such
reports and registration statements filed by C-COR with the SEC since June 25, 2004 (collectively,
the “C-COR SEC Reports”). Except as disclosed in Section 4.7(a) of the C-COR Disclosure
Schedule, the C-COR SEC Reports (i) were prepared in all material respects in accordance with the
requirements of the 1933 Act (as defined herein) or the Exchange Act, as the case may be, and (ii)
did not at the time they were filed (or if amended or superseded by a filing prior to the date of
this Agreement, then on the date of such filing) contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading.
None of C-COR’s Subsidiaries is required to file any forms, reports or other documents with the
SEC.
(b) Except as disclosed in Section 4.7(b) of the C-COR Disclosure Schedule, each of the
consolidated financial statements (including, in each case, any related notes thereto) contained in
the C-COR SEC Reports was prepared in accordance with GAAP applied on a consistent basis throughout
the periods involved (except as may be indicated in the notes thereto), and each fairly presents in
all material respects the consolidated financial position of C-COR and its Subsidiaries as at the
respective dates thereof and the consolidated results of its operations and cash flows for the
periods indicated, except that the unaudited interim financial statements were subject to normal
and recurring year-end adjustments which were not, or are not expected to be, material in amount.
(c) C-COR has established and maintains “disclosure controls and procedures” (as defined in
Rule 13a-15(e) promulgated under the Exchange Act) that are reasonably designed to ensure that
material information (both financial and non-financial) relating to C-COR and its Subsidiaries
required to be disclosed by C-COR in the reports that it files or submits under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified in the rules and
forms of the SEC, and that such information is accumulated and communicated to C-COR’s principal
executive officer and principal financial officer, or persons performing similar functions, as
appropriate to allow timely decisions regarding disclosure and to make the certifications of the
principal executive officer and the principal financial officer of C-COR required by Section 302 of
the Xxxxxxxx-Xxxxx Act of 2002 (“Xxxxxxxx-Xxxxx”) with respect to such reports. For
purposes of this Agreement, “principal executive officer” and “principal financial officer” shall
have the meanings given to such terms in Xxxxxxxx-Xxxxx.
(d) C-COR has established and maintains a “system of internal control over financial
reporting” (as defined in Rule 13a-15(f) promulgated under the Exchange Act) (“internal
controls”). Such internal controls are sufficient to provide reasonable assurance regarding
the reliability of C-COR’s financial reporting and the preparation of C-COR’s financial statements
for external purposes in accordance with GAAP (as defined herein). C-COR has disclosed, based on
its most recent evaluation of internal controls prior to the date hereof, to C-COR’s auditors and
audit committee (i) any significant deficiencies and material weaknesses known to C-COR in the
design or operation of internal controls which are reasonably likely to adversely affect in a
material respect C-COR’s ability to record, process, summarize and report financial information
14
and (ii) any material fraud known to C-COR that involves management or other employees who
have a significant role in internal controls. C-COR has made available to ARRIS a summary of any
such disclosure regarding material weaknesses and fraud made by management to C-COR’s auditors and
audit committee since July 1, 2005. For purposes of this Agreement, a “significant deficiency” in
controls means an internal control deficiency that adversely affects an entity’s ability to
initiate, authorize, record, process, or report external financial data reliably in accordance with
GAAP. A “significant deficiency” may be a single deficiency or a combination of deficiencies that
results in more than a remote likelihood that a misstatement of the annual or interim financial
statements that is more than inconsequential will not be prevented or detected. For purposes of
this Agreement, a “material weakness” in internal controls means a significant deficiency, or a
combination of significant deficiencies, that results in more than a remote likelihood that a
material misstatement of the annual or interim financial statements will not be prevented or
detected.
SECTION 4.8 — Absence of Certain Changes or Events. Except as set forth in Section 4.8 of the
C-COR Disclosure Schedule or the C-COR SEC Reports, since June 29, 2007, C-COR has conducted its
business in the ordinary course and there has not occurred: (i) any Material Adverse Effect; (ii)
any amendments or changes in the Articles of Incorporation or Bylaws of C-COR; (iii) any damage to,
destruction or loss of any asset of C-COR (whether or not covered by insurance) that would have a
Material Adverse Effect; (iv) any material change by C-COR in its accounting methods, principles or
practices, except as disclosed in Section 4.8 of the C-COR Disclosure Schedule; (v) any material
revaluation by C-COR of any of its assets, including, without limitation, writing down the value of
inventory or writing off notes or accounts receivable other than in the ordinary course of
business; (vi) any other action or event that would have required the consent of ARRIS pursuant to
Section 6.1 had such action or event occurred after the date of this Agreement; or (vii) any sale
of a material amount of property of C-COR or any of its Subsidiaries, except in the ordinary course
of business.
SECTION 4.9 — No Undisclosed Liabilities. Except as is disclosed in Section 4.9 of the C-COR
Disclosure Schedule, neither C-COR nor any of its Subsidiaries has any liabilities (absolute,
accrued, contingent or otherwise), except liabilities (a) in the aggregate adequately provided for
in C-COR’s audited balance sheet (including any related notes thereto) as of June 29, 2007 (the
“2007 C-COR Balance Sheet”), (b) incurred in the ordinary course of business and not
required under GAAP to be reflected on the 2007 C-COR Balance Sheet, (c) incurred since June 29,
2007, in the ordinary course of business consistent with past practice, or (d) incurred in
connection with this Agreement.
SECTION 4.10 — Absence of Litigation. Except as set forth in Section 4.10 of the C-COR
Disclosure Schedule, there are no claims, actions, suits or proceedings pending or, to the
knowledge of C-COR, overtly threatened and to the knowledge of C-COR, there are no investigations
pending or threatened against C-COR or any of its Subsidiaries, or any properties or rights of
C-COR or any of its Subsidiaries, before any court, arbitrator or administrative, governmental or
regulatory authority or body, domestic or foreign, could reasonably be expected to result in a
liability in excess of $500,000.
SECTION 4.11 — Joint Proxy Statement. None of the information supplied or to be supplied by
or on behalf of C-COR for inclusion or incorporation by reference in the registration
15
statement to be filed with the SEC by ARRIS in connection with the issuance of shares of ARRIS
Common Stock in the Merger (the “Registration Statement”) will, at the time the
Registration Statement becomes effective under the 1933 Act, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were made, not misleading.
None of the information supplied or to be supplied by or on behalf of C-COR for inclusion or
incorporation by reference in the joint proxy statement, in definitive form, relating to the
meetings of C-COR and ARRIS stockholders to be held in connection with the Merger, or in the
related proxy and notice of meeting, or soliciting material used in connection therewith (referred
to herein collectively as the “Joint Proxy Statement”) will, at the dates mailed to
stockholders and at the times of the C-COR Stockholders’ Meeting and the ARRIS Stockholders’
Meeting (as defined herein), contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the statements therein,
in light of the circumstances under which they are made, not misleading. The information provided
by C-COR for inclusion in the Joint Proxy Statement (except for information relating solely to
ARRIS) will comply as to form in all material respects with the provisions of the Exchange Act and
the rules and regulations promulgated thereunder.
SECTION 4.12 — Employee Benefit Plans, Employment Agreements.
(a) Section 4.12(a) of the C-COR Disclosure Schedule lists all employee pension plans (as
defined in Section 3(2) of the Employee Retirement Income Security Act of 1974 (“ERISA”)),
all material employee welfare plans (as defined in Section 3(1) of ERISA) and all other material
bonus, stock option, stock purchase, incentive, deferred compensation, supplemental retirement,
severance and other similar fringe or employee benefit plans, programs or arrangements, and any
material current or former employment, executive compensation, consulting or severance agreements,
written or otherwise, for the benefit of, or relating to, any employee of or consultant to C-COR,
any trade or business (whether or not incorporated) which is a member of a controlled group
including C-COR or which is under common control with C-COR (an “ERISA Affiliate”) within
the meaning of Section 414 of the Code, or any Subsidiary of C-COR, as well as each plan with
respect to which C-COR or an ERISA Affiliate could incur liability under Section 4069 (if such plan
has been or were terminated) or Section 4212(c) of ERISA (collectively the “C-COR Employee
Plans”). C-COR has made available to ARRIS copies of (i) each such written C-COR Employee Plan
(other than those referred to in Section 4(b)(4) of ERISA), (ii) the most recent annual report on
Form 5500 series, with accompanying schedules and attachments, filed with respect to each C-COR
Employee Plan required to make such a filing, (iii) the most recent actuarial valuation for each
C-COR Employee Plan subject to Title IV of ERISA, and (iv) such other documents or information that
ARRIS reasonably requests. For purposes of this Section 4.12(a), the term “material,” used with
respect to any C-COR Employee Plan, shall mean that C-COR or an ERISA Affiliate has incurred or may
incur obligations in an annual amount exceeding $500,000 with respect to such C-COR Employee Plan.
(b) (i) Except as set forth in Section 4.12(b) of the C-COR Disclosure Schedule, none of the
C-COR Employee Plans promises or provides retiree medical or other retiree welfare benefits to any
person, (ii) none of the C-COR Employee Plans is a “multiemployer plan” as such term is defined in
Section 3(37) of ERISA; (iii) there has been no “prohibited transaction,”
16
as such term is defined in Section 406 of ERISA and Section 4975 of the Code, with respect to
any C-COR Employee Plan that could result in any material liability of C-COR or any of its
subsidiaries; (iv) all C-COR Employee Plans are in compliance in all material respects with the
requirements prescribed by any and all statutes (including ERISA and the Code), orders, or
governmental rules and regulations currently in effect with respect thereto (including all
applicable requirements for notification to participants or the Department of Labor, the Pension
Benefit Guaranty Corporation (the “PBGC”), Internal Revenue Service (the “IRS”) or
Secretary of the Treasury), and C-COR and each of its Subsidiaries have performed all material
obligations required to be performed by them under, are not in any material respect in default
under or violation of, and have no knowledge of any default or violation by any other party to, any
of the C-COR Employee Plans; (v) each C-COR Employee Plan that is subject to Section 409A of the
Code has been operated prior to 2008 in material good faith compliance with temporary and
transition guidance issued by the IRS with respect to Section 409A of the Code, and will be amended
within the time prescribed by law so that payments thereunder will not result in the imposition of
any additional tax as a result of Section 409A of the Code; (vi) each C-COR Employee Plan intended
to qualify under Section 401(a) of the Code and each trust intended to qualify under Section 501(a)
of the Code is the subject of a favorable determination letter from the IRS, and nothing has
occurred which may reasonably be expected to impairs such determination; (vii) all contributions
required to be made to any C-COR Employee Plan pursuant to Section 412 of the Code, or the terms of
C-COR Employee Plan or any collective bargaining agreement, have been made on or before their due
dates; (viii) with respect to each C-COR Employee Plan, no “reportable event” within the meaning of
Section 4043 of ERISA (excluding any such event for which the 30 day notice requirement has been
waived under the regulations to Section 4043 of ERISA) nor any event described in Section 4062,
4063 or 4041 of ERISA has occurred; and (ix) neither C-COR nor any ERISA Affiliate has incurred,
nor reasonably expects to incur, any liability under Title IV of ERISA (other than liability for
premium payments to the PBGC arising in the ordinary course).
(c) Section 4.12(c) of the C-COR Disclosure Schedule sets forth a true and complete list of
each current or former employee, officer or director of C-COR or any of its subsidiaries who holds
(i) any option to purchase C-COR Common Stock as of the date hereof, together with the number of
shares of C-COR Common Stock subject to such option, the option price of such option (to the extent
determined as of the date hereof), whether such option is intended to qualify as an incentive stock
option within the meaning of Section 422(b) of the Code (an “ISO”), and the expiration date
of such option; (ii) any other right, directly or indirectly, to acquire C-COR Common Stock,
together with the number of shares of C-COR Common Stock subject to such right. Section 4.12(c) of
the C-COR Disclosure Schedule also sets forth the total number of such ISOs, such nonqualified
options and such other rights. The per share exercise price for each option to purchase C-COR
Common Stock issued by C-COR equaled the fair market value of one share of C-COR Common Stock.
(d) Section 4.12(d) of the C-COR Disclosure Schedule sets forth a true and complete list of
(i) all employment agreements with officers of C-COR or any of its Subsidiaries; (ii) all
agreements with consultants who are individuals obligating C-COR or any of its Subsidiaries to make
annual cash payments in an amount exceeding $200,000; (iii) all employees of, or consultants to,
C-COR or any of its Subsidiaries who have executed a non-competition agreement with C-COR or any of
its Subsidiaries; (iv) all severance agreements, programs and
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policies of C-COR or any of its Subsidiaries with or relating to its employees, in each case
with outstanding commitments exceeding $100,000, excluding programs and policies required to be
maintained by law; and (v) all plans, programs, agreements and other arrangements of C-COR or any
of its Subsidiaries with or relating to its employees that contain change in control provisions.
SECTION 4.13 — Labor Matters. Except as set forth in Section 4.13 of the C-COR Disclosure
Schedule, (i) there are no material controversies pending or, to the knowledge of C-COR, threatened
between C-COR or any of its Subsidiaries and any of their respective employees; (ii) neither C-COR
nor any of its Subsidiaries is a party to any collective bargaining agreement or other labor union
contract applicable to persons employed by C-COR or its Subsidiaries, nor to the knowledge of
C-COR, are there any activities or proceedings by any labor union to organize any employees; and
(iii) to the knowledge of C-COR, there are not any material strikes, slowdowns, work stoppages,
lockouts, or threats thereof, by or with respect to any employees of C-COR or any of its
Subsidiaries.
SECTION 4.14 — Restrictions on Business Activities. Except for this Agreement or as set forth
in Section 4.14 of the C-COR Disclosure Schedule, to the knowledge of C-COR, there is no material
agreement, judgment, injunction, order or decree binding upon C-COR or any of its Subsidiaries that
has or could reasonably be expected to have the effect of prohibiting or impairing any material
business practice of C-COR or any of its Subsidiaries, any acquisition of property by C-COR or any
of its Subsidiaries or the conduct of business by C-COR or any of its Subsidiaries as currently
conducted or as proposed to be conducted by C-COR.
SECTION 4.15 — Title to Property. Except as set forth in Section 4.15 of the C-COR Disclosure
Schedule, C-COR and each of its Subsidiaries have good and defensible title to all of their
properties and assets, free and clear of all liens, charges and encumbrances, except (i) liens for
Taxes (as defined herein) not yet due and payable, (ii) mechanics’, materialmen’s or similar
statutory liens for amounts not yet due or being contested and (iii) such liens or other
imperfections of title, if any, as do not materially detract from the value of or interfere with
the present use of the property affected thereby; and, to the knowledge of C-COR, all leases
pursuant to which C-COR or any of its Subsidiaries lease from others material amounts of real or
personal property are valid and effective in accordance with their respective terms, and there is
not, to the knowledge of C-COR, under any of such leases, any existing material default or event of
default (or event which with notice or lapse of time, or both, would constitute a material
default).
SECTION 4.16 — Customers. Except as set forth in Section 4.16 of the C-COR Disclosure
Schedule, C-COR has not received any notice and has no knowledge to the effect that any of C-COR’s
ten largest customers for fiscal year 2007 may terminate or materially alter its business relations
with C-COR, either as a result of the transactions contemplated by this Agreement or otherwise,
except for such alterations that have not had or are not reasonably expected to have a Material
Adverse Effect.
SECTION 4.17 — Supplier Relations. Except as set forth on Section 4.17 of the C-COR
Disclosure Schedule, C-COR has not received any notice and has no knowledge to the effect that any
of C-COR’s ten largest suppliers for fiscal year 2007 may terminate or materially alter its
business relations with C-COR, either as a result of the transactions contemplated by this
Agreement or otherwise.
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SECTION 4.18 — Inventory. The inventory (a) is sufficient for the operations of C-COR (as
conducted on the date hereof) in the ordinary course consistent with past practice, (b) consists of
items which are good and merchantable within normal trade tolerances and (c) is of a quality and
quantity presently usable or saleable in the ordinary course of the business of C-COR (subject to
applicable reserves).
SECTION 4.19 — Taxes. For purposes of this Agreement, “Tax” or “Taxes” shall
mean taxes, fees, levies, duties, tariffs, imposts, and governmental impositions or charges of any
kind in the nature of (or similar to) taxes, payable to any federal, state, local or foreign taxing
authority, including (without limitation) income, franchise, profits, gross receipts, ad valorem,
net worth, value added, sales, use, service, real or personal property, special assessments,
capital stock, license, payroll, withholding, employment, social security, workers’ compensation,
unemployment compensation, utility, severance, production, excise, stamp, occupation, premiums,
windfall profits, transfer and gains taxes, together with any interest, penalties, additional taxes
and additions to tax imposed with respect thereto, whether disputed or not and including any
obligation to indemnify or otherwise assume or succeed to the tax liability of any other person;
and “Tax Returns” shall mean returns, reports, and information statements with respect to
Taxes required to be filed with the IRS or any other taxing authority, domestic or foreign,
including, without limitation, consolidated, combined and unitary tax returns.
(a) Except as set forth in Section 4.19(a) of the C-COR Disclosure Schedule, each of C-COR and
its Subsidiaries (together the “C-COR Entities”), including for this purpose, their
branches, has timely filed (taking into account any extension of time within which to file) with
the appropriate Taxing authorities all material income and other Tax Returns in all jurisdictions
in which Tax Returns are required to be filed, and such Tax Returns are correct and complete in all
material respects. All Taxes of the C-COR Entities (whether or not shown on any Tax Return) that
have become due or payable have been fully and timely paid, or proper accruals pursuant to GAAP
have been established in the 2007 C-COR Balance Sheet with respect thereto (except for Taxes
relating to events subsequent to the date thereof), except to the extent any failure to accrue or
reserve would not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. There are no material liens for any Taxes (other than a lien for current real
property or ad valorem Taxes not yet due and payable) on any of the assets of any of the C-COR
Entities.
(b) Except as set forth in Section 4.19(b) of the C-COR Disclosure Schedule, none of the C-COR
Entities has received in writing from any foreign, federal, state, or local taxing authority
(including jurisdictions where the C-COR Entities have not filed Tax Returns) any notice of
deficiency or proposed adjustment for any amount of Tax proposed, asserted, or assessed by any
taxing authority against C-COR or any of its Subsidiaries exceeding the amount reserved on the face
of, rather than in any notes thereto, the 2007 C-COR Balance Sheet. Section 4.19(b) of the C-COR
Disclosure Schedule lists all federal, state, local, and foreign income Tax Returns that currently
are the subject of audit. C-COR has delivered to ARRIS correct and complete copies of all federal
income Tax Returns filed since October 15, 2002, and all examination reports, and statements of
deficiencies assessed against or agreed to by the C-COR Entities. Except as set forth in Section
4.19(b) of the C-COR Disclosure Schedule, none of the C-COR Entities has waived any statute of
limitations in respect of any Taxes or agreed to a Tax assessment or deficiency.
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(c) Each C-COR Entity has complied in all material respects with all applicable laws, rules
and regulations relating to the withholding of Taxes and the payment thereof to appropriate
authorities, including Taxes required to have been withheld and paid in connection with amounts
paid or owing to any employee or independent contractor, and Taxes required to be withheld and paid
pursuant to Sections 1441 and 1442 of the Code or similar provisions under foreign law.
(d) Except as set forth in Section 4.19(d) of the C-COR Disclosure Schedule, none of the C-COR
Entities is a party to any Tax allocation or sharing agreement, and none of the C-COR Entities has
been a member of an affiliated group filing a consolidated federal income Tax Return (other than a
group the common parent of which was C-COR) or has any Tax liability of any person (other than
another C-COR Entity that is a member of the consolidated federal income Tax group of which C-COR
is the common parent) under Treasury Regulation Section 1.1502-6 or any similar provision of state,
local or foreign law, or as a transferee or successor, by contract or otherwise.
(e) During the five-year period ending on the date hereof, none of the C-COR Entities was a
distributing corporation or a controlled corporation in a transaction intended to be governed by
Section 355 of the Code.
(f) Except as set forth in Section 4.19(f) of the C-COR Disclosure Schedule, none of the C-COR
Entities has made any payments, is obligated to make any payments, or is a party to any contract
that could obligate it to make any payments that could be disallowed as a deduction under Section
280G or 162(m) of the Code.
(g) None of the C-COR Entities has been a United States real property holding corporation
within the meaning of Section 897(c)(2) of the Code during the applicable period specified in
Section 897(c)(1)(A)(ii) of the Code.
(h) None of the C-COR Entities has been or will be required to include any adjustment in
taxable income for any Tax period (or portion thereof) ending after the Closing Date pursuant to
Section 481 of the Code or any comparable provision under state or foreign Tax laws as a result of
transactions or events occurring prior to the Closing.
(i) None of the C-COR Entities is or has been a Passive Foreign Investment Company within the
meaning of the Code or the Treasury Regulations promulgated thereunder. Schedule 4.19(i) of the
C-COR Disclosure Schedule lists each C-COR Entity that is a Controlled Foreign Corporation within
the meaning of the Code and the Treasury Regulations promulgated thereunder.
(j) To the knowledge of C-COR, except as set forth in Section 4.19(j) of the C-COR Disclosure
Schedule, the net operating losses of the C-COR Entities are not subject to any limitation on their
use under the provisions of Sections 382, 384, or 269 of the Code or any of the provisions of the
Treasury Regulations dealing with the utilization of net operating losses other than any such
limitations as may arise as a result of the consummation of the transactions contemplated hereby.
SECTION 4.20 — Environmental Matters. Except as set forth in Section 4.20 of the C-COR
Disclosure Schedule, and except in those cases, either individually or in the aggregate, that
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are not reasonably expected to have a Material Adverse Effect, C-COR and each of its
Subsidiaries (i) are in compliance with all Environmental Laws (as defined below); (ii) have
obtained all applicable permits, licenses and other authorizations that are required to be obtained
under all applicable federal, foreign, state or local laws or any regulation, code, plan, order,
decree, judgment, notice or demand letter issued, entered, promulgated or approved thereunder
relating to pollution or protection of the environment, including laws relating to emissions,
discharges, releases or threatened releases of pollutants, contaminants, or Hazardous Materials
into ambient air, surface water, ground water, or land or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport, or handling of pollutants,
contaminants or hazardous or toxic materials or wastes (“Environmental Laws”) by C-COR or
its Subsidiaries; (iii) are in compliance with all terms and conditions of such required permits,
licenses and authorizations, and have made all appropriate filings for issuance or renewal of such
permits, licenses and authorizations; (iv) as of the date hereof, are not aware of nor have
received any notice, claim, demand, report or other information alleging any past or present
violations of Environmental Laws, or any liabilities arising under Environmental Laws, against
C-COR or any of its Subsidiaries; (v) have not used any waste disposal site or otherwise disposed
of, transported, or arranged for the transportation of, any Hazardous Materials to any place or
location, or in violation of any Environmental Laws; and (vi) have taken all actions necessary
under applicable Environmental Laws to register any products or materials required to be registered
by C-COR or its Subsidiaries (or any of their respective agents) thereunder.
SECTION 4.21 — Intellectual Property.
(a) Section 4.21(a)-1 of the C-COR Disclosure Schedule sets forth, for the Owned Intellectual
Property (as defined below), a correct and complete list of all (i) issued Patents (as defined
below) and filed and pending applications for Patents, (ii) registered Trademarks (as defined
below) and Trademarks for which registrations have been applied for, (iii) domain name
registrations, (iv) mask work registrations and (v) registered Copyrights (as defined below) and
Copyrights for which registrations have been applied for, indicating for each of the foregoing
(i)-(v), the applicable jurisdiction, registration number (or application number) and date issued
(or date filed). C-COR and its Subsidiaries exclusively own, free and clear of all liens, all
right, title and interest in the Owned Intellectual Property except as set forth in Section
4.21(a)-2 of the C-COR Disclosure Schedule.
(b) All Trademarks, Patents and Copyrights listed in Section 4.21(a) of the C-COR Disclosure
Schedule (i) are currently in compliance in all material respects with all applicable legal
requirements (including, as applicable, application, registration and maintenance requirements,
such as the timely post-registration filing of affidavits of use and incontestability and renewal
applications with respect to Trademarks, and the payment of filing, examination and annuity and
maintenance fees in the United States, (ii) are, to the knowledge of C-COR, valid and enforceable,
and (iii) except as set forth in Section 4.21(b)-1 of the C-COR Disclosure Schedule, are not
subject to any maintenance fees or actions falling due on or before March 31, 2008. No Trademark
listed in Section 4.21(a) of the C-COR Disclosure Schedule currently is involved in any opposition
or cancellation proceeding and, to the knowledge of C-COR, no such action has been threatened with
respect to any of those Trademarks. As of the date hereof, except as set forth in Section 4.21(b)-2
of the C-COR Disclosure Schedule, no Patent owned by C-COR or any of its Subsidiaries currently is
involved in any interference, reissue, re-
21
examination or opposition proceeding and, to the knowledge of C-COR, no such action has been
threatened with respect to any such Patent.
(c) Section 4.21(c)-1 of the C-COR Disclosure Schedule sets forth a complete and accurate list
of any and all contracts or other written agreements (excluding license agreements for
off-the-shelf software applications programs having a price of less than $10,000 per copy, seat,
CPU or named user) pursuant to which C-COR or any of its Subsidiaries has been granted or otherwise
receives from a third party any right to use or distribute any software (as defined below) (other
than the Third Party Embedded Software (as defined below) and any Software licensed pursuant to a
Limited License (as defined below)). Section 4.21(c)-2 of the C-COR Disclosure Schedule sets forth
a complete and accurate list of all third party Software that is contained or embedded in, and
necessary for the operation and use of, any commercially available products of C-COR (“Third
Party Embedded Software” and, together with the contracts and agreements listed in Section
4.21(c)-1 of the C-COR Disclosure Schedule, the “Third Party Software Licenses”). C-COR has
all of the Third Party Embedded Software rights materially necessary to manufacture, distribute,
and sell all Software embedded in C-COR products, provided, that the foregoing shall not be
deemed to be a representation that such Third Party Embedded Software rights do not infringe the
patent rights of any other person, other than the Third Party Embedded Software developer or
provider.
(d) Except for the Third Party Software Licenses, Section 4.21(d) of the C-COR Disclosure
Schedule sets forth a complete and accurate list of any and all contracts or other written
arrangements pursuant to which C-COR or any of its Subsidiaries has been granted or otherwise
receives any right to use, exercise or practice any right under any Intellectual Property (as
defined below) of a third party (the “Third Party IP Licenses” and, together with the Third
Party Software Licenses, the “Third Party Licenses”). To the knowledge of C-COR, C-COR and
its Subsidiaries have valid and enforceable rights to use all of the Intellectual Property covered
by the Third Party Licenses. No royalties, honoraria or other fees are past due and owing by C-COR
or any of its Subsidiaries under the Third Party Licenses. C-COR has all of the Third Party IP
Licenses necessary to manufacture, distribute, and sell all C-COR products, provided, that
the foregoing shall not be deemed to be a representation that such rights do not infringe the
patent rights of any other person, other than the Third Party IP Licenses developer or provider.
(e) Except as set forth on Section 4.21(e)-1 of the C-COR Disclosure Schedule, the Owned
Intellectual Property and the Intellectual Property covered by the Third Party Licenses constitute
all of the Intellectual Property used in and, to the knowledge of C-COR, necessary for the
operation of C-COR’s business as currently conducted. C-COR and its Subsidiaries have taken all
reasonable steps to protect the Owned Intellectual Property, including reasonable steps to prevent
and xxxxx any infringement or misappropriation of the Owned Intellectual Property. To the knowledge
of C-COR, except as set forth on Section 4.21(e)-2 of the C-COR Disclosure Schedule, no third party
has challenged in writing, to C-COR, C-COR’s ownership, use, validity or enforceability of any of
the Owned Intellectual Property since C-COR’s acquisition of such Intellectual Property. Neither
C-COR nor any of its Subsidiaries has licensed or otherwise authorized any third party to make,
have made, sell, copy, distribute, modify, reverse engineer, or prepare derivatives of any Owned
Intellectual Property (other than Copyrights in C-COR Software, which is addressed in the last
sentence of Section 4.21(h) below), except pursuant to a written agreement (including via
electronic means).
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(f) Except as set forth on Section 4.21(f)-1 of the C-COR Disclosure Schedule, the conduct of
C-COR’s business as currently conducted with respect to the development of the products, services
and platforms set forth on Section 4.21(f)-2 of the C-COR Disclosure Schedule, to the knowledge of
C-COR, does not infringe upon any Intellectual Property rights of any third party. Except as set
forth on Section 4.21(f)-3 of the C-COR Disclosure Schedule, to the knowledge of C-COR, no third
party has notified C-COR or any of C-COR’s Subsidiaries in writing that (i) any of such third
party’s Intellectual Property rights are infringed by C-COR or any of its Subsidiaries, or (ii)
C-COR or any of its Subsidiaries requires a license to any of such third party’s Intellectual
Property rights in order for C-COR or its Subsidiaries, as applicable, to be non-infringing, and
neither C-COR nor any of its Subsidiaries has received any written offer to license (or any other
form of written notice of) any of such third party’s Intellectual Property rights.
(g) To the knowledge of C-COR, except as set forth in Section 4.21(g)-1 of the C-COR
Disclosure Schedule, no third party is misappropriating, infringing, diluting or violating any
Owned Intellectual Property. Except as set forth on Section 4.21(g)-2 of the C-COR Disclosure
Schedule, no such claims have been brought or threatened against any third party by or on behalf of
C-COR or any of its Subsidiaries.
(h) Section 4.21(h)-1 of the C-COR Disclosure Schedule contains a complete and accurate list
of all Software that is owned by C-COR or any of its Subsidiaries and sold, licensed, leased or
otherwise distributed by C-COR or any of its Subsidiaries or authorized resellers to end user
customers of C-COR’s or its Subsidiaries’ products or services (the “C-COR Software”). C-COR
Software was developed either by (i) employees of C-COR or its Subsidiaries within the scope of
their employment who have executed enforceable confidentiality and assignment of inventions
agreements, which are with or have been assigned to C-COR or any of its Subsidiaries, or (ii)
independent contractors who have assigned their rights to C-COR or one of its Subsidiaries pursuant
to enforceable written agreements or (iii) acquired pursuant to an enforceable written agreement or
assignment. Neither C-COR nor any of its Subsidiaries have licensed or otherwise authorized any
third party to copy, distribute, modify, decompile, or prepare derivatives of any C-COR Software
except pursuant to a written license agreement or other written arrangement.
(i) Except as set forth on Section 4.21(i)-1 of the C-COR Disclosure Schedule, all material
Trademarks of C-COR and its Subsidiaries within the Owned Intellectual Property and currently used
in the operation of the business of C-COR or any of its Subsidiaries have been in continuous use by
C-COR or a Subsidiary of C-COR, as applicable, since the date of their initial use in commerce.
Except as set forth on Section 4.21(i)-2 of the C-COR Disclosure Schedule, to the knowledge of
C-COR, there has been no prior use of any registered Trademarks owned by C-COR or any of its
Subsidiaries or other action taken by any third party that would confer upon such third party
superior rights in such Trademarks. C-COR has taken reasonable steps to prevent infringement of the
Trademarks referenced in the first sentence of this subsection (i).
(j) The Copyrights within the Owned Intellectual Property have been solely (i) created by (A)
employees of C-COR and its Subsidiaries within the scope of their employment who have executed the
confidentiality and assignment of inventions agreement set forth in Section 4.21(h)-2 of the C-COR
Disclosure Schedule, or (B) independent contractors who have
23
assigned their rights in such works to C-COR, either as a “work made for hire” as defined
under Section 101 of the United States Copyright Act, or pursuant to enforceable written
agreements, or (ii) acquired pursuant to an enforceable written assignment from the original
author(s) or subsequent assignees. To the knowledge of C-COR, the works covered by such Copyrights
were not copies of, nor derived from, any work for which C-COR or any of its Subsidiaries does not
own the Copyrights. To the knowledge of C-COR, no other person has any claim to authorship or
ownership of any part of any of the Copyrights within the Owned Intellectual Property.
(k) The Patents within the Owned Intellectual Property relate solely to inventions (i) created
by (A) employees of C-COR and its Subsidiaries within the scope of their employment who have
executed the confidentiality and assignment of inventions agreement set forth in Section 4.21(h)-2
of the C-COR Disclosure Schedule, or (B) independent contractors who have assigned their rights to
C-COR pursuant to enforceable written agreements, or (ii) acquired pursuant to an enforceable
written assignment from the original inventor(s) or subsequent assignees or pursuant to written
agreements setting forth an obligation of the original investor to assign their inventions to
C-COR. The inventions covered by such Patents were not copies of any invention for which C-COR or
any of its Subsidiaries does not own the Patent, and no other person has any claim to inventorship
or ownership of any part thereof.
(l) C-COR and its Subsidiaries have taken reasonable steps to protect their respective rights
in material confidential information and trade secrets owned by them or disclosed to them by a
third party and used in connection with the conduct of C-COR’s business. Without limiting the
foregoing, C-COR and its Subsidiaries have enforced a policy of requiring each employee, consultant
and contractor to execute proprietary information, invention assignment and confidentiality
agreements, as appropriate, substantially consistent with C-COR’s standard forms (complete and
current copies of which have been delivered or made available to ARRIS). Except under valid and
binding confidentiality obligations, there has been no material disclosure by C-COR or any of its
Subsidiaries to a third party of any confidential information or trade secrets used in connection
with the conduct of C-COR’s business.
(m) C-COR and its Subsidiaries have valid registrations for each of the domain names set forth
in Section 4.21(a) of the C-COR Disclosure Schedule. The registration of each such domain name is
free and clear of all liens and is in full force and effect. C-COR has paid all fees required to
maintain each such registration. Neither C-COR nor any of its Subsidiaries has received written
notice of any claim asserted against C-COR or any of its Subsidiaries adverse to its rights to such
domain names, and, to the knowledge of C-COR, none of C-COR’s registrations or uses of the domain
names has been disturbed or placed “on hold.”
(n) To the knowledge of C-COR, all C-COR Software is free from any defect or programming or
documentation error, including bugs, logic errors or failures of such software to operate in all
material respects as described in the related documentation, and substantially conforms to the
specifications of such software, other than those defects, errors, bugs or failures that would not
have a Material Adverse Effect on C-COR. To the knowledge of C-COR, all Software licensed from any
third party is free from any material defect or programming or documentation error, including major
bugs, logic errors or failures of such Software to operate in all material respects as described in
the related documentation, and substantially conforms to the specifications of such Software. With
respect to C-COR Software, the applications can be
24
compiled from the associated source code in accordance with the means currently employed by
C-COR. Except for any components of the source code licensed in from third parties, C-COR has
actual and sole possession of the complete source code of C-COR Software. Except as set forth on
Section 4.21(n) of the C-COR Disclosure Schedule, other than C-COR’s or any of its Subsidiaries’
delivery of C-COR source code to third party escrow agents or their disclosure of such source code
to third parties as part of a software development kit made available by C-COR or any of its
Subsidiaries in the ordinary course of business, no event has occurred, and to the knowledge of
C-COR no circumstance or condition exists, that (with or without notice or lapse of time) will, or
could reasonably be expected to, result in the disclosure or delivery to any third party of the
source code for C-COR Software. C-COR Software (as used or distributed by C-COR or its
Subsidiaries) does not contain any “back door,” “time bomb,” “Trojan horse,” “worm,” “drop dead
device,” “virus” (as these terms are commonly used in the computer software industry), or other
Software routines or hardware components intentionally designed to permit unauthorized access, to
disrupt, disable or erase software, hardware or data, or to perform any other similar type of
unauthorized activities.
(o) Except as set forth in Section 4.21(o) of the C-COR Disclosure Schedule, none of C-COR
Software or any Owned Intellectual Property are, in whole or in part, subject to the provision of
any open source or other similar type of license agreement or distribution model that (i) requires
the distribution or making available of the source code for C-COR Software to the general public,
(ii) prohibits or limits C-COR or any of its Subsidiaries from charging a fee or receiving
consideration in connection with sublicensing or distributing any C-COR Software, (iii) except as
specifically permitted by law, grants any right to any third party (other than C-COR and its
Subsidiaries) or otherwise allows any such third party to decompile, disassemble or otherwise
reverse-engineer any C-COR Software, or (iv) requires the licensing of any C-COR Software to the
general public for the purpose of permitting others to make derivative works of C-COR Software (any
such open source or other type of license agreement or distribution model described in clause (i),
(ii), (iii) or (iv) above, a “Limited License”). By way of clarification, but not
limitation, the term “Limited License” includes (A) GNU’s General Public License (GPL) or
Lesser/Library GPL (LGPL), (B) the Artistic License (e.g., PERL), (C) the Mozilla Public License,
(D) the Netscape Public License, (E) the Sun Community Source License (SCSL), and (F) the Sun
Industry Standards License (SISL). To the knowledge of C-COR, none of C-COR Software incorporates,
or is distributed with, any Software that is subject to a Limited License, nor does any C-COR
Software constitute a derivative work of or dynamically link with any such Software.
(p) Except as set forth on Section 4.21(p) of the C-COR Disclosure Schedule, no government
funding, facilities of a university, college, or other educational institution or research center
was used in the creation or development of the Owned Intellectual Property or C-COR Software. To
the knowledge of C-COR, no current or former employee, consultant or independent contractor who was
directly involved in, or who contributed directly to, the creation or development of any Owned
Intellectual Property or C-COR Software has performed services for any governmental entity, a
university, college, or other educational institution, or a research center, during a period of
time during which such employee, consultant or independent contractor was also performing services
used in the creation or development of the Owned Intellectual Property or C-COR Software. Neither
C-COR nor any of its Subsidiaries are party to any contract, license or agreement with any
governmental entity that grants to such governmental
25
entity any right or license with respect to the Owned Intellectual Property or C-COR Software,
other than as granted in the ordinary course of business pursuant to a non-exclusive license to any
C-COR Software.
(q) For the purposes of this Agreement:
(i) The term “Copyrights” means (A) any rights in original works of authorship
fixed in any tangible medium of expression as set forth in the United States Copyright Act,
17 U.S.C. §101 et. seq., and any rights in mask works, registered and unregistered, as
defined in 17 U.S.C. §901, (B) all registrations and applications to register the foregoing
anywhere in the world, (C) all foreign counterparts and analogous rights anywhere in the
world, and (D) all rights in and to any of the foregoing;
(ii) The term “Intellectual Property” means any and all (A) Copyrights,
Trademarks, and Patents and all rights to obtain and rights to apply for Patents, and to
register Trademarks and Copyrights, (B) and to the extent enforceable rights of protection
are available, such right in Software, ideas, innovations, inventions (whether or not
patentable, reduced to practice, or the subject of an application for Patent), know-how and
show-how, trade secrets, works of authorship, and confidential technical and non-technical
information to the extent protectable under intellectual property rights anywhere in the
world, (C) moral rights and author’s rights, (D) all rights in mask works and registrations
and applications for registrations thereof (E) all other industrial, proprietary and
intellectual property related rights anywhere in the world, and all renewals and extensions
of any of the foregoing, regardless of whether or not such rights have been registered with
the appropriate authorities in such jurisdictions in accordance with the relevant
legislation, (F) copies and tangible embodiments of all the foregoing, in whatever form or
medium, (G) all rights in and to any of the foregoing, including the right to xxx, recover,
and retain damages, costs, and attorneys’ fees for past and present infringement or
misappropriation of any of the foregoing;
(iii) The term “Owned Intellectual Property” means Intellectual Property
currently owned by or subject to an obligation to be assigned to C-COR and its Subsidiaries;
(iv) The term “Patents” means (A) all classes and types of patents (including
national and multinational statutory invention registrations, utility models, xxxxx patents,
design patents and industrial designs) and the inventions covered thereby and any
enhancements or improvements thereto (including the exclusive right to use, make, have made,
sell, offer to sell and import the inventions), (B) invention disclosures, provisional
patent applications, patent applications, continuations, continuations-in-part, divisionals
or substitutes of the original applications upon which the any of foregoing patent rights
are based, (C) any reexaminations, reissues, renewals or extensions of any of the foregoing,
(D) foreign counterparts (including national and multinational) of any of the foregoing, and
(E) all rights in and to any of the foregoing;
(v) The term “Software” means all computer programs and systems, whether
embodied in software, firmware or otherwise, including, software compilations, software
26
implementations of algorithms, software tool sets, compilers, and software models and
methodologies (regardless of the stage of development or completion), all databases and
compilations, and all related documentation, including system documentation, user manuals,
and training materials, all descriptions, flow-charts and other work product used to design,
plan organize and develop any of the foregoing, and including any and all forms in which any
of the foregoing is embodied (whether in source code, object code, executable code or human
readable form); and
(vi) The term “Trademarks” means (A) all classes and types of trademarks,
service marks, logos, trade dress and trade names, Web addresses and domain names, and other
indicia of commercial source or origin (whether registered, common law, statutory or
otherwise), (B) registrations and pending applications to register any of the foregoing
including any intent to use applications, supplemental registrations and any renewals or
extensions, (C) goodwill associated with any of the foregoing, (D) foreign counterparts of
any of the foregoing anywhere in the world, (E) all goodwill associated with any of the
foregoing, and (F) all rights in and to any of the foregoing.
SECTION 4.22 — Product Warranty and Product Liability. C-COR has delivered to ARRIS true,
correct and complete copy of C-COR’s standard warranty or warranties for sales of products and/or
services, and except as expressly set forth therein, there are no warranties, deviations from
standard warranties or commitments or obligations with respect to the return, repair, replacement
or re-performance of products and/or services under which C-COR could reasonably be expected to
have any material liability which has not been adequately reserved for on the financial statements
of C-COR. Except as set forth in Section 4.22 of the C-COR Disclosure Schedule, C-COR’s products
and services have not been the subject of any broad-based (i.e., excluding customary warranty
claims with respect to individual defective products) replacement, field fix, retrofit,
modification or recall campaign costing in excess of $10,000,000 in the aggregate after July 1,
2004, and no facts or conditions exist that are reasonably expected to result in such a recall
campaign. All of C-COR’s products have been designed, manufactured and labeled and all of C-COR’s
services have been performed so as to meet and comply with all industry and governmental standards
and specifications and all applicable laws and orders currently in effect in all material respects,
and have received all governmental approvals necessary to allow their sale and use. All products
and services that C-COR produces or performs under contracts in which C-COR commits to deliver
products or perform services that are designed, manufactured, labeled and/or performed so as to
meet and comply with any industry and/or governmental standards and specifications or laws or
orders currently in effect have been designed, manufactured, labeled and/or performed in a manner
that complies with such contractual requirements in all material respects.
SECTION 4.23 — Insurance. All material fire and casualty, general liability, business
interruption, product liability, professional liability and sprinkler and water damage insurance
policies maintained by C-COR or any of its Subsidiaries are with reputable insurance carriers,
provide full and adequate coverage for all normal risks incident to the business of C-COR and its
Subsidiaries and their respective properties and assets and are in character and amount at least
equivalent to that carried by entities engaged in similar businesses and subject to the same or
similar perils or hazards, except as would not have a Material Adverse Effect.
27
SECTION 4.24 — Import and Export Control Laws. C-COR and each of its Subsidiaries has at all
times as to which the applicable statute of limitations has not yet expired, conducted its import
and export transactions in accordance in all material respects with all applicable U.S. import,
export and re-export controls, including the United States Export Administration Act and
Regulations and Foreign Assets Control Regulations, and all other applicable import/export controls
in other countries in which C-COR and its Subsidiaries conduct material business. Without limiting
the foregoing:
(a) C-COR and each of its Subsidiaries has obtained, and is in compliance in all material
respects with, all material export licenses, license exceptions and other consents, notices,
waivers, approvals, orders, authorizations, registrations, declarations, classifications and
filings with any governmental entity required for (i) the export and re-export of products,
services, Software and technologies and (ii) releases of technologies and Software to foreign
nationals located in the United States and abroad (“Export Approvals”);
(b) There are no pending or, to the knowledge of C-COR, threatened claims against C-COR or any
of its Subsidiaries with respect to such Export Approvals;
(c) To the knowledge of C-COR, there are no actions, conditions or circumstances pertaining to
C-COR’s or any of its Subsidiaries’ import or export transactions that may give rise to any future
claims;
(d) Except as set forth on Section 4.24(d) of the C-COR Disclosure Schedule, no Export
Approvals for the transfer of export licenses to ARRIS or the Surviving Corporation are required,
or if any such Export Approvals are required, they can be obtained expeditiously without material
cost;
(e) None of C-COR, its Subsidiaries or any of their respective affiliates is a party to any
contract or bid with, or has conducted business with (directly or, to the knowledge of C-COR,
indirectly), a person located in, or otherwise has any operations in, or sales to, Cuba, Myanmar
(Burma), Iran, Iraq, North Korea, Libya, Rwanda, Syria or Sudan;
(f) Since January 1, 2007, neither C-COR nor any of its Subsidiaries has received written
notice to the effect that a governmental entity claimed or alleged that C-COR or any of its
Subsidiaries was not in compliance in any material respect with any applicable laws relating to the
export of goods and services to any foreign jurisdiction against which the United States or the
United Nations maintains sanctions or export controls, including applicable regulations of the
United States Department of Commerce and the United States Department of State; and
(g) None of C-COR, its Subsidiaries or any of their respective affiliates has made any
voluntary disclosures to, or has been subject to any fines, penalties or sanctions from, any
governmental entity regarding any past import or export control violations.
SECTION 4.25 — Foreign Corrupt Practices Act. To the knowledge of C-COR, neither C-COR nor
any of its Subsidiaries (including any of their officers, directors, agents, distributors,
employees or other person associated with or acting on their behalf) has, directly or indirectly,
taken any action which would cause it to be in material violation of the Foreign Corrupt Practices
Act of 1977, as amended, or any rules or regulations thereunder or any similar anti-corruption or
28
anti-bribery Laws applicable to C-COR or any of its Subsidiaries in any jurisdiction other
than the United States (collectively, the “FCPA”), or used any corporate funds for unlawful
contributions, gifts, entertainment or other unlawful expenses relating to political activity,
made, offered or authorized any unlawful payment to foreign or domestic government officials or
employees, whether directly or indirectly, or made, offered or authorized any unlawful bribe,
rebate, payoff, influence payment, kickback or other similar unlawful payment, whether directly or
indirectly, except for any of the foregoing which is no longer subject to potential claims of
violation as a result of the expiration of the applicable statute of limitations. C-COR has
established reasonable internal controls and procedures intended to ensure compliance with the FCPA
and has made available to ARRIS copies of any such written controls and procedures.
SECTION 4.26 — Board Recommendation; Required Vote. The Board of Directors of C-COR at a
meeting duly called and held, by vote of the members present at such meeting has (a) determined
that this Agreement and the transactions contemplated hereby, including the Merger, are advisable,
fair to and in the best interests of the stockholders of C-COR; (b) adopted this Agreement in
accordance with Section 1922(c) of Pennsylvania Law; (c) directed that this Agreement be submitted
to a vote of shareholders entitled to vote thereon at a regular or special meeting of stockholders;
and (d) resolved to recommend that the stockholders of C-COR approve and adopt this Agreement and
the Merger (collectively, the “C-COR Board Recommendation”). The affirmative vote of a
majority of the votes cast at the C-COR Stockholders’ Meeting by the holders of all outstanding
shares of C-COR Common Stock entitled to vote is necessary to adopt this Agreement and the Merger
is the only vote of the holders of any class or series of capital stock of C-COR necessary to adopt
this Agreement and approve the transactions contemplated by this Agreement, including the Merger
(the “C-COR Stockholders’ Approval”).
SECTION 4.27 — Opinion of Financial Advisor. The Board of Directors of C-COR has received the
opinion of C-COR’s financial advisor, Xxxxxxx Xxxxx & Co. Inc. (“Xxxxxxx Xxxxx”), to the
effect that, as of the date of this Agreement, the Merger Consideration is fair, from a financial
point of view, to the stockholders of C-COR.
SECTION 4.28 — Brokers. No broker, finder or investment banker (other xxxx Xxxxxxx Xxxxx) is
entitled to any brokerage, finder’s or other fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of C-COR. C-COR has
heretofore furnished to ARRIS a complete and correct copy of all agreements between C-COR and
Xxxxxxx Xxxxx pursuant to which such firm would be entitled to any payment relating to the
transactions contemplated hereunder.
SECTION 4.29 — Certain of Pennsylvania Law Not Applicable. Assuming that ARRIS does not own
or acquire 20% or more of the C-COR Common Stock prior to the Effective Time, Subchapters “C”
through “J” of Chapter 25 of Pennsylvania Law will not apply to the execution, delivery or
performance of this Agreement, including the Merger or the C-COR stockholder vote with respect
thereto, or the other transactions contemplated by this Agreement.
SECTION 4.30 — C-COR Rights Plan. C-COR has amended or otherwise taken all necessary action,
and C-COR and the Board of Directors of C-COR have taken all necessary action to render the rights
issuable pursuant to the Rights Agreement dated as of August 17,
29
1999, between X-XXX.xxx Corp. and American Stock & Transfer Co. (the “C-COR Rights
Agreement”) inapplicable to the execution and delivery of this Agreement and consummation of
the Merger and ensure that none of the execution or delivery of this Agreement or the consummation
of the Merger will result in (a) the occurrence of the “flip-in event” described under Section
11(a)(ii) of the C-COR Rights Agreement or (b) the rights becoming evidenced by, and transferable
pursuant to, certificates separate from the certificates representing the shares of C-COR Common
Stock. C-COR and the Board of Directors of C-COR have taken all actions necessary to ensure that
the Rights shall expire immediately prior to the Effective Time, without the payment of any money
or other consideration.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF ARRIS AND THE MERGER
SUBSIDIARY
SUBSIDIARY
ARRIS and the Merger Subsidiary hereby, represents and warrants to C-COR that, except as set
forth in the written disclosure schedule delivered on or prior to the date hereof, by ARRIS to
C-COR that is arranged in paragraphs corresponding to the numbered and lettered paragraphs
contained in this Article III (the “ARRIS Disclosure Schedule”) the statements contained in
this Article V are true and correct. The ARRIS Disclosure Schedule shall be arranged in paragraphs
corresponding to the numbered and lettered paragraphs contained in this Article V. Unless
otherwise stated therein, if the disclosure of any paragraph lists an item or information in such a
way as to make its relevance to the disclosure required in another paragraph reasonably apparent on
its face, such disclosure shall qualify and apply to the other paragraph.
SECTION 5.1 — Organization and Qualification; Subsidiaries. Each of ARRIS and its
Subsidiaries (as defined herein) is an entity duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, has the requisite corporate power and
authority and is in possession of all Approvals necessary to own, lease and operate the properties
it purports to own, operate or lease and to carry on its business as it is now being conducted,
except where the failure to be in good standing or to have such Approvals would not have a Material
Adverse Effect. Each of ARRIS and each of its Subsidiaries, including the Merger Subsidiary, is
duly qualified or licensed as a foreign entity to do business, and is in good standing, in each
jurisdiction where the character of its properties owned, leased or operated by it or the nature of
its activities makes such qualification or licensing necessary, except for such failures to be so
duly qualified or licensed and in good standing that would not have a Material Adverse Effect. A
true and complete list of all of ARRIS’ Subsidiaries, together with the jurisdiction of
organization of each Subsidiary and the percentage of each Subsidiary’s outstanding capital stock
or ownership interests owned by ARRIS or another Subsidiary, is set forth in Section 5.1 of the
ARRIS Disclosure Schedule. Except as set forth in Section 5.1 of the ARRIS Disclosure Schedule,
ARRIS does not directly or indirectly own any equity or similar interest in, or any interest
convertible into or exchangeable or exercisable for, any equity or similar interest in, any
corporation, partnership, joint venture or other business association or entity, with respect to
which interest ARRIS or any of its Subsidiaries has invested or is required to invest $50,000 or
more, excluding securities in any publicly traded company and comprising less than five percent of
the outstanding stock of such company.
30
SECTION 5.2 — Certificate of Incorporation and By-laws. ARRIS has heretofore furnished to
C-COR a complete and correct copy of its Certificate of Incorporation and By-laws as most recently
restated and subsequently amended to date, and has furnished or made available to C-COR the
Subsidiary Documents of each of its Subsidiaries, including the Merger Subsidiary. Such
Certificate of Incorporation, By-laws and Subsidiary Documents are in full force and effect.
Neither ARRIS nor any of its Subsidiaries is in violation of any of the provisions of its
Certificate of Incorporation or By-laws or Subsidiary Documents, except for immaterial violations
of the Subsidiary Documents which may exist.
SECTION 5.3 — Capitalization. The authorized capital stock of ARRIS consists of (i)
320,000,000 shares of ARRIS Common Stock and (ii) 5,000,000 shares of preferred stock, $1.00 par
value per share, none of which is issued and outstanding and none of which is reserved for
issuance. As of September 20, 2007, (i) 110,122,378 shares of ARRIS Common Stock were issued and
outstanding, all of which are validly issued, fully paid and nonassessable, and no shares were held
in treasury, (ii) no shares of ARRIS Common Stock were held by Subsidiaries of ARRIS, (iii)
8,093,994 shares of ARRIS Common Stock were reserved for future issuance pursuant to outstanding
warrants or pursuant to stock options, or other similar rights granted under the ARRIS incentive
plans and agreements listed in Section 5.3 of the ARRIS Disclosure Schedule (the “ARRIS Stock
Option Plans”), and (iv) 59,005 shares of ARRIS Common Stock were reserved for future issuance
under the ARRIS Employee Stock Purchase Plan. No material change in such capitalization has
occurred between September 20, 2007 and the date hereof. Except as set forth in Section 5.3 or
Section 5.9 of the ARRIS Disclosure Schedule, and other than the 2.00% Convertible Senior Notes due
2026 (the “ARRIS Notes”) and employee and director stock options issued pursuant to
shareholder approved plans, there are no options, warrants, convertible securities or other similar
rights, agreements, arrangements or commitments of any character relating to the issued or unissued
capital stock of ARRIS or any of its Subsidiaries or obligating the ARRIS or any of its
Subsidiaries to issue or sell any shares of capital stock of, or other equity interests in, ARRIS
or any of its Subsidiaries. All shares of ARRIS Common Stock subject to issuance as aforesaid,
upon issuance on the terms and conditions specified in the instruments pursuant to which they are
issuable, shall be duly authorized, validly issued, fully paid and nonassessable. Except as
disclosed in Section 5.3 of the ARRIS Disclosure Schedule, there are no obligations, contingent or
otherwise, of ARRIS or any of its Subsidiaries to repurchase, redeem or otherwise acquire any
shares of ARRIS Common Stock or the capital stock of any Subsidiary or to provide funds to or make
any investment (in the form of a loan, capital contribution or otherwise) in any such Subsidiary or
any other entity. There are not, and never have been, preemptive rights with respect to the ARRIS
Common Stock. Except as set forth in Sections 5.1 and 5.3 of the ARRIS Disclosure Schedule, all of
the outstanding shares of capital stock of each of the ARRIS’ Subsidiaries is duly authorized,
validly issued, fully paid and nonassessable, and all such shares are owned by ARRIS or another
Subsidiary of ARRIS free and clear of all security interests, liens, claims, pledges, agreements,
limitations in ARRIS’ voting rights, charges or other encumbrances of any nature whatsoever.
SECTION 5.4 — Authority Relative to this Agreement. ARRIS has all necessary corporate power
and authority to execute and deliver this Agreement and to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery of this Agreement by
ARRIS and the consummation by ARRIS of the transactions
31
contemplated hereby have been duly and validly authorized by all necessary corporate action on
the part of ARRIS, and no other corporate proceedings on the part of ARRIS (other than the approval
of the issuance of ARRIS Common Stock pursuant to this Agreement by the holders of at least a
majority of the votes cast at the ARRIS Stockholders’ Meeting by the holders of all outstanding
shares of ARRIS Common Stock entitled to vote in accordance with Delaware Law and ARRIS’
Certificate of Incorporation and Bylaws) are necessary to authorize this Agreement or to consummate
the transactions contemplated hereby. This Agreement has been duly and validly executed and
delivered by ARRIS and, assuming the due authorization, execution and delivery by the other
Parties, constitutes a legal, valid and binding obligation of ARRIS enforceable against each of
ARRIS and the Merger Subsidiary in accordance with its terms.
SECTION 5.5 — No Conflict, Required Filings and Consents.
(a) Section 5.5(a) of the ARRIS Disclosure Schedule includes a list of all agreements to which
ARRIS or any of its Subsidiaries is a party or by which any of them is bound that, as of the date
hereof are required to be filed as “material contracts” with the SEC pursuant to the requirements
of the Exchange Act (collectively, the “ARRIS Material Contracts”).
(b) Except as set forth in Section 5.5(b) of the ARRIS Disclosure Schedule, the execution and
delivery of this Agreement by ARRIS does not, and the performance of this Agreement by ARRIS will
not, (i) conflict with or violate the Certificate of Incorporation, By-laws or Subsidiary Documents
of ARRIS or any of its Subsidiaries, (ii) conflict with or violate any law, rule, regulation,
order, judgment or decree applicable to ARRIS or any of its Subsidiaries or by which its or their
respective properties are bound or affected, or (iii) result in any breach of or constitute a
default (or an event which with notice or lapse of time or both would become a default) under, or
impair ARRIS’ or any of its Subsidiaries’ rights or alter the rights or obligations of any third
party under, or give to others any rights of termination, amendment, acceleration or cancellation
of any ARRIS Material Contract, or result in the creation of a lien or encumbrance on any of the
properties or assets of ARRIS or any of its Subsidiaries pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation
to which ARRIS or any of its Subsidiaries is a party or by which ARRIS or any of its Subsidiaries
or its or any of their respective properties are bound or affected, except in any such case for any
such conflicts, violations, breaches, defaults, liens or other occurrences with respect to (ii) and
(iii) above that would not have a Material Adverse Effect.
(c) The execution and delivery of this Agreement by ARRIS does not, and the performance of
this Agreement by ARRIS will not, require any consent, approval, authorization or permit of, or
filing with or notification to, any governmental or regulatory authority, domestic or foreign,
except (i) for applicable requirements, if any, of the 1933 Act, the Exchange Act, the pre-merger
notification requirements of the HSR Act and the filing of the Certificate of Merger as required by
Delaware Law, and (ii) where the failure to obtain such consents, approvals, authorizations or
permits, or to make such filings or notifications, would not prevent or delay consummation of the
offer of ARRIS Common Stock or the Merger, or otherwise prevent ARRIS or Acquisition from
performing their respective obligations under this Agreement, and would not have a Material Adverse
Effect.
32
SECTION 5.6 — Compliance, Permits.
(a) Except as disclosed in Section 5.6(a) of the ARRIS Disclosure Schedule, neither ARRIS nor
any of its Subsidiaries is in conflict with, or in default or violation of, (i) any law, rule,
regulation, order, judgment or decree applicable to ARRIS or any of its Subsidiaries or by which
its or any of their respective properties is bound or affected or (ii) any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or any other instrument or
obligation to which ARRIS or any of its Subsidiaries is a party or by which ARRIS or any of its
Subsidiaries or its or any of their respective properties is bound or affected, except for any such
conflicts, defaults or violations that would not have a Material Adverse Effect.
(b) Except as disclosed in Section 5.6(b) of the ARRIS Disclosure Schedule, ARRIS and its
Subsidiaries hold all permits, licenses, easements, variances, exemptions, consents, certificates,
orders and approvals from governmental authorities that are material to the operation of the
business of ARRIS and its Subsidiaries taken as a whole as it is now being conducted (collectively,
the “ARRIS Permits”), except where the failure to have such ARRIS Permits would not have a
Material Adverse Effect. ARRIS and its Subsidiaries are in compliance with the terms of the ARRIS
Permits, except where the failure to so comply would not have a Material Adverse Effect.
SECTION 5.7 — SEC Filings; Financial Statements.
(a) ARRIS has filed all forms, reports and documents required to be filed with the SEC and has
made available to C-COR (i) its Annual Reports on Form 10-K for the fiscal years ended December 31,
2004, 2005 and 2006, respectively, (ii) its Quarterly Reports on Form 10-Q for the periods ended
September 30, 2006, March 31, 2007 and June 30, 2007 (iii) all proxy statements relating to ARRIS’
meetings of stockholders (whether annual or special) held since January 1, 2004, (iv) all other
reports or registration statements (other than Reports on Form 10-Q not referred to in clause (ii)
above) filed by ARRIS with the SEC since January 1, 2004, and (v) all amendments and supplements to
all such reports and registration statements filed by ARRIS with the SEC since January 1, 2004
(collectively, the “ARRIS SEC Reports”). Except as disclosed in Section 5.7 of the ARRIS
Disclosure Schedule, the ARRIS SEC Reports (i) were prepared in all material respects in accordance
with the requirements of the 1933 Act or the Exchange Act, as the case may be, and (ii) did not at
the time they were filed (or if amended or superseded by a filing prior to the date of this
Agreement, then on the date of such filing) contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading. None of the
ARRIS’ Subsidiaries is required to file any forms, reports or other documents with the SEC.
(b) Each of the consolidated financial statements (including, in each case, any related notes
thereto) contained in the ARRIS SEC Reports was prepared in accordance with GAAP applied on a
consistent basis throughout the periods involved (except as may be indicated in the notes thereto),
and each fairly presents in all material respects the consolidated financial position of ARRIS and
its Subsidiaries as at the respective dates thereof and the consolidated results of its operations
and cash flows for the periods indicated, except that the unaudited interim financial
33
statements were or are subject to normal and recurring year-end adjustments which were not. or
are not expected to be, material in amount.
(c) ARRIS has established and maintains “disclosure controls and procedures” (as defined in
Rule 13a-15(e) promulgated under the Exchange Act) that are reasonably designed to ensure that
material information (both financial and non-financial) relating to ARRIS and its Subsidiaries
required to be disclosed by ARRIS in the reports that it files or submits under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified in the rules and
forms of the SEC, and that such information is accumulated and communicated to ARRIS’ principal
executive officer and principal financial officer, or persons performing similar functions, as
appropriate to allow timely decisions regarding disclosure and to make the certifications of the
principal executive officer and the principal financial officer of ARRIS required by Xxxxxxxx-Xxxxx
with respect to such reports. For purposes of this Agreement, “principal executive officer” and
“principal financial officer” shall have the meanings given to such terms in Xxxxxxxx-Xxxxx.
(d) ARRIS has established and maintains a “system of internal control over financial
reporting” (as defined in Rule 13a-15(f) promulgated under the Exchange Act) (“internal
controls”). Such internal controls are sufficient to provide reasonable assurance regarding
the reliability of ARRIS’ financial reporting and the preparation of ARRIS’ financial statements
for external purposes in accordance with GAAP. ARRIS has disclosed, based on its most recent
evaluation of internal controls prior to the date hereof, to ARRIS’ auditors and audit committee
(i) any significant deficiencies and material weaknesses known to ARRIS in the design or operation
of internal controls which are reasonably likely to adversely affect in a material respect ARRIS’
ability to record, process, summarize and report financial information and (ii) any material fraud
known to ARRIS that involves management or other employees who have a significant role in internal
controls. ARRIS has made available to C-COR a summary of any such disclosure regarding material
weaknesses and fraud made by management to ARRIS’ auditors and audit committee since December 31,
2004. For purposes of this Agreement, a “significant deficiency” in controls means an internal
control deficiency that adversely affects an entity’s ability to initiate, authorize, record,
process, or report external financial data reliably in accordance with GAAP. A “significant
deficiency” may be a single deficiency or a combination of deficiencies that results in more than a
remote likelihood that a misstatement of the annual or interim financial statements that is more
than inconsequential will not be prevented or detected. For purposes of this Agreement, a
“material weakness” in internal controls means a significant deficiency, or a combination of
significant deficiencies, that results in more than a remote likelihood that a material
misstatement of the annual or interim financial statements will not be prevented or detected.
SECTION 5.8 — Absence of Certain Changes or Events. Except as set forth in Section 5.8 of the
ARRIS Disclosure Schedule or the ARRIS SEC Reports, since June 30, 2007, ARRIS has conducted its
business in the ordinary course and there has not occurred: (i) any Material Adverse Effect; (ii)
any amendments or changes in the Certificate of Incorporation or Bylaws of ARRIS; (iii) any damage
to, destruction or loss of any asset of ARRIS (whether or not covered by insurance) that would have
a Material Adverse Effect; (iv) any material change by ARRIS in its accounting methods, principles
or practices; (v) any material revaluation by ARRIS of any of its assets, including, without
limitation, writing down the value of inventory or writing off notes
34
or accounts receivable other than in the ordinary course of business; (vi) any other action or
event that would have required the consent of C-COR pursuant to Section 6.1 had such action or
event occurred after the date of this Agreement; or (vii) any sale of a material amount of property
of ARRIS or any of its Subsidiaries, except in the ordinary course of business.
SECTION 5.9 — No Undisclosed Liabilities. Except as is disclosed in Section 5.9 of the ARRIS
Disclosure Schedule, neither ARRIS nor any of its Subsidiaries has any liabilities (absolute,
accrued, contingent or otherwise), except liabilities (a) in the aggregate adequately provided for
in ARRIS’ audited balance sheet (including any related notes thereto) as of December 31, 2006, (the
“2006 ARRIS Balance Sheet”), (b) incurred in the ordinary course of business and not
required under GAAP to be reflected on the 2006 ARRIS Balance Sheet, (c) incurred since December
31, 2006, in the ordinary course of business consistent with past practice, or (d) incurred in
connection with this Agreement.
SECTION 5.10 — Absence of Litigation. Except as set forth in Section 5.10 of the ARRIS
Disclosure Schedule, there are no claims, actions, suits or proceedings pending or, to the
knowledge of ARRIS, overtly threatened and to the knowledge of ARRIS, there are no investigations
pending or threatened against ARRIS or any of its Subsidiaries, or any properties or rights of
ARRIS or any of its Subsidiaries, before any court, arbitrator or administrative, governmental or
regulatory authority or body, domestic or foreign, that could reasonably be expected to result in a
liability in excess of $500,000.
SECTION 5.11 — Joint Proxy Statement. None of the information supplied or to be supplied by
or on behalf of ARRIS for inclusion or incorporation by reference in the Registration Statement
will, at the time the Registration Statement becomes effective under the 1933 Act, contain any
untrue statement of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the circumstances under which they
were made, not misleading. None of the information supplied or to be supplied by or on behalf of
ARRIS for inclusion or incorporation by reference in the Joint Proxy Statement, will, at the dates
mailed to stockholders and at the times of the C-COR Stockholders’ Meeting and the ARRIS
Stockholders’ Meeting, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the statements therein,
in light of the circumstances under which they are made, not misleading. The information provided
by ARRIS for the Registration Statement and the Joint Proxy Statement (except for information
relating solely to C-COR) will comply as to form in all material respects with the provisions of
the 1933 Act and the Exchange Act and the rules and regulations promulgated thereunder.
SECTION 5.12 — Employee Benefit Plans, Employment Agreements. Section 5.12 of ARRIS
Disclosure Schedule lists all employee pension plans (as defined in Section 3(2) of ERISA), all
material employee welfare plans (as defined in Section 3(1) of ERISA) and all other material bonus,
stock option, stock purchase, incentive, deferred compensation, supplemental retirement, severance
and other similar fringe or employee benefit plans, programs or arrangements, and any material
current or former employment, executive compensation, consulting or severance agreements, written
or otherwise, for the benefit of, or relating to, any employee of or consultant to ARRIS, any trade
or business (whether or not incorporated) which is a member of a controlled group including ARRIS
or which is under common control with
35
ARRIS (an “ERISA Affiliate”) within the meaning of Section 414 of the Code, or any
Subsidiary of ARRIS, as well as each plan with respect to which ARRIS or an ERISA Affiliate could
incur liability under Section 4069 (if such plan has been or were terminated) or Section 4212(c) of
ERISA (collectively the “ARRIS Employee Plans”). There have been made available to C-COR
copies of (i) each such written ARRIS Employee Plan (other than those referred to in Section
4(b)(4) of ERISA), (ii) the most recent annual report on Form 5500 series, with accompanying
schedules and attachments, filed with respect to each ARRIS Employee Plan required to make such a
filing, (iii) the most recent actuarial valuation for each ARRIS Employee Plan subject to Title IV
of ERISA, and (iv) such other documents or information that C-COR reasonably requests. For
purposes of this Section 5.12, the term “material,” used with respect to any ARRIS Employee Plan,
shall mean that ARRIS or an ERISA Affiliate has incurred or may incur obligations in an annual
amount exceeding $500,000 with respect to such ARRIS Employee Plan.
SECTION 5.13 — Taxes.
(a) Each of ARRIS and its Subsidiaries (together the “Acquirer Entities”) has timely filed
(taking into account any extension of time within which to file) with the appropriate Taxing
authorities all material income and other Tax Returns in all jurisdictions in which Tax Returns are
required to be filed, and such Tax Returns are correct and complete in all material respects. All
Taxes of the Acquirer Entities (whether or not shown on any Tax Return) that have become due or
payable have been fully and timely paid, or proper accruals pursuant to GAAP have been established
in ARRIS’ consolidated unaudited balance sheet as of June 30, 2007 with respect thereto (except for
Taxes relating to events subsequent to the date thereof), except to the extent any failure to
accrue or reserve would not, individually, or in the aggregate, reasonably be expected to have a
Material Adverse Effect. There are no liens for any Taxes (other than a lien for current real
property or ad valorem Taxes not yet due and payable) on any of the assets of any of the Acquirer
Entities.
(b) None of the Acquirer Entities has received from any foreign, federal, state, or local
taxing authority (including jurisdictions where the Acquired Companies or their Subsidiaries have
not filed Tax Returns) notice of deficiency or proposed adjustment for any amount of Tax proposed,
asserted, or assessed by any taxing authority against ARRIS or any of its Subsidiaries exceeding
the amount reserved for on its financial statements.
(c) Each Acquirer Entity has complied in all material respects with all applicable laws, rules
and regulations relating to the withholding of Taxes and the payment thereof to appropriate
authorities, including Taxes required to have been withheld and paid in connection with amounts
paid or owing to any employee or independent contractor, and Taxes required to be withheld and paid
pursuant to Sections 1441 and 1442 of the Code or similar provisions under foreign law.
(d) None of the Acquirer Entities is a party to any Tax allocation or sharing agreement, and
none of the Acquirer Entities has been a member of an affiliated group filing a consolidated
federal income Tax Return (other than a group the common parent of which was ARRIS) or has any Tax
liability of any person (other than another Acquirer Entity that is a member of the consolidated
federal income Tax group of which ARRIS is the common parent)
36
under Treasury Regulation Section 1.1502-6 or any similar provision of state, local or foreign
law, or as a transferee or successor, by contract or otherwise.
(e) During the five-year period ending on the date hereof, none of the Acquirer Entities was a
distributing corporation or a controlled corporation in a transaction intended to be governed by
Section 355 of the Internal Revenue Code.
SECTION 5.14 — Environmental Matters. Except as set forth in Section 5.14 of the ARRIS
Disclosure Schedule, and except in those cases, either individually or in the aggregate, that are
not reasonably expected to have a Material Adverse Effect, ARRIS and each of its Subsidiaries (i)
are in compliance with all Environmental Laws; (ii) have obtained all applicable permits, licenses
and other authorizations that are required to be obtained under all applicable Environmental Laws
by ARRIS or its Subsidiaries; (iii) are in compliance with all terms and conditions of such
required permits, licenses and authorizations, and have made all appropriate filings for issuance
or renewal of such permits, licenses and authorizations; (iv) as of the date hereof, are not aware
of nor have received any notice, claim, demand, report or other information alleging any past or
present violations of Environmental Laws, or any liabilities arising under Environmental Laws,
against ARRIS or any of its Subsidiaries; (v) have not used any waste disposal site or otherwise
disposed of, transported, or arranged for the transportation of, any Hazardous Materials to any
place or location, or in violation of any Environmental Laws; and (vi) have taken all actions
necessary under applicable Environmental Laws to register any products or materials required to be
registered by ARRIS or its Subsidiaries (or any of their respective agents) thereunder.
SECTION 5.15 — ARRIS Customers. Except as set forth in Section 5.15 of the ARRIS Disclosure
Schedule, ARRIS has not received any notice and has no knowledge to the effect that any of ARRIS’
ten largest customers for fiscal year 2007 may terminate or materially alter its business relations
with ARRIS, either as a result of the transactions contemplated by this Agreement or otherwise,
except for such alterations that have not had or are not reasonably expected to have a Material
Adverse Effect.
SECTION 5.16 — ARRIS Intellectual Property.
(a) All Trademarks, Patents and Copyrights owned by ARRIS (“ARRIS Trademarks”,
“ARRIS Patents”, and “ARRIS Copyrights” respectively; collectively “ARRIS Owned
Intellectual Property”) are currently in compliance in all material respects with all
applicable legal requirements. No ARRIS Trademark is currently involved in any opposition or
cancellation proceeding and, to the knowledge of ARRIS, no such action has been threatened with
respect to any of those ARRIS Trademarks. No ARRIS Patent is currently involved in any
interference, reissue, re-examination or opposition proceeding and, to the knowledge of ARRIS, no
such action has been threatened with respect to any such ARRIS Patent.
(b) To the knowledge of ARRIS, ARRIS and its Subsidiaries have valid and enforceable rights to
use all Intellectual Property licensed from third parties.
(c) To the knowledge of ARRIS, the ARRIS Owned Intellectual Property and the Intellectual
Property licensed from third parties constitute all of the Intellectual Property used in
37
and, to the knowledge of ARRIS, necessary for the operation of ARRIS’ business as currently
conducted. ARRIS and its Subsidiaries have taken all reasonable steps to protect the ARRIS Owned
Intellectual Property, including reasonable steps to prevent and xxxxx any infringement or
misappropriation of the ARRIS Owned Intellectual Property.
(d) Except as set forth on Section 5.16(d) of the ARRIS Disclosure Schedule, to the knowledge
of ARRIS, the conduct of ARRIS’ business as currently conducted does not infringe upon any
Intellectual Property rights of any third party. Except as set forth on Section 5.16(d) of the
ARRIS Disclosure Schedule, no third party has notified ARRIS of any allegation of infringement upon
any third party Intellectual Property rights.
(e) To the knowledge of ARRIS, no third party is misappropriating, infringing, diluting or
violating any ARRIS Owned Intellectual Property.
(f) Software developed by ARRIS (“ARRIS Software”) was developed either by (i)
employees of ARRIS or its Subsidiaries within the scope of their employment who have executed a
confidentiality and assignment of inventions agreement, (ii) independent contractors who have
assigned their rights to ARRIS or one of its Subsidiaries pursuant to enforceable written
agreements, or (iii) acquired pursuant to an enforceable written agreement or assignment.
(g) To the knowledge of ARRIS, the ARRIS Copyrights have been solely (i) created by (A)
employees of ARRIS and its Subsidiaries within the scope of their employment who have executed
confidentiality and assignment of inventions agreements, or (B) independent contractors who have
assigned their rights to ARRIS pursuant to enforceable written agreements, or (ii) acquired
pursuant to an enforceable written assignment or agreement.
(h) To the knowledge of ARRIS, the ARRIS Patents relate solely to inventions (i) created by
(A) employees of ARRIS and its Subsidiaries within the scope of their employment who have executed
a confidentiality and assignment of inventions agreement, or (B) independent contractors who have
assigned their rights to ARRIS pursuant to enforceable written agreements, or (ii) acquired
pursuant to an enforceable written agreement or assignment. To the knowledge of ARRIS, the
inventions covered by such Patents were not copies of any invention for which ARRIS or any of its
Subsidiaries does not own the Patent, and no other person has any claim to inventorship or
ownership of any part thereof.
(i) ARRIS and its Subsidiaries have taken reasonable steps to protect their respective rights
in material confidential information and trade secrets owned by them or disclosed to them by a
third party and used in connection with the conduct of ARRIS’ business. Without limiting the
foregoing, ARRIS and its Subsidiaries have enforced a policy of requiring each employee, consultant
and contractor to execute proprietary information, invention assignment and confidentiality
agreements, as appropriate, substantially consistent with ARRIS’ standard forms. Except under valid
and binding confidentiality obligations, there has been no material disclosure by ARRIS or any of
its Subsidiaries to a third party of any confidential information or trade secrets used in
connection with the conduct of ARRIS’ business.
(j) ARRIS and its Subsidiaries have valid registrations for each of the domain names owned by
ARRIS. The registration of each such domain name is free and clear of all liens and is
38
in full force and effect. ARRIS has paid all fees required to maintain each such registration.
Neither ARRIS nor any of its Subsidiaries has received written notice of any claim asserted
against ARRIS or any of its Subsidiaries adverse to its rights to such domain names, and, to the
knowledge of ARRIS, none of ARRIS’ registrations or uses of the domain names has been disturbed or
placed “on hold.”
(k) To the knowledge of ARRIS, all ARRIS Software is free from any material defect or
programming or documentation error, including major bugs, logic errors or failures of such software
to operate in all material respects as described in the related documentation, and substantially
conforms to the specifications of such software, other than those defects, errors, bugs or failures
that would not have a Material Adverse Effect on ARRIS.
(l) Except as set forth in Section 5.16(l) of the ARRIS Disclosure Schedule, none of the ARRIS
Software or any ARRIS Owned Intellectual Property are, in whole or in part, subject to the
provision of any open source or other similar type of license agreement or distribution model that
(i) requires the distribution or making available of the source code for ARRIS Software to the
general public, (ii) prohibits or limits ARRIS or any of its Subsidiaries from charging a fee or
receiving consideration in connection with sublicensing or distributing any ARRIS Software, (iii)
except as specifically permitted by law, grants any right to any third party (other than ARRIS and
its Subsidiaries) or otherwise allows any such third party to decompile, disassemble or otherwise
reverse-engineer any ARRIS Software, or (iv) requires the licensing of any ARRIS Software to the
general public for the purpose of permitting others to make derivative works of ARRIS Software.
SECTION 5.17 — Foreign Corrupt Practices Act. To the knowledge of ARRIS, neither ARRIS nor
any of its Subsidiaries (including any of their officers, directors, agents, distributors,
employees or other person associated with or acting on their behalf) has, directly or indirectly,
taken any action which would cause it to be in material violation of the FCPA, or used any
corporate funds for unlawful contributions, gifts, entertainment or other unlawful expenses
relating to political activity, made, offered or authorized any unlawful payment to foreign or
domestic government officials or employees, whether directly or indirectly, or made, offered or
authorized any unlawful bribe, rebate, payoff, influence payment, kickback or other similar
unlawful payment, whether directly or indirectly, except for any of the foregoing which is no
longer subject to potential claims of violation as a result of the expiration of the applicable
statute of limitations. ARRIS has established reasonable internal controls and procedures intended
to ensure compliance with the FCPA and has made available to ARRIS copies of any such written
controls and procedures.
SECTION 5.18 — Opinion of Financial Advisor. The Board of Directors of ARRIS has received the
opinion of ARRIS’ financial advisor, UBS Securities LLC, to the effect that, as of the date of such
opinion, the Merger Consideration to be paid by ARRIS is fair, from a financial point of view, to
ARRIS.
SECTION 5.19 — Brokers. No broker, finder or investment banker (other than UBS Securities
LLC) is entitled to any brokerage, finder’s or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or on behalf of ARRIS.
ARRIS has heretofore furnished to C-COR a complete and correct copy of all
39
agreements between ARRIS and UBS Securities LLC pursuant to which such firm would be entitled
to any payment relating to the transactions contemplated hereunder.
SECTION 5.20 — Financial Capability. ARRIS has sufficient funds or capital commitments in
place to consummate the transactions contemplated herein on the terms and conditions contained in
this Agreement and will have such funds or capital commitments on the Closing Date.
SECTION 5.21 — Board Recommendation; Required Vote.
(a) The Board of Directors of ARRIS, at a meeting duly called and held, by vote of the members
present at such meeting has (a) determined that this Agreement and the transactions contemplated
hereby are advisable, fair to and in the best interests of the stockholders of ARRIS; (b) declared
advisable and in all respects approved the issuance of ARRIS Common Stock pursuant to this
Agreement; (c) resolved to recommend that the stockholders of ARRIS approve the issuance of ARRIS
Common Stock pursuant to this Agreement; (d) approved the Merger as the sole stockholder of the
Merger Subsidiary; and (e) directed that the proposed issuance of ARRIS Common Stock pursuant to
this Agreement be submitted to stockholders of ARRIS for consideration in accordance with this
Agreement, which resolutions as of the date of this Agreement, have not been subsequently
rescinded, modified or withdrawn in any way (collectively, the “ARRIS Board
Recommendation”). The vote of the stockholders of ARRIS to approve the issuance of ARRIS
Common Stock pursuant to this Agreement is the only vote of the holders of capital stock of ARRIS
necessary to approve the transactions contemplated by this Agreement.
(b) The Board of Directors of the Merger Subsidiary, at a meeting duly called and held, by
unanimous vote of the members present at such meeting has (a) determined that this Agreement and
the transactions contemplated hereby, including the Merger, are advisable, fair to and in the best
interests of the stockholders of the Merger Subsidiary; (b) declared advisable and in all respects
approved this Agreement, and the transactions contemplated by this Agreement, including the Merger;
(c) directed that this Agreement be submitted to a vote of ARRIS, as sole stockholder of the Merger
Subsidiary; and (d) resolved to recommend that ARRIS, as sole stockholder of the Merger Subsidiary,
approve and adopt this Agreement and the Merger, which resolutions as of the date of this
Agreement, have not been subsequently rescinded, modified or withdrawn in any way (collectively,
the “Merger Subsidiary Board Recommendation”). The vote of ARRIS, as the sole stockholder
of the Merger Subsidiary, to approve this Agreement and the Merger is the only vote of the holders
of capital stock of the Merger Subsidiary necessary to approve the transactions contemplated by
this Agreement, and ARRIS in that capacity has approved this Agreement and the Merger.
SECTION 5.22 — ARRIS Rights Plan. ARRIS has amended or otherwise taken all necessary action,
and ARRIS and the Board of Directors of ARRIS have taken all necessary action to render the rights
issuable pursuant to the Rights Agreement dated as of October 3, 2002, between ARRIS and The Bank
of New York (the “ARRIS Rights Agreement”) inapplicable to the execution and delivery of
this Agreement and consummation of the Merger and ensure that none of the execution or delivery of
this Agreement or the consummation of the Merger will result in (a) the rights becoming evidenced
by, and transferable pursuant to,
40
certificates separate from the certificates representing the shares of ARRIS Common Stock and
(b) the rights becoming exercisable under the ARRIS Rights Agreement.
ARTICLE VI
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 6.1 — Conduct of Business by C-COR Pending the Merger. C-COR covenants and agrees
that, except as contemplated by this Agreement, during the period from the date of this Agreement
and continuing until the earlier of the termination of this Agreement, unless ARRIS shall otherwise
consent in writing (which consent shall not be unreasonably withheld), C-COR shall conduct its
business and shall cause the businesses of its Subsidiaries to be conducted only in, and C-COR and
its Subsidiaries shall not take any action except in, the ordinary course of business and in the
manner consistent with past practice; and C-COR shall use reasonable commercial efforts to preserve
substantially intact the business organization of C-COR and its Subsidiaries, to keep available the
services of the present officers, employees and consultants of C-COR and its Subsidiaries and to
preserve the present relationships of C-COR and its Subsidiaries with customers, suppliers and
other persons with which C-COR or any of its Subsidiaries has significant business relations. By
way of amplification and not limitation, except as contemplated by this Agreement, neither C-COR
nor any of its Subsidiaries shall, during the period from the date of this Agreement and continuing
until the earlier of the termination of this Agreement or the Merger, directly or indirectly do, or
propose to do, any of the following without the prior written consent of ARRIS (which consent shall
not be unreasonably withheld):
(a) amend or otherwise change the Articles of Incorporation, Bylaws or Subsidiary Documents of
C-COR or any of its Subsidiaries;
(b) except as set forth in Section 6.1(b) of the C-COR Disclosure Schedule, issue, sell,
pledge, dispose of or encumber, or authorize the issuance, sale, pledge, disposition or encumbrance
of, any shares of capital stock of any class, or any options, warrants, convertible securities or
other rights of any kind to acquire any shares of capital stock, or any other ownership interest
(including, without limitation, any phantom interest) in C-COR or any of its Subsidiaries (except
for (i) the issuance of shares of C-COR Common Stock issuable pursuant to Stock Options listed in
Section 4.12(c) of the C-COR Disclosure Schedule, (ii) the grant of options under C-COR’s Stock
Option Plans to new hires consistent with past practice to purchase up to 50,000 (in the aggregate)
shares of C-COR Common Stock at the market value on the date of grant, and the issuance of shares
upon exercise thereof (provided that the vesting of such options granted from and after the date
hereof pursuant to this clause (ii) shall not be accelerated by the transactions contemplated by
this Agreement and, if necessary, C-COR will amend the Incentive Plan to so provide), (iii) the
grant of options under C-COR’s Stock Option Plans to non-employee directors of C-COR consistent
with past practice to purchase up to 7,500 shares of C-COR Common Stock per non-employee director,
at the market value on the date of grant, and the issuance of shares upon the exercise thereof or
(iv) issuance of shares of C-COR Common Stock upon conversion of the C-COR Notes;
(c) except as set forth on Section 6.1(c) of the C-COR Disclosure Schedule, sell, pledge,
dispose of or encumber any assets of C-COR or any of its Subsidiaries (except for (i)
41
sales of assets in the ordinary course of business and in a manner consistent with past
practice, (ii) disposition of obsolete or worthless assets, and (iii) sales of immaterial assets
not in excess of $500,000;
(d) (i) declare, set aside, make or pay any dividend or other distribution (whether in cash,
stock or property or any combination thereof) in respect of any of its capital stock, except that a
wholly owned Subsidiary of C-COR may declare and pay a dividend or make advances to C-COR, (ii)
split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance
of any other securities in respect of, in lieu of or in substitution for shares of its capital
stock, or (iii) amend the terms or change the period of exercisability of, purchase, repurchase,
redeem or otherwise acquire, or permit any Subsidiary to purchase, repurchase, redeem or otherwise
acquire, any of its securities or any securities of its Subsidiaries, including, without
limitation, shares of C-COR Common Stock or any option, warrant or right, directly or indirectly,
to acquire shares of C-COR Common Stock, or propose to do any of the foregoing;
(e) (i) acquire (by merger, consolidation, or acquisition of stock or assets) any
corporation, partnership or other business organization or division thereof; (ii) incur any
indebtedness for borrowed money, other than renewal or extension of C-COR’s revolving credit
facility with Citizen’s Bank of Pennsylvania (the “C-COR LOC Facility”) which renewal or extension
shall not materially modify the terms of the C-COR LOC Facility other than to renew or extend the
Commitment Period (as defined in the C-COR LOC Facility) thereof and to make substantially similar
changes to any notes issued thereunder, or issue any debt securities or assume, guarantee or
endorse or otherwise as an accommodation become responsible for, the obligations of any person or,
except in the ordinary course of business consistent with past practice or in connection with
purchases of equipment or capital improvements, make any loans or advances (other than loans or
advances to or from direct or indirect wholly owned Subsidiaries), (iii) enter into or amend any
material contract or agreement other than in the ordinary course of business; or (iv) authorize any
capital expenditures or purchase of fixed assets which are, in the aggregate, in excess of the
amounts set forth in Section 6.1(e) of the C-COR Disclosure Schedule;
(f) except as set forth in Section 6.1(f) of the C-COR Disclosure Schedule, increase the
compensation payable or to become payable to its officers or employees, except for increases in
salary or wages of employees of C-COR or its Subsidiaries in accordance with past practice and in
amounts that are in the aggregate reflected in the budgets previously provided to ARRIS or, except
in the ordinary course of business, grant any severance or termination pay to, or enter into any
employment or severance agreement with any director, officer or other employee of C-COR or any of
its Subsidiaries, or establish, adopt, enter into or amend any collective bargaining, bonus, profit
sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred
compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or
arrangement for the benefit of any current or former directors, officers or employees, except, in
each case, as may be required by law; provided however, C-COR may take action prior to the
Effective Time (i) to determine the Matching Contribution to be made under C-COR’s 401(k) savings
plan (the “C-COR Retirement Savings and Profit Sharing Plan”) for 2008 (which shall not
exceed the rate of matching contribution made for 2007) and to determine the status of such plan
for 2008 as a “safe harbor” plan described in Sections 401(k)(12) and 401(m)(10) of the Code, (ii)
to provide for the deferral, matching and discretionary contributions
42
for 2008 under the terms of C-COR’s Supplemental Executive Retirement Plan (which matching and
discretionary contributions shall not exceed the rate of such contributions made for 2007) and
(iii) to amend the terms of the C-COR Employee Plans to the extent necessary or desirable to
conform to the requirements of Section 409A of the Code or to satisfy an exception to Section 409A
of the Code, including without limitation to provide elections before the end of 2007 to affected
participants in such plans regarding new benefit timing and/or form elections consistent with
transition guidance promulgated by the IRS (provided that to the extent permissible without
violating Section 409A of the Code, such amendments do not further accelerate the time of payment
or vesting pursuant to the transactions contemplated by this Agreement, except that payments
pursuant to a qualifying change in control may be made at any time following Closing);
(g) take any action to change accounting policies or procedures (including, without
limitation, procedures with respect to revenue recognition, payments of accounts payable and
collection of accounts receivable) or any action that would prevent or impede the Merger from
qualifying as a tax-free reorganization under Section 368 of the Code;
(h) make any material Tax election inconsistent with past practice or settle or compromise any
material federal, state, local or foreign Tax liability or agree to an extension of a statute of
limitations, except to the extent the amount of any such settlement has been reserved for in the
financial statements contained in the C-COR SEC Reports filed prior to the date of this Agreement;
(i) pay, discharge or satisfy any material claims, liabilities or obligations (absolute,
accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or
satisfaction in the ordinary course of business and consistent with past practice of liabilities
reflected or reserved against in the financial statements contained in the C-COR SEC Reports filed
prior to the date of this Agreement or incurred in the ordinary course of business and consistent
with past practice;
(j) make any significant change in any Tax or accounting methods or systems of internal
accounting controls, except as may be appropriate to conform to changes in Tax Laws or regulatory
accounting requirements or GAAP; or
(k) take, or agree in writing or otherwise to take, any of the actions described in Sections
6.1(a) through (i) above, or any action which would make any of the representations or warranties
of C-COR contained in this Agreement untrue or incorrect or prevent C-COR from performing or cause
C-COR not to perform its covenants hereunder.
SECTION 6.2 — No Solicitation by C-COR.
(a) C-COR shall not, nor shall it permit or authorize any of its Subsidiaries or any officer,
director, employee, accountant, counsel, financial advisor, agent or other representative of C-COR
or any of its Subsidiaries (collectively, the “C-COR Representatives”) to, on its or any of
its Subsidiaries’ behalf, directly or indirectly,
43
(i) solicit, initiate, facilitate, respond to or encourage, including by way of
furnishing non-public information, any inquiries regarding or relating to, or the submission
of, any Takeover Proposal (as defined below),
(ii) participate in any discussions or negotiations, furnish to any person any
information or data relating to C-COR or its Subsidiaries, provide access to any of the
properties, books, records or employees of C-COR or its Subsidiaries or take any other
action, in each such case regarding or to facilitate the making of any proposal that
constitutes, or may reasonably be expected to lead to, any Takeover Proposal,
(iii) enter into any letter of intent, memorandum of understanding, agreement in
principle, acquisition agreement, merger agreement or other similar agreement or commitment
with respect to any Takeover Proposal (an “Alternative Acquisition Agreement”) or
agree to, approve, endorse or resolve to recommend or approve any Takeover Proposal, except
in each case as otherwise specifically provided in Section 6.2(b),
(iv) grant any waiver or release under any standstill or similar agreement by any third
party who has made a Takeover Proposal,
(v) take any action to exempt any third party from the restrictions on “business
combinations” contained in Subchapters “C” through “J” of Chapter 25 of Pennsylvania Law or
otherwise cause such restrictions not to apply, or
(vi) authorize or direct any C-COR Representative to take any such action;
provided, however, that nothing contained in this Section 6.2(a) or any other
provision of this Agreement shall prohibit C-COR or the Board of Directors of C-COR from (A) taking
and disclosing to C-COR’s stockholders a position required by Rules 14d-9 and 14e-2 or Item 1012(a)
of Regulation M-A promulgated under the Exchange Act, (B) making such disclosure to C-COR’s
stockholders as, in the good faith judgment of the Board of Directors of C-COR, after receiving
advice from its outside counsel and its financial advisors, C-COR is required under Pennsylvania
Law in order to comply with its fiduciary duties, or (C) notifying any third party solely of the
existence of, and restrictions under, the provisions of this Section 6.2, provided that C-COR may
not, except as permitted by Section 6.2(b), withdraw or modify, or propose to withdraw or modify,
its approval or recommendation of this Agreement or the transactions contemplated hereby, including
the Merger, or approve or recommend, or propose to approve or recommend, any Takeover Proposal, or
enter into any Alternative Acquisition Agreement. Upon execution of this Agreement, C-COR shall,
and it shall cause C-COR Representatives and its Subsidiaries to, immediately terminate any
existing activities, discussions, solicitations or negotiations with any third party conducted
previously with respect to any Takeover Proposal and, if requested by ARRIS, to request the return
and/or destruction of any materials previously provided in connection with any such activities,
discussions, solicitations or negotiations.
Notwithstanding any of the foregoing restrictions set forth in Section 6.1 or this Section
6.2(a), nothing in this Agreement prevents C-COR or the Board of Directors of C-COR from furnishing
(or causing to be furnished), prior to, but not after, the time the vote is taken with
44
respect to adoption of this Agreement and approval of the Merger at the Meeting of the
stockholders of C-COR, information concerning its business, properties or assets to any third party
pursuant to a confidentiality agreement with terms and conditions substantially similar to those of
the Confidentiality Agreement (as defined herein), so long as such information is contemporaneously
provided to ARRIS, and may negotiate and participate in discussions and negotiations with such
third party who has made a bona fide, written Takeover Proposal, but only if: (w) such
Takeover Proposal was made after the date of this Agreement (it being understood that such a
Takeover Proposal made after the date of this Agreement by a third party who has made a Takeover
Proposal prior to the date of this Agreement is considered a new Takeover Proposal made after the
date of this Agreement); (x) none of C-COR, its Subsidiaries nor the C-COR Representatives has
solicited, initiated, or knowingly facilitated or encouraged any Takeover Proposal, or otherwise
directly or indirectly violated this Section 6.2 (other than unintentional breaches that (1) have
not directly or indirectly resulted in the making of such Takeover Proposal and (2) otherwise have
had only an immaterial impact on ARRIS’ rights under this Section 6.2); (y) such third party has
submitted a Takeover Proposal that the Board of Directors of C-COR has determined, after receiving
advice from its outside legal counsel and its financial advisors, either (i) constitutes a Superior
Proposal (as defined below) or (ii) is reasonably likely to lead to a Superior Proposal; and (z)
the Board of Directors of C-COR determines in good faith, after receiving advice from its outside
counsel and its financial advisors, that such action is required to discharge the Board of
Directors of C-COR’s fiduciary duties to C-COR’s stockholders under Pennsylvania Law. C-COR shall
not release or permit the release of any third party from, or waive or permit the waiver of any
provision of, any confidentiality, standstill (other than to permit the making of a Takeover
Proposal) or similar agreement to which C-COR is a party or under which C-COR has any rights. C-COR
shall promptly (and in any event within one business day) notify ARRIS telephonically and in
writing of the existence of any proposal, discussion, negotiation or inquiry received by C-COR that
is or could reasonably be expected to constitute or lead to a Takeover Proposal, and C-COR shall
promptly communicate in writing to ARRIS the terms and conditions of any such proposal, discussion,
negotiation or inquiry which it may receive, and provide a copy of any written proposal (to the
extent permissible by the terms thereof) and the identity of the third party making the same. C-COR
shall inform ARRIS within one business day after any change to the material terms of any such
Takeover Proposal. Within one business day after any determination by the C-COR Board that a
Takeover Proposal constitutes a Superior Proposal, C-COR shall deliver to ARRIS and Merger
Subsidiary a written notice advising them of such determination, specifying the terms and
conditions of such Superior Proposal and the identity of the third party making such Superior
Proposal, and providing ARRIS and Merger Subsidiary with a copy of the Superior Proposal to the
extent permissible by the terms thereof.
(b) Neither the Board of Directors of C-COR nor any committee thereof shall (i) withdraw or
modify, or propose to withdraw or modify, in a manner adverse to ARRIS or Merger Subsidiary, the
recommendation of the Board of Directors of C-COR, (ii) approve or recommend, or propose to approve
or recommend, any Takeover Proposal or (iii) enter into any Alternative Acquisition Agreement
(other than a confidentiality agreement expressly permitted by and in accordance with Section
6.2(a)). Notwithstanding the foregoing, prior to, but not after, the time the vote is taken with
respect to the adoption of this Agreement and approval of the Merger at the Meeting of the
stockholders of C-COR, the Board of Directors of C-COR may make a Change in C-COR Recommendation in
a manner adverse to ARRIS or Merger
45
Subsidiary (including, for such purpose, a withdrawal of such recommendation by the Board of
Directors of C-COR) (a “Change in C-COR Recommendation”) and/or approve or recommend a
Superior Proposal (and, in connection therewith, take such action as shall be necessary to exempt
such Superior Proposal from any Takeover Statute (as defined herein) and the C-COR Rights
Agreement), and C-COR may enter into an Alternative Acquisition Agreement with respect to a
Superior Proposal in connection with the termination of this Agreement, in each case if (A) C-COR
has received a Superior Proposal that is pending at the time C-COR determines to take such action,
(B) the C-COR Board has determined in good faith, after receiving advice from its outside counsel
and its financial advisors, that such action is required to discharge the fiduciary duties of the
Board of Directors of C-COR to C-COR’s stockholders under Pennsylvania Law and (C) at least three
business days have passed following ARRIS’ receipt of an Adverse Recommendation Notice (as defined
below), and ARRIS does not make an offer within such three business day period that is at least as
favorable to C-COR’s stockholders as the Superior Proposal, as concluded by the Board of Directors
of C-COR in its good faith judgment, after receiving advice from its outside counsel and its
financial advisors (it being agreed that the Board of Directors of C-COR shall convene a meeting to
consider any such offer by ARRIS as promptly as possible following receipt of such offer and that
the Board of Directors of C-COR shall not withhold, withdraw or modify the recommendation of the
Board of Directors of C-COR until the earlier of the receipt of ARRIS’ revised offer or three
business days after receipt by ARRIS of the Adverse Recommendation Notice).
(c) For purposes of this Agreement:
(i) The term “Adverse Recommendation Notice” means a written notice
from C-COR advising ARRIS that the Board of Directors of C-COR has received a
Superior Proposal that it intends to accept or recommend or advising ARRIS that it
intends to make a Change in C-COR Recommendation, specifying the material terms and
conditions of such Superior Proposal and the other information required by Section
6.2(a); provided, however, any material amendment to the financial
terms or other material terms of such Superior Proposal shall require a new Adverse
Recommendation Notice and a new three business day period pursuant to Section 6.2(b)
hereof.
(ii) The term “Competing Transaction” means any transaction, other than
the transactions contemplated by this Agreement, to acquire beneficial ownership (as
defined under Rule 13(d) promulgated under the Exchange Act) of (A) assets that
constitute 20% or more of the consolidated revenues, net income or assets of C-COR
and its Subsidiaries or (B) 20% or more (in number or voting power) of any class of
equity securities or other capital stock of C-COR or any of its Subsidiaries, in any
such case pursuant to any transaction or series of transactions, including (I) a
merger, consolidation, share exchange, or other business combination (including any
so-called merger-of-equals and whether or not C-COR is the entity surviving any such
transaction) involving C-COR or any of its Subsidiaries, (II) a sale, issuance,
exchange, transfer or other disposition of shares of capital stock of C-COR or any
of its Subsidiaries, (III) a sale, lease, license, exchange, transfer or other
disposition of assets of C-COR or any of its Subsidiaries or (IV) a tender offer,
exchange offer or similar transaction with
46
respect to either C-COR or any of its Subsidiaries, including any single or
multi-step transaction or series of related transactions, which is structured to
permit such third party or another third party to acquire beneficial ownership of
assets that constitute 20% or more of the consolidated revenues, net income or
assets of C-COR and its Subsidiaries, or 20% or more of the equity interest in
either C-COR or any of its Subsidiaries.
(iii) The term “Superior Proposal” means an unsolicited written
proposal or offer (whether a Takeover Proposal or otherwise) by a third party to
acquire (whether by way of merger, acquisition or otherwise), directly or
indirectly, greater than 50% of the shares of C-COR Common Stock then outstanding
(or the effect of which would be that the stockholders of C-COR beneficially own
less than 50% of the voting power of the combined or ongoing entity), or to acquire
all or substantially all of the assets of C-COR and (A) otherwise on terms which the
Board of Directors of C-COR determines in good faith, after consultation with its
financial advisors, and taking into account all terms and conditions of the proposal
or offer that it deems relevant (including all legal, financial, regulatory and
other aspects, including any financing condition and time to consummation), to be
more favorable to C-COR’s stockholders from a financial point of view than the
Merger, and (B) that, in the good faith reasonable judgment of the Board of
Directors of C-COR, is reasonably likely to be consummated.
(iv) The term “Takeover Proposal” means any inquiry, proposal, offer or
indication of interest (including any inquiry, proposal, offer or indication of
interest to its stockholders), whether in writing or otherwise, from a third party
that constitutes, or could reasonably be expected to lead to, a Competing
Transaction.
SECTION 6.3 — Conduct of Business by ARRIS Pending the Merger. ARRIS covenants and agrees
that, except as contemplated by this Agreement, during the period from the date of this Agreement
and continuing until the earlier of the termination of this Agreement, unless C-COR shall otherwise
consent in writing (which consent shall not be unreasonably withheld), ARRIS shall conduct its
business and shall cause the businesses of its Subsidiaries to be conducted only in, and ARRIS and
its Subsidiaries shall not take any action except in, the ordinary course of business and in the
manner consistent with past practice; and ARRIS shall use reasonable commercial efforts to preserve
substantially intact the business organization of ARRIS and its Subsidiaries, to keep available the
services of the present officers, employees and consultants of ARRIS and its Subsidiaries and to
preserve the present relationships of ARRIS and its Subsidiaries with customers, suppliers and
other persons with which ARRIS or any of its Subsidiaries has significant business relations or
take any actions which would reasonably be expected to interfere with or delay the consummation of
the Merger or otherwise breach this Agreement. By way of amplification and not limitation, except
as contemplated by this Agreement, neither ARRIS nor any of its Subsidiaries shall, during the
period from the date of this Agreement and continuing until the earlier of the termination of this
Agreement or the Merger, directly or indirectly do, or propose to do, any of the following without
the prior written consent of C-COR (which consent shall not be unreasonably withheld):
47
(a) amend or otherwise change the Articles of Incorporation, Bylaws or Subsidiary Documents of
ARRIS or any of its Subsidiaries;
(b) (i) declare, set aside, make or pay any dividend or other distribution (whether in cash,
stock or property or any combination thereof) in respect of any of its capital stock, except that a
wholly owned Subsidiary of ARRIS may declare and pay a dividend or make advances to ARRIS or (ii)
split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance
of any other securities in respect of, in lieu of or in substitution for shares of its capital
stock; and
(c) take, or agree in writing or otherwise to take, any of the actions described in Sections
6.3(a) and (b) above, or any action which would make any of the representations or warranties of
ARRIS contained in this Agreement untrue or incorrect or prevent ARRIS from performing or cause
ARRIS not to perform its covenants hereunder.
SECTION 6.4 — Recommendation of the Board of Directors of ARRIS. The Board of Directors of
ARRIS shall recommend the approval of the issuance of ARRIS Common Stock pursuant to this Agreement
in the Joint Proxy Statement. Neither the Board of Directors of ARRIS nor any committee thereof
shall withdraw or modify, or propose to or resolve to withdraw or modify, in a manner adverse to
C-COR, the ARRIS Board Recommendation.
ARTICLE VII
ADDITIONAL AGREEMENTS
SECTION 7.1 — Joint Proxy Statement and the Registration Statement.
(a) As promptly as practicable after the execution and delivery of this Agreement, the Parties
shall prepare and file with the SEC, and shall use all reasonable efforts to have cleared by the
SEC, and promptly thereafter shall mail to the holders of record of shares of ARRIS Common Stock
and C-COR Common Stock, the Joint Proxy Statement, provided, however, that C-COR and ARRIS shall
not mail or otherwise furnish the Joint Proxy Statement to their respective stockholders unless and
until they have received notice from the SEC that the Registration Statement is effective under the
0000 Xxx.
(b) The Parties will cooperate in the preparation of the Joint Proxy Statement and the
Registration Statement and in having the Registration Statement declared effective as soon as
practicable.
SECTION 7.2 — C-COR and ARRIS Stockholders’ Meetings and Consummation of the Merger.
(a) Following the execution and delivery of this Agreement, C-COR shall promptly take all
action necessary in accordance with Pennsylvania Law and its Articles of Incorporation and Bylaws
to convene a stockholders’ meeting (the “C-COR Stockholders’ Meeting”) and ARRIS shall
promptly take all action necessary in accordance with Delaware Law and its Certificate of
Incorporation and By-laws to convene a stockholders’ meeting (the “ARRIS Stockholders’
Meeting”). Each of C-COR and ARRIS shall use all commercially reasonable
48
efforts to solicit from its respective stockholders proxies to be voted at its stockholders’
meeting in favor of this Agreement pursuant to the Joint Proxy Statement and, subject to the
fiduciary duties of its Board of Directors, each of C-COR and ARRIS shall include in the Joint
Proxy Statement the recommendation of its Board of Directors in favor of this Agreement and the
Merger. Each of the Parties shall take all other action necessary or, in the opinion of the other
Parties, advisable to promptly and expeditiously secure any vote or consent of stockholders
required by Pennsylvania Law or Delaware Law, as applicable, the applicable requirements of any
securities exchange, and such Party’s Certificate or Articles of Incorporation and Bylaws to effect
the Merger.
(b) Upon the terms and subject to the conditions hereof and as soon as practicable after the
conditions set forth in Article VIII hereof have been fulfilled or waived, each of the Parties
shall execute such instruments and agreements as may be required by Pennsylvania Law and Delaware
Law in the manner required by such applicable state law and deliver to and file such instruments
and documents with the Department of State of the Commonwealth of Pennsylvania and the Secretary of
State of the State of Delaware, as applicable, and the Parties shall take all such other and
further actions as may be required by law to make the Merger effective. Prior to the filings
referred to in this Section 7.2(b), a closing (the “Closing”) will be held at the offices
of Xxxxxxxx Xxxxxxx LLP in Atlanta, Georgia (or such other place as the Parties may agree) for the
purpose of confirming all the foregoing. The Closing will take place upon the fulfillment or waiver
of all of the conditions to closing set forth in Article VIII of this Agreement, or as soon
thereafter as practicable (the date of the Closing being herein referred to as the “Closing
Date”).
SECTION 7.3 — Additional Agreements.
(a) Each of the Parties will comply in all material respects with all applicable laws and with
all applicable rules and regulations of any governmental authority in connection with its
execution, delivery and performance of this Agreement and the transactions contemplated hereby.
Each of the Parties agrees to use all commercially reasonable efforts to obtain in a timely manner
all necessary waivers, consents and approvals and to effect all necessary registrations and
filings, and to use all commercially reasonable efforts to take, or cause to be taken, all other
actions and to do, or cause to be done, all other things necessary, proper or advisable to
consummate and make effective as promptly as practicable the transactions contemplated by this
Agreement. Without limiting the generality of the foregoing, each of C-COR and ARRIS shall promptly
prepare and file a Premerger Notification (as defined in the HSR Act) in accordance with the HSR
Act, shall promptly comply with any requests for additional information, and shall use its
commercially reasonable efforts to obtain termination of the waiting period thereunder as promptly
as practicable.
(b) C-COR and ARRIS shall cooperate in the preparation, execution and filing of all returns,
questionnaires, applications or other documents regarding any real property transfer or gains,
sales, use, transfer, value added, stock transfer and stamp taxes, and transfer, recording,
registration and other fees and similar taxes which become payable in connection with the Merger
that are required or permitted to be filed on or before the Effective Time. Except to the extent
set forth in Section 2.5(f) hereof, each of ARRIS and the Merger Subsidiary shall pay,
49
without deduction from any amount payable to holders of C-COR Common Stock, any such taxes or
fees imposed on any Party that become payable in connection with the Merger.
SECTION 7.4 — Notification of Certain Matters. Each of C-COR and ARRIS shall give prompt
notice to the other of the following:
(a) the occurrence or nonoccurrence of any event whose occurrence or nonoccurrence would be
likely to cause either (i) any representation or warranty contained in this Agreement to be untrue
or inaccurate in any material respect at any time from the date hereof to the Effective Time, or
(ii) directly or indirectly, any Material Adverse Effect on such Party;
(b) any material failure of such Party, or any officer, director, employee or agent of any
thereof, to comply with or satisfy any covenant, condition or agreement to be complied with or
satisfied by it hereunder; and
(c) any facts relating to such Party which would make it necessary or advisable to amend the
Joint Proxy Statement or the Registration Statement in order to make the statements therein not
misleading or to comply with applicable law; provided, however, that the delivery
of any notice pursuant to this Section 7.4 shall not limit or otherwise affect the remedies
available hereunder to the Party receiving such notice.
SECTION 7.5 — Access to Information.
(a) From the date hereof to the Effective Time, each of C-COR and ARRIS shall, and shall cause
its respective Subsidiaries, and its and their officers, directors, employees, auditors, counsel
and agents to afford the officers, employees, auditors, counsel and agents of the other Party
complete reasonable access at all reasonable times to such Party’s and its Subsidiaries’ officers,
employees, auditors, counsel agents, properties, offices and other facilities and to all of their
respective books and records, and shall furnish the other with all financial, operating and other
data and information as such other Party may reasonably request.
(b) Each of C-COR and ARRIS agrees that all information so received from the other Party shall
be deemed received pursuant to the confidentiality agreement, dated as of September 6, 2007 between
C-COR and ARRIS (the “Confidentiality Agreement”) and such Party shall, and shall cause its
Subsidiaries and each of its and their respective officers, directors, employees, financial
advisors and agents (“Party Representatives”), to comply with the provisions of the
Confidentiality Agreement with respect to such information and the provisions of the
Confidentiality Agreement are hereby incorporated herein by reference with the same effect as if
fully set forth herein.
SECTION 7.6 — Public Announcements. C-COR and ARRIS shall use all reasonable efforts to
develop a joint communications plan and each Party shall use all reasonable efforts to ensure that
all press releases and other public statements with respect to the transactions contemplated hereby
shall be consistent with such joint communications plan or, to the extent inconsistent therewith,
shall have received the prior written approval of the other.
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SECTION 7.7 — Cooperation.
(a) Upon the terms and subject to the conditions hereof, each of the Parties agrees to use its
commercially reasonable efforts to take or cause to be taken all actions and to do or cause to be
done all things necessary, proper or advisable to consummate the transactions contemplated by this
Agreement and shall use its commercially reasonable efforts to obtain all necessary waivers,
consents and approvals, and to effect all necessary filings under the 1933 Act, the Exchange Act
and the HSR Act. The Parties shall cooperate in responding to inquiries from, and making
presentations to, regulatory authorities. Notwithstanding the foregoing, no Party shall have any
obligation to divest, or agree to divest, any asset or business.
(b) Each of C-COR and ARRIS agree to use its commercially reasonable efforts to comply
promptly with all requirements of any property transfer statutes, to the extent applicable to the
transactions contemplated hereby, and to take all actions necessary to cause the transactions
contemplated hereby to be effected in compliance therewith. C-COR and ARRIS agree that they will
consult with each other to determine what, if any, actions must be taken prior to or after the
Effective Time to ensure compliance with such statutes.
(c) The Parties shall use their reasonable efforts to satisfy or cause to be satisfied all of
the conditions precedent that are set forth in Article VII, as applicable to each of them.
SECTION 7.8 — Indemnification, Directors, and Officers’ Insurance.
(a) As of the Effective Time, the indemnification and exculpation provisions contained in the
Certificate of Incorporation and Bylaws of the Surviving Corporation shall be at least as favorable
to individuals who immediately prior to the Closing Date were directors, officers, agents or
employees of C-COR or its Subsidiaries or otherwise entitled to indemnification under C-COR’s or
such Subsidiary’s Bylaws or Articles of Incorporation (an “Indemnified Party”) as those
contained as of the date hereof in the Bylaws and Articles of Incorporation of C-COR or such
Subsidiary, respectively, and shall not be amended, repealed or otherwise modified for a period of
six years after the Closing Date in any manner that would adversely affect the rights thereunder of
any Indemnified Party; provided, however, that nothing contained herein shall limit
ARRIS’ ability to merge the Surviving Corporation into ARRIS or any of its Subsidiaries or any
other person or otherwise eliminate the Company’s or the Surviving Corporation’s corporate
existence so long as such rights are preserved. C-COR covenants that it shall, to the fullest
extent permitted under Pennsylvania law and regardless of whether the Merger becomes effective,
indemnify, defend and hold harmless, and after the Effective Time, the Surviving Corporation shall,
to the fullest extent permitted by Delaware law, indemnify, defend and hold harmless, each
Indemnified Party against any costs or expenses (including reasonable attorneys’ fees), judgments,
fines, losses, claims, damages, liabilities and amounts paid in settlement in connection with any
claim, action, suit, proceeding or investigation, including, without limitation, liabilities
arising out of this Agreement or under the 1933 Act or the Exchange Act, and in the event of any
such claim, action, suit, proceeding or investigation (whether arising before or after the
Effective Time), (i) C-COR or the Surviving Corporation shall pay the reasonable fees and expenses
of counsel selected by the Indemnified Parties, which counsel shall be reasonably satisfactory to
C-COR or the Surviving Corporation, promptly as statements therefor are received, and (ii) C-COR
and the Surviving Corporation will
51
cooperate in the defense of any such matter; provided, however, that neither
C-COR nor the Surviving Corporation shall be liable for any settlement effected without its written
consent (which consent shall not be unreasonably withheld); and provided, further, that neither
C-COR nor the Surviving Corporation shall be obliged pursuant to this Section 7.8(a) to pay the
fees and disbursements of more than one counsel for all Indemnified Parties in any single action,
except to the extent that, in the reasonable opinion of counsel for the Indemnified Parties, two or
more of such Indemnified Parties have conflicting interests in the outcome of such action.
(b) The Surviving Corporation shall cause to be obtained prior to the Effective Time, although
in lieu thereof C-COR may obtain prior to the Effective Time, “tail” insurance policies with a
claims period of at least six years from the Effective Time with respect to directors’ and
officers’ liability insurance in amount and scope at least as favorable as C-COR’s existing
policies for claims arising from facts or events that occurred on or prior to the Effective Time;
provided, however, that in no event shall the Surviving Corporation be required to
expend pursuant to this Section 7.8 more than an amount per year equal to 200% of current annual
premiums paid by C-COR for such insurance; provided, further however, that in the
event of an expiration, termination or cancellation of such policies, ARRIS or the Surviving
Corporation shall be required to obtain as much coverage as is possible under substantially similar
policies for such maximum annual amount in aggregate annual premiums.
(c) It is expressly agreed that the Indemnified Parties (and, if deceased, his or her heirs or
beneficiaries) to whom this Section 7.8 applies shall be third party beneficiaries of the
obligations to such persons set forth in this Section 7.8. The obligations of the Surviving
Corporation and its Subsidiaries under this Section 7.8 shall not be terminated or modified in such
a manner as to adversely affect the rights of any Indemnified Party (or, if deceased, his or her
heirs or beneficiaries) to whom this Section 7.8 applies without the consent of such affected
person.
SECTION 7.9 — Employee Benefit Plans.
(a) ARRIS hereby agrees that, immediately following the Effective Time, it shall, or it shall
cause the Surviving Corporation to, (i) initially provide each employee of C-COR and each of its
Subsidiaries as of the Effective Time (each, an “Employee”) with at least the same level of
base salary and, taken as a whole, cash incentive compensation and other variable cash compensation
as was provided to each such Employee immediately prior to the Effective Time, and (ii) initially
provide the Employees with employee benefits that are no less favorable in the aggregate than those
provided to similarly situated employees of ARRIS. From and after the Effective Time, ARRIS shall
cause the Surviving Corporation and its Subsidiaries to honor in accordance with their terms, all
employment agreements and change in control agreements (including, without limitation, distribution
elections under C-COR’s Supplemental Executive Retirement Plan) listed on Section 4.12 of the C-COR
Disclosure Schedule, except in the event the individuals covered under such agreements enter into
new agreements with ARRIS, and, for a period of 18 months following the Effective Time, severance
plans or agreements listed on Section 4.12 of the C-COR Disclosure Schedule.
(b) Employees shall receive credit for all purposes (including, for purposes of eligibility to
participate, vesting, benefit accrual and eligibility to receive benefits, but excluding
52
benefit accruals under any defined benefit pension plan) under any employee benefit plan,
program or arrangement established or maintained by ARRIS or the Surviving Corporation under which
the Employee may be eligible to participate on or after the Effective Time to the same extent
recognized by C-COR or any of its Subsidiaries with respect to its own Employees under comparable
plans immediately prior to the Effective Time, but which shall not result in the duplication of
benefits thereunder.
(c) In the event that ARRIS or the Surviving Corporation does not elect to continue C-COR’s
401(k) savings plan (the “C-COR Retirement Savings and Profit Sharing Plan”) and elects to
transfer account balances to ARRIS’ (or the Surviving Corporation’s) 401(k) savings plan,
outstanding plan loans shall be transferred in kind so as to permit such loans to continue in
accordance with their terms without triggering a taxable distribution event. In the event ARRIS or
the Surviving Corporation does not choose to continue C-COR’s flexible spending account (“FSA”)
program, it shall nevertheless allow the current coverage periods under such FSAs to continue
through March 31, 2008 to permit participants who remain employees to continue to obtain
reimbursements for eligible expenses incurred through March 31, 2008 on the same terms and
conditions as existed immediately prior to the Effective Time.
(d) With respect to the welfare benefits plans, programs and arrangements maintained,
sponsored or contributed to by ARRIS or the Surviving Corporation in which an Employee may be
eligible to participate on the Effective Time, ARRIS shall (i) waive, or shall use commercially
reasonable efforts to cause its insurance carrier to waive, all limitations as to preexisting and
at-work conditions, if any, with respect to participation and coverage requirements applicable to
each Employee, (ii) to the extent that ARRIS’ insurance carrier will not provide coverage to an
Employee as a result of a preexisting or at-work condition and in the event that such Employee
elects continuation coverage pursuant to Section 4980B of the Code or Sections 601 to 608 of ERISA
or other similar state laws (“COBRA”), ARRIS shall pay for such continuation coverage to the extent
that the cost of the coverage exceeds the amount that the Employee was paying for the benefit
coverage immediately prior to the Employee’s loss of coverage and such payments shall continue
until the COBRA period has ended or, if earlier, until the Employee is entitled to coverage under
any employer-sponsored group health plan or any government-sponsored health program, (iii) provide
credit to each Employee for any co-payments, deductibles and out-of-pocket expenses paid by such
Employee under C-COR’s comparable plans during the relevant plan year, up to and including the
Effective Time, and (iv) use commercially reasonable efforts to provide in-network coverage for
State College-based Employees.
(e) As of the Closing, ARRIS and its affiliates shall assume and be liable for all obligations
of C-COR and all of its Subsidiaries in respect of any accrued but unpaid vacation, holiday or
similar liability as of the Closing and to provide COBRA continuation coverage to C-COR employees
and qualified beneficiaries.
SECTION 7.10 — Stock Exchange Listing. ARRIS shall use all reasonable efforts to obtain,
prior to the Effective Time, the approval for listing on the NASDAQ, effective upon official notice
of issuance, of the shares of ARRIS Common Stock into which the C-COR Shares will be converted
pursuant to Article II hereof and which will be issuable upon exercise of options pursuant to
Section 2.8 hereof.
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SECTION 7.11 — No Shelf Registration. ARRIS shall not be required to amend or maintain the
effectiveness of the Registration Statement for the purpose of permitting resale of the shares of
ARRIS Common Stock received pursuant hereto by the persons who may be deemed to be “affiliates” of
C-COR or ARRIS within the meaning of Rule 145 promulgated under the 1933 Act.
SECTION 7.12 — Affiliates. C-COR (i) has disclosed to ARRIS on Section 7.12 of the C-COR
Disclosure Schedule hereof all persons who are, or may be, as of the date hereof its “affiliates”
for purposes of Rule 145 under the 1933 Act or SEC Accounting Series Release 135, and (ii) shall
use commercially reasonable efforts to cause each person who is identified as an “affiliate” of it
on Section 7.12 of the C-COR Disclosure Schedule to deliver to ARRIS as promptly as practicable but
in no event later than the Closing Date, a signed agreement substantially in the form previously
agreed to by C-COR and ARRIS. C-COR and ARRIS shall notify each other from time to time of any
other persons who then are, or may be, such an “affiliate” and use all reasonable efforts to cause
each additional person who is identified as an “affiliate” to execute a signed agreement as set
forth in this Section 7.12.
SECTION 7.13 — Change in Control, Severance and Employment Agreements. C-COR shall cooperate
reasonably with ARRIS and the Merger Subsidiary in accelerating to the earlier of the Effective
Time or December 31, 2007, with respect to those individuals and specific awards or payments
identified by ARRIS, any one or more of the following subject to the limitations of Section 409A of
the Code: (i) benefits under any existing change in control agreements; (ii) benefits to be paid in
the event of a change in control under any existing employment agreements; (iii) bonuses or other
incentive compensation reasonably likely to be earned; and (iv) benefits under any nonqualified
deferred compensation arrangements. Notwithstanding the foregoing, ARRIS shall honor existing
participant elections as to timing and forms of benefits under C-COR’s Supplemental Executive
Retirement Plan (including elections made before the end of 2007 with respect to payment in
connection with a qualified change in control, if applicable). The parties understand that
payments subject to Section 409A of the Code that are triggered by termination of employment must
be delayed for six months for specified employees under Section 409A(2)(B)(i).
SECTION 7.14 —Tax-Free Reorganization.
(a) This Agreement is a “plan of reorganization” within the meaning of Section 1.368-2(g) of
the Treasury regulations promulgated under the Code. From and after the date of this Agreement and
until the Effective Time, each Party hereto shall use all commercially reasonable efforts to cause
the Merger to qualify as a reorganization under the provisions of Section 368(a) of the Code.
Following the Effective Time, neither the Merger Subsidiary, ARRIS, C-COR or any of their
affiliates shall knowingly take any action that could cause the Merger to fail to qualify as a
reorganization under Section 368(a) of the Code.
(b) Officers of C-COR shall execute and deliver to each of C-COR’s and ARRIS’ counsel, at the
time the Registration Statement or any amendment thereto is filed with the SEC and on or about the
Closing Date, certificates substantially in compliance with IRS published advance ruling
guidelines, with customary exceptions and modifications thereto, to enable such firms to deliver
any opinions required in connection with the filing of the Registration Statement
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and the opinions contemplated by Sections 8.2(d) and 8.3(d). C-COR does not know of any reason
why C-COR will not be able to deliver such certificates.
(c) Officers of ARRIS shall execute and deliver to each of C-COR’s and ARRIS’ counsel at the
time the Registration Statement or any amendment thereto is filed with the SEC and on or about the
Closing Date, certificates substantially in compliance with IRS published advance ruling
guidelines, with customary exceptions and modifications thereto, to enable such firms to delivery
any opinions required in connection with the filing of the Registration Statement and the opinions
contemplated by Sections 8.2(d) and 8.3(d). ARRIS does not know of any reason why ARRIS will not be
able to deliver such certificates.
SECTION 7.15 — Section 16 Matters. Prior to the Effective Time, C-COR shall take all such
steps as may be required (to the extent permitted under applicable law) to cause any dispositions
of C-COR Common Stock (including derivative securities with respect to C-COR Common Stock)
resulting from the transactions contemplated by Article II by each individual who is subject to the
reporting requirements of Section 16(a) of the Exchange Act with respect to C-COR to be exempt
under Rule 16b-(3) promulgated under the Exchange Act.
SECTION 7.16 — C-COR Notes. If requested by ARRIS, to the extent permitted by the C-COR
Notes, C-COR shall redeem the C-COR Notes in accordance with ARRIS’ request.
SECTION 7.17 — C-COR Incentive Plan. If requested by ARRIS, C-COR shall take all reasonable
actions necessary to amend the Incentive Plan to permit consultants of C-COR to be eligible to
receive awards thereunder.
SECTION 7.18 — C-COR Intellectual Property. C-COR will deliver to ARRIS as soon as reasonably
practicable a list of maintenance fees outside the United States for all Patents listed on Section
4.21(a) of the C-COR Disclosure Schedule. Within thirty (30) days of the date of the Agreement
C-COR will provide the names of the parties and the date executed for each contract or agreement
set forth on Schedule 4.21(c)-1. Within thirty (30) days of the date of this Agreement, C-COR will
identify to ARRIS, for each contract listed in Section 4.21(c)-1 and Section 4.21(c)-2 of the C-COR
Disclosure Schedule, all royalties, honoraria or other fees (if any) that will become due or
payable thereunder on or prior to March 31, 2008. Within thirty (30) days of the signing of this
Agreement, C-COR will identify to ARRIS, for each Contract listed in Section 4.21(d) of the C-COR
Disclosure Schedule, all royalties, honoraria or other fees (if any) that will become due or
payable thereunder within five months after the date of this Agreement. C-COR will deliver to
ARRIS as soon as reasonably practicable a complete and accurate list of all Agreements referenced
in Section 4.21(k)(i)(B) or 4.21(k)(ii).
SECTION 7.19 — Change of Control Notifications . Prior to the Closing, ARRIS will deliver to
each C-COR employee subject to a change of control agreement a non-binding indication of ARRIS’
then-current expectation with respect to the term of such employee’s employment after the Effective
Time.
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ARTICLE VIII
CONDITIONS TO THE MERGER
SECTION 8.1 — Conditions to Obligations of Each Party to Effect the Merger. The respective
obligations of each Party to effect the Merger shall be subject to the following conditions:
(a) Stockholder Approval. The Merger and this Agreement shall have been approved and adopted
by the requisite vote of the stockholders of each of C-COR and the Merger Subsidiary and the
issuance of ARRIS Common Stock pursuant to the Merger shall have been approved by the requisite
vote of the stockholders of ARRIS, in each case in accordance with Pennsylvania Law, Delaware Law
and the rules of NASDAQ, as applicable;
(b) Legality. No federal, state or foreign statute, rule, regulation, executive order, decree
or injunction shall have been enacted, entered, promulgated or enforced by any court or
governmental authority which is in effect and has the effect of (i) making the Merger illegal or
otherwise prohibiting the consummation of the Merger or (ii) creating a Material Adverse Effect on
ARRIS, with or without including its ownership of C-COR and its Subsidiaries after the Merger, or
C-COR;
(c) Regulatory Matters. All authorizations, consents, orders or approvals of, or declarations
or filings with, and all expirations of waiting periods imposed by, any governmental body, agency
or official, including, without limitation, any waiting period applicable to the consummation of
the Merger under the HSR Act, shall have expired or been terminated (all of the foregoing,
“Consents”) that are necessary for the consummation of the transactions contemplated
hereby, other than immaterial Consents the failure to obtain which would have no material adverse
effect on the consummation of the transactions contemplated hereby and no Material Adverse Effect
on ARRIS, with or without including its ownership of C-COR and its Subsidiaries after the Merger,
or C-COR, shall have been filed, have occurred or have been obtained (all such permits, approvals,
filings and consents and the lapse of all such waiting periods being referred to as the
“Requisite Regulatory Approvals”) and all such Requisite Regulatory Approvals shall be in
full force and effect, provided, however, that a Requisite Regulatory Approval
shall not be deemed to have been obtained if in connection with the grant thereof any state or
federal governmental body, agency or official shall have imposed any condition, requirement,
restriction or change of regulation, or any other action directly or indirectly related to such
grant taken by such governmental body, which would reasonably be expected to either (i) have a
Material Adverse Effect on either ARRIS, with or without including its ownership of C-COR and its
Subsidiaries, or C-COR, or (ii) prevent the Parties from realizing in all material respects the
economic benefits of the transactions contemplated by this Agreement that the Parties currently
anticipate receiving therefrom;
(d) Registration Statement Effective. The Registration Statement shall have become effective
prior to the mailing by each of C-COR and ARRIS of the Joint Proxy Statement to its respective
stockholders, no stop order suspending the effectiveness of the Registration Statement shall then
be in effect, and no proceedings for that purpose shall then be threatened by the SEC or shall have
been initiated by the SEC and not concluded or withdrawn;
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(e) Stock Exchange Listing. The shares of ARRIS Common Stock into which the C-COR Shares will
be converted pursuant to Article II hereof and the shares of ARRIS Common Stock issuable upon the
exercise of options pursuant to Section 2.8 hereof shall have been duly approved for listing on the
NASDAQ, subject to official notice of issuance;
(f) Consents Under C-COR Agreements. C-COR shall have obtained the consent or approval of any
person whose consent or approval shall be required under any agreement or instrument in order to
permit the consummation of the transactions contemplated hereby except those which the failure to
obtain would not, individually or in the aggregate, have a Material Adverse Effect on ARRIS, with
or without including its ownership of C-COR and its Subsidiaries after the Merger, or C-COR; and
(g) Consents Under ARRIS Agreements. ARRIS shall have obtained the consent or approval of any
person whose consent or approval shall be required under any agreement or instrument in order to
permit the consummation of the transactions contemplated hereby except those which the failure to
obtain would not, individually or in the aggregate, have a Material Adverse Effect on ARRIS, with
or without including its ownership of C-COR and its Subsidiaries after the Merger, or C-COR.
SECTION 8.2 — Additional Conditions to Obligations of C-COR. The obligations of C-COR to
effect the Merger are also subject to the fulfillment of the following conditions:
(a) Representations and Warranties. The representations and warranties of ARRIS contained in
this Agreement shall be true and correct on the date hereof and (except to the extent such
representations and warranties speak as of a date earlier than the date hereof) shall also be true
and correct on and as of the Closing Date, except for changes permitted under Section 6.1 hereof or
otherwise contemplated by this Agreement, with the same force and effect as if made on and as of
the Closing Date, provided, however, that for purposes of this Section 8.2(a) only,
such representations and warranties shall be deemed to be true and correct unless the failure or
failures of such representations and warranties to be so true and correct (without regard to
materiality qualifiers contained therein), individually or in the aggregate, results or would
reasonably be expected to result in a Material Adverse Effect on ARRIS;
(b) Agreements, Conditions and Covenants. ARRIS shall have performed or complied in all
material respects with all agreements, conditions and covenants required by this Agreement to be
performed or complied with by them on or before the Effective Time;
(c) Certificate. C-COR shall have received a certificate of an executive officer of ARRIS to
the effect set forth in paragraphs (a) and (b) above;
(d) Tax Opinion.
(i) C-COR shall have received an opinion of Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP,
special counsel to C-COR, dated as of the Closing Date, in form and substance reasonably
satisfactory to C-COR, substantially to the effect that, on the basis of the facts,
representations and assumptions set forth in such opinion, all of which are consistent with
the state of facts existing as of the Effective Time, to the effect that (A) the Merger will
qualify as a reorganization within the meaning of Section 368(a) of the
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Code and (B) C-COR, the Merger Subsidiary and ARRIS each will be a “party to the
reorganization” within the meaning of Section 368 of the Code. In rendering such opinion,
Xxxxxxx Xxxxx Xxxxxxx & Ingersoll, LLP may require and rely upon representations and
covenants including those contained in certificates of officers of C-COR and ARRIS and
others. The issuance of such tax opinion shall be conditioned upon receipt by C-COR’s
counsel of representation letters from each of ARRIS and C-COR reasonably satisfactory in
form and substance to each of C-COR’s and ARRIS’ counsel; and
(ii) ARRIS shall have received the opinion described in Section 8.3(d) (i) hereof; and
SECTION 8.3 — Additional Conditions to Obligations of ARRIS. The obligations of ARRIS to
effect the Merger are also subject to the fulfillment of the following conditions:
(a) Representations and Warranties. The representations and warranties of C-COR contained in
this Agreement shall be true and correct on the date hereof and (except to the extent such
representations and warranties speak as of a date earlier than the date hereof) shall also be true
and correct on and as of the Closing Date, except for changes permitted under Section 6.1 hereof or
otherwise contemplated by this Agreement, with the same force and effect as if made on and as of
the Closing Date, provided, however, that for purposes of this Section 8.3(a) only,
such representations and warranties shall be deemed to be true and correct unless the failure or
failures of such representations and warranties to be so true and correct (without regard to
materiality qualifiers contained therein), individually or in the aggregate, results or would
reasonably be expected to result in a Material Adverse Effect on C-COR or ARRIS;
(b) Agreements, Conditions and Covenants. C-COR shall have performed or complied in all
material respects with all agreements, conditions and covenants required by this Agreement to be
performed or complied with by them on or before the Effective Time;
(c) Certificate. ARRIS shall have received a certificate of an executive officer of C-COR to
the effect set forth in paragraphs (a) and (b) above;
(d) Tax Opinion.
(i) ARRIS shall have received a written opinion of Xxxxxxxx Xxxxxxx LLP, special
counsel to ARRIS, dated as of the Effective Time, in form and substance reasonably
satisfactory to ARRIS, substantially to the effect that, on the basis of the facts,
representations and assumptions set forth in such opinion, all of which are consistent with
the state of facts existing as of the Effective Time, to the effect that (A) the Merger will
qualify as a reorganization within the meaning of Section 368 of the Code and (B) C-COR, the
Merger Subsidiary and ARRIS will each be a “party to the reorganization” within the meaning
of Section 368 of the Code. In rendering such opinion, Xxxxxxxx Xxxxxxx LLP may require and
rely upon representations and covenants including those contained in certificates of
officers of ARRIS and C-COR and others. The issuance of such tax opinion shall be
conditioned upon receipt by ARRIS’ counsel of representation
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letters from each of ARRIS and C-COR reasonably satisfactory inform and substance to
each of C-COR’s and ARRIS’ counsel; and
(ii) C-COR shall have received the opinion described in Section 8.2(d)(i) hereof.
(e) Affiliate Agreements. ARRIS shall have received the agreements required by Section 7.12
hereof to be delivered by the C-COR “affiliates,” duly executed by each “affiliate” of C-COR.
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
SECTION 9.1 — Termination by Mutual Consent. This Agreement may be terminated and the Merger
may be abandoned at any time prior to the Effective Time, whether before or after the approval by
stockholders of C-COR and ARRIS referred to in Section 7.2(a), by mutual written consent of C-COR
or ARRIS as authorized by the respective Board of Directors.
SECTION 9.2 — Termination by Either ARRIS or C-COR. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time, whether before or after the
approval by stockholders of C-COR and ARRIS referred to in Section 7.2(a), by ARRIS or C-COR as
authorized by the respective Board of Directors and by written notice if:
(a) the Merger is not consummated by March 31, 2008 (as such date may be extended by mutual
written consent of ARRIS and C-COR) (the “Termination Date”);
(b) the approval of the stockholders of ARRIS or of C-COR required by Section 7.2(a) is not
obtained at a duly held stockholders meeting of each such company, including any adjournments
thereof;
(c) any order permanently restraining, enjoining or otherwise prohibiting consummation of the
Merger becomes final and non-appealable, whether before or after the stockholders meeting of either
Party (provided such Party used commercially reasonable efforts to have such order lifted); or
(d) if the Average Trading Price, as determined in accordance with Section 2.2(b), is less
than $11.41;
provided, however, that the right to terminate this Agreement pursuant to clause
(a) or (b) above will not be available to any Party that has breached or failed to perform in any
material respect its obligations under this Agreement in any manner that has been the principal
cause of or primarily resulted in the failure of the Merger to be consummated; and
provided, further, that, prior to or upon any termination (i) by C-COR pursuant to
clause (b) above, C-COR must have paid to ARRIS any C-COR Termination Fee (as defined herein) then
due and payable under Section 9.5(b) under the terms specified in Section 9.5(b) or (ii) by ARRIS
pursuant to clause (b) above, ARRIS must have paid to C-COR any ARRIS Termination Fee (as defined
herein) then due and payable under Section 9.5(c) under the terms specified in Section 9.5(c).
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SECTION 9.3 — Termination by C-COR. This Agreement may be terminated and the Merger may be
abandoned at any time prior to the Effective Time by C-COR as authorized its the Board of
Directors:
(a) if prior to, but not after, the time the vote is taken with respect to the adoption of
this Agreement at the stockholders meeting of either Party, (i) C-COR’s Board of Directors,
pursuant to and in compliance with Section 6.2, has approved or recommended to the stockholders of
C-COR any Superior Proposal and (ii) prior to or upon termination pursuant to this Section 9.3(a),
C-COR has paid to ARRIS the C-COR Termination Fee then due and payable under Section 9.5;
provided, however, that (A) prior to such termination pursuant to this Section
9.3(a), C-COR notified ARRIS in writing promptly of its intention to terminate this Agreement and
to enter into a binding Alternative Acquisition Agreement concerning a Superior Proposal promptly
following the Waiting Period (as defined below), attaching the most current version of such
agreement (or, to the extent no such agreement is contemplated to be entered into by C-COR in
connection with such Superior Proposal, a description of all material terms and conditions of such
Superior Proposal), and (B) ARRIS did not make, within three business days after its receipt of
such written notification (the “Waiting Period”), an offer that the Board of Directors of
C-COR determined, in good faith after consultation with its financial advisor, is at least as
favorable to the stockholders of C-COR from a financial point of view as such Superior Proposal (it
being understood that (1) C-COR shall not enter into any such binding agreement prior to or during
the Waiting Period, (2) C-COR shall keep ARRIS reasonably informed at all times during the Waiting
Period of the status and material terms and conditions (including any amendment thereto) of such
Superior Proposal and provide copies of all draft Alternative Acquisition Agreements relating to
such Superior Proposal (and any executed confidentiality agreement entered into in the
circumstances referred to in Section 6.2(a)), and (3) C-COR shall notify ARRIS promptly if C-COR’s
intention to enter into such binding written agreement changes at any time after giving
notification of such Superior Proposal); or
(b) if there has been a breach of any representation, warranty, covenant or agreement made by
ARRIS or Merger Subsidiary in this Agreement, or any such representation or warranty becomes untrue
after the date of this Agreement, such that the condition set forth in Sections 8.2(a) or 8.2(b),
as the case may be, would not be satisfied and such breach is not cured within twenty days after
written notice thereof is given by C-COR to ARRIS; provided, however, that the
right to terminate this Agreement by C-COR will not be available to ARRIS if C-COR is at that time
in material breach of this Agreement.
SECTION 9.4 — Termination by ARRIS. This Agreement may be terminated and the Merger may be
abandoned at any time prior to the Effective Time by ARRIS as authorized by its Board of Directors:
(a) if a C-COR Triggering Event (as defined below) has occurred; or
(b) if there has been a breach of any representation, warranty, covenant or agreement made by
C-COR in this Agreement, or any such representation or warranty becomes untrue after the date of
this Agreement, such that the condition set forth in Sections 8.3(a) or 8.3(b), as the case may be,
would not be satisfied and such breach is not cured within 20 days after written notice thereof is
given by ARRIS to C-COR; provided, however, that the right to terminate this
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Agreement by ARRIS will not be available to ARRIS if ARRIS or Merger Subsidiary is at that
time in material breach of this Agreement.
For the purposes of this Agreement, a “C-COR Triggering Event” will be deemed to have
occurred if:
(A) the Board of Directors of C-COR fails to recommend approval of this Agreement and
the Merger in the Proxy Statement, a Change in C-COR Recommendation occurs or the Board of
Directors of C-COR resolves to make a change in its recommendation;
(B) the Board of Directors of C-COR recommends to the stockholders of C-COR a Competing
Transaction or publicly announces that it intends to do so or enters into any Alternative
Acquisition Agreement accepting any Acquisition Proposal;
(C) a tender offer or exchange offer for the outstanding shares of capital stock of
C-COR is commenced (other than pursuant to the transactions contemplated by this Agreement),
and the Board of Directors of C-COR fails to recommend against (or maintain such
recommendation against) acceptance of such tender offer or exchange offer by its
stockholders;
(D) the Board of Directors of C-COR, upon request of ARRIS following receipt of a
proposal or offer for a Competing Transaction, fails to reaffirm to ARRIS the approval or
recommendation of the Merger and this Agreement within five business days after such
request; or
(E) C-COR or any of its officers, directors, representatives, or agents knowingly and
materially breaches its obligations under Section 6.2.
SECTION 9.5 — Effect of Termination and Abandonment.
(a) In the event of termination of this Agreement and the abandonment of the Merger pursuant
to this Article IX, this Agreement (other than as set forth in Section 10.1) becomes void and of no
effect with no liability or obligation on the part of any party (or of any of its directors,
officers, employees, agents, legal and financial advisors or other representatives);
provided, however, except as otherwise provided in this Agreement, no termination
relieves any Party hereto of any liability or damages resulting from any fraud or willful or
intentional breach of this Agreement. No termination of this Agreement affects the obligations of
the Parties contained in the Confidentiality Agreement, all of which obligations survive in
accordance with their terms.
(b) C-COR shall pay to ARRIS a fee equal to $22.5 million (the “C-COR Termination
Fee”), by wire transfer of immediately available funds on the date that the C-COR Termination
Fee is due as provided below, in the event this Agreement is terminated:
(i) by ARRIS or C-COR pursuant to Section 9.2(a) or Section 9.2(b) as a result of the
failure to obtain the approval of the C-COR stockholders, if the following occurs:
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(A) after the date of this Agreement and prior to the stockholders meeting of
either Party, any third party makes a Takeover Proposal (substituting 35% for the
20% threshold in the definition of Competing Transaction for purposes of this
Section 9.5(b)(i)) to C-COR or publicly discloses or announces an intention (whether
or not conditional and whether or not withdrawn) to make a Takeover Proposal, prior
to either (1) with respect to any termination pursuant to Section 9.2(a), the date
of such termination or (2) with respect to any termination pursuant to Section
9.2(b), the date of the C-COR Stockholders’ Meeting; and
(B) within twelve months of such termination C-COR or any of its Subsidiaries
enters into an Alternative Acquisition Agreement to consummate, or consummates, or
approves or recommends to the stockholders of C-COR or otherwise does not oppose, a
Competing Transaction with such third party;
(ii) by C-COR (A) pursuant to Section 9.2(b) and, prior to the date of the stockholders
meeting of either Party, a C-COR Triggering Event shall have occurred or (B) pursuant to
Section 9.3(a); or
(iii) by ARRIS pursuant to Section 9.4(a).
C-COR shall pay ARRIS the C-COR Termination Fee no later than: (x) on the date of the first to
occur of the execution of an Alternative Acquisition Agreement (other than a confidentiality
agreement), approval or recommendation to the stockholders of C-COR of a Competing Transaction,
failure to oppose a Competing Transaction or the consummation of a Competing Transaction, in the
case of clause (i) above; (y) on the date of termination of this Agreement in the case of clause
(ii) above; and (z) two business days after termination of this Agreement in the case of clause
(iii) above. ARRIS and Merger Subsidiary agree that payment of the C-COR Termination Fee, if such
fee is actually paid as provided herein, will be the sole and exclusive remedy of ARRIS and Merger
Subsidiary upon termination of this Agreement.
C-COR acknowledges that the agreements contained in this Section 9.5(b) are an integral part
of the transactions contemplated by this Agreement, and that, without these agreements, ARRIS and
the Merger Subsidiary would not enter into this Agreement. If C-COR fails to pay the C-COR
Termination Fee in accordance with this Section 9.5(b) and, in order to obtain such payment, ARRIS
commences a suit that results in a judgment against C-COR for the C-COR Termination Fee, C-COR
shall pay to ARRIS its reasonable costs and expenses (including reasonable attorneys’ fees and
expenses) incurred in connection with such suit, together with interest on the amount of the C-COR
Termination Fee, from the date such payment was required to be made until the date of payment at
the prime rate as announced in The Wall Street Journal in effect on the date such payment was
required to be made, after delivery to C-COR of reasonable documentation evidencing such costs and
expenses.
(c) ARRIS shall pay to C-COR a fee equal to $22.5 million (the “ARRIS Termination
Fee”), by wire transfer of immediately available funds on the date that the ARRIS Termination
Fee is due as provided below, in the event this Agreement is terminated by ARRIS or C-COR pursuant
to Section 9.2(a) or Section 9.2(b) as a result of the failure to obtain the approval of the ARRIS
stockholders, if the following occurs:
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(i) after the date of this Agreement and prior to the stockholders meeting of either
Party, any third party makes an ARRIS Takeover Proposal (as defined herein) to ARRIS or
publicly discloses or announces an intention (whether or not conditional and whether or not
withdrawn) to make a Takeover Proposal, prior to either (1) with respect to any termination
pursuant to Section 9.2(a), the date of such termination or (2) with respect to any
termination pursuant to Section 9.2(b), the date of the ARRIS Stockholders’ Meeting; and
(ii) within twelve months of such termination ARRIS or any of its Subsidiaries enters
into an ARRIS Alternative Acquisition Agreement (as defined herein) to consummate, or
consummates, or approves or recommends to the stockholders of ARRIS or otherwise does not
oppose, an ARRIS Competing Transaction (as defined herein) with such third party;
ARRIS shall pay C-COR the ARRIS Termination Fee no later than on the date of the first to occur of
the execution of an Alternative Acquisition Agreement (other than a confidentiality agreement),
approval or recommendation to the stockholders of ARRIS of an ARRIS Competing Transaction, failure
to oppose an ARRIS Competing Transaction or the consummation of an ARRIS Competing Transaction.
C-COR agrees that payment of the ARRIS Termination Fee, if such fee is actually paid as provided
herein, will be the sole and exclusive remedy of C-COR upon termination of this Agreement.
ARRIS acknowledges that the agreements contained in this Section 9.5(c) are an integral part
of the transactions contemplated by this Agreement, and that, without these agreements, C-COR would
not enter into this Agreement. If ARRIS fails to pay the ARRIS Termination Fee in accordance with
this Section 9.5(c) and, in order to obtain such payment, C-COR commences a suit that results in a
judgment against ARRIS for the ARRIS Termination Fee, ARRIS shall pay to C-COR its reasonable costs
and expenses (including reasonable attorneys’ fees and expenses) incurred in connection with such
suit, together with interest on the amount of the ARRIS Termination Fee, from the date such payment
was required to be made until the date of payment at the prime rate as announced in The Wall Street
Journal in effect on the date such payment was required to be made, after delivery to C-COR of
reasonable documentation evidencing such costs and expenses.
For purpose of this Agreement:
(A) The term “ARRIS Alternative Acquisition Agreement” means any letter of
intent, memorandum of understanding, agreement in principle, acquisition agreement, merger
agreement or other similar agreement or commitment with respect to any ARRIS Takeover
Proposal.
(B) The term “ARRIS Competing Transaction” means any transaction, other than
the transactions contemplated by this Agreement, to acquire beneficial ownership (as defined
under Rule 13(d) promulgated under the Exchange Act) of (1) assets that constitute 35% or
more of the consolidated revenues, net income or assets of ARRIS and its Subsidiaries or (2)
35% or more (in number or voting power) of any class of equity securities or other capital
stock of ARRIS or any of its Subsidiaries, in any such case
63
pursuant to any transaction or series of transactions, including (w) a merger,
consolidation, share exchange, or other business combination (including any so-called
merger-of-equals and whether or not ARRIS is the entity surviving any such transaction)
involving ARRIS or any of its Subsidiaries, (x) a sale, issuance, exchange, transfer or
other disposition of shares of capital stock of ARRIS or any of its Subsidiaries, (y) a
sale, lease, license, exchange, transfer or other disposition of assets of ARRIS or any of
its Subsidiaries or (z) a tender offer, exchange offer or similar transaction with respect
to either ARRIS or any of its Subsidiaries, including any single or multi-step transaction
or series of related transactions, which is structured to permit such third party or another
third party to acquire beneficial ownership of assets that constitute 35% or more of the
consolidated revenues, net income or assets of ARRIS and its Subsidiaries, or 35% or more of
the equity interest in either ARRIS or any of its Subsidiaries.
(C) The term “ARRIS Takeover Proposal” means any inquiry, proposal, offer or
indication of interest (including any inquiry, proposal, offer or indication of interest to
its stockholders), whether in writing or otherwise, from a third party that constitutes, or
could reasonably be expected to lead to, an ARRIS Competing Transaction.
ARTICLE X
GENERAL PROVISIONS
SECTION 10.1 — Non-Survival of Representations, Warranties and Agreements. The
representations. warranties and agreements in this Agreement shall terminate at the Effective Time
or upon the termination of this Agreement pursuant to Section 9.1 hereof, as the case may be,
except that (a) the agreements set forth in Article I and Sections 2.5, 2.6, 2.7, 7.8, and 7.9
hereof shall survive the Effective Time indefinitely, (b) the agreements and representations set
forth in Sections 4.11, 4.28, 5.11, 5.19, 7.5(b) and 10.3 and Article IX hereof shall survive
termination indefinitely and (c) nothing contained herein shall limit any covenant or agreement of
the Parties that by its terms contemplates performance after the Effective Time.
SECTION 10.2 — Notices. All notices and other communications given or made pursuant hereto
shall be in writing and shall be deemed to have been duly given or made as of the date of receipt
and shall be delivered personally, sent by nationally recognized overnight courier or sent by
telecopy, to the Parties at the following addresses or telecopy numbers (or at such other address
or telecopy number for a Party as shall be specified by like notice):
(a) | if to C-COR: |
C-COR Incorporated
00 Xxxxxxx Xxxx
Xxxxx Xxxxxxx, Xxxxxxxxxxxx 00000
Attention: President
Telecopy No.: (000) 000-0000
00 Xxxxxxx Xxxx
Xxxxx Xxxxxxx, Xxxxxxxxxxxx 00000
Attention: President
Telecopy No.: (000) 000-0000
64
with a copy to: |
Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP
51st Floor, 0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx
Telecopy No.: (000) 000-0000
51st Floor, 0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx
Telecopy No.: (000) 000-0000
(b) | if to ARRIS: |
ARRIS Group, Inc.
0000 Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: President
Telecopy No.: (000) 000-0000
0000 Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: President
Telecopy No.: (000) 000-0000
with a copy to: |
Xxxxxxxx Xxxxxxx LLP
000 Xxxxxxxxx Xxxxxx, XX
Xxxxxxx, Xxxxxxx 00000
Attention: X. Xxxxxxxx Xxxxxxxxx, Jr.
Telecopy No.: (000) 000-0000
000 Xxxxxxxxx Xxxxxx, XX
Xxxxxxx, Xxxxxxx 00000
Attention: X. Xxxxxxxx Xxxxxxxxx, Jr.
Telecopy No.: (000) 000-0000
SECTION 10.3 — Expenses. Except as otherwise provided herein, all costs and expenses incurred
in connection with this Agreement and the transactions contemplated hereby shall be paid by the
Party incurring such costs and expenses, except that those expenses incurred in connection with the
printing of the Joint Proxy Statement and the Registration Statement, as well as the filing fees
related thereto and any filing fee required in connection with the filing of Premerger
Notifications under the HSR Act, shall be shared equally by C-COR and ARRIS.
SECTION 10.4 — Certain Definitions. For purposes of this Agreement, the following terms shall
have the following meanings:
(a) “1933 Act” means the Securities Act of 1933, as the same may be amended from time to time,
and “Exchange Act” means the Securities Exchange Act of 1934, as the same may be amended from time
to time.
(b) “ARRIS Common Stock” means the shares of common stock, par value $.01 per share of ARRIS.
(c) “affiliate” of a person means a person that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with, the first mentioned
person.
(d) “C-COR Common Stock” or “C-COR Common Stock” means the shares of common stock, par value
$.05 per share of C-COR.
65
(e) “control” (including the terms “controlled by” and “under common control with”) means the
possession, direct or indirect, of the power to direct or cause the direction of the management and
policies of a person, whether through the ownership of stock, as trustee or executor, by contract
or credit arrangement or otherwise.
(f) “GAAP” means generally accepted accounting principles in the United States, as in effect
from time to time.
(g) “HSR Act” means the Xxxx-Xxxxx- Xxxxxx Antitrust Improvements Act of 1976, as the same may
be amended from time to time.
(h) “Hazardous Materials” means (a) any substance, material, element, compound, waste or
chemical, whether solid, liquid or gaseous which is defined, listed or otherwise classified or
regulated in any way as a “contaminant,” “pollutant” “toxic pollutant,” “toxic substance,”
“hazardous substance,” “hazardous waste,” or “special waste” under any Environmental Laws; (b)
petroleum and its refined products; (c) polychlorinated biphenyls; (d) radon; and (e) any raw
materials, building components (including without limitation, asbestos-containing materials) and
manufactured products containing hazardous substances listed or classified as such under
Environmental Laws.
(i) “knowledge” of any Party shall mean the actual knowledge of the executive officers of such
Party following due inquiry.
(j) “Material Adverse Effect” means any change in or effect on the business of the referenced
corporation or any of its Subsidiaries that is or will be materially adverse to the business,
operations (including the income statement), prospects, properties (including intangible
properties), condition (financial or otherwise), assets, liabilities or regulatory status of such
referenced corporation and its Subsidiaries taken as a whole, but shall not include the effects of
changes that are generally applicable in (A) the United States economy, (B) the United States
securities markets, (C) the announcement of this Agreement and the transactions contemplated
hereby, (D) the taking of any action required under this Agreement or the transactions contemplated
hereby, (E) changes in GAAP, (E) changes in laws of general applicability or interpretations
thereof by courts or governmental entities, (F) changes in C-COR and ARRIS’ industry and (G) any
acts of terrorism or any outbreak of war, if, in any of (A) through (G), the effect on C-COR or
ARRIS, determined without including its ownership of C-COR after the Merger, (as the case may be)
and its respective Subsidiaries, taken as a whole, is not disproportionate relative to the effect
on the other and its Subsidiaries, taken as a whole. All references to Material Adverse Effect on
ARRIS or its Subsidiaries contained in Article IV, V or VI of this Agreement shall be deemed to
refer solely to ARRIS and its Subsidiaries without including its ownership of C-COR and its
Subsidiaries after the Merger.
(k) “person” means an individual, corporation, partnership, association, trust, unincorporated
organization, entity or group (as defined in the Exchange Act).
(l) “Subsidiary,” “C-COR Subsidiary,” or “ARRIS Subsidiary” means any corporation or other
legal entity of which C-COR or ARRIS, as the case may be (either alone or through or together with
any other Subsidiary or Subsidiaries), owns, directly or indirectly, more
66
than 50% of the stock or other equity interests the holders of which are generally entitled to
vote for the election of the board of directors or other governing body of such corporation or
other legal entity.
(m) “Takeover Statute” means a “fair price,” “moratorium,” “control share acquisition” or
other similar anti-takeover statute or regulation enacted under state or federal Laws in the United
States, including Section 203 of the Delaware Law and Subchapters “C” through “J” of Chapter 25 of
the Pennsylvania Law.
(n) “third party” means any person or group other than ARRIS, Merger Subsidiary, C-COR, any
affiliate of ARRIS or any affiliate of C-COR.
SECTION 10.5 — Specific Performance. The parties hereto agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not performed in accordance
with their specific terms or were otherwise breached. Accordingly, the parties further agree that
each party shall be entitled to an injunction or restraining order to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other right or remedy to
which such party may be entitled under this Agreement, at law or in equity.
SECTION 10.6 — Headings. The headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this Agreement.
SECTION 10.7 — Severability. If any term or other provision of this Agreement is invalid,
illegal or incapable of being enforced by any rule of law or public policy, all other conditions
and provisions of this Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not affected in any manner
adverse to any Party. Upon such determination that any term or other provision is invalid, illegal
or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement
so as to effect the original intent of the Parties as closely as possible in an acceptable manner
to the end that the transactions contemplated hereby are fulfilled to the maximum extent possible.
SECTION 10.8 — Entire Agreement; No Third-Party Beneficiaries. This Agreement constitutes the
entire agreement and, except as expressly set forth herein, supersedes any and all other prior
agreements and undertakings, both written and oral, among the Parties, or any of them, with respect
to the subject matter hereof and, except for Section 7.8 (Indemnification, Directors’ and Officers’
Insurance) is not intended to confer upon any person other than C-COR, ARRIS, and the Merger
Subsidiary and, after the Effective Time, their respective stockholders, any rights or remedies
hereunder. Without by implication limiting the foregoing, in no event shall Section 7.9 or 8.2(e)
confer any rights on any current, former or future employee of C-COR or ARRIS or any of their
Subsidiaries.
SECTION 10.9 — Assignment. This Agreement shall not be assigned by operation of law or
otherwise.
67
SECTION 10.10 — Governing Law; Jurisdiction and Venue. Other than the validity of the Merger,
which shall be governed by the laws of the Commonwealth of Pennsylvania, this Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware, regardless of the
laws that might otherwise govern under applicable principles of conflicts of law thereof. For all
actions, suits and proceedings arising out of or relating to this Agreement, the parties hereby
irrevocably and unconditionally (i) consent to the personal jurisdiction of any state or federal
court of competent jurisdiction located in the City of Wilmington in the State of Delaware and (ii)
waive any defense or objection to proceeding in such court, including those objections and defenses
based on an alleged lack of personal jurisdiction, improper venue and forum non-conveniens.
SECTION 10.11 — Counterparts. This Agreement may be executed in one or more counterparts, and
by the different Parties in separate counterparts, each of which when executed shall be deemed to
be an original, but all of which shall constitute one and the same agreement.
[This space intentionally left blank.]
68
IN WITNESS WHEREOF, C-COR and ARRIS have caused this Agreement to be executed as of the date
first written above by their respective officers thereunto duly authorized.
C-COR INCORPORATED |
||||
By: | /s/ Xxxxx X Xxxxxx | |||
Xxxxx X. Xxxxxx | ||||
Chairman and Chief Executive Officer | ||||
ARRIS GROUP, INC. |
||||
By: | /s/ Xxxxxx X. Xxxxxxxxx | |||
Xxxxxx X. Xxxxxxxxx | ||||
Chairman and Chief Executive Officer | ||||
AIR MERGER SUBSIDIARY, INC. |
||||
By: | /s/ Xxxxxx X. Xxxxxxxxx | |||
Xxxxxx X. Xxxxxxxxx | ||||
President | ||||
List of Disclosure Schedules
Schedule No. | Schedule Title | |
4.1
|
C-COR Organization and Qualification; Subsidiaries | |
4.3
|
C-COR Capitalization | |
4.5(a)
|
C-COR Material Contracts | |
4.5(b)
|
C-COR No Conflict | |
4.5(c)
|
C-COR Required Filings and Consents | |
4.6(a)
|
C-COR Compliance | |
4.6(b)
|
C-COR Permits | |
4.7(a) and (b)
|
C-COR SEC Filings; Financial Statements | |
4.8
|
C-COR Absence of Changes | |
4.9
|
C-COR Undisclosed Liabilities | |
4.10
|
C-COR Litigation | |
4.12(a)
|
C-COR Employee Benefit Plans | |
4.12(b)
|
C-COR Retiree Benefits | |
4.12(c)
|
C-COR Options | |
4.12(d)
|
C-COR Agreements related to Employment | |
4.13
|
C-COR Labor Matters | |
4.14
|
C-COR Restrictions on Business Activities | |
4.15
|
C-COR Title to Property | |
4.16
|
C-COR Customers | |
4.17
|
C-COR Supplier Relations | |
4.19(a)
|
C-COR Tax Returns | |
4.19(b)
|
C-COR Tax Returns Subject to Audit | |
4.19(d)
|
C-COR Tax Groups | |
4.19(f)
|
C-COR Certain Payments | |
4.19(i)
|
C-COR Controlled Foreign Companies | |
4.19(j)
|
C-COR Net Operating Loss Limitations | |
4.20
|
C-COR Environmental Matters | |
4.21(a)
|
C-COR Intellectual Property | |
4.21(b)
|
C-COR Trademarks, Patents & Copyrights | |
4.21(c)
|
C-COR Third Party Software | |
4.21(d)
|
C-COR Third Party IP Licenses | |
4.21(e)
|
C-COR Owned Intellectual Property | |
4.21(f)
|
C-COR Third Party Infringement | |
4.21(g)
|
C-COR Infringement on Owned Intellectual Property | |
4.21(h)
|
C-COR Software | |
4.21(h)-2
|
C-COR Form Non-Competition Agreement | |
4.21(i)-2
|
C-COR Trademarks | |
4.21(n)
|
C-COR Software | |
4.21(o)
|
C-COR Licenses | |
4.21(p)
|
C-COR Funding | |
4.22
|
C-COR Warranties | |
4.24(d)
|
C-COR Import and Export Control Laws |
Schedule No. | Schedule Title | |
4.25
|
C-COR Foreign Corrupt Practices Act | |
5.1
|
ARRIS Organization and Qualification; Subsidiaries | |
5.3
|
ARRIS Capitalization | |
5.5(a)
|
ARRIS No Conflict; Required Filings | |
5.5(b)
|
ARRIS Consents | |
5.6(a)
|
ARRIS Compliance | |
5.6(b)
|
ARRIS Permits | |
5.7
|
ARRIS SEC Filings; Financial Statements | |
5.8
|
ARRIS Absence of Certain Changes or Events | |
5.9
|
ARRIS No Undisclosed Liabilities | |
5.10
|
ARRIS Litigation | |
5.12
|
ARRIS Employee Benefit Plans; Employment Agreements | |
5.14
|
ARRIS Environmental Matters | |
5.15
|
ARRIS Customers | |
5.16(d)
|
ARRIS Infringement on Third Party IP Rights | |
5.16(l)
|
ARRIS Open Source Licensing | |
6.1
|
Business Pending the Merger | |
7.12
|
Affiliates |