Exhibit 2.1
AGREEMENT
AND PLAN OF MERGER
Among
INTERNATIONAL BUSINESS MACHINES CORPORATION
ONYX ACQUISITION CORP.
and
NETEZZA CORPORATION
Dated as of September 19, 2010
TABLE OF
CONTENTS
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Page
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ARTICLE I
The Merger
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Section 1.01.
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The Merger
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1
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Section 1.02.
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Closing
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1
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Section 1.03.
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Effective Time of the Merger
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1
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Section 1.04.
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Effects of the Merger
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2
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Section 1.05.
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Certificate of Incorporation and Bylaws
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2
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Section 1.06.
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Directors
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2
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Section 1.07.
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Officers
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2
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ARTICLE II
Conversion of Securities
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Section 2.01.
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Conversion of Capital Stock
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2
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Section 2.02.
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Appraisal Rights
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2
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Section 2.03.
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Exchange of Certificates
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3
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ARTICLE III
Representations and Warranties
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Section 3.01.
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Representations and Warranties of the Company
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4
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Section 3.02.
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Representations and Warranties of Parent and Sub
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29
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ARTICLE IV
Covenants Relating to Conduct of Business
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Section 4.01.
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Conduct of Business
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30
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Section 4.02.
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No Solicitation
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34
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Section 4.03.
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Conduct by Parent
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36
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ARTICLE V
Additional Agreements
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Section 5.01.
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Preparation of the Proxy Statement; Stockholders Meeting
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36
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Section 5.02.
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Access to Information; Confidentiality
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38
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Section 5.03.
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Reasonable Best Efforts; Consultation and Notice
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39
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Section 5.04.
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Equity Awards
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41
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Section 5.05.
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Indemnification, Exculpation and Insurance
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43
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Section 5.06.
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Fees and Expenses
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43
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Section 5.07.
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Public Announcements
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44
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Section 5.08.
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Sub Compliance
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44
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Section 5.09.
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Certain Pre-Closing Actions
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44
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ARTICLE VI
Conditions Precedent
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Section 6.01.
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Conditions to Each Party’s Obligation to Effect the Merger
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44
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Section 6.02.
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Conditions to Obligations of Parent and Sub
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45
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Section 6.03.
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Conditions to Obligation of the Company
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46
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Section 6.04.
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Frustration of Closing Conditions
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46
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i
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Page
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ARTICLE VII
Termination, Amendment and Waiver
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Section 7.01.
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Termination
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46
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Section 7.02.
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Effect of Termination
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47
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Section 7.03.
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Amendment
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47
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Section 7.04.
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Extension; Waiver
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47
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ARTICLE VIII
General Provisions
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Section 8.01.
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Nonsurvival of Representations and Warranties
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47
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Section 8.02.
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Notices
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47
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Section 8.03.
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Definitions
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48
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Section 8.04.
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Exhibits; Interpretation
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49
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Section 8.05.
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Counterparts
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50
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Section 8.06.
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Entire Agreement; No Third-Party Beneficiaries
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50
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Section 8.07.
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Governing Law
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50
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Section 8.08.
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Assignment
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50
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Section 8.09.
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Consent to Jurisdiction; Service of Process; Venue
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50
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Section 8.10.
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Waiver of Jury Trial
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51
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Section 8.11.
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Enforcement
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51
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Section 8.12.
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Consents and Approvals
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51
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Section 8.13.
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Severability
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51
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EXHIBIT |
A Form of Amended and Restated Certificate of Incorporation of
the Surviving Corporation
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ii
GLOSSARY
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Term
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Section
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409A Authorities
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3.01(m)(xi)
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2000 Plan
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3.01(c)(i)
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2007 Plan
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3.01(c)(i)
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Acquisition Agreement
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4.02(b)
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Adverse Recommendation Change
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4.02(b)
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Adverse Recommendation Change Notice
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4.02(b)
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Affiliate
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8.03(a)
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Agreement
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Preamble
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Appraisal Shares
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2.02
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Assumed Shares
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5.04(a)(vii)
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Bankruptcy and Equity Exception
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3.01(d)
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Baseline Financials
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3.01(e)(i)
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Benefit Agreements
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3.01(g)(i)
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Benefit Plans
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3.01(k)(i)
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Cash-Out RSU
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5.04(a)(viii)
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Cash-Out Stock Option
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5.04(a)(viii)
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Certificate
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2.01(c)
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Certificate of Merger
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1.03
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Closing
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1.02
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Closing Date
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1.02
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Code
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2.03(f)
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Commonly Controlled Entity
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3.01(k)(i)
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Company
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Preamble
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Company Bylaws
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3.01(a)
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Company Certificate
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3.01(a)
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Company Common Stock
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2.01
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Company Letter
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3.01
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Company Personnel
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3.01(g)(i)
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Company Preferred Stock
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3.01(c)(i)
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Company Stock Plans
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3.01(c)(i)
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Confidentiality Agreement
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4.02(a)
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Contract
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3.01(d)
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Contract Disputes Act
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3.01(t)(ii)
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Derivative Work
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3.01(p)(iii)
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DGCL
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1.01
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Effective Time
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1.03
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Environmental Claims
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3.01(l)
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Environmental Law
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3.01(l)
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Environmental Permits
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3.01(l)
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Equity Equivalents
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3.01(c)(iii)
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ERISA
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3.01(m)(i)
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Exchange Act
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3.01(d)
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Exchange Ratio
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5.04(a)(viii)
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iii
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Term
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Section
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FCC
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5.02(b)
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FCC Licenses
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5.02(b)
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FCPA
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3.01(s)
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Filed SEC Document
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3.01(e)(i)
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Firmware
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3.01(p)(iv)
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GAAP
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3.01(e)(i)
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Government Contract
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3.01(t)(i)
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Governmental Entity
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3.01(d)
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GPL
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3.01(p)(ii)(N)
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Grant Date
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3.01(c)(iii)
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Hazardous Materials
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3.01(l)
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HSR Act
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3.01(d)
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Indebtedness
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3.01(c)(iv)
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Intellectual Property
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3.01(p)(iv)
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Intervening Event
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4.02(b)
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IRS
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3.01(m)(ii)
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Judgment
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3.01(d)
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knowledge
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8.03(b)
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Law
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3.01(d)
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Leased Real Property
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3.01(o)(iii)
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Legal Restraints
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6.01(c)
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LGPL
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3.01(p)(ii)(N)
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Liens
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3.01(b)
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Major Customer
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3.01(i)(i)(R)
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Major Customer Contract
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3.01(i)(i)(R)
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Major Supplier
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3.01(i)(i)(S)
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Major Supplier Contract
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3.01(i)(i)(S)
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Material Adverse Effect
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8.03(c)
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Material Contract
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3.01(i)(i)
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Merger
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Recitals
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Merger Consideration
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2.01(c)
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Non-Affiliate Plan Fiduciary
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3.01(m)(ix)
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Nonqualified Deferred Compensation Plan
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3.01(m)(xi)
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Offer Letters
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Recitals
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Parent
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Preamble
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Parent Common Stock
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5.04(a)(ii)
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Paying Agent
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2.03(a)
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Pension Plan
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3.01(m)(i)
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Performance RSUs
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3.01(c)(i)
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Permits
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3.01(j)
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Permitted Liens
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3.01(i)(i)(E)
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person
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8.03(d)
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Post-Signing Returns
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4.01(c)
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Proxy Statement
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3.01(d)
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iv
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Term
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Section
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Release
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3.01(l)
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Residual Shares
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5.04(a)(vii)
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Restricted Share Agreements
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3.01(c)(v)
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Restricted Shares
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3.01(c)(i)
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Rollover RSU
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5.04(a)(viii)
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Rollover RSU Holder
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5.04(a)(viii)
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Rollover Stock Option
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5.04(a)(viii)
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RSU Agreements
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3.01(c)(v)
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RSUs
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3.01(c)(i)
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SEC
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3.01(d)
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SEC Documents
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3.01(e)(i)
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Section 262
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2.02
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Securities Act
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3.01(e)(i)
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Service-based RSUs
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3.01(c)(i)
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Software
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3.01(p)(iv)
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SOX
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3.01(e)(ii)
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Specified Contracts
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3.01(i)(i)
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Stockholder Approval
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3.01(v)
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Stockholders Meeting
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5.01(c)
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Stock Option Agreements
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3.01(c)(v)
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Stock Options
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3.01(c)(i)
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Sub
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Preamble
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Subsidiary
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8.03(e)
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Superior Proposal
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4.02(a)
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Surviving Corporation
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1.01
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Takeover Proposal
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4.02(a)
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tax return
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3.01(n)(xvii)
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taxes
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3.01(n)(xvii)
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taxing authority
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3.01(n)(xvii)
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Termination Date
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7.01(b)(i)
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Termination Fee
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5.06(b)
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Third Party Software
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3.01(p)(iv)
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Welfare Plan
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3.01(m)(iv)
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v
AGREEMENT AND PLAN OF MERGER dated as of September 19, 2010
(this “
Agreement”), by and among INTERNATIONAL
BUSINESS MACHINES CORPORATION, a New York corporation
(“
Parent”), ONYX ACQUISITION CORP., a
Delaware
corporation and a wholly owned subsidiary of Parent
(“
Sub”), and
NETEZZA CORPORATION, a
Delaware
corporation (the “
Company”).
ARTICLE I
Section 1.01.
The
Merger. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with
the General Corporation Law of the State of
Delaware (the
“
DGCL”), Sub shall be merged with and into the
Company at the Effective Time. At the Effective Time, the
separate corporate existence of Sub shall cease and the Company
shall continue as the surviving corporation (the
“
Surviving Corporation”).
Section 1.02.
Closing. The
closing of the Merger (the “
Closing”) will take
place at 10:00 a.m., New York time, on a date to be
specified by the parties, which shall be not later than the
second business day after satisfaction or (to the extent
permitted by law) waiver of the conditions set forth in
Article VI (other than those that by their terms are to be
satisfied or waived at the Closing, it being understood that the
occurrence of the Closing shall remain subject to the
satisfaction or waiver of such conditions at Closing), at the
offices of Cravath, Swaine & Xxxxx LLP, 000 Xxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, unless another time, date or
place is agreed to in writing by Parent and the Company;
provided,
however, that if all the conditions set
forth in Article VI shall not have been satisfied or (to
the extent permitted by law) waived on such second business day,
then the Closing shall take place on the first business day on
which all such conditions shall have been satisfied or (to the
extent permitted by law) waived. The date on which the Closing
occurs is referred to in this Agreement as the “
Closing
Date”.
Section 1.03.
Effective
Time of the Merger. Upon the terms and
subject to the conditions set forth in this Agreement, as soon
as practicable on or after the Closing Date, the parties shall
file a certificate of merger (the “
Certificate of
Merger”) in such form as is required by, and executed
and acknowledged in accordance with, the relevant provisions of
the DGCL. The Merger shall become effective at such date and
time as the Certificate of Merger is duly filed with the
Secretary of State of the State of
Delaware or, to the extent
permitted by applicable Law, at such subsequent date and time as
Parent and the Company shall agree and
1
specify in the Certificate of Merger. The date and time at which
the Merger becomes effective is referred to in this Agreement as
the “Effective Time”.
Section 1.04.
Effects
of the Merger. The Merger shall have the
effects set forth in Section 259 of the DGCL.
Section 1.05.
Certificate
of Incorporation and Bylaws. (a) The
certificate of incorporation of the Company as in effect
immediately prior to the Effective Time shall be amended by
virtue of the Merger at the Effective Time to read in the form
of Exhibit A hereto and, as so amended, shall be the
certificate of incorporation of the Surviving Corporation until
thereafter changed or amended as provided therein or by
applicable Law.
(b) Parent shall cause the bylaws of the Surviving
Corporation to be amended and restated in their entirety so that
the bylaws of Sub as in effect immediately prior to the
Effective Time shall be the bylaws of the Surviving Corporation
until thereafter changed or amended as provided therein or by
applicable Law, except that all references to the name of Sub
shall be changed to refer to the name of the Company.
Section 1.06.
Directors. The
directors of Sub immediately prior to the Effective Time shall
be the directors of the Surviving Corporation until the earlier
of their resignation or removal or until their respective
successors are duly elected and qualified, as the case may be.
Section 1.07.
Officers. The
officers of Sub immediately prior to the Effective Time shall be
the officers of the Surviving Corporation until the earlier of
their resignation or removal or until their respective
successors are duly elected and qualified, as the case may be.
ARTICLE II
Section 2.01.
Conversion
of Capital Stock. At the Effective Time, by
virtue of the Merger and without any action on the part of the
holder of any shares of Common Stock, par value $0.001 per
share, of the Company (the “
Company Common
Stock”), or the holder of any shares of capital stock
of Sub:
(a)
Capital Stock of Sub. Each
issued and outstanding share of common stock of Sub, par value
$0.01 per share, shall be converted into and become one
fully paid and nonassessable share of common stock, par value
$0.01 per share, of the Surviving Corporation.
(b)
Cancelation of Treasury Stock and Parent-Owned
Stock. All shares of Company Common Stock
that are owned as treasury stock by the Company or owned by
Parent or Sub immediately prior to the Effective Time shall
automatically be canceled and shall cease to exist, and no
consideration shall be delivered or deliverable in exchange
therefor.
(c)
Conversion of Company Common
Stock. Each share of Company Common Stock
issued and outstanding immediately prior to the Effective Time
(other than (i) shares to be canceled in accordance with
Section 2.01(b) and (ii) except as provided in
Section 2.02, the Appraisal Shares) shall be converted into
the right to receive $27.00 in cash, without interest (the
“
Merger Consideration”). At the Effective Time
such shares shall no longer be outstanding and shall
automatically be canceled and shall cease to exist, and each
holder of a certificate or evidence of shares in book-entry form
that immediately prior to the Effective Time represented any
such shares (a “
Certificate”) shall cease to
have any rights with respect thereto, except the right to
receive the Merger Consideration in accordance with the terms of
this Agreement. The right of any holder of any share of Company
Common Stock to receive the Merger Consideration shall be
subject to and reduced by the amount of any withholding that is
required under applicable tax Law, such withholding to be
pursuant to the terms of Section 2.03(f) and any applicable
tax Law.
Section 2.02.
Appraisal
Rights. Notwithstanding anything in this
Agreement to the contrary, shares (the “
Appraisal
Shares”) of Company Common Stock issued and outstanding
immediately prior to the Effective Time that are held by any
holder who is entitled to demand and properly demands appraisal
of such
2
shares pursuant to, and who complies in all respects with, the
provisions of Section 262 of the DGCL
(“Section 262”) shall not be converted
into the right to receive the Merger Consideration as provided
in Section 2.01(c), but instead such holder shall be
entitled to payment of the fair value of such shares in
accordance with the provisions of Section 262. At the
Effective Time, the Appraisal Shares shall no longer be
outstanding and shall automatically be canceled and shall cease
to exist, and each holder of a certificate or evidence of shares
in book-entry form that immediately prior to the Effective Time
represented Appraisal Shares shall cease to have any rights with
respect thereto, except the right to receive the fair value of
such shares in accordance with the provisions of
Section 262. Notwithstanding the foregoing, if any such
holder shall fail to perfect or otherwise shall waive, withdraw
or lose the right to appraisal under Section 262 or a court
of competent jurisdiction shall determine that such holder is
not entitled to the relief provided by Section 262, then
the right of such holder to be paid the fair value of such
holder’s Appraisal Shares under Section 262 shall
cease and such Appraisal Shares shall be deemed to have been
converted at the Effective Time into, and shall have become, the
right to receive the Merger Consideration as provided in
Section 2.01(c). The Company shall serve prompt notice to
Parent of any demands for appraisal of any shares of Company
Common Stock, withdrawals of any such demands and any other
related instruments served pursuant to the DGCL received by the
Company, and Parent shall have the right to participate in and
direct all negotiations and proceedings with respect to such
demands. The Company shall not, without the prior written
consent of Parent, make any payment with respect to, or settle
or offer to settle, any such demands, or agree to do or commit
to do any of the foregoing.
Section 2.03.
Exchange
of Certificates. (a)
Paying
Agent. Prior to the Effective Time, Parent
shall designate a bank or trust company reasonably acceptable to
the Company to act as agent for the payment of the Merger
Consideration upon surrender of Certificates (the
“
Paying Agent”), and, from time to time after
the Effective Time, Parent shall make available, or cause the
Surviving Corporation to make available, to the Paying Agent
funds in amounts and at the times necessary for the payment of
the Merger Consideration pursuant to Section 2.01(c) upon
surrender of Certificates, it being understood that all such
funds shall be invested as directed by Parent and that any and
all interest or other amounts earned with respect to funds made
available to the Paying Agent pursuant to this Agreement shall
be turned over to Parent.
(b)
Exchange Procedure. As soon as
reasonably practicable after the Effective Time, the Surviving
Corporation or Parent shall cause the Paying Agent to mail to
each holder of record of a Certificate (i) a form of letter
of transmittal (which shall include an accompanying substitute
IRS
Form W-9
or the applicable IRS
Form W-8,
shall specify that delivery shall be effected, and risk of loss
and title to the Certificates held by such person shall pass,
only upon proper delivery of the Certificates to the Paying
Agent and shall be in a form and have such other provisions
(including customary provisions regarding delivery of an
“agent’s message” with respect to shares held in
book-entry form) as Parent may reasonably specify and which
shall be reasonably acceptable to the Company) and
(ii) instructions for use in effecting the surrender of the
Certificates in exchange for the Merger Consideration. Upon
surrender of a Certificate for cancelation to the Paying Agent
or to such other agent or agents as may be appointed by Parent,
together with such letter of transmittal, duly completed and
validly executed, and such other documents as may reasonably be
required by the Paying Agent, the holder of such Certificate
shall be entitled to receive in exchange therefor the amount of
cash equal to the Merger Consideration that such holder has the
right to receive pursuant to Section 2.01(c), and the
Certificate so surrendered shall forthwith be canceled. In the
event of a transfer of ownership of Company Common Stock that is
not registered in the stock transfer books of the Company,
payment of the Merger Consideration in exchange therefor may be
made to a person other than the person in whose name the
Certificate so surrendered is registered if such Certificate
shall be properly endorsed or otherwise be in proper form for
transfer and the person requesting such payment shall pay any
transfer or other taxes required by reason of the payment to a
person other than the registered holder of such Certificate or
establish to the satisfaction of the Surviving Corporation that
such tax has been paid or is not applicable. No interest shall
be paid or shall accrue on the cash payable upon surrender of
any Certificate.
(c)
No Further Ownership Rights in Company Common
Stock. All Merger Consideration paid upon the
surrender of a Certificate in accordance with the terms of this
Article II shall be deemed to have been paid in full
satisfaction of all rights pertaining to the shares of Company
Common Stock formerly represented by such
3
Certificate. At the close of business on the day on which the
Effective Time occurs, the stock transfer books of the Company
shall be closed, and there shall be no further registration of
transfers on the stock transfer books of the Surviving
Corporation of the shares that were outstanding immediately
prior to the Effective Time. If, after the close of business on
the day on which the Effective Time occurs, Certificates are
presented to the Surviving Corporation or the Paying Agent for
transfer or any other reason, they shall be canceled and
exchanged as provided in this Article II.
(d)
No Liability. None of Parent,
Sub, the Company, the Surviving Corporation or the Paying Agent
shall be liable to any person in respect of any Merger
Consideration that would otherwise have been payable in respect
of any Certificate which is delivered to a public official in
accordance with any applicable abandoned property, escheat or
similar Law. If any Certificates shall not have been surrendered
immediately prior to the date on which any Merger Consideration
would otherwise escheat to or become the property of any
Governmental Entity, any Merger Consideration payable in
accordance with this Article II in respect thereof shall,
to the extent permitted by applicable Law, become the property
of the Surviving Corporation, free and clear of all claims or
interest of any person previously entitled thereto.
(e)
Lost Certificates. If any
Certificate shall have been lost, stolen, defaced or destroyed,
upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen, defaced or
destroyed and, if required by the Surviving Corporation, the
posting by such person of a bond in such amount as the Surviving
Corporation may direct as indemnity against any claim that may
be made against it with respect to such Certificate, the Paying
Agent or the Surviving Corporation, as the case may be, shall
pay the Merger Consideration in respect of such lost, stolen,
defaced or destroyed Certificate.
(f)
Withholding Rights. Parent,
the Surviving Corporation or the Paying Agent shall be entitled
to deduct and withhold from the Merger Consideration otherwise
payable pursuant to this Agreement to any holder of shares of
Company Common Stock such amounts as Parent, the Surviving
Corporation or the Paying Agent is required to deduct and
withhold with respect to the making of such payment under the
Internal Revenue Code of 1986, as amended (the
“
Code”), or any provision of state, local or
foreign tax Law. To the extent that amounts are so withheld and
paid over to the appropriate taxing authority by Parent, the
Surviving Corporation or the Paying Agent, such withheld amounts
shall be treated for all purposes of this Agreement as having
been paid to the holder of the shares of Company Common Stock in
respect of which such deduction and withholding was made by
Parent, the Surviving Corporation or the Paying Agent.
(g)
Termination of Fund. At any
time following the six-month anniversary of the Closing Date,
the Surviving Corporation shall be entitled to require the
Paying Agent to deliver to it any funds (including any interest
received with respect thereto) that had been made available to
the Paying Agent pursuant to Section 2.03(a) and that have
not been disbursed to holders of Certificates, and thereafter,
subject to the time limitations in Section 2.03(d), such
holders shall be entitled to look only to Parent and the
Surviving Corporation (subject to abandoned property, escheat or
other similar Laws) as general creditors thereof with respect to
the payment of any Merger Consideration that may be payable upon
surrender of any Certificates held by such holders, as
determined pursuant to this Agreement, without any interest
thereon.
ARTICLE III
Section 3.01.
Representations
and Warranties of the Company. Except as set
forth in the letter (with specific reference to the Section of
this Agreement to which the information stated in such
disclosure relates;
provided, that disclosure contained
in any section of the Company Letter shall be deemed to be
disclosed with respect to any other Section of this Agreement to
the extent that it is reasonably apparent from the face of such
disclosure that such disclosure is applicable to such other
Section of this Agreement) delivered by the Company to Parent
prior to the execution of this Agreement (the “
Company
Letter”), the Company represents and warrants to Parent
and Sub as follows:
4
the jurisdiction of its organization (except, in the case of
good standing, for entities organized under the Laws of any
jurisdiction that does not recognize such concept),
(ii) has all requisite corporate, company, partnership or
other organizational power and authority to carry on its
business as currently conducted and (iii) is duly qualified
or licensed to do business and is in good standing in each
jurisdiction (except, in the case of good standing, any
jurisdiction that does not recognize such concept) in which the
nature of its business or the ownership, leasing or operation of
its properties makes such qualification or licensing necessary,
other than where the failure to be so organized, existing,
qualified or licensed or in good standing (except, in the case
of clause (i) above, with respect to the Company) is not
reasonably likely to have a Material Adverse Effect. The Company
has made available to Parent complete and correct copies of the
certificate of incorporation of the Company, as amended to the
date of this Agreement (the “Company
Certificate”), and the bylaws of the Company, as
amended to the date of this Agreement (the “Company
Bylaws”), and the certificate of incorporation and
bylaws (or similar organizational documents) of each of its
Subsidiaries, in each case as amended to the date of this
Agreement. The Company has made available to Parent complete and
correct copies of the minutes (or, in the case of draft minutes,
the most recent drafts thereof) of all meetings of the
stockholders, the Board of Directors and each committee of the
Board of Directors of the Company and each of its Subsidiaries
held since January 1, 2008 (other than portions of any
minutes (or drafts thereof) related to the transactions
contemplated by this Agreement or any Takeover Proposal). The
Company has made available to Parent complete and correct copies
of all resolutions of the Board of Directors of the Company, and
each committee thereof, in respect of this Agreement.
(b)
Subsidiaries. Section 3.01(b)
of the Company Letter sets forth a complete and correct list of
each Subsidiary of the Company, its place and form of
organization, its address and each jurisdiction in which it is
authorized to conduct business. All the outstanding shares of
capital stock of, or other equity or voting interests in, each
such Subsidiary are owned by the Company, by one or more wholly
owned Subsidiaries of the Company or by the Company and one or
more wholly owned Subsidiaries of the Company, free and clear of
all pledges, claims, liens, charges, options, security interests
or other encumbrances of any kind or nature whatsoever
(collectively, “
Liens”), except for transfer
restrictions imposed by applicable securities Laws, and are duly
authorized, validly issued, fully paid and nonassessable. Except
for the capital stock of, or other equity or voting interests
in, its Subsidiaries, the Company does not own, directly or
indirectly, any capital stock of, or other equity or voting
interests in, any person.
(c)
Capital
Structure. (i) The authorized capital
stock of the Company consists of 500,000,000 shares of
Company Common Stock and 5,000,000 shares of Preferred
Stock, par value $0.001 per share, of the Company (the
“
Company Preferred Stock”). At the close of
business on September 16, 2010,
(A) 63,273,988 shares of Company Common Stock
(excluding treasury shares) were issued and outstanding, 43,668
of which were subject to vesting or transfer restrictions
and/or
subject to forfeiture back to the Company or repurchase by the
Company, whether granted pursuant to the 2007 Stock Incentive
Plan of the Company (the “
2007 Plan”), the 2000
Stock Incentive Plan of the Company (the “
2000
Plan”, and, together with the 2007 Plan, the
“
Company Stock Plans”) or otherwise (such
shares, together with any shares granted after
September 16, 2010 that are so subject, are referred to
herein as “
Restricted Shares”),
(B) 226,415 shares of Company Common Stock were held
by the Company as treasury shares and
(C) 12,674,300 shares of Company Common Stock were
reserved and available for issuance in the aggregate pursuant to
the Company Stock Plans, of which (x) 9,315,057 shares
of Company Common Stock were subject to outstanding options to
acquire shares of Company Common Stock from the Company (such
options, together with any other stock options granted after
September 16, 2010, in each case whether granted pursuant
to the Company Stock Plans or otherwise, the “
Stock
Options”) (y) none were Restricted Shares and
(z) a maximum of 791,375 shares of Company Common
Stock were subject to outstanding restricted share units (such
restricted share units, together with any other restricted share
units granted after September 16, 2010, in each case
whether granted pursuant to the Company Stock Plans or
otherwise, the “
RSUs”), of which
(1) 588,875 shares of Company Common Stock were
subject to RSUs with service-based, but not performance-based
vesting or delivery requirements (such RSUs
“
Service-based RSUs”) and (2) a maximum of
202,500 shares of Company Common
5
Stock were subject to RSUs with performance-based vesting or
delivery requirements (such RSUs “Performance
RSUs”). All outstanding Stock Options, Restricted
Shares and RSUs have been granted under the Company Stock Plans.
Other than the Company Stock Plans, the Stock Option Agreements,
the RSU Agreements and the Restricted Share Agreements, there is
no plan, Contract or arrangement providing for the grant of
Stock Options, Restricted Shares or RSUs. No shares of Company
Preferred Stock are issued or outstanding. No shares of Company
Common Stock are owned by any Subsidiary of the Company.
Section 3.01(c)(i) of the Company Letter sets forth
(1) a complete and correct list, as of the close of
business on September 16, 2010, of all outstanding Stock
Options, the number of shares of Company Common Stock subject to
each such Stock Option, the grant date, exercise price per
share, vesting schedule and expiration date of each such Stock
Option, the name of the holder thereof, an indication of whether
or not each such holder is a current employee or director of the
Company or any of its Subsidiaries, whether or not such Stock
Option (or any portion thereof) is intended to qualify as an
“incentive stock option” under Section 422 of the
Code and the name of the Company Stock Plan pursuant to which
each such Stock Option was granted, (2) a complete and
correct list, as of the close of business on September 16,
2010, of all outstanding Restricted Shares, the grant date,
vesting schedule, purchase price (if any) and repurchase price
(if any) of each such Restricted Share, the name of the holder
thereof, an indication of whether or not each such holder is a
current employee or director of the Company or any of its
Subsidiaries, an indication of whether an election pursuant to
Section 83(b) of the Code has been made with respect to
such Restricted Share and the name of the Company Stock Plan
pursuant to which such Restricted Share was granted and
(3) a complete and correct list, as of the close of
business on September 16, 2010, of all outstanding RSUs,
the number of shares of Company Common Stock subject to each
such RSU, the grant date and vesting schedule of each such RSU,
an indication of whether such RSU is a Service-based RSU or a
Performance RSU, the name of the holder thereof, an indication
of whether or not each such holder is a current employee or
director of the Company or any of its Subsidiaries and the name
of the Company Stock Plan pursuant to which such RSU was
granted. As of the date of this Agreement, other than the
outstanding Stock Options, the outstanding Restricted Shares and
the outstanding RSUs, there are no outstanding rights of any
person to receive Company Common Stock under the Company Stock
Plans or otherwise, on a deferred basis or otherwise. As of the
close of business on September 16, 2010, there were
outstanding Stock Options to purchase 9,315,057 shares of
Company Common Stock with exercise prices on a per share basis
lower than the Merger Consideration, and the weighted average
exercise price of such Stock Options was equal to $6.29 per
share.
(ii) Except for outstanding shares of Common Stock, Stock
Options, Restricted Shares and RSUs set forth in
Section 3.01(c)(i), as of the close of business on
September 16, 2010, no shares of capital stock of, or other
equity or voting interests in, the Company, or securities
convertible into, or exchangeable or exercisable for, or
options, warrants, shares of deferred stock, restricted stock
awards, stock appreciation rights, phantom stock awards or other
rights to acquire any such capital stock of, or other equity or
voting interests in, the Company, or other rights that are
linked to the value of Company Common Stock or the value of the
Company or any part thereof, were issued, reserved for issuance
or outstanding. From the close of business on September 16,
2010 to the date of this Agreement, (A) there have been no
issuances by the Company of shares of capital stock of, or other
equity or voting interests in, the Company, other than issuances
of shares of Company Common Stock pursuant to the exercise of
Stock Options or the settlement of RSUs, in each case
outstanding as of September 16, 2010, and only if and to
the extent required by their respective terms as in effect on
such date and (B) there have been no issuances by the
Company of securities convertible into, or exchangeable or
exercisable for, or options, warrants, shares of deferred stock,
restricted stock awards, stock appreciation rights, phantom
stock awards, other rights to acquire shares of capital stock
of, or other equity or voting interests in, the Company, or
other rights that are linked to the value of Company Common
Stock or the value of the Company or any part thereof.
(iii) All outstanding shares of capital stock of the
Company are, and all shares that may be issued pursuant to the
Company Stock Plans will be, when issued in accordance with the
terms thereof, duly authorized, validly issued, fully paid and
nonassessable and not subject to preemptive rights. Except as
set forth in this Section 3.01(c), there are no
(A) bonds, debentures, notes or other Indebtedness of the
Company or any of its Subsidiaries and (B) securities or
other instruments or rights (including stock
6
appreciation rights, phantom stock awards or other similar
rights) issued by, or other obligations of, the Company or any
of its Subsidiaries, in each case, that are linked to, or the
value of which is in any way based upon or derived from, the
value of any class of capital stock of, or other equity or
voting interests in, the Company or any of its Subsidiaries, the
value of the Company, any of its Subsidiaries or any part
thereof, or any dividends or other distributions declared or
paid on any shares of capital stock of, or other equity or
voting interests in, the Company or any of its Subsidiaries, or
which have or which by their terms may have at any time (whether
actual or contingent) the right to vote (or which are
convertible into, or exchangeable for, securities having the
right to vote) on any matters on which stockholders of the
Company or any of its Subsidiaries may vote (the items referred
to in clauses (A) and (B) collectively,
“Equity Equivalents”). Except as set forth in
this Section 3.01(c) or contemplated by
Section 4.01(a) of the Company Letter, there are no
securities, options, warrants, calls, rights or Contracts of any
kind to which the Company or any of its Subsidiaries is a party,
or by which the Company or any of its Subsidiaries is bound,
obligating the Company or any of its Subsidiaries to issue,
deliver or sell, or cause to be issued, delivered or sold,
additional shares of capital stock of, or other equity or voting
interests in, or securities convertible into, or exchangeable or
exercisable for, shares of capital stock of, or other equity or
voting interests in, the Company or any of its Subsidiaries or
obligating the Company or any of its Subsidiaries to issue,
grant, extend or enter into any such security, option, warrant,
call, right or Contract. With respect to the Stock Options,
(1) each Stock Option intended to qualify as an
“incentive stock option” under Section 422 of the
Code so qualifies, (2) each grant of a Stock Option was
duly authorized no later than the date on which the grant of
such Stock Option was by its terms to be effective (the
“Grant Date”) by all necessary corporate
action, including, as applicable, approval by the Board of
Directors of the Company (or a duly constituted and authorized
committee thereof) and any required stockholder approval by the
necessary number of votes or written consents, and the award
agreement governing such grant (if any) was duly executed and
delivered by each party thereto, (3) each such grant was
made in accordance with the terms of the applicable Company
Stock Plan, the Exchange Act and all other applicable Laws and
regulatory rules or requirements, including the rules of The New
York Stock Exchange and any other exchange on which Company
securities are traded, (4) the per share exercise price of
each Stock Option was not less than the fair market value
(within the meaning of Section 422 of the Code, in the case
of each Stock Option intended to qualify as an “incentive
stock option” and within the meaning of Section 409A
of the Code, in the case of each other Stock Option, other than
any Stock Option that is exempt from Section 409A of the
Code due to the effective date provisions thereof) of a share of
Company Common Stock on the applicable Grant Date and
(5) each such grant was properly accounted for in
accordance with GAAP in the financial statements (including the
related notes) of the Company and disclosed in the
Company’s SEC Documents in accordance with the Exchange Act
and all other applicable Laws. Except pursuant to the forfeiture
conditions of the Stock Options, Restricted Shares and RSUs
outstanding as of the date of this Agreement and except pursuant
to the cashless exercise or tax withholding provisions of such
Stock Options, Restricted Shares and RSUs, in each case as in
effect on the date of this Agreement, there are no outstanding
contractual or other obligations of the Company or any of its
Subsidiaries to (I) repurchase, redeem or otherwise acquire
any shares of capital stock of, or other equity or voting
interests in, the Company or any of its Subsidiaries or
(II) vote or dispose of any shares of capital stock of, or
other equity or voting interests in, the Company or any of its
Subsidiaries. The Company is not a party to any voting agreement
with respect to any shares of capital stock of, or other equity
or voting interests in, the Company or any of its Subsidiaries
and, to the knowledge of the Company, as of the date of this
Agreement there are no irrevocable proxies and no voting
agreements with respect to any shares of capital stock of, or
other equity or voting interests in, the Company or any of its
Subsidiaries. The Company has not knowingly granted, and there
is no and has been no Company policy or practice to grant, Stock
Options prior to, or otherwise coordinate the grant of Stock
Options with, the release or other public announcement of
material information regarding the Company or its Subsidiaries
or their financial results or prospects.
(iv) Neither the Company nor any of its Subsidiaries has
any (A) indebtedness for borrowed money,
(B) indebtedness evidenced by any bond, debenture, note,
mortgage, indenture or other debt instrument or debt security,
(C) accounts payable to trade creditors and accrued
expenses not arising in the ordinary
7
course of business, (D) amounts owing as deferred purchase
price for the purchase of any property, (E) capital lease
obligations or (F) guarantees with respect to any
indebtedness or obligation of a type described in
clauses (A) through (E) above of any other person
(other than, in the case of clauses (A), (B) and (D),
accounts payable to trade creditors and accrued expenses, in
each case arising in the ordinary course of
business)(collectively, “Indebtedness”).
(v) All Stock Options, Restricted Shares and RSUs may, by
their terms, be treated in accordance with Section 5.04(a).
No holder of any Stock Option, Restricted Share or RSU is
entitled to any treatment of such Stock Option, Restricted Share
or RSU other than as provided with respect to such Stock Option,
Restricted Share or RSU in Section 5.04(a), as applicable,
and after the Closing no holder of a Stock Option, Restricted
Share or RSU (or former holder of a Stock Option, Restricted
Shares or RSU) or any current or former participant in the
Company Stock Plans or any other Benefit Plan or Benefit
Agreement shall have the right thereunder to acquire any capital
stock of the Company or any other equity interest therein
(including phantom stock or stock appreciation rights). All
outstanding Stock Options are evidenced by individual written
stock option agreements (the “Stock Option
Agreements”), all outstanding Restricted Shares are
evidenced by individual written restricted share agreements (the
“Restricted Share Agreements”) and all
outstanding RSUs are evidenced by individual written restricted
share unit agreements (the “RSU Agreements”),
in each case substantially identical to the applicable forms
that have previously been made available to Parent.
(d)
Authority;
Noncontravention. Assuming the accuracy of
Section 3.02(f), the Company has the requisite corporate
power and authority to execute and deliver this Agreement, to
consummate the Merger and the other transactions contemplated by
this Agreement, subject, in the case of the Merger, to obtaining
the Stockholder Approval, and to comply with the provisions of
this Agreement. Assuming the accuracy of Section 3.02(f),
the execution and delivery of this Agreement by the Company, the
consummation by the Company of the Merger and the other
transactions contemplated by this Agreement and the compliance
by the Company with the provisions of this Agreement have been
duly authorized by all necessary corporate action on the part of
the Company, and no other corporate proceedings on the part of
the Company are necessary to authorize this Agreement, to comply
with the terms of this Agreement or to consummate the Merger and
the other transactions contemplated by this Agreement, subject,
in the case of the Merger, to obtaining the Stockholder
Approval. This Agreement has been duly executed and delivered by
the Company and, assuming the due execution and delivery of this
Agreement by Parent and Sub, constitutes a valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms except as enforceability thereof may
be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar Laws relating to the
enforcement of creditors’ rights generally and by general
principles of equity (the “
Bankruptcy and Equity
Exception”). The Board of Directors of the Company, at
a meeting duly called and held at which all of the directors of
the Company were present in person or by telephone, duly and
unanimously adopted resolutions (i) adopting, approving and
declaring advisable this Agreement, the Merger and the other
transactions contemplated by this Agreement, (ii) declaring
that it is in the best interests of the Company’s
stockholders that the Company enter into this Agreement and
consummate the Merger and the other transactions contemplated by
this Agreement on the terms and subject to the conditions set
forth in this Agreement, (iii) declaring that the
consideration to be paid to the Company’s stockholders in
the Merger is fair to such stockholders, (iv) directing
that the adoption of this Agreement be submitted to a vote at a
meeting of the Company’s stockholders to be held as set
forth in Section 5.01(c) and (v) recommending that the
Company’s stockholders adopt this Agreement, which
resolutions, except to the extent expressly permitted by
Section 4.02, have not been rescinded, modified or
withdrawn in any way. The execution and delivery of this
Agreement, the consummation of the Merger and the other
transactions contemplated by this Agreement and compliance by
the Company with the provisions of this Agreement do not and
will not conflict with, or result in any violation or breach of,
or default (with or without notice or lapse of time or both)
under, or give rise to a right of, or result in, termination,
cancelation or acceleration of any obligation or to a loss of a
benefit under, or result in the creation of any Lien in or upon
any of the properties or assets of the Company or any of its
Subsidiaries under, or give rise to any increased, additional,
accelerated or guaranteed rights or entitlements under
(including any right of a holder of a
8
security of the Company or any of its Subsidiaries to require
the Company or any of its Subsidiaries to acquire such
security), any provision of (A) the Company Certificate or
the Company Bylaws or the certificate of incorporation or bylaws
(or similar organizational documents) of any of its
Subsidiaries, (B) any loan or credit agreement, bond,
debenture, note, mortgage, indenture, guarantee, lease or other
contract, commitment, agreement, instrument, binding arrangement
or understanding, obligation, undertaking or license, whether
oral or written (each, including all amendments thereto, a
“
Contract”), or Permit to or by which the
Company or any of its Subsidiaries is a party or bound or to or
by which any of their respective properties or assets are
subject or bound or (C) subject to the governmental filings
and other matters referred to in the following sentence, any
(1) Federal, state or local, domestic or foreign, statute,
law, code, ordinance, rule or regulation of any Governmental
Entity (each, a “
Law”), assuming receipt of the
Stockholder Approval and the adoption of this Agreement by
Parent, as the sole stockholder of Sub, or (2) Federal,
state or local, domestic or foreign, judgment, injunction,
order, writ or decree of any Governmental Entity (each, a
“
Judgment”), in each case, applicable to the
Company or any of its Subsidiaries or their respective
properties or assets, other than, in the case of
clauses (B) and (C), any such conflicts, violations,
breaches, defaults, terminations, cancelations, accelerations,
losses, Liens, rights or entitlements that are not reasonably
likely to (x) have a Material Adverse Effect or
(y) individually or in the aggregate, impair in any
material respect the ability of the Company to perform its
obligations under this Agreement. No consent, approval, order or
authorization of, registration, declaration or filing with, or
notice to, any Federal, state or local, domestic or foreign,
government or any court, administrative agency or commission or
other governmental, quasi-governmental or regulatory authority
or agency, domestic or foreign (a “
Governmental
Entity”), is required to be obtained or received by the
Company or any of its Subsidiaries in connection with the
execution and delivery of this Agreement by the Company, the
consummation by the Company of the Merger and the other
transactions contemplated by this Agreement or the compliance by
the Company with the provisions of this Agreement, except for
(I) the filing of a premerger notification and report form
by the Company under the
Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended (the “
HSR
Act”), and the filings and receipt, termination or
expiration, as applicable, of such other approvals or waiting
periods required under any other applicable competition, merger
control, antitrust or similar Law, (II) the filing with the
Securities and Exchange Commission (the “
SEC”)
of a proxy statement relating to the adoption of this Agreement
by the Company’s stockholders (as amended or supplemented
from time to time, the “
Proxy Statement”) and
such reports under the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder
(collectively, the “
Exchange Act”), as may be
required in connection with this Agreement and the Merger and
the other transactions contemplated by this Agreement,
(III) the filing of the Certificate of Merger with the
Secretary of State of the State of
Delaware and appropriate
documents with the relevant authorities of other jurisdictions
in which the Company or any of its Subsidiaries is qualified to
do business, (IV) any filings required under the rules and
regulations of The New York Stock Exchange and (V) such
other consents, approvals, orders, authorizations,
registrations, declarations, filings and notices the failure of
which to be obtained or made are not reasonably likely to
(x) have a Material Adverse Effect or (y) individually
or in the aggregate, impair in any material respect the ability
of the Company to perform its obligations under this Agreement.
(e)
SEC Documents. (i) To the
extent complete and correct copies are not available on the
SEC’s website, the Company has made available to Parent
complete and correct copies of all reports, schedules, forms,
statements and other documents filed with or furnished to the
SEC by the Company since July 18, 2007 (such documents
available on the SEC’s website or made available to Parent,
together with all information incorporated therein by reference,
the “
SEC Documents”). Since July 18, 2007,
the Company has filed with or furnished to the SEC each report,
schedule, form, statement or other document or filing required
by Law to be filed or furnished by the Company at or prior to
the time so required. No Subsidiary of the Company is required
to file or furnish any report, schedule, form, statement or
other document with, or make any other filing with, or furnish
any other material to, the SEC. As of its respective effective
date, in the case of SEC Documents that are registration
statements filed pursuant to the Securities Act, and as of its
respective filing or furnishing date (or, if amended or
superseded by a filing prior to the date of this Agreement, on
the date of such amended or superseded filing), in the case
9
of each other SEC Document, each of the SEC Documents
(A) complied as to form in all material respects with the
requirements of the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder (collectively, the
“Securities Act”) and the Exchange Act, in each
case, applicable to such SEC Document, and (B) did not
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 light of the
circumstances under which they were made, not misleading. Except
to the extent that information contained in any SEC Document
filed or furnished and publicly available prior to the date of
this Agreement (a “Filed SEC Document”) has
been revised or superseded by a later filed or furnished Filed
SEC Document, none of the SEC Documents contains any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which
they were made, not misleading. To the extent complete and
correct copies are not available on the SEC’s website, the
Company has made available to Parent copies of all comment
letters received by the Company from the SEC since July 18,
2007 and prior to the date of this Agreement and relating to the
SEC Documents, together with all written responses of the
Company thereto. As of the date of this Agreement, there are no
outstanding or unresolved comments in such comment letters
received by the Company from the SEC. As of the date of this
Agreement, to the knowledge of the Company none of the SEC
Documents is the subject of any ongoing review by the SEC. The
financial statements (including the related notes) of the
Company included in the SEC Documents complied, at the time the
respective statements were filed, as to form in all material
respects with the applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto,
were prepared in accordance with generally accepted accounting
principles in effect from time to time in the United States of
America (“GAAP”) (except, in the case of
unaudited quarterly financial statements, as permitted by
Form 10-Q
of the SEC) applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto) and
fairly present in all material respects the consolidated
financial position of the Company and its consolidated
Subsidiaries as of the dates thereof and their consolidated
results of operations and cash flows for the periods then ended
(subject, in the case of unaudited quarterly financial
statements, to normal and recurring year-end audit adjustments).
Except as set forth in the most recent audited financial
statements (including the notes thereto) included in the Filed
SEC Documents (the “Baseline Financials”), the
Company and its Subsidiaries have no material liabilities or
obligations of any nature (whether accrued, absolute, contingent
or otherwise) other than such liabilities or obligations
(A) with respect to or arising from the transactions
contemplated by this Agreement, (B) incurred in the
ordinary course of business consistent in all material respects
with past practice after the date of the Baseline Financials but
prior to the date of this Agreement, (C) that are not
reasonably likely to have a Material Adverse Effect or
(D) disclosed in the unaudited financial statements
(including the notes thereto) included in the Company’s
Form 10-Q
for the period ended July 31, 2010, filed with the SEC on
September 9, 2010.
(ii) The Company is in compliance in all material respects
with the provisions of the Xxxxxxxx-Xxxxx Act of 2002 and the
rules and regulations promulgated thereunder (collectively,
“SOX”) applicable to it. The Company has
promptly disclosed, by filing a
Form 8-K
or posting on its website, any change in or waiver of the
Company’s code of ethics, as required by
Section 406(b) of SOX. To the knowledge of the Company,
there have been no violations of provisions of the
Company’s code of ethics since the adoption of such code of
ethics.
(iii) The principal executive officer of the Company and
the principal financial officer of the Company each has made all
certifications required by
Rule 13a-14
and 15d-14
under the Exchange Act and Sections 302 and 906 of SOX, as
applicable, with respect to the SEC Documents, and the
statements contained in such certifications were accurate as of
the date they were made. For purposes of this Agreement,
“principal executive officer” and “principal
financial officer” shall have the meanings given to such
terms in SOX. Neither the Company nor any of its Subsidiaries
has outstanding, or has arranged any outstanding,
“extension of credit” to directors or executive
officers within the meaning of Section 402 of SOX.
10
(iv) Neither the Company nor any of its Subsidiaries is a
party to or bound by, or has any commitment to become a party to
or bound by, any joint venture, off-balance sheet partnership or
any similar Contract (including any Contract relating to any
transaction or relationship between or among the Company and any
of its Subsidiaries, on the one hand, and any unconsolidated
Affiliate, including any structured finance, special purpose or
limited purpose entity or person, on the other hand, or any
“off-balance sheet arrangements” (as defined in
Item 303(a) of
Regulation S-K
of the SEC)), where the purpose or intended or known result or
effect of such joint venture, partnership or Contract is to
avoid disclosure of any material transaction involving, or
material liabilities of, the Company or any of its Subsidiaries
in the Company’s or any of its Subsidiaries’ published
financial statements or other SEC Documents.
(v) The Company maintains “internal control over
financial reporting” (as defined in
Rule 13a-15(f)
of the Exchange Act) in compliance with the Exchange Act.
(vi) The Company maintains “disclosure controls and
procedures” (as defined in
Rule 13a-15(e)
of the Exchange Act) in compliance with the Exchange Act.
(f)
Information Supplied. None of
the information included or incorporated by reference in the
Proxy Statement will, at the date it is first mailed to the
Company’s stockholders, at the time of the Stockholders
Meeting or at the time of any amendment or supplement thereof,
as amended or supplemented at such date or time, 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, except
that no representation is made by the Company with respect to
statements made or incorporated by reference therein based on
information supplied by or on behalf of Parent or Sub
specifically for inclusion or incorporation by reference in the
Proxy Statement. The Proxy Statement will comply as to form in
all material respects with the requirements of the Exchange Act.
(g)
Absence of Certain Changes or
Events. (i) From January 31, 2010
to the date of this Agreement, the Company and its Subsidiaries
have conducted their respective businesses in the ordinary
course of business consistent in all material respects with past
practice and there has not been (A) any Material Adverse
Effect (including any Material Adverse Effect resulting from an
occurrence prior to January 31, 2010), (B) any
declaration, setting aside or payment of any dividend on, or
other distribution (whether in cash, stock or property) in
respect of, any of the Company’s or any of its
Subsidiaries’ capital stock or other equity or voting
interests, except for dividends by a direct or indirect wholly
owned Subsidiary of the Company to its parent, (C) any
split, combination or reclassification of any of the
Company’s or any of its Subsidiaries’ capital stock or
other equity or voting interests or any issuance or the
authorization of any issuance of any other securities in respect
of, in lieu of or in substitution for shares of capital stock
of, or other equity or voting interests in, the Company or any
of its Subsidiaries, (D)(1) any grant by the Company or any of
its Subsidiaries to any current or former director, officer,
employee, contractor or consultant of the Company or any of its
Subsidiaries (collectively, “
Company
Personnel”) of any bonus or award opportunity, any loan
or any increase in any type of compensation or benefits, except
for grants of normal bonus opportunities and normal increases of
base cash compensation, in each case, in the ordinary course of
business consistent with past practice, or (2) any payment
by the Company or any of its Subsidiaries to any Company
Personnel of any bonus or award, except for bonuses or awards
paid prior to the date of this Agreement in the ordinary course
of business consistent with past practice, (E) any grant by
the Company or any of its Subsidiaries to any Company Personnel
of any severance, separation, change in control, retention,
termination or similar compensation or benefits or increase
therein or of the right to receive any severance, separation,
change in control, retention, termination or similar
compensation or benefits or increase therein, (F) any
adoption or establishment of or entry by the Company or any of
its Subsidiaries into, any amendment of, modification to or
termination of, or agreement to amend, modify or terminate, or
any termination of (or announcement of an intention to amend,
modify or terminate), (1) any employment, deferred
compensation, change in control, severance, termination,
employee benefit, loan, indemnification, retention, equity or
equity based compensation, consulting or similar Contract
between the Company or any of its Subsidiaries, on the one
11
hand, and any Company Personnel, on the other hand, (2) any
Contract between the Company or any of its Subsidiaries, on the
one hand, and any Company Personnel, on the other hand, the
benefits of which are contingent, or the terms of which are
altered, upon the occurrence of a transaction involving the
Company of the nature contemplated by this Agreement (alone or
in combination with any other event) or (3) any trust or
insurance Contract or other agreement to fund or otherwise
secure payment of any compensation or benefit to be provided to
any Company Personnel (all such Contracts under this
clause (F), including any such Contract that is entered
into on or after the date of this Agreement, collectively,
“Benefit Agreements”), (G) any grant or
amendment of any award under any Benefit Plan or Benefit
Agreement (including the grant or amendment of Stock Options,
Restricted Shares, RSUs, stock appreciation rights, performance
units, stock repurchase rights or other equity or equity-based
compensation), (H) any payment to any Company Personnel of
any compensation or benefit not provided for under any Benefit
Plan or Benefit Agreement, other than the payment of base cash
compensation in the ordinary course of business consistent with
past practice, (I) other than the execution and delivery of
this Agreement, the taking of any action to accelerate, or that
is reasonably likely to result in the acceleration of, the time
of vesting or payment of any rights, compensation, benefits or
funding obligations under any Benefit Plan or Benefit Agreement
or otherwise, (J) any material change in financial or tax
accounting methods, principles or practices by the Company or
any of its Subsidiaries, except insofar as may have been
required by GAAP or applicable Law, (K) any material tax
election or change in any material tax election or any
settlement or compromise of any material tax liability,
(L) any material write-down by the Company or any of its
Subsidiaries of any of the material assets of the Company or any
of its Subsidiaries or (M) any licensing or other agreement
with regard to the acquisition or disposition of any material
Intellectual Property or rights thereto, other than nonexclusive
licenses granted in the ordinary course of the business of the
Company and its Subsidiaries consistent with past practice.
(ii) Since January 31, 2010, each of the Company and
its Subsidiaries has continued all pricing, sales, receivables
and payables practices in accordance with the ordinary course of
business consistent with past practice and has not engaged,
except in the ordinary course of business consistent with past
practice, in (A) any promotional sales or discount activity
with any customers or distributors with the effect of
accelerating to prior fiscal quarters (including the current
fiscal quarter) sales to the trade or otherwise that would
otherwise be expected to occur in subsequent fiscal quarters,
(B) any practice that would have the effect of accelerating
to prior fiscal quarters (including the current fiscal quarter)
collections of receivables that would otherwise be expected to
be made in subsequent fiscal quarters, (C) any practice
that would have the effect of postponing to subsequent fiscal
quarters payments by the Company or any of its Subsidiaries that
would otherwise be expected to be made in prior fiscal quarters
(including the current fiscal quarter) or (D) any other
promotional sales or discount activity.
(h)
Litigation. Section 3.01(h)
of the Company Letter sets forth, as of the date of this
Agreement, a complete and correct list of each claim, action,
suit or judicial, administrative or regulatory proceeding or
investigation pending or, to the knowledge of the Company,
threatened by or against the Company or any of its Subsidiaries
(i) for money damages (other than for immaterial amounts),
(ii) that seeks injunctive relief, (iii) that may give
rise to any legal restraint on or prohibition against or limit
the material benefits to Parent of the Merger or the other
transactions contemplated by this Agreement or (iv) that,
if resolved in accordance with plaintiff’s demands, is
reasonably likely to have a Material Adverse Effect. There is no
Judgment of any Governmental Entity or arbitrator outstanding
against, or, to the knowledge of the Company, investigation,
proceeding, notice of violation, order of forfeiture or
complaint by any Governmental Entity involving, the Company or
any of its Subsidiaries that is reasonably likely to have a
Material Adverse Effect.
(i)
Contracts. (i) Section 3.01(i)
of the Company Letter sets forth, as of the date of this
Agreement, (with specific reference to the subsection of this
Section 3.01(i) to which such Contract relates) a complete
and correct list of:
(A) each Contract pursuant to which the Company or any of
its Subsidiaries has agreed not to compete with any person in
any area or to engage in any activity or business, or pursuant
to which
12
any benefit or right is required to be given or lost, or any
penalty or detriment (other than any immaterial penalty or
detriment) is incurred, as a result of so competing or engaging;
(B) each Contract to or by which the Company or any of its
Subsidiaries is a party or bound providing for exclusivity or
any similar requirement or pursuant to which the Company or any
of its Subsidiaries is restricted in any way, or which after the
Effective Time could restrict Parent or any of its Subsidiaries
in any way, with respect to the development, manufacture,
marketing or distribution of their respective products or
services or otherwise prohibits any activity with respect to the
operation of their businesses, or pursuant to which any benefit
or right is required to be given or lost, or any penalty or
detriment (other than any immaterial penalty or detriment) is
incurred, as a result of non-compliance with any such exclusive
or restrictive requirements or which requires the Company or any
of its Subsidiaries to refrain from granting license or
franchise rights to any other person;
(C) each Contract to or by which the Company or any of its
Subsidiaries is a party or bound or with respect to which the
Company or any of its Subsidiaries has any obligation with
(1) any Affiliate of the Company or any of its Subsidiaries
(excluding Contracts entered into between the Company’s
Subsidiaries or between the Company and any of its
Subsidiaries), (2) any Company Personnel or (3) any
union or other labor organization (other than, in each case,
(I) offer letters or employment agreements that are
terminable at will by the Company or any of its Subsidiaries
both without any penalty and without any obligation of the
Company or any of its Subsidiaries to pay severance or other
compensation or benefits (other than accrued base salary,
accrued commissions, accrued bonuses, accrued vacation pay,
accrued floating holidays and legally mandated benefits),
(II) invention assignment and confidentiality agreements
relating to the assignment of inventions to the Company or any
of its Subsidiaries not involving the payment of money and
(III) Benefit Plans and Benefit Agreements other than offer
letters or employment agreements);
(D) each Contract under which the Company or any of its
Subsidiaries has incurred any Indebtedness (other than any
intercompany Indebtedness) having an aggregate principal amount
in excess of $100,000;
(E) each Contract to or by which the Company or any of its
Subsidiaries is a party or bound creating or granting a Lien
(including Liens upon properties or assets acquired under
conditional sales, capital leases or other title retention or
security devices), other than (1) Liens for taxes not yet
due and payable, that are payable without penalty or that are
being contested in good faith and for which adequate reserves
have been established, (2) Liens for assessments and other
governmental charges or landlords’, carriers’,
warehousemen’s, mechanics’, repairmen’s,
workers’ or similar Liens incurred in the ordinary course
of business, consistent with past practice, in each case for
sums not yet due and payable or due but not delinquent or being
contested in good faith by appropriate proceedings,
(3) Liens incurred in the ordinary course of business,
consistent with past practice, in connection with workers’
compensation, unemployment insurance and other types of social
security or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government
contracts, performance and return of money bonds and similar
obligations and (4) Liens incurred in the ordinary course
of business consistent with past practice that are not
reasonably likely to adversely interfere in a material way with
the use of the properties or assets encumbered thereby
(collectively, “Permitted Liens”);
(F) each material Contract to or by which the Company or
any of its Subsidiaries is a party or bound (other than Benefit
Plans and Benefit Agreements) containing any provisions
(1) contemplating or relating in any way to a “change
in control” or similar event with respect to the Company or
one or more of its Subsidiaries, including provisions requiring
consent or approval of, or notice to, any Governmental Entity or
other person in the event of a change in control of the Company
or one or more of its Subsidiaries, or otherwise having the
effect of providing that the consummation of the Merger or any
of the other transactions contemplated by this Agreement or the
execution, delivery or effectiveness of this Agreement will
materially conflict with, result in a material violation or
material
13
breach of, or constitute a material default (with or without
notice or lapse of time or both) under, such Contract, or give
rise under such Contract to any right of, or result in, a
termination, right of first refusal, material amendment,
revocation, cancelation or material acceleration of any material
obligation, or a loss of a material benefit or the creation of
any material Lien upon any of the material properties or assets
of the Company, Parent or any of their respective Subsidiaries,
or to any increased, guaranteed, accelerated or additional
material rights or material entitlements of any person,
(2) prohibiting or imposing any restrictions on the
assignment of all or any portion of such Contract by the Company
or its Subsidiaries (without regard to any exception permitting
assignments to subsidiaries or Affiliates), including provisions
requiring consent or approval of, or notice to, any Governmental
Entity or other person in the event of a change in control of
the Company or one or more of its Subsidiaries, or
(3) having the effect of providing that the consummation of
the Merger or any of the other transactions contemplated by this
Agreement or the execution, delivery or effectiveness of this
Agreement will require that a third party be provided with
access to source code or that any source code be released from
escrow and provided to any third party;
(G) each Contract currently in effect or under which
performance is ongoing to or by which the Company or any of its
Subsidiaries is a party or bound providing for payments of
royalties or other license fees to third parties in excess of
$100,000 annually, that is not terminable without penalty on
90 days or less notice;
(H) each Contract to or by which the Company or any of its
Subsidiaries is a party or bound granting a third party any
license to Intellectual Property that is not limited to the
internal use of such third party and its subsidiaries;
(I) each Contract pursuant to which the Company or any of
its Subsidiaries has been granted any license to Intellectual
Property, other than nonexclusive licenses granted in the
ordinary course of business of the Company and its Subsidiaries
consistent with past practice;
(J) each Contract to or by which the Company or any of its
Subsidiaries is a party or bound granting the other party to
such Contract or a third party “most favored nation”
pricing or terms that (1) applies to the Company or any of
its Subsidiaries or (2) immediately following the Effective
Time, would apply to Parent or any of its Subsidiaries other
than the Surviving Corporation or its Subsidiaries;
(K) each Contract pursuant to which the Company or any of
its Subsidiaries has agreed or is required to provide any third
party with access to source code, to provide for source code to
be put in escrow or to grant a contingent license to source code;
(L) each Contract to or by which the Company or any of its
Subsidiaries is a party or bound for any joint venture (whether
in partnership, limited liability company or other
organizational form) or alliance or similar arrangement;
(M) each Contract to or by which the Company or any of its
Subsidiaries is a party or bound for any development, marketing,
resale, distribution or similar arrangement relating to any
product or service;
(N) each Contract to or by which the Company or any of its
Subsidiaries is a party or bound with any Governmental Entity;
(O) each material Contract to or by which the Company or
any of its Subsidiaries is a party or bound entered into in the
last five years in connection with the settlement or other
resolution of any suit, claim, action, investigation or
proceeding that has any material continuing obligations,
liabilities or restrictions;
(P) each Contract to or by which the Company or any of its
Subsidiaries is a party or bound providing for future
performance by the Company or any of its Subsidiaries in
consideration of amounts previously paid;
14
(Q) each material Contract to or by which the Company or
any of its Subsidiaries is a party or bound for professional
services engagements for a fixed fee that guarantees a specific
result;
(R) each Contract between the Company or any of its
Subsidiaries and any of the 50 largest customers of the Company
and its Subsidiaries (determined on the basis of revenues
received by the Company or any of its Subsidiaries in the four
consecutive fiscal quarter period ended July 31, 2010 (each
such customer, a “Major Customer”, and each
such Contract, a “Major Customer Contract”));
(S) each Contract between the Company or any of its
Subsidiaries and any of the 25 largest licensors or other
suppliers to the Company and its Subsidiaries (determined on the
basis of amounts paid by the Company or any of its Subsidiaries
in the four consecutive fiscal quarter period ended
July 31, 2010 (each such licensor or other supplier, a
“Major Supplier”, and each such Contract, a
“Major Supplier Contract”));
(T) except for the Contracts disclosed above, each Contract
(other than Benefit Plans and Benefit Agreements) which has
aggregate future sums due to or from the Company or any of its
Subsidiaries, taken as a whole, (i) during the period
commencing on the date of this Agreement and ending on the
12-month
anniversary of this Agreement, in excess of $375,000 or
(ii) in aggregate more than $1,500,000 during the life of
the Contract; and
(U) except for the Contracts disclosed above, each Contract
to or by which the Company or any of its Subsidiaries is a party
or bound and material to the Company and its Subsidiaries, taken
as a whole, not made in the ordinary course of business
consistent in all material respects with past practice.
The Contracts of the Company or any of its Subsidiaries of the
type referred to in clauses (A) through (U) of this
subsection (i) are collectively referred to in this
Agreement as “Specified Contracts”. The Company
has made available to Parent a complete and correct copy of each
of the Specified Contracts, including all amendments thereto.
Each Contract of the Company or any of its Subsidiaries that is
material to the Company and its Subsidiaries taken as a whole (a
“Material Contract”) is in full force and
effect (except for those Contracts that have expired in
accordance with their terms) and is a legal, valid and binding
agreement of the Company or such Subsidiary, as the case may be,
and, to the knowledge of the Company, of each other party
thereto, enforceable against the Company or such Subsidiary, as
the case may be, and, to the knowledge of the Company, against
the other party or parties thereto, in each case, in accordance
with its terms, subject to the Bankruptcy and Equity Exception.
Each of the Company and its Subsidiaries has performed or is
performing all material obligations required to be performed by
it under the Material Contracts and is not (with or without
notice or lapse of time or both) in material breach or default
thereunder, and has not knowingly waived or failed to enforce
any material rights or benefits thereunder (other than in the
ordinary course of business consistent with past practice), and,
to the knowledge of the Company, no other party to any of the
Material Contracts is (with or without notice or lapse of time
or both) in material breach or default thereunder. To the
knowledge of the Company, as of the date of this Agreement,
there has occurred no event giving (with or without notice or
lapse of time or both) to others any right of termination,
material amendment or cancelation of any Material Contract. To
the knowledge of the Company, as of the date of this Agreement,
there are no circumstances that are reasonably likely to occur
that could reasonably be expected to adversely affect the
ability of the Company or any of its Subsidiaries to perform its
material obligations under any Material Contract.
(ii) None of the Major Customers or Major Suppliers has
terminated, failed to renew or requested any material amendment
to any of its Major Customer Contracts or Major Supplier
Contracts, or any of its existing relationships (other than
renewals and amendments in the ordinary course of business not
adverse in any material respect to the Company or its
Subsidiaries, taken as a whole), with the Company or any of its
Subsidiaries.
(j)
Permits; Compliance with
Laws. The Company and its Subsidiaries have
in effect all certificates, permits, licenses, franchises,
approvals, concessions, qualifications, registrations,
certifications and
15
similar authorizations from any Governmental Entity
(collectively, “Permits”) that are necessary
for them to own, lease or operate their properties and assets
and to carry on their businesses in all material respects as
currently conducted, except where the absence of such Permits
would not, individually or in the aggregate, be material to the
Company and its Subsidiaries, taken as a whole.
Section 3.01(j) of the Company Letter sets forth, as of the
date of the Agreement, a complete and correct list of the
Permits that are material, individually or in the aggregate, to
the Company and its Subsidiaries, taken as a whole. Each of the
Company and its Subsidiaries is, and since February 1, 2007
has been, in compliance in all material respects with all
applicable Laws and Judgments, and, to the knowledge of the
Company as of the date of this Agreement, no condition or state
of facts exists that is reasonably likely to give rise to a
material violation of, or a material liability or default under,
any such applicable Law or Judgment. The execution and delivery
of this Agreement by the Company does not, and the consummation
of the Merger and the other transactions contemplated by this
Agreement and compliance with the terms hereof are not
reasonably likely to, cause the revocation or cancelation of any
material Permit. As of the date of this Agreement, neither the
Company nor any of its Subsidiaries has received any written
communication during the three year period prior to the date of
this Agreement from any person that alleges that the Company or
any of its Subsidiaries is not in compliance in all material
respects with, or is subject to liability under, any Permit, Law
or Judgment or relating to the revocation or modification of any
material Permit. As of the date of this Agreement, neither the
Company nor any of its Subsidiaries has received any notice that
any investigation or review by any Governmental Entity is
pending with respect to the Company or any of its Subsidiaries
or any of the material assets or operations of the Company or
any of its Subsidiaries or that any such investigation or review
is contemplated.
(k)
Absence of Changes in Benefit Plans; Employment
Agreements; Labor Relations. (i) Except
as disclosed in the Filed SEC Documents, since January 31,
2010, none of the Company or any of its Subsidiaries has
adopted, entered into, established, terminated, amended or
modified or agreed to adopt, enter into, establish, terminate,
amend or modify (or announced an intention to adopt, enter into,
establish, terminate, amend or modify) any collective bargaining
agreement or any bonus, pension, profit sharing, deferred
compensation, incentive compensation, equity or equity-based
compensation, performance, retirement, thrift, savings,
cafeteria, paid time off, perquisite, fringe benefit, vacation,
unemployment, severance, change in control, termination,
retention, disability, death benefit, hospitalization, medical
or other welfare benefit or other similar plan, program, policy,
arrangement or understanding (whether oral or written, formal or
informal, funded or unfunded and whether or not legally binding
or subject to the Laws of the United States) sponsored,
maintained, contributed to or required to be sponsored,
maintained or contributed to by the Company, any of its
Subsidiaries or any other person or entity that, together with
the Company, is treated as a single employer under
Section 414(b), (c), (m) or (o) of the Code or
with respect to which the Company is otherwise jointly or
severally liable under applicable Law (each, a “
Commonly
Controlled Entity”), in each case, providing
compensation or benefits to any Company Personnel, including the
Company Stock Plans, but not including the Benefit Agreements
(all such plans, programs, policies, arrangements and
understandings, including any such plan, program, policy,
arrangement or understanding entered into, adopted or
established on or after the date of this Agreement,
collectively, “
Benefit Plans”), or has made any
change in any actuarial or other assumption used to calculate
funding obligations with respect to any Pension Plan, or any
change in the manner in which contributions to any Pension Plan
are made or the basis on which such contributions are determined.
(ii) There are no collective bargaining or other labor
union agreements to which the Company or any of its Subsidiaries
is a party or by which any of them is bound. Between
February 1, 2007 and the date of this Agreement, neither
the Company nor any of its Subsidiaries has encountered any
labor union organizing activity, or had any actual or, to the
knowledge of the Company as of the date of this Agreement,
threatened employee strikes, work stoppages, slowdowns or
lockouts and, to the knowledge of the Company as of the date of
this Agreement, no labor union organizing activity, strike, work
stoppage, slowdown or lockout is threatened. None of the
employees of the Company or any of its Subsidiaries is
represented by any labor union, works council or similar
organization with respect to his or her employment by the
Company or such Subsidiary. The Company and its Subsidiaries do
not have any obligation (including to inform or consult with any
such employees or their representatives in respect
16
of the Merger or the other transactions contemplated by this
Agreement) with respect to any such organization. Each of the
Company and its Subsidiaries is, and since February 1, 2007
has been, in compliance in all material respects with all
applicable Laws and Judgments relating to labor relations,
employment and employment practices, occupational safety and
health standards, terms and conditions of employment, payment of
wages, classification of employees, immigration, visa, work
status, human rights, pay equity and workers’ compensation,
and is not, and since February 1, 2007 has not, engaged in
any unfair labor practice. As of the date of this Agreement,
there is no unfair labor practice charge or complaint against
the Company or any of its Subsidiaries pending or, to the
knowledge of the Company, threatened, in each case before the
National Labor Relations Board or any comparable Governmental
Entity. As of the date of this Agreement, no question concerning
representation has been raised or is, to the knowledge of the
Company, threatened respecting the employees of the Company or
any of its Subsidiaries. No grievance or arbitration proceeding
arising out of a collective bargaining agreement is pending or,
to the knowledge of the Company, threatened against the Company
or any of its Subsidiaries.
(l)
Environmental
Matters. (i) Each of the Company and its
Subsidiaries is, and has been, in compliance in all material
respects with all Environmental Laws, except where the failure
to so comply would not, individually or in the aggregate,
reasonably be expected to result in any material liability to
the Company and its Subsidiaries, taken as a whole, and, as of
the date of this Agreement, neither the Company nor any of its
Subsidiaries has received any (A) communication alleging
that the Company or such Subsidiary is in violation of, or may
have liability under, any Environmental Law or
(B) currently outstanding written request by any
Governmental Entity for information pursuant to any
Environmental Law; (ii) (A) each of the Company and
its Subsidiaries possesses and is in compliance in all material
respects with all Permits required under Environmental Laws
(“
Environmental Permits”) for the conduct of
its operations, (B) all such Environmental Permits are
valid and in good standing and (C) as of the date of this
Agreement, neither the Company nor any of its Subsidiaries has
been advised in writing by any Governmental Entity of any actual
or potential change in any material respect in the status or
terms and conditions of any such Environmental Permit;
(iii) as of the date of this Agreement, there are no
material Environmental Claims pending or, to the knowledge of
the Company, threatened against the Company or any of its
Subsidiaries; (iv) there has been no Release of or exposure
to any Hazardous Material that is reasonably likely to form the
basis of any material Environmental Claim against the Company or
any of its Subsidiaries; (v) neither the Company nor any of
its Subsidiaries has retained or assumed, either contractually
or by operation of Law, any liabilities or obligations that are
reasonably likely to form the basis of any material
Environmental Claim against the Company or any of its
Subsidiaries; (vi) there are no underground or aboveground
storage tanks, generators or known or suspected
asbestos-containing materials on, at, under or about any
property owned, operated or leased by the Company or any of its
Subsidiaries, nor, to the knowledge of the Company, were there
any underground storage tanks on, at, under or about any such
property in the past; (vii) neither the Company nor any of
its Subsidiaries stores, generates or disposes of Hazardous
Materials (excluding office, cleaning or similar supplies used
in the ordinary course of the Company’s or any of its
Subsidiaries’ operations) at, on, under, about or from
property owned or leased by the Company or any of its
Subsidiaries; and (viii) as of the date of this Agreement,
there are no past or present events, conditions, circumstances,
activities, practices, incidents, actions or plans that are
reasonably likely to form the basis of a material Environmental
Claim against the Company or any of its Subsidiaries.
For all purposes of this Agreement,
(A) “Environmental Claims” means any and
all administrative, regulatory or judicial actions, suits,
Judgments, demands, directives, claims, Liens, investigations,
proceedings or written or oral notices of noncompliance or
violation by or from any person alleging liability of any kind
or nature (including liability or responsibility for the costs
of enforcement proceedings, investigations, cleanup,
governmental response, removal or remediation, natural resource
damages, property damages, personal injuries, medical
monitoring, penalties, contribution, indemnification and
injunctive relief) arising out of, based on or resulting from
(1) the presence or Release of, or exposure to, any
Hazardous Material at any location, or (2) the failure to
comply with any Environmental Law;
(B) “Environmental Law” means any Law,
Judgment, legally binding agreement or Permit issued,
promulgated or entered into by or with any Governmental Entity
relating to pollution, the environment
17
(including ambient air, surface water, groundwater, land surface
or subsurface strata), natural resources, the climate, human
health and safety or the protection of endangered or threatened
species; (C) “Hazardous Materials” means
any petroleum or petroleum products, radioactive materials or
wastes, asbestos in any form, polychlorinated biphenyls,
hazardous or toxic substances and any other chemical, material,
substance or waste that is prohibited, limited or regulated
under any Environmental Law; and
(D) “Release” means any actual or
threatened release, spill, emission, leaking, dumping,
injection, pouring, deposit, disposal, discharge, dispersal,
leaching or migration into or through the environment or within
any building, structure, facility or fixture.
(m)
Employee Benefits
Matters. (i) Section 3.01(m)(i) of
the Company Letter sets forth a complete and correct list of all
“employee welfare benefit plans” (as defined in
Section 3(1) of the Employee Retirement Income Security Act
of 1974, as amended (“
ERISA”)), all
“employee pension benefit plans” (as defined in
Section 3(2) of ERISA) (each, a “
Pension
Plan”) and all other Benefit Plans and Benefit
Agreements that, in each case, are in effect as of the date of
this Agreement. The Company has made available to Parent
complete and correct copies of the following with respect to
each Benefit Plan and Benefit Agreement, to the extent
applicable, (A) each Benefit Plan and each Benefit
Agreement (or, in the case of any unwritten Benefit Plans or
Benefit Agreements, written descriptions thereof), including any
amendments thereto, (B) the two most recent annual reports,
or such similar reports, statements, information returns or
material correspondence required to be filed with or delivered
to any Governmental Entity, if any, with respect to each Benefit
Plan (including reports filed on Form 5500 with
accompanying schedules and attachments), (C) the most
recent summary plan description (if any), and any summary of
material modifications, prepared for each Benefit Plan for which
a summary plan description is required under applicable Law,
(D) each trust agreement and group annuity or insurance
Contract and other documents relating to the funding or payment
of compensation or benefits under each Benefit Plan and Benefit
Agreement (if any) and (E) the two most recent actuarial
valuations for each Benefit Plan (if any). Each Benefit Plan and
Benefit Agreement has been administered, funded and invested in
all material respects in accordance with its terms. The Company
and its Subsidiaries and each Benefit Plan and Benefit Agreement
are in compliance in all material respects with applicable Law,
including ERISA and the Code, and the terms of any collective
bargaining agreements or other labor union Contracts.
(ii) Each Pension Plan intended to be tax qualified under
the Code has been the subject of a favorable determination,
qualification or opinion letter from the U.S. Internal
Revenue Service (the “IRS”) with respect to all
tax Law changes with respect to which the IRS is currently
willing to provide a determination letter to the effect that
such Pension Plan is qualified and exempt from United States
Federal income taxes under Sections 401(a) and 501(a),
respectively, of the Code, and no such letter has been revoked
(nor, as of the date of this Agreement, has revocation been
threatened) and no event has occurred since the date of the most
recent such letter or application therefor relating to any such
Pension Plan that is reasonably likely to adversely affect the
qualification of such Pension Plan or materially increase the
costs relating thereto or require security under
Section 307 of ERISA. Each Benefit Plan required to have
been approved by any
non-United
States Governmental Entity (or permitted to have been approved
to obtain any beneficial tax or other status) has been so
approved or timely submitted for approval, no such approval has
been revoked (nor, as of the date of this Agreement, has
revocation been threatened) and no event has occurred since the
date of the most recent approval or application therefor
relating to any such Pension Plan that is reasonably likely to
affect any such approval relating thereto or increase the costs
relating thereto. The Company has made available to Parent a
complete and correct copy of the most recent determination,
qualification, opinion or approval letter or similar document
received from a Governmental Entity with respect to each Benefit
Plan intended to qualify for favorable tax treatment or other
status, as well as a complete and correct copy of each pending
application for a determination, qualification, opinion or
approval letter or similar document, if any, and a complete and
correct list of all amendments to any such Benefit Plans as to
which a favorable determination, qualification, opinion or
approval letter has not yet been received.
(iii) Neither the Company nor any Commonly Controlled
Entity has sponsored, maintained, contributed to or been
obligated to maintain or contribute to, or has any actual or
contingent liability under, any
18
Benefit Plan that is a “defined benefit plan” (as
defined in Section 3(35) of ERISA) or a “multiemployer
plan” (within the meaning of Section 4001(a)(3) of
ERISA), or that is subject to Section 302 or Title IV
of ERISA or Section 412 of the Code or that is otherwise a
defined benefit pension plan or that provides for the payment of
termination indemnities, other than any such plan that is
sponsored by a Governmental Entity, and neither the Company nor
any Commonly Controlled Entity could incur any liability with
respect to any such plan (under Title IV of ERISA or
otherwise).
(iv) No Benefit Plan or Benefit Agreement that provides
welfare benefits, whether or not subject to ERISA (each, a
“Welfare Plan”), is funded through a
“welfare benefits fund” (as such term is defined in
Section 419(e) of the Code), or is unfunded or
self-insured. There are no understandings, agreements or
undertakings, written or oral, that would prevent any Welfare
Plan (including any Welfare Plan covering retirees or other
former employees) from being amended or terminated without
material liability to the Company or any of its Subsidiaries at
or at any time after the Effective Time. No Welfare Plan
provides benefits, and there are no understandings, written or
oral, with respect to the provision of welfare benefits, after
termination of employment, except where the cost thereof is
borne entirely by the former employee (or his or her eligible
dependents or beneficiaries) or as required by
Section 4980B(f) of the Code or any similar state statute
or foreign Law. The Company and its Subsidiaries have complied
in all material respects with the applicable requirements of
Section 4980B(f) of the Code,
Sections 601-609
of ERISA and any similar state statute or foreign Law with
respect to each Benefit Plan that is a “group health
plan” (as defined in Section 5000(b)(1) of the Code or
any similar state statute).
(v) Section 3.01(m)(v) of the Company Letter sets
forth, as of the date of this Agreement, a complete and correct
list of (A) each Benefit Plan and each Benefit Agreement
pursuant to which any Company Personnel could become entitled to
any additional compensation, severance or other benefits or any
acceleration of the time of payment or vesting of any
compensation, severance or other benefits as a result of the
Merger and the other transactions contemplated by this Agreement
(alone or in combination with any other event, including any
termination of employment on or following the Closing), or any
compensation or benefits the value of which would be calculated
on the basis of the Merger and the other transactions
contemplated by this Agreement (alone or in combination with any
other event, including any termination of employment on or
following the Closing), (B) the names of all Company
Personnel entitled to any such compensation or benefits actually
payable as of the Closing Date or upon termination of employment
after the Closing Date, (C) the category or type of each
such form of compensation or benefit to which such Company
Personnel is entitled, (D) the aggregate value of each such
form of compensation or benefit actually payable as of the
Closing Date and each such form of compensation or benefit that
would be payable upon termination of employment or otherwise
after the Closing Date, in each case, to all Company Personnel,
and (E) the aggregate value of any such compensation or
benefits that would be paid to each individual set forth in
Section 3.01(m)(v) of the Company Letter as of the Closing
Date and upon termination of employment. Except as expressly set
forth in Section 5.04, no Company Personnel will be
entitled to any severance, separation, change in control,
termination, bonus, retention or other additional compensation
or benefits or any acceleration of the time of payment or
vesting of any compensation or benefits as a result of the
Merger and the other transactions contemplated by this Agreement
(alone or in combination with any other event, including any
termination of employment on or following the Closing) or any
compensation or benefits related to or contingent upon, or the
value of which will be calculated on the basis of, the Merger
and the other transactions contemplated by this Agreement (alone
or in combination with any other event, including any
termination of employment on or following the Closing). The
execution and delivery of this Agreement, the consummation of
the Merger and the other transactions contemplated by this
Agreement (alone or in combination with any other event,
including any termination of employment on or following the
Closing) and compliance by the Company with the provisions of
this Agreement do not and will not (A) trigger any funding
(through a grantor trust or otherwise) of, or increase the cost
of, or give rise to any other obligation under, any Benefit
Plan, Benefit Agreement or any other employment arrangement,
(B) trigger the forgiveness of Indebtedness owed by any
Company Personnel to the Company or any of its Affiliates or
(C) result in any violation or breach of, or a default
(with or without notice or lapse of time or both)
19
under, or limit to the Company’s or any of its
Subsidiaries’ ability to amend, modify or terminate, any
Benefit Plan or Benefit Agreement.
(vi) No deduction of any amount payable pursuant to the
terms of the Benefit Plans or Benefit Agreements has been
disallowed or is subject to disallowance under
Section 162(m) of the Code.
(vii) All reports, returns and similar documents with
respect to each Benefit Plan required to be filed with any
Governmental Entity or distributed to any Benefit Plan
participant have been duly and timely filed or distributed. All
participant data necessary to administer each Benefit Plan and
Benefit Agreement is in the possession of the Company or its
Subsidiaries and is in a form that is sufficient for the proper
administration of the Benefit Plans and Benefit Agreements in
accordance with their terms and all applicable Laws and such
data is complete and correct in all material respects. As of the
date of this Agreement, neither the Company nor any of its
Subsidiaries has received notice of any, and, to the knowledge
of the Company as of the date of this Agreement, there are no,
pending investigations by any Governmental Entity with respect
to, or pending termination proceedings or other material claims
(except claims for benefits payable in the normal operation of
the Benefit Plans and Benefit Agreements), suits or proceedings
against or involving or asserting any rights or claims to
benefits under, any Benefit Plan or Benefit Agreement.
(viii) All material contributions, premiums and benefit
payments under or in connection with each Benefit Plan and
Benefit Agreement that are required to have been made by the
Company or any of its Subsidiaries in accordance with the terms
of such Benefit Plan and Benefit Agreement and applicable Laws
have been timely made. No Benefit Plan, or any insurance
Contract related thereto, requires or permits a retroactive
increase in premiums or payments on termination of such Benefit
Plan or such insurance Contract. Neither the Company nor any of
its Subsidiaries has incurred, or could reasonably be expected
to incur, any unfunded liabilities in relation to any Benefit
Plan or Benefit Agreement.
(ix) With respect to each Benefit Plan, (A) there has
not occurred any prohibited transaction in which the Company,
any of its Subsidiaries or any of their respective directors,
officers or employees or, to the knowledge of the Company, any
trustee, administrator or other fiduciary of such Benefit Plan
or trust created thereunder, in each case, who is not a
director, officer or employee of the Company or any of its
Subsidiaries (a “Non-Affiliate Plan
Fiduciary”), has engaged that could subject the
Company, any of its Subsidiaries or any of their respective
directors, officers or employees or any Non-Affiliate Plan
Fiduciary to the tax or penalty on prohibited transactions
imposed by Section 4975 of the Code or the sanctions
imposed under Title I of ERISA or any other applicable Law
and (B) none of the Company, any of its Subsidiaries or any
of their respective directors, officers or employees or, to the
knowledge of the Company, any Non-Affiliate Plan Fiduciary, or
any agent of any of the foregoing, has engaged in any
transaction or acted in a manner, or failed to act in a manner,
that could subject the Company, any of its Subsidiaries or any
of their respective directors, officers or employees or any
Non-Affiliate Plan Fiduciary to any material liability for
breach of fiduciary duty under ERISA or any other applicable
Law. No Benefit Plan or related trust has been terminated, nor
has there been any “reportable event” (as such term is
defined in Section 4043 of ERISA) for which the
30-day
reporting requirement has not been waived with respect to any
Benefit Plan during the last five years, and no notice of a
reportable event will be required to be filed in connection with
the Merger or the other transactions contemplated by this
Agreement.
(x) Neither the Company nor any of its Subsidiaries has any
liability or obligations, including under or on account of a
Benefit Plan or Benefit Agreement, arising out of the hiring of
persons to provide services to the Company or any of its
Subsidiaries and treating such persons as consultants or
independent contractors and not as employees of the Company or
any of its Subsidiaries.
(xi) Each Benefit Plan and each Benefit Agreement that is a
“nonqualified deferred compensation plan” within the
meaning of Treas. Reg.
Section 1.409A-1(a)(1)(a)
(a “Nonqualified Deferred Compensation Plan”)
(A) was operated in compliance with Section 409A of
the Code between January 1, 2005 and December 31,
2008, based upon a good faith, reasonable interpretation of
(1) Section 409A of the Code and (2) the final
Treasury Regulations and other guidance issued by the IRS
thereunder, to the extent
20
applicable (clauses (1) and (2), together, the
“409A Authorities”) and (B) has been
operated in compliance with the 409A Authorities since
January 1, 2009. Each Nonqualified Deferred Compensation
Plan has been in documentary compliance with the 409A
Authorities since January 1, 2009.
(n)
Taxes. (i) Each of the
Company and its Subsidiaries has timely filed all tax returns
required to be filed by it in the manner prescribed by
applicable Law. All such tax returns are complete and correct in
all material respects. Each of the Company and its Subsidiaries
has timely paid all material taxes due, and the most recent
financial statements contained in the Filed SEC Documents
reflect an adequate reserve, in accordance with GAAP, for all
material taxes payable by the Company and its Subsidiaries for
all taxable periods and portions thereof through the date of
such financial statements.
(ii) No tax return of the Company or any of its
Subsidiaries is currently, or has been, under audit or
examination by any taxing authority, and no written, or to the
knowledge of the Company, unwritten, notice of such an audit or
examination has been received by the Company or any of its
Subsidiaries. There is no material deficiency, refund
litigation, proposed adjustment in writing or matter in
controversy with respect to any taxes due and owing by the
Company or any of its Subsidiaries. Each material deficiency
resulting from any completed audit or examination or concluded
litigation relating to taxes by any taxing authority has been
timely paid. The relevant statute of limitations is closed with
respect to the income tax returns of the Company and its
Subsidiaries for all years.
(iii) There is no currently effective agreement or other
document extending, or having the effect of extending, the
period of assessment or collection of any taxes of the Company
or any of its Subsidiaries, and no power of attorney (other than
powers of attorney authorizing employees of the Company to act
on behalf of the Company) with respect to any taxes has been
executed or filed with any taxing authority which is still in
effect.
(iv) No Liens for taxes exist with respect to any assets or
properties of the Company or any of its Subsidiaries, except for
statutory Liens for taxes not yet due and payable or being
contested in good faith through appropriate proceedings and for
which adequate reserves in accordance with GAAP have been
established.
(v) None of the Company or any of its Subsidiaries is a
party to or bound by or currently has any liability under any
tax sharing agreement, tax indemnity obligation or similar
agreement, arrangement or practice with respect to taxes
(including any advance pricing agreement, closing agreement
(including pursuant to Section 7121 of the Code) or other
agreement relating to taxes with any taxing authority).
(vi) None of the Company or any of its Subsidiaries will be
required to include in a taxable period ending after the
Effective Time (i) taxable income attributable to income
that accrued (for purposes of the financial statements of the
Company included in the Filed SEC Documents) in a prior taxable
period but was not recognized for tax purposes in any prior
taxable period as a result of the installment method of
accounting, the completed contract method of accounting, the
long-term contract method of accounting, the cash method of
accounting or Section 481 of the Code or comparable
provisions of any tax Law or as a result of prepaid amounts or
deferred revenue received on or prior to the Effective Time or
(ii) income deferred under Section 108(i) of the Code
in a taxable period prior to the Effective Time.
(vii) Neither the Company nor any of its Subsidiaries 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 or made an election under Section 897(i) of the
Code to be treated as a domestic corporation for purposes of
Sections 897, 1445 and 6039C of the Code.
(viii) Neither the Company nor any of its Subsidiaries has
ever (A) made an election under Treasury
Regulation Section 301.7701-3(c)
to be treated as a partnership or disregarded entity for
U.S. Federal income tax purposes or (B) made a similar
election under any comparable provision of any Federal, state or
local, domestic or foreign tax Law.
(ix) No amount, economic benefit or other entitlement that
could be received (whether in cash or property or the vesting of
property) as a result of the Merger and the other transactions
contemplated by
21
this Agreement (alone or in combination with any other event,
including any termination of employment on or following the
Closing) by any person who is a “disqualified
individual” (as such term is defined in Treasury
Regulation Section 1.280G-1)
with respect to the Company would be characterized as an
“excess parachute payment” (as such term is defined in
Section 280G(b)(1) of the Code). Section 3.01(n)(ix)
of the Company Letter sets forth (A) the Company’s
reasonable, good faith estimate of the maximum amount that could
be paid to each such “disqualified individual” as a
result of the Merger and the other transactions contemplated by
this Agreement (alone or in combination with any other event,
including any termination of employment on or following the
Closing) and (B) the “base amount” (as such term
is defined in Section 280G(b)(3) of the Code) for each such
“disqualified individual”, in each case calculated as
of the date of this Agreement. No person is entitled to any
gross-up,
make-whole or other additional payment from the Company or any
of its Subsidiaries in respect of any tax (including Federal,
state, local and foreign income, excise and other taxes
(including taxes imposed under Section 4999 or 409A of the
Code)) or interest or penalty related thereto.
(x) The Company and its Subsidiaries have complied in all
material respects with all applicable Laws relating to the
payment and withholding of taxes (including withholding of taxes
pursuant to Sections 1441, 1442, 3102 and 3402 of the Code
or similar provisions under any other Law) and have, within the
time and the manner prescribed by applicable Law, withheld from
and paid over to the proper taxing authorities all amounts
required to be so withheld and paid over under applicable Laws.
(xi) Neither the Company nor any of its Subsidiaries has
constituted either a “distributing corporation” or a
“controlled corporation” (A) in a distribution of
stock qualifying for tax-free treatment under Section 355
of the Code in the two years prior to the date of this Agreement
or (B) in a distribution that could otherwise constitute
part of a “plan” or “series of related
transactions” (within the meaning of Section 355(e) of
the Code) in conjunction with the Merger or any of the other
transactions contemplated by this Agreement.
(xii) Each of the Company and its Subsidiaries has
disclosed on its U.S. Federal income tax returns all
positions taken therein that could give rise to a substantial
understatement of U.S. Federal income tax within the
meaning of Section 6662 of the Code.
(xiii) To the knowledge of the Company, all related party
transactions involving the Company or any of its Subsidiaries
are at arm’s length in material compliance with
Section 482 of the Code and the Treasury Regulations
promulgated thereunder and any comparable provision of any tax
Law.
(xiv) Neither the Company nor any of its Subsidiaries
(A) owns any interest in any person that is treated as a
“passive foreign investment company” within the
meaning of Section 1297(a) of the Code with respect to the
Company or such Subsidiary or (B) has ever made an election
under Section 1362 of the Code to be treated as an
S corporation for U.S. Federal income tax purposes or
made a similar election under any comparable provision of any
tax Law.
(xv) Each of the Company and its Subsidiaries has conducted
all aspects of its business in accordance with the terms and
conditions of all tax rulings and tax concessions that were
provided by any relevant taxing authority.
(xvi) Neither the Company nor any of its Subsidiaries has
ever participated in any “listed transaction”, as
defined in Treasury
Regulation Sections 1.6011-4(b)(2)
or 301.6111-2(b)(2).
(xvii) For purposes of this Agreement,
(A) “taxes” means all (1) Federal,
state and local, domestic and foreign income, franchise,
property, sales, excise, employment, payroll, social security,
value-added, ad valorem, transfer, withholding and other taxes,
including taxes based on or measured by gross receipts, profits,
sales, use or occupation, tariffs, levies, impositions,
assessments or governmental charges of any nature whatsoever,
including any interest, penalties or additions with respect
thereto, and any obligations under any Contracts with any other
person with respect to such amounts, (2) liability for the
payment of any amounts of the types described in clause (1)
as a result of being a member of an affiliated, consolidated,
combined, unitary or aggregate group and (3) liability for
the payment of any amounts as a result of an express or implied
obligation to indemnify any other person with respect to the
payment of
22
any amounts of the type described in clause (1) or (2);
(B) “taxing authority” means any
Governmental Entity exercising regulatory authority in respect
of any taxes; and (C) “tax return” means
any Federal, state or local, domestic or foreign return,
declaration, report, estimate, form, claim for refund,
information return, statement (including any statement pursuant
to Treasury
Regulation Section 1.6011-4(a))
or other document relating to taxes, including any certificate,
schedule or attachment thereto.
(o)
Properties. (i) Each of
the Company and its Subsidiaries has good and marketable title
to, or in the case of leased tangible property and leased
tangible assets has valid and enforceable leasehold interests
in, all of its material properties and tangible assets, free and
clear of all Liens, except for Permitted Liens.
(ii) The material properties and tangible assets owned or
leased by the Company and its Subsidiaries, or which they
otherwise have the right to use, are sufficient (subject to
normal wear and tear) to operate their businesses in
substantially the same manner as they are currently conducted.
The assets of the Company and each of its Subsidiaries, taken as
a whole, are in good working order and have been maintained in
accordance with prudent industry practice.
(iii) Section 3.01(o)(iii) of the Company Letter sets
forth a complete and correct list, as of the date of this
Agreement, of all real property and interests in real property
leased by the Company or any of its Subsidiaries (each such
property, a “Leased Real Property”). Neither
the Company nor any of its Subsidiaries currently owns or has
previously owned, in fee, any real property or interests in real
property.
(iv) With respect to each Leased Real Property,
(A) the Merger and the other transactions contemplated by
this Agreement do not require the consent of any party to any
lease, (B) neither the Company nor any of its Subsidiaries
has subleased, licensed or otherwise granted anyone the right to
use or occupy such Leased Real Property or any portion thereof
and (C) neither the Company nor any of its Subsidiaries has
collaterally assigned or granted any other security interest in
any such leasehold estate or any interest therein.
(v) Each of the Company and its Subsidiaries is in
compliance in all material respects with the terms of all
material leases of Leased Real Property to which it is a party
and under which it is in occupancy, and each such lease is a
legal, valid and binding agreement of the Company or its
Subsidiary, as the case may be, and, to the knowledge of the
Company, of each other party thereto, enforceable against the
Company or such Subsidiary, as the case may be, and, to the
knowledge of the Company, against the other party or parties
thereto, in each case, in accordance with its terms, subject to
the Bankruptcy and Equity Exception. Each of the Company and its
Subsidiaries enjoys peaceful and undisturbed possession in all
material respects under all the leases to the material Leased
Real Property to which it is a party and under which it is in
occupancy.
(p)
Intellectual
Property. (i) Section 3.01(p)(i) of
the Company Letter sets forth a complete and correct list of all
issued patents, patent applications, registered trademarks,
tradenames and service marks and applications therefor,
registered copyrights and applications therefor and domain names
and applications therefor, if any, owned by or licensed to the
Company or any of its Subsidiaries as of the date of this
Agreement. The Company has made available to Parent complete and
correct copies of all license agreements relating to
Intellectual Property to or by which the Company or any of its
Subsidiaries is a party or bound as of the date of this
Agreement, other than nonexclusive licenses granted in the
ordinary course of the business of the Company and its
Subsidiaries consistent with past practice.
(ii) (A) The Company and each of its Subsidiaries
owns, or is licensed or otherwise has the right to use (in each
case, without payments to third parties and free and clear of
any Liens) all Intellectual Property necessary for or material
to the conduct of its business as currently conducted and such
rights are not subject to termination by any third party.
(B) All issued patents, patent applications, registered
trademarks, registered tradenames, registered service marks,
registered copyrights and domain names and applications therefor
owned by the Company or any of its Subsidiaries have been duly
registered
and/or
filed, as applicable, with or issued by each
23
applicable Governmental Entity in each applicable jurisdiction,
and the Company and each of its Subsidiaries have taken
reasonable steps to maintain the registrations and applications
for the Intellectual Property set forth in
Section 3.01(p)(i) of the Company Letter, including the
filing of all necessary affidavits of continuing use and payment
of all necessary maintenance fees, subject to affirmative
decisions reasonably made in the ordinary course of business not
to seek or maintain such protections.
(C) To the knowledge of the Company, none of the Company or
any of its Subsidiaries or any of its or their products or
services has infringed upon or otherwise violated, or is
infringing upon or otherwise violating, the Intellectual
Property rights of any person.
(D) As of the date of this Agreement, there is no suit,
claim, action, investigation or proceeding pending or, to the
knowledge of the Company, threatened with respect to, and, as of
the date of this Agreement, neither the Company nor any of its
Subsidiaries has been notified in writing of, any possible
infringement or other violation in any material respect by the
Company or any of its Subsidiaries or any of its or their
products or services of the Intellectual Property rights of any
person. Between February 1, 2007 and the date of this
Agreement, the Company has not been notified in writing of any
possible infringement or other violation in any material respect
by the Company or any of its Subsidiaries or any of its or their
products or services of the Intellectual Property rights of any
person. To the knowledge of the Company as of the date of this
Agreement, there is no investigation pending or threatened with
respect to any possible infringement or other violation in any
material respect by the Company or any of its Subsidiaries or
any of its or their products or services of the Intellectual
Property rights of any person.
(E) To the knowledge of the Company as of the date of this
Agreement, no person or any product or service of any person is
infringing upon or otherwise violating in any material respect
any Intellectual Property rights of the Company or any of its
Subsidiaries.
(F) The Company and its Subsidiaries have taken reasonable
measures to maintain the confidentiality of their Intellectual
Property. Each of the former or current members of management or
key personnel of the Company or any of its Subsidiaries,
including all former and current employees, agents, consultants
and independent contractors who have contributed to or
participated in the conception and development of Intellectual
Property owned, intended to be owned or used by the Company or
any of its Subsidiaries, have assigned or otherwise transferred
to the Company or any of its Subsidiaries all ownership and
other rights of any nature whatsoever (to the extent permitted
by Law) of such person in any material Intellectual Property
owned, intended to be owned or used by the Company or any of its
Subsidiaries, and none of the former or current members of
management or key personnel of the Company or any of its
Subsidiaries, including all former and current employees,
agents, consultants and independent contractors who have
contributed to or participated in the conception and development
of Intellectual Property owned, intended to be owned or used by
the Company or any of its Subsidiaries, have a valid claim
against the Company or any of its Subsidiaries in connection
with the involvement of such persons in the conception and
development of any material Intellectual Property owned,
intended to be owned or used by the Company or any of its
Subsidiaries, and as of the date of this Agreement no such claim
has been asserted or, to the knowledge of the Company,
threatened. To the knowledge of the Company, none of the current
employees of the Company or any of its Subsidiaries has any
patents issued or applications pending for any device, process,
design or invention of any kind which is material to the
businesses of the Company and its Subsidiaries, taken as a whole.
(G) The execution and delivery of this Agreement, the
consummation of the Merger and the other transactions
contemplated by this Agreement and the compliance with the
provisions of this Agreement do not and will not conflict with,
or result in any violation of or default (with or without notice
or lapse of time or both) under, or give rise to any right,
license or encumbrance relating to, any material Intellectual
Property owned or used by the Company or any of its Subsidiaries
or with respect to which the Company or any of its Subsidiaries
now has or has had any agreement with any third party, or any
right of termination, cancelation or acceleration of any
material Intellectual Property right or obligation set forth in
any agreement to or by which the Company or any of its
Subsidiaries is a party or bound, or
24
the loss or encumbrance of any material Intellectual Property or
material benefit related thereto, or result in the creation of
any Lien in or upon any material Intellectual Property or right.
(H) To the extent Third Party Software is distributed or
utilized in the services provided to customers of the Company or
any of its Subsidiaries together with the Intellectual Property
of the Company or any of its Subsidiaries, (1) any third
party rights have been identified in Section 3.01(p)(ii)(H)(1)
of the Company Letter, (2) all necessary licenses have been
obtained and (3) no royalties or payments are due (or such
royalties and payments are identified in
Section 3.01(p)(ii)(H)(3) of the Company Letter).
(I) None of the source code or other material trade secrets
of the Company or any of its Subsidiaries has been published or
disclosed by the Company or any of its Subsidiaries, except
pursuant to a non-disclosure agreement that is, in all material
respects, in the standard form used by the Company that has been
made available to Parent prior to the date of this Agreement,
or, to the knowledge of the Company, by any other person to any
person except pursuant to licenses or Contracts requiring such
other person to keep such trade secrets confidential.
(J) No person has any marketing or distribution rights to
any material Intellectual Property of the Company or any of its
Subsidiaries.
(K) Neither the Company nor any of its Subsidiaries has
assigned, sold or otherwise transferred ownership of any
material issued patent, patent application, registered trademark
or application therefor, service xxxx, registered copyright or
application therefor or any other material Intellectual Property
since February 1, 2007.
(L) No licenses or rights have been granted to a third
party to distribute the source code for, or to use any source
code to create Derivative Works of, any product currently
marketed by, commercially available from or under development by
the Company or any of its Subsidiaries for which the Company or
one of its Subsidiaries possesses the source code.
(M) The Company and each of its Subsidiaries has
(1) created and has safely stored
back-up
copies of all their material computer programs and Software
(including object code, source code and associated data and
documentation) and (2) taken reasonable steps to protect
their material Intellectual Property and their rights
thereunder, and to the knowledge of the Company, no such rights
to any material Intellectual Property have been lost or are in
jeopardy of being lost through failure to act by the Company or
any of its Subsidiaries.
(N) Section 3.01(p)(ii)(N) of the Company Letter
identifies any and all open source, public source or freeware
Software or any modification or derivative thereof, including
any version of any Software licensed pursuant to any GNU General
Public License (“GPL”), GNU Lesser/Library
General Public License (“LGPL”), that is used
in, incorporated into, integrated or bundled with any
Intellectual Property, product or service of the Company or any
of its Subsidiaries.
(O) The Company and its Subsidiaries are in compliance with
all Contracts pursuant to which any source code of the Company
or any of its Subsidiaries has been placed into escrow (other
than any non-compliance which would not (with or without notice
or lapse of time or both) affect whether such source code would
be released from such escrow), neither the Company nor any of
its Subsidiaries is in material breach or default under any such
Contract and no source code has been released from escrow
pursuant to any such Contract.
(iii) For purposes of this Agreement, “Derivative
Work” shall have the meaning set forth in
17 U.S.C. Section 101.
(iv) For purposes of this Agreement,
(A) “Intellectual Property” means
Software, trademarks, service marks, brand names, certification
marks, trade dress, assumed names, domain names, trade names and
other indications of origin, the goodwill associated with the
foregoing and registrations in any jurisdiction of, and
applications in any jurisdiction to register, the foregoing,
including any extension, modification or renewal of any such
registration or application; patents, applications for patents
(including divisions,
25
provisionals, continuations, continuations in-part and renewal
applications), and any renewals, extensions or reissues thereof,
in any jurisdiction; trade secrets, know-how, formulae,
processes, procedures, research records, records of invention,
test information, market surveys, Software and confidential
information, whether patentable or not in any jurisdiction and
rights in any jurisdiction to limit the use or disclosure
thereof by any person; writings and other works and any renewals
or extensions thereof; any similar intellectual property or
proprietary rights; and any claims or causes of action (pending,
threatened or which could be filed) arising out of any
infringement or misappropriation of any of the foregoing;
(B) “Software” means all types of computer
software programs, including operating systems, application
programs, software tools, Firmware and software imbedded in
equipment, including both object code and source code; the term
“Software” shall also include all written or
electronic data, documentation and materials that explain the
structure or use of Software or that were used in the
development of Software, including software specifications, or
are used in the operation of the Software, including logic
diagrams, flow charts, procedural diagrams, error reports,
manuals and training materials,
look-up
tables and databases; the term “Firmware” shall
include all types of firmware, firmware specifications, masks,
circuit layouts, hardware and hardware descriptions; and
(C) “Third Party Software” means Software
with respect to which a third party holds any copyright or other
ownership right (and, therefore, such Software is not owned
exclusively by the Company or any of its Subsidiaries).
(q)
Receivables. As of the date of
this Agreement, all the accounts receivable of the Company
(i) represented actual Indebtedness or other obligations
incurred by the applicable account debtors and (ii) have
arisen from bona fide transactions in the ordinary course of
business.
(r)
Insurance. To the knowledge of
the Company, the Company or its Subsidiaries maintain policies
of fire and casualty, liability and other forms of insurance in
such amounts, with such deductibles and against such risks and
losses as are customary for businesses in the Company’s and
its Subsidiaries’ business. Section 3.01(r) of the
Company Letter sets forth, as of the date of this Agreement, a
complete and correct list of the insurance policies maintained
by the Company and its Subsidiaries and the annualized premium
payable with respect to each such policy. As of the date of this
Agreement, all such policies are in full force and effect, all
premiums due and payable thereon have been paid, and no notice
of cancelation or termination has been received with respect to
any such policy which has not been replaced on substantially
similar terms prior to the date of such cancelation. As of the
date of this Agreement, there is no material claim pending under
any such policies as to which coverage has been questioned,
denied or disputed.
(s)
Unlawful Payments. Neither the
Company nor any of its Subsidiaries, nor any of the directors,
officers, agents, employees, representatives, franchisees or
distributors of the Company or any of its Subsidiaries, acting
in their capacities as such, has taken any action, directly or
indirectly, that: (A) violated the FCPA or (B) would
have violated the FCPA (in any case where the Company, any of
its Subsidiaries, or any other Person referenced above may not
have been subject to the FCPA). There have been no false or
fictitious entries made in the books or records of the Company
or any of its Subsidiaries relating to any payment that the FCPA
prohibits, and neither the Company nor any of its Subsidiaries
has established or maintained a secret or unrecorded fund for
use in making any such payments. As used in this Agreement, the
“
FCPA” means the Foreign Corrupt Practices Act
of 1977, as amended from time to time.
(t)
Government
Contracts. (i) To the knowledge of the
Company, none of the employees, consultants, agents, franchisees
or distributors of the Company or any of its Subsidiaries is or
during the six years prior to the date of this Agreement has
been (except as to routine security investigations) under
administrative, civil or criminal investigation, indictment or
information by any Governmental Entity. There is no pending, and
during the six years prior to the date of this Agreement there
has been no, audit or, to the knowledge of the Company,
investigation by a Governmental Entity with respect to any
alleged improper activity, misstatement or omission arising
under or relating to any Contract between or among the Company
or any of its Subsidiaries and any Governmental Entity. Any
Contract between or among the Company or any of its
Subsidiaries, or any of their respective franchisees or
distributors, and any Governmental Entity is hereinafter
referred to as a “
Government Contract”. During
the six years prior to
26
the date of this Agreement, neither the Company nor any of its
Subsidiaries has conducted or initiated any internal
investigation, has had reason to conduct, initiate or report any
internal investigation, or has made a voluntary disclosure with
respect to any alleged improper activity, misstatement or
omission arising under or relating to a Government Contract.
None of the Company, its Subsidiaries or, to the knowledge of
the Company, any of their respective employees, consultants,
agents, franchisees or distributors has made any intentional
misstatement or omission in connection with any voluntary
disclosure that has led or is expected to lead, either before or
after the Closing Date, to any of the consequences set forth in
the immediately preceding two sentences or any other material
damage, penalty assessment, recoupment of payment or
disallowance of cost to or against the Company or any of its
Subsidiaries.
(ii) As of the date of this Agreement, there are
(A) no outstanding claims against the Company or any of its
Subsidiaries by a Governmental Entity or by any prime
contractor, subcontractor, vendor or other third party arising
under or relating to any Government Contract that are reasonably
likely to result in a material liability to the Company or any
of its Subsidiaries (taken as a whole), a material suspension or
debarment of the Company or any of its Subsidiaries from doing
business with a Governmental Entity, a finding of
non-responsibility or ineligibility for contracting with a
Governmental Entity or any other material impairment of any
business relationship between the Company and any of its
Subsidiaries, on the one hand, and a Governmental Entity, on the
other hand, and (B) no disputes between the Company or any
of its Subsidiaries and a Governmental Entity under the Contract
Disputes Act of 1978, as amended (the “Contract Disputes
Act”), or similar applicable Law or between the Company
or any of its Subsidiaries and any prime contractor,
subcontractor or vendor arising under or relating to any
Government Contract. To the knowledge of the Company, no event,
condition or omission has occurred that would reasonably
constitute grounds for a claim or a dispute under
clause (A) or (B). Neither the Company nor any of its
Subsidiaries has an interest in any pending or, to the knowledge
of the Company, potential material claim under the Contract
Disputes Act or similar applicable Law against a Governmental
Entity or any prime contractor, subcontractor or vendor arising
under or relating to any Government Contract.
(iii) None of the Company, its Subsidiaries or, to the
knowledge of the Company, any of their respective employees,
consultants, agents, franchisees or distributors is (or during
the six years prior to the date of this Agreement has been)
suspended or debarred from doing business with a Governmental
Entity or is (or during such period was) the subject of a
finding of non-responsibility or ineligibility for contracting
with a Governmental Entity.
(iv) All material test and inspection results that the
Company or its Subsidiaries have provided to a Governmental
Entity or any other entity pursuant to a Government Contract or
as a part of the delivery to a Governmental Entity pursuant to a
Government Contract of any article designed, engineered or
manufactured by the Company or its Subsidiaries were complete
and correct in all material respects. Either the Company or one
of its Subsidiaries has provided all material test and
inspection results to the relevant Governmental Entity pursuant
to each Government Contract as required by applicable Law and
the terms of the applicable Government Contract.
(v) With respect to each Government Contract (A) the
Company and each of its Subsidiaries, as applicable, have
complied in all material respects with the terms and conditions
of such Government Contract; (B) the Company and each of
its Subsidiaries, as applicable, have complied in all material
respects with all requirements of all applicable Law or
agreements pertaining to such Government Contract; (C) all
representations and certifications of the Company, any of its
Subsidiaries, or any of their respective officers, directors or
employees set forth in or pertaining to such Government Contract
were current, complete and correct in all material respects, as
of their effective date, and the Company or one of its
Subsidiaries has complied in all material respects with all such
representations and certifications; (D) as of the date of
this Agreement, no Governmental Entity, nor any prime
contractor, subcontractor or other entity, has notified the
Company or any of its Subsidiaries in writing that the Company
or any of its Subsidiaries has breached or violated any
applicable Law pertaining to such Government Contract;
(E) as of the date of this Agreement, no termination for
default, cure notice or show cause notice is currently in
27
effect pertaining to such Government Contract and, to the
knowledge of the Company, no event, condition or omission has
occurred or exists that would constitute grounds to any such
action; (F) as of the date of this Agreement, no cost
incurred by the Company or its Subsidiaries pertaining to such
Government Contract is the subject of any investigation or has
been disallowed by the relevant Governmental Entity; and
(G) as of the date of this Agreement, no material amount of
money due to the Company or its Subsidiaries pursuant to such
Government Contract has been withheld or set off.
(u)
State Takeover
Statutes. Assuming the accuracy of
Section 3.02(f), the approval of the Merger by the Board of
Directors of the Company referred to in Section 3.01(d)
constitutes the only action necessary to render inapplicable to
this Agreement, the Merger, the other transactions contemplated
by this Agreement and compliance with the terms of this
Agreement, the restrictions on “business combinations”
(as defined in Section 203 of the DGCL) set forth in
Section 203 of the DGCL to the extent, if any, such
restrictions would otherwise be applicable to this Agreement,
the Merger, the other transactions contemplated by this
Agreement or compliance with the terms of this Agreement. No
other state takeover or similar statute or regulation is
applicable to this Agreement, the Merger, the other transactions
contemplated by this Agreement or compliance with the terms of
this Agreement.
(v)
Voting Requirements. Assuming
the accuracy of Section 3.02(f), the affirmative vote at
the Stockholders Meeting or any adjournment or postponement
thereof of the holders of a majority of the outstanding shares
of Company Common Stock entitled to vote thereon in favor of
adopting this Agreement (the “
Stockholder
Approval”) is the only vote of the holders of any class
or series of the Company’s capital stock necessary to
approve or adopt this Agreement or to consummate the Merger and
the other transactions contemplated by this Agreement.
(w)
Brokers; Schedule of Fees and
Expenses. No broker, investment banker,
financial advisor or other person, other than Qatalyst Partners
LP, the fees and expenses of which will be paid by the Company
or one or more of its Subsidiaries, is entitled to any
broker’s, finder’s, financial advisor’s or other
similar fee or commission in connection with the Merger and the
other transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Company or any of its
Subsidiaries. The Company has made available to Parent complete
and correct copies of all agreements under which any such fees
or commissions are payable and all indemnification and other
agreements related to the engagement of the persons to whom such
fees are payable. The fees and expenses of any accountant,
broker, financial advisor, consultant, legal counsel or other
person retained by the Company or any of its Subsidiaries in
connection with this Agreement or the Merger and the other
transactions contemplated by this Agreement incurred or to be
incurred by the Company or any of its Subsidiaries in connection
with this Agreement or the Merger and the other transactions
contemplated by this Agreement will not exceed the fees and
expenses set forth in Section 3.01(w) of the Company Letter.
(x)
Opinion of Financial
Advisor. The Company has received the written
opinion of Qatalyst Partners LP in customary form to the effect
that, as of the date of this Agreement, and based upon and
subject to the various qualifications and assumptions set forth
therein, the consideration to be received by the holders of
shares of Company Common Stock, other than Parent or any
affiliate of Parent, pursuant to this Agreement is fair, from a
financial point of view, to such holders, a copy of which
opinion will be delivered to Parent solely for informational
purposes as promptly as practicable after the date of this
Agreement.
(y)
Auditor
Relationship. Section 3.01(y) of the
Company Letter sets forth a complete and correct list of all
relationships, audit or otherwise (including a description of
services that the Company or any of its Subsidiaries has
received, or is receiving, in connection with each such
relationship), between the Company or any of its Subsidiaries,
on the one hand, and PricewaterhouseCoopers LLP or any of its
Affiliates, on the other hand.
28
(a)
Organization. Each of Parent
and Sub is a corporation duly organized, validly existing and in
good standing under the Laws of the jurisdiction of its
organization and has all requisite corporate power and authority
to carry on its business as currently conducted.
(b)
Authority;
Noncontravention. Each of Parent and Sub has
the requisite corporate power and authority to execute and
deliver this Agreement, to consummate the Merger and the other
transactions contemplated by this Agreement and to comply with
the provisions of this Agreement (subject, in the case of the
Merger, to the adoption of this Agreement by Parent, as the sole
stockholder of Sub). The execution and delivery of this
Agreement by Parent and Sub, the consummation by Parent and Sub
of the Merger and the other transactions contemplated by this
Agreement and the compliance by Parent and Sub with the
provisions of this Agreement have been duly authorized by all
necessary corporate action on the part of Parent and Sub, and no
other corporate proceedings on the part of Parent or Sub are
necessary to authorize this Agreement, to comply with the terms
of this Agreement or to consummate the Merger and the other
transactions contemplated by this Agreement (subject, in the
case of the Merger, to the adoption of this Agreement by Parent,
as the sole stockholder of Sub). This Agreement has been duly
executed and delivered by Parent and Sub, as applicable, and,
assuming the due execution and delivery of this Agreement by the
Company, constitutes a valid and binding obligation of Parent
and Sub, as applicable, enforceable against Parent and Sub, as
applicable, in accordance with its terms, subject to the
Bankruptcy and Equity Exception. The execution and delivery of
this Agreement, the consummation of the Merger and the other
transactions contemplated by this Agreement and the compliance
by Parent and Sub with the provisions of this Agreement do not
and will not conflict with, or result in any violation or breach
of, or default (with or without notice or lapse of time or both)
under, or give rise to a right of, or result in, termination,
cancelation or acceleration of any obligation or to a loss of a
material benefit under, or result in the creation of any Lien in
or upon any of the properties or assets of Parent or Sub under,
or give rise to any increased, additional, accelerated or
guaranteed rights or entitlements under, any provision of
(i) the certificate of incorporation or bylaws of Parent or
Sub, (ii) any Contract or Permit to or by which Parent or
Sub is a party or bound or to or by which their respective
properties or assets are subject or bound or otherwise under
which Parent or Sub has rights or benefits or (iii) subject
to the governmental filings and other matters referred to in the
following sentence, any Law (assuming receipt of the Stockholder
Approval and the adoption of this Agreement by Parent, as the
sole stockholder of Sub) or Judgment, in each case, applicable
to Parent or Sub or their respective properties or assets, other
than, in the case of clauses (ii) and (iii), any such
conflicts, violations, breaches, defaults, terminations,
cancelations, accelerations, losses, Liens, rights or
entitlements that, individually or in the aggregate, are not
reasonably likely to impair in any material respect the ability
of each of Parent and Sub to perform its obligations under this
Agreement or prevent or materially impede or materially delay
the consummation of the Merger or the other transactions
contemplated by this Agreement. No consent, approval, order or
authorization of, registration, declaration or filing with, or
notice to, any Governmental Entity is required by or with
respect to Parent or Sub in connection with the execution and
delivery of this Agreement by Parent and Sub, the consummation
by Parent and Sub of the Merger or the other transactions
contemplated by this Agreement or the compliance by Parent and
Sub with the provisions of this Agreement, except for
(A) the filing of a premerger notification and report form
under the HSR Act and the filings and receipt, termination or
expiration, as applicable, of such other approvals or waiting
periods required under any other applicable competition, merger
control, antitrust or similar Law, (B) the filing of the
Certificate of Merger with the Secretary of State of the State
of
Delaware and appropriate documents with the relevant
authorities of other states in which the Company or any of its
Subsidiaries is qualified to do business and (C) such other
consents, approvals, orders, authorizations, registrations,
declarations, filings and notices, the failure of which to be
obtained or made, individually or in the aggregate, are not
reasonably likely to impair in any material respect the ability
of each of Parent and Sub to perform its obligations under this
Agreement or prevent or materially impede or materially delay
the consummation of the Merger or the other transactions
contemplated by this Agreement.
29
(c)
Information Supplied. None of
the information supplied or to be supplied by or on behalf of
Parent or Sub specifically for inclusion or incorporation by
reference in the Proxy Statement will, at the date the Proxy
Statement is first mailed to the Company’s stockholders, at
the time of the Stockholders Meeting or at the time of any
amendment or supplement thereof, as amended or supplemented at
such date or time, 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.
(d)
Interim Operations of Sub. Sub
was formed solely for the purpose of engaging in the Merger and
the other transactions contemplated by this Agreement and has
engaged in no business other than in connection with the Merger
and the other transactions contemplated by this Agreement.
(e)
Financing. Parent and Sub
have, and will have available to them upon the Effective Time,
sufficient funds to perform all of their respective obligations
under this Agreement and to consummate the Merger and the other
transactions contemplated hereby, including payment in full of
the Merger Consideration and the amounts payable to the holders
of Cash-Out RSUs and Cash-Out Stock Options, and to pay all
associated fees, costs and expenses.
(f)
State Takeover
Statutes. Neither Parent nor Sub has been an
“interested stockholder” with respect to the Company
at any time within three years of the date of this Agreement, as
those terms are used in Section 203 of DGCL.
ARTICLE IV
Section 4.01.
Conduct
of Business. (a)
Conduct of Business by
the Company. During the period from the date
of this Agreement to the Effective Time, except with the prior
written consent of Parent (which shall not be unreasonably
delayed) or as specifically contemplated by this Agreement or as
set forth in Section 4.01(a) of the Company Letter, the
Company shall, and shall cause each of its Subsidiaries to,
carry on their respective businesses in the ordinary course
consistent with past practice and use commercially reasonable
efforts to comply with all applicable Laws and, to the extent
consistent therewith, use commercially reasonable efforts to
keep available the services of their present officers, software
developers and other employees, to preserve their assets and
technology, their relationships with customers, suppliers,
licensors, licensees, distributors and others having material
business dealings with them and to maintain their franchises,
rights and Permits. Without in any way limiting the generality
of the foregoing, during the period from the date of this
Agreement to the Effective Time, except with the prior written
consent of Parent (which shall not be unreasonably delayed) or
as specifically contemplated by this Agreement or as set forth
in Section 4.01(a) of the Company Letter (with specific
reference to the subsection of this Section 4.01 to which
the information stated in such disclosure relates), the Company
shall not, and shall not permit any of its Subsidiaries to:
(i) (A) declare, set aside or pay any dividends on, or
make any other distributions (whether in cash, stock or
property) in respect of, any of its capital stock or other
equity or voting interests, except for dividends by a direct or
indirect wholly owned Subsidiary of the Company to its parent,
(B) split, combine or reclassify any of its capital stock
or other equity or voting interests, or issue or authorize the
issuance of any other securities in respect of, in lieu of or in
substitution for, shares of its capital stock or other equity or
voting interests, (C) purchase, redeem or otherwise acquire
any shares of capital stock, other equity or voting interests or
any other securities of the Company or any of its Subsidiaries
or any options, warrants, calls or rights to acquire any such
shares or other securities (including any Stock Options,
Restricted Shares or RSUs, except pursuant to the forfeiture
conditions of such Stock Options, Restricted Shares or RSUs or
the cashless exercise or tax withholding provisions of such
Stock Options, Restricted Shares or RSUs, in each case only if
and to the extent required by the terms of such awards as in
effect on the date of this Agreement) or (D) take any
action that would result in any amendment, modification or
change of any term of any Indebtedness of the Company or any of
its Subsidiaries;
30
(ii) issue, deliver, sell, pledge or otherwise encumber any
(A) shares of its capital stock, other equity or voting
interests or Equity Equivalents (other than the issuance of
shares of Company Common Stock upon the exercise of Stock
Options and the settlement of RSUs, in each case outstanding as
of the date of this Agreement and only if and to the extent
required by the terms of the Company Stock Plans as in effect on
the date of this Agreement), or (B) securities convertible
into, or exchangeable or exercisable for, or any options,
warrants, calls or rights to acquire, any such stock, interests
or Equity Equivalents;
(iii) amend or propose to amend its certificate of
incorporation or bylaws (or similar organizational documents);
(iv) acquire or agree to acquire (A) by merging or
consolidating with, or by purchasing all or a substantial
portion of the assets of, or by purchasing all or a substantial
equity or voting interest in, or by any other manner, any
business or person or division thereof or (B) any other
assets other than immaterial assets acquired in the ordinary
course of business consistent with past practice;
(v) sell, lease, license, sell and lease back, mortgage or
otherwise encumber or subject to any Lien or otherwise dispose
of any of its material properties or assets (including any
shares of capital stock, equity or voting interests or other
rights, instruments or securities), except for (A) grants
of nonexclusive licenses in the ordinary course of business
consistent with past practice, (B) sales of inventory or
used equipment in the ordinary course of business consistent
with past practice and (C) Permitted Liens incurred in the
ordinary course of business consistent with past practice;
(vi) (A) repurchase, prepay or incur any Indebtedness,
including by way of a guarantee or an issuance or sale of debt
securities, or issue and sell options, warrants, calls or other
rights to acquire any debt securities of the Company or any of
its Subsidiaries, enter into any “keep well” or other
Contract to maintain any financial statement or similar
condition of another person or enter into any arrangement having
the economic effect of any of the foregoing or (B) make any
loans, advances or capital contributions to, or investments in,
any other person, other than (1) the Company or any direct
or indirect wholly owned Subsidiary of the Company and
(2) advances of travel and similar expenses to employees in
the ordinary course of business consistent with past practice;
(vii) incur or commit to incur any capital expenditures, or
any obligations or liabilities in connection therewith, that
individually are in excess of $375,000 or in the aggregate are
in excess of $750,000;
(viii) (A) pay, discharge, settle or satisfy any
claims (including any claims of stockholders and any stockholder
litigation relating to this Agreement, the Merger or any other
transaction contemplated by this Agreement or otherwise),
liabilities or obligations (whether absolute, accrued, asserted
or unasserted, contingent or otherwise), other than the payment,
discharge, settlement or satisfaction in the ordinary course of
business consistent with past practice, or as required by their
terms on the date of this Agreement, of claims, liabilities or
obligations reserved against or included in the Baseline
Financials (for amounts not in excess of such reserves or as so
included), incurred since the date of such financial statements
in the ordinary course of business consistent with past practice
or incurred in connection with the transactions contemplated in
this Agreement, in each case, the payment, discharge, settlement
or satisfaction of which does not include any obligation (other
than the payment of money) to be performed by the Company or its
Subsidiaries following the Closing Date, (B) waive,
relinquish, release, grant, transfer or assign any right of
material value or (C) waive any material benefits of, or
agree to modify in any adverse respect, or fail to enforce, or
consent to any matter with respect to which its consent is
required under, any confidentiality, standstill or similar
Contract to or by which the Company or any of its Subsidiaries
is a party or bound, in each case unless the failure to grant
any such waiver, modification, or consent or any action to
enforce would reasonably be likely to result in a breach of the
fiduciary duties of the Company’s Board of Directors under
applicable Law and the Company has given prior written notice of
such action to Parent;
(ix) enter into any lease or sublease of real property
(whether as a lessor, sublessor, lessee or sublessee), or modify
or amend in any material respect, or exercise any right to
renew, any lease or sublease of real property or acquire any
interest in real property;
31
(x) other than in the ordinary course of business
consistent with past practice, enter into, extend, terminate,
materially amend or renew any material Contract;
(xi) except as required to ensure that any Benefit Plan or
Benefit Agreement as in effect on the date of this Agreement is
not then out of compliance with applicable Law or as
specifically required pursuant to this Agreement,
(A) adopt, establish, enter into, terminate, amend or
modify in any material respect any Benefit Plan or Benefit
Agreement, (B) increase in any manner the compensation or
benefits of, or pay any bonus or award to, or grant any loan to,
any Company Personnel, (C) pay or provide to any Company
Personnel any compensation or benefit not provided for under a
Benefit Plan or Benefit Agreement as in effect on the date of
this Agreement, other than the payment of base cash compensation
in the ordinary course of business consistent with past
practice, (D) grant or amend any award under any Benefit
Plan (including the grant or amendment of Stock Options,
Restricted Shares, RSUs, stock appreciation rights, performance
units, stock purchase rights or other equity or equity based
compensation) or remove or modify existing restrictions in any
Benefit Plan or Benefit Agreement or awards made thereunder,
(E) grant any severance, separation, change in control,
termination, retention or similar compensation or benefits to,
or increase in any manner the severance, separation, change in
control, termination, retention or similar compensation or
benefits of, any Company Personnel, (F) pay any severance,
separation, change in control, termination, retention or similar
compensation or benefits to any Company Personnel,
(G) enter into any trust, annuity or insurance Contract or
similar agreement or take any other action to fund or in any
other way secure the payment of compensation or benefits under
any Benefit Plan or Benefit Agreement, (H) take any action
to accelerate, or that could reasonably be expected to result in
the acceleration of, the time of payment or vesting of any
rights, compensation, benefits or funding obligations under any
Benefit Plan or Benefit Agreement or otherwise or (I) make
any material determination under any Benefit Plan or Benefit
Agreement that is inconsistent with the ordinary course of
business or past practice;
(xii) form any Subsidiary of the Company;
(xiii) enter into any Contract (other than Contracts that,
individually or in the aggregate, are not material) containing
any provisions having the effect of providing that the
consummation of the Merger or the other transactions
contemplated by this Agreement or compliance by the Company with
the provisions of this Agreement will conflict with, result in
any violation or breach of, or constitute a default (with or
without notice or lapse of time or both) under, such Contract,
or give rise under such Contract to any right of, or result in,
a termination, right of first refusal, material amendment,
revocation, cancelation or material acceleration, or a loss of a
material benefit or the creation of any material Lien upon any
of the properties or assets of the Company, Parent or any of
their respective subsidiaries, or to any increased, guaranteed,
accelerated or additional rights or entitlements of any person,
except to the extent such conflicts, results, defaults, rights,
losses or entitlements are required by applicable Law;
(xiv) except as required by applicable Law, adopt or enter
into any collective bargaining agreement or other labor union
Contract applicable to the employees of the Company or any of
its Subsidiaries;
(xv) write-down any of its material assets, including any
Intellectual Property, or make any change in any financial or
tax accounting principle, method or practice, other than as
required by GAAP or applicable Law;
(xvi) except in the ordinary course of business consistent
with past practice engage in (A) any promotional sales or
discount activity with any customers or distributors with the
effect of accelerating to prior fiscal quarters (including the
current fiscal quarter) sales to the trade or otherwise that
would otherwise be expected to occur in subsequent fiscal
quarters, (B) any practice which would have the effect of
accelerating to prior fiscal quarters (including the current
fiscal quarter) collections of receivables that would otherwise
be expected to be made in subsequent fiscal quarters,
(C) any practice which would have the effect of postponing
to subsequent fiscal quarters payments by the Company or any of
its Subsidiaries that would otherwise be expected to be made in
prior fiscal quarters (including the current fiscal quarter) or
(D) any other promotional sales or discount activity;
32
(xvii) take any action or fail to take any action with the
knowledge that such action or failure to act would result in the
material loss or reduction in value of the Intellectual Property
of the Company and its Subsidiaries, taken as a whole;
(xviii) enter into, extend or renew any Contract or
amendment thereof (A) that grants any person the right or
ability to access, license or use all or a material portion of
the Intellectual Property of the Company and its Subsidiaries,
other than in the ordinary course of business consistent with
past practice; or (B) providing for the services of any
dealer, distributor, sales representative or similar
representative; provided, however, that the
Company may enter into, extend or renew any Contract providing
for the services of any dealer, distributor, sales
representative or similar representative if such entry,
extension or renewal (including the terms and conditions
thereof) is in the ordinary course of business consistent with
past practice;
(xix) enter into, extend or renew any Contract or any
material amendment thereof that if it were to have been entered
into prior to the date hereof would have been a Specified
Contract or amendment thereof (other than pursuant to
Section 3.01(i)(i)(M), (N), (O), (P), (R), (S) and
(T)); or
(xx) authorize any of, or commit, resolve or agree to take
any of, the foregoing actions.
(b) Parent shall consider in good faith any requests by the
Company to consent to exceptions to the requirements set forth
in Section 4.01(a).
(c)
Certain Tax Matters. During
the period from the date of this Agreement to the Effective
Time, (i) the Company and each of its Subsidiaries shall
timely file all tax returns (“
Post-Signing
Returns”) required to be filed by each such entity
(after taking into account any extensions), and all Post-Signing
Returns shall be complete and correct in all material respects
and shall be prepared on a basis consistent with the past
practice of the Company;
provided that the Company
(A) shall provide all Post-Signing Returns in respect of
income and similar taxes to Parent for review and comment at
least 15 business days prior to the date such Post-Signing
Returns are required to be filed and (B) shall consider in
good faith any comments made by Parent and act reasonably and in
good faith to resolve any objections raised by Parent with
respect to such Post-Signing Returns; (ii) the Company and
each of its Subsidiaries shall timely pay all taxes due and
payable; (iii) the Company will accrue a reserve in its
books and records and financial statements in accordance with
GAAP and past practice for all taxes payable by the Company or
any of its Subsidiaries for which no Post-Signing Return is due
prior to the Effective Time; (iv) the Company and each of
its Subsidiaries will promptly notify Parent of any suit, claim,
action, investigation, proceeding or audit pending against or
with respect to the Company or any of its Subsidiaries in
respect of any material amount of tax and will not settle or
compromise any such suit, claim, action, investigation,
proceeding or audit without Parent’s prior written consent,
which consent shall not be unreasonably withheld, conditioned or
delayed; (v) none of the Company or any of its Subsidiaries
will make or change any tax election without Parent’s
written consent, which consent shall not be unreasonably
withheld, conditioned or delayed; and (vi) the Company and
each of its Subsidiaries will retain (in accordance with the
Company’s retention policy) all books, documents and
records necessary for the preparation of tax returns and reports
and tax audits.
(d)
Additional Tax
Matters. (i) The Company and each of its
Subsidiaries shall cooperate, and, to the extent within its
control, shall cause its respective Affiliates, directors,
officers, employees, contractors, consultants, agents, auditors
and representatives reasonably to cooperate, with Parent in all
tax matters, including by maintaining and making available to
Parent and its Affiliates all books and records relating to
taxes.
(ii) The Company shall deliver to Parent at or prior to the
Closing a certificate, in form and substance satisfactory to
Parent, duly executed and acknowledged, certifying that the
payment of the Merger Consideration and any payments made in
respect of Appraisal Shares pursuant to the terms of this
Agreement are exempt from withholding pursuant to the Foreign
Investment in Real Property Tax Act.
(iii) No later than five business days prior to the Closing
Date, the Company shall deliver to the Parent a list of the
Company’s stockholders and holders of Stock Options,
Restricted Shares and RSUs, in each case along with such
stockholders’ or holders’ taxpayer identification
numbers for U.S. Federal income tax
33
purposes. The Company acknowledges and consents that Parent
shall be entitled to deliver such list to the Paying Agent for
the purpose of facilitating the payment of the Merger
Consideration and the treatment of Stock Options, Restricted
Shares and RSUs as contemplated by Section 5.04.
(iv) Prior to the Closing Date, the Company and each of its
Subsidiaries, as applicable, shall have entered into executed
agreements governing all related party transactions. Such
agreements shall be in compliance with Section 482 of the
Code and the Treasury Regulations promulgated thereunder and any
comparable provision of any tax Law.
(v) Prior to the Closing Date, the Company shall deliver to
Parent a schedule setting forth the following information with
respect to the Company and its Subsidiaries as of the most
recent practicable date: the amount of any net operating losses,
unused investment or other credits, unused foreign tax credits
or excess charitable contributions of the Company or any of its
Subsidiaries for Federal income tax, alternative minimum tax or
any other tax purposes (including dates of expiration of such
items, any limitations on such items and all Schedules M-1 and
M-3 prepared or filed by the Company or any of its Subsidiaries).
Section 4.02.
No
Solicitation. (a) Notwithstanding any
provision in this Agreement to the contrary, the Company shall
not, nor shall it authorize or permit any of its Subsidiaries
to, nor shall it authorize or permit any director, officer or
employee of the Company or any of its Subsidiaries or any
investment banker, attorney, accountant or other advisor or
representative of the Company or any of its Subsidiaries to,
directly or indirectly, (i) solicit, initiate or knowingly
encourage, or take any other action to knowingly facilitate, any
Takeover Proposal or any inquiries or the making of any proposal
that could reasonably be expected to lead to a Takeover Proposal
or (ii) enter into, continue or otherwise participate in
any discussions or negotiations regarding, or furnish to any
person (or any representative thereof) any information knowingly
with respect to, or otherwise cooperate in any way with any
person (or any representative thereof) knowingly with respect
to, any Takeover Proposal;
provided,
however, that
at any time prior to obtaining the Stockholder Approval, in
response to a bona fide written Takeover Proposal that the Board
of Directors of the Company determines in good faith constitutes
or could reasonably be expected to lead to a Superior Proposal,
and which Takeover Proposal did not result from a breach of this
Section 4.02, the Company may, and may permit and authorize
its Subsidiaries and its representatives and its
Subsidiaries’ representatives to, in each case subject to
compliance with Section 4.02(c), (A) furnish
information with respect to the Company and its Subsidiaries to
the person making such Takeover Proposal (and its
representatives) pursuant to a confidentiality agreement which
contains terms as to confidentiality that are no less
restrictive than those contained in the Confidentiality
Agreement dated as of July 1, 2010 between Parent and the
Company (as it may be amended from time to time, the
“
Confidentiality Agreement”),
provided
that all such information had been provided, or is concurrently
provided, to Parent, and (B) participate in discussions or
negotiations with, and only with, the person making such
Takeover Proposal (and its representatives) regarding such
Takeover Proposal. Without limiting the generality of the
foregoing, it is understood that any violation of the
restrictions set forth in the preceding sentence by any
director, officer or employee of the Company or any of its
Subsidiaries or any investment banker, attorney, accountant or
other advisor or representative of the Company or any of its
Subsidiaries shall be deemed to be a breach of this
Section 4.02(a) by the Company.
For purposes of this Agreement, the term “Takeover
Proposal” means (x) any inquiry relating to, or
that could reasonably be expected to lead to, or (y) any
proposal or offer from any person or group (other than Parent or
Sub or any of their Affiliates) for, in one transaction or a
series of transactions, any merger, consolidation, business
combination, recapitalization, liquidation or dissolution
involving the Company or any direct or indirect acquisition,
including by way of any merger, consolidation, tender offer,
exchange offer, stock acquisition, asset acquisition, binding
share exchange, business combination, recapitalization,
liquidation, dissolution, joint venture, license agreement or
similar transaction, of (i) assets or businesses that
constitute or represent 15% or more of the total revenue, net
income, EBITDA or assets of the Company and its Subsidiaries,
taken as a whole, or (ii) 15% or more of the outstanding
shares of Company Common Stock or of any class of capital stock
of, or other equity or voting interests in, one or more of the
Subsidiaries of the Company which, in the aggregate, directly or
indirectly hold the assets or businesses referred to in
clause (i) above; provided that clause (x) of
this paragraph shall be inapplicable to clause (i) of the
immediately preceding paragraph and to Section 4.02(c).
34
For purposes of this Agreement, the term “Superior
Proposal” means any binding bona fide written offer
which did not result from a breach of Section 4.02(a) made
by any person (other than Parent or Sub or any of their
Affiliates) that, if consummated, would result in such person
(or, in the case of a direct merger between such person and the
Company, the stockholders of such person) acquiring, directly or
indirectly, more than 50% of the voting power of the Company
Common Stock or all or substantially all the assets of the
Company and its Subsidiaries, taken as a whole, and which offer,
in the good faith judgment of the Board of Directors of the
Company (after consultation with a financial advisor of national
reputation and outside legal counsel), (i) provides
consideration which is more favorable to the stockholders of the
Company than the consideration provided in the Merger (taking
into account all of the terms and conditions of such offer and
this Agreement (including any changes to the terms of this
Agreement proposed by Parent in response to such Superior
Proposal or otherwise which are binding on Parent)) and
(ii) is reasonably capable of being completed, taking into
account all financial, legal, regulatory and other aspects of
such proposal.
(b) Neither the Board of Directors of the Company nor any
committee thereof shall (or shall agree or resolve to)
(i) withdraw or modify in a manner adverse to Parent or
Sub, or propose publicly to withdraw or modify in a manner
adverse to Parent or Sub, the recommendation or declaration of
advisability by such Board of Directors or any such committee of
this Agreement or the Merger (any such action, resolution or
agreement to take such action being referred to herein as an
“
Adverse Recommendation Change”),
(ii) recommend, declare advisable or propose to recommend
or declare advisable, the approval or adoption of any Takeover
Proposal or resolve or agree to take any such action, or adopt
or approve any Takeover Proposal, or (iii) cause or permit
the Company to enter into any letter of intent, memorandum of
understanding, agreement in principle, acquisition agreement,
merger agreement, option agreement, joint venture agreement,
partnership agreement or other agreement (each, an
“
Acquisition Agreement”) constituting or
related to, or which is intended to or is reasonably likely to
lead to, any Takeover Proposal (other than a confidentiality
agreement referred to in Section 4.02(a)), or resolve or
agree to take any such action. Notwithstanding the foregoing or
any other provision of this Agreement to the contrary, at any
time prior to the Stockholder Approval, the Board of Directors
of the Company may, in response to a Superior Proposal or an
Intervening Event, effect an Adverse Recommendation Change,
provided that the Board of Directors of the Company
determines in good faith, after consultation with its outside
legal counsel and a financial advisor of nationally recognized
reputation, that the failure to do so is reasonably likely to
result in a breach of its fiduciary duties to the stockholders
of the Company under applicable Law, and
provided
further, that the Board of Directors of the Company may
not effect such an Adverse Recommendation Change unless
(A) the Board of Directors of the Company shall have first
provided prior written notice to Parent (an “
Adverse
Recommendation Change Notice”) that it is prepared to
effect an Adverse Recommendation Change in response to a
Superior Proposal or an Intervening Event, which notice shall
not constitute a breach of this Section 4.02(b) and shall,
in the case of a Superior Proposal, attach the most current
version of any written agreement relating to the transaction
that constitutes such Superior Proposal, and, in the case of an
Intervening Event, attach information describing such
Intervening Event in reasonable detail, and (B) Parent does
not make, within five business days after the receipt of such
notice, a binding proposal that would, in the good faith
judgment of the Board of Directors of the Company (after
consultation with a financial advisor of national reputation and
outside legal counsel), (x) cause the offer previously
constituting a Superior Proposal to no longer constitute a
Superior Proposal or (y) obviate the need for an Adverse
Recommendation Change as a result of an Intervening Event (it
being understood and agreed that any amendment or modification
of such Superior Proposal (other than a non-substantive
amendment or modification) shall require a new Adverse
Recommendation Change Notice and a new three business day
period). The Company agrees that, during the five or three
business day period, as applicable, prior to its effecting an
Adverse Recommendation Change, the Company and its officers,
directors and representatives shall negotiate in good faith with
Parent and its officers, directors and representatives regarding
any revisions to the terms of the Merger and the other
transactions contemplated by this Agreement proposed by Parent.
For purposes of this Agreement, the term “Intervening
Event” means an event, circumstance, fact or other
information, unknown to the Board of Directors of the Company as
of the date of this Agreement, which becomes known prior to the
Stockholder Approval; provided, however, that in
no event shall the receipt,
35
existence or terms of a Takeover Proposal or any matter relating
thereto or consequence thereof constitute an Intervening Event.
(c) In addition to the obligations of the Company set forth
in paragraphs (a) and (b) of this Section 4.02,
the Company shall, as promptly as possible and in any event
within 24 hours after the Company’s receipt thereof,
advise Parent orally and in writing of (i) any Takeover
Proposal or any request for information or inquiry that the
Company reasonably believes could lead to or contemplates a
Takeover Proposal and (ii) the terms and conditions of such
Takeover Proposal, request or inquiry (including any subsequent
amendment or other modification (other than any immaterial
amendment or modification, which shall be provided promptly to
Parent) to such terms and conditions) and the identity of the
person making any such Takeover Proposal, request or inquiry.
Commencing upon the provision of any notice referred to above,
the Company (or its outside counsel) shall (A) on a daily
basis at a mutually agreeable time, advise Parent (or its
outside counsel) of the progress of negotiations concerning any
Takeover Proposal, the material resolved and unresolved issues
related thereto and any other material matters identified with
reasonable specificity by Parent (or its outside counsel) and
the material details (including material amendments or proposed
amendments as to price and other material terms) of any such
Takeover Proposal, request or inquiry and (B) promptly upon
receipt or delivery thereof, provide Parent (or its outside
counsel) with copies of all material documents and material
written or electronic communications relating to any such
Takeover Proposal (including the financing thereof), request or
inquiry exchanged between the Company, its Subsidiaries or any
of their respective officers, directors, employees, investment
bankers, attorneys, accountants or other advisors or
representatives, on the one hand, and the person making a
Takeover Proposal or any of its Affiliates, or their respective
officers, directors, employees, investment bankers, attorneys,
accountants or other advisors or representatives, on the other
hand.
(d) Nothing contained in this Section 4.02 or
elsewhere in this Agreement shall prohibit the Company from
(i) taking and disclosing to its stockholders a position
contemplated by
Rule 14d-9
and
Rule 14e-2(a)
promulgated under the Exchange Act or (ii) making any
disclosure to its stockholders if, in the good faith judgment of
the Board of Directors of the Company, failure so to disclose
would be inconsistent with applicable Law; provided,
however, that in no event shall the Company or its Board
of Directors or any committee thereof take, agree or resolve to
take any action prohibited by Section 4.02(b).
Section 4.03.
Conduct
by Parent. During the period from the date of
this Agreement to the Effective Time, except as consented to in
writing by the Company prior to such action or as specifically
contemplated by this Agreement, Parent shall not, and shall not
permit any of its Subsidiaries to, take any action that is
reasonably likely to result in (a) any representation and
warranty of Parent or Sub set forth in this Agreement that is
qualified as to materiality becoming untrue (as so qualified) or
(b) any such representation and warranty that is not so
qualified becoming untrue in any material respect.
ARTICLE V
Section 5.01.
Preparation
of the Proxy Statement; Stockholders
Meeting. (a) As promptly as reasonably
practicable following the date of this Agreement, the Company
shall prepare and, no later than the tenth calendar day (or, if
such calendar day is not a business day, on the first business
day subsequent to such calendar day) immediately following the
date of this Agreement, file with the SEC the preliminary Proxy
Statement. Notwithstanding anything contained in this Agreement
to the contrary, (x) if the Company does not receive
comments from the SEC with respect to the preliminary Proxy
Statement, absent any Legal Restraint that has the effect of
preventing such action, the Company shall file with the SEC the
definitive Proxy Statement, and shall cause the mailing of the
definitive Proxy Statement to the stockholders of the Company,
on or prior to the second business day after the tenth calendar
day immediately following the date of filing of the preliminary
Proxy Statement with the SEC, and (y) if the Company does
receive comments from the SEC with respect to the preliminary
Proxy Statement, absent any Legal Restraint that has the effect
of preventing such action, the Company shall file with the SEC
the definitive Proxy Statement, and shall cause the mailing of
the definitive Proxy Statement to the stockholders of the
Company, on or prior to the second business day
36
immediately following clearance by the SEC with respect to such
comments. Each of the Company and Parent shall furnish all
information concerning such person to the other as may be
reasonably requested in connection with the preparation, filing
and distribution of the Proxy Statement. The Company shall
promptly notify Parent upon the receipt of any comments from the
SEC or its staff or any request from the SEC or its staff for
amendments or supplements to the Proxy Statement and shall
provide Parent with copies of all correspondence between it and
its representatives, on the one hand, and the SEC, on the other
hand. Each of the Company and Parent shall use commercially
reasonable efforts to respond as promptly as practicable to any
comments of the SEC with respect to the Proxy Statement.
Notwithstanding the foregoing, prior to filing or mailing the
Proxy Statement (or any amendment or supplement thereto) or
responding to any comments of the SEC with respect thereto, and
unless the Board of Directors of the Company shall have received
a Takeover Proposal or made an Adverse Recommendation Change,
the Company (i) shall provide Parent an opportunity to
review and comment on such document or response, (ii) shall
include in such document or response all comments reasonably
proposed by Parent and (iii) shall not file or mail such
document, or respond to the SEC, prior to receiving the approval
of Parent, which approval shall not be unreasonably withheld or
delayed. If, at any time prior to the Stockholders Meeting, any
information relating to the Company, Parent or any of their
respective Affiliates, officers or directors should be
discovered by the Company or Parent which should be set forth in
an amendment or supplement to the Proxy Statement, so that the
Proxy Statement shall not 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 party that discovers such information
shall promptly notify the other parties hereto, and an
appropriate amendment or supplement describing such information
shall be filed with the SEC and, to the extent required by
applicable Law, disseminated to the stockholders of the Company.
If the Company receives a Takeover Proposal (or any subsequent
material amendment or material modification to any such Takeover
Proposal) or if an Intervening Event occurs, the ten calendar
day periods referenced in this Section 5.01(a) and the two
business day period referenced in clause (y) of the second
sentence of this Section 5.01(a) will be extended in each
such circumstance by three calendar days.
(b) The Company agrees that the Proxy Statement will comply
as to form in all material respects with the requirements of the
Exchange Act and that none of the information included or
incorporated by reference in the Proxy Statement will, at the
date the Proxy Statement is filed with the SEC or mailed to the
stockholders of the Company or at the time of the Stockholders
Meeting, or at the time of any amendment or supplement thereof,
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, except
that no covenant is made by the Company with respect to
statements made in the Proxy Statement based on information
supplied in writing by or on behalf of Parent or Sub
specifically for inclusion or incorporation for reference
therein. Parent agrees that none of such information will, at
the date the Proxy Statement is filed with the SEC or mailed to
the stockholders of the Company or at the time of the
Stockholders Meeting, or at the time of any amendment or
supplement thereof, 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.
(c) As promptly as practicable after the date of this
Agreement, the Company shall, in compliance with applicable Law,
the Company Certificate, the Company By-Laws and the rules of
The New York Stock Exchange, establish a record date (which will
be as promptly as reasonably practicable following the date of
this Agreement) for, duly call, give notice of, convene and hold
a meeting of its stockholders, which meeting the Company shall,
absent any Legal Restraint that has the effect of preventing
such action, cause to occur on the 30th calendar day (or,
if such calendar day is not a business day, on the first
business day subsequent to such calendar day) immediately
following the date of mailing of the Proxy Statement (the
“Stockholders Meeting”), for the purpose of
obtaining the Stockholder Approval, regardless of whether the
Board of Directors of the Company determines at any time that
this Agreement is no longer advisable or recommends that the
stockholders of the Company reject it or any other Adverse
Recommendation Change has occurred at any time; provided,
however, that (i) if the Company is unable to obtain
a quorum of its stockholders at such time, the Company may
adjourn the Stockholders Meeting if necessary in order to obtain
a quorum of its
37
stockholders and the Company shall use its commercially
reasonable efforts to obtain such a quorum as promptly as
practicable, (ii) the Company may adjourn or postpone the
Stockholders Meeting to the extent (and only to the extent) the
Company reasonably determines that such adjournment or
postponement is required by applicable Law and (iii) if the
Company receives a Takeover Proposal, the price or material
terms of a previously received Takeover Proposal are modified or
amended or an Intervening Event occurs, in any such case during
the five calendar day period immediately prior to the day of the
Stockholders Meeting, the Company may delay the Stockholders
Meeting until the date that is the fifth business day after the
date on which the Stockholders Meeting would otherwise have been
held. The notice of such Stockholders Meeting shall state that a
resolution to adopt this Agreement will be considered at the
Stockholders Meeting. Subject to Section 4.02(b),
(x) the Board of Directors of the Company shall recommend
to holders of Company Common Stock that they adopt this
Agreement and shall include such recommendation in the Proxy
Statement and (y) subject to Section 4.02(d), the
Company shall use its commercially reasonable efforts to solicit
the Stockholder Approval. Without limiting the generality of the
foregoing, the Company agrees that its obligations pursuant to
this Section 5.01(c) shall not be affected by the
commencement, public proposal, public disclosure or
communication to the Company or any other person of any Takeover
Proposal.
Section 5.02.
Access
to Information;
Confidentiality. (a) Subject to
compliance with applicable Laws, the Company shall, and shall
cause each of its Subsidiaries to, afford to Parent and to
Parent’s officers, employees, investment bankers,
attorneys, accountants, consultants and other representatives
and advisors reasonable access upon reasonable advance notice
and during normal business hours during the period prior to the
Effective Time or the termination of this Agreement to all their
respective properties, assets, books, records, Contracts,
Permits, documents, information, officers and employees, and
during such period the Company shall, and shall cause each of
its Subsidiaries to, make available to Parent any information
concerning its business as Parent may reasonably request
(including the work papers of PricewaterhouseCoopers LLP,
subject to the customary requirements of PricewaterhouseCoopers
LLP). Notwithstanding the foregoing, nothing in this
Section 5.02 shall require the Company to disclose to
Parent board or committee minutes or materials to the extent
related to the transactions contemplated by this Agreement or
any Takeover Proposals. Following the date of this Agreement and
prior to the Effective Time, Parent may (but shall not be
required to), following reasonable notice to the Company,
contact and interview any Company Personnel and review the
personnel records and such other information concerning the
Company Personnel as Parent may reasonably request. No
investigation by Parent or any of its officers, directors,
employees, investment bankers, attorneys, accountants or other
advisors or representatives and no other receipt of information
by Parent or any of its officers, directors, employees,
investment bankers, attorneys, accountants or other advisors or
representatives shall operate as a waiver or otherwise affect
any representation, warranty, covenant, agreement or other
provision of this Agreement, or the obligations of the parties
(or remedies with respect thereto) or the conditions to the
obligations of the parties under the Agreement. Except as
required by any applicable Law or Judgment, Parent will hold,
and will direct its officers, employees, investment bankers,
attorneys, accountants and other advisors and representatives to
hold, any and all information received from the Company
confidential in accordance with the Confidentiality Agreement.
(b) Without limiting the generality of the foregoing,
during the period from the date of this Agreement to the
Effective Time, the Company shall, and shall cause each of its
Subsidiaries to, as and to the extent reasonably requested by
Parent, provide Parent, to the extent applicable, with
(i) a materially complete and correct list of all licenses
issued by the Federal Communications Commission (the
“FCC”) and held by the Company or any of its
Subsidiaries (the “FCC Licenses”),
(ii) materially complete and correct copies of each FCC
License, (iii) if available, the address and physical
location of the device(s) covered by each FCC License,
(iv) if available, a written description of the purpose of
the device(s) covered by each FCC License, (v) materially
complete and correct copies of any Notices of Apparent Liability
for Forfeiture issued by the FCC against the Company or any of
its Subsidiaries and (vi) all reasonably available
information in the possession of the Company or any of its
Subsidiaries necessary for Parent to make an independent
determination that the Company and its Subsidiaries have
complied with FCC rules regarding changes of ownership control
of the FCC Licenses (including descriptions of any transactions
that effected a change of ownership or control of the FCC
Licenses (including any intracompany reorganizations) and
corporate
38
organizational charts depicting the ownership structure of the
holder of the FCC Licenses before and after any such change of
ownership or control).
(c) Subject to applicable law, the Company and Parent
shall, and shall cause each of their respective Subsidiaries to,
cooperate to ensure an orderly transition and integration
process in connection with the Merger and the other transactions
contemplated by this Agreement in order to minimize the
disruption to, and preserve the value of, the business of the
Surviving Corporation and its Subsidiaries.
Section 5.03.
Reasonable
Best Efforts; Consultation and
Notice. (a) Upon the terms and subject
to the conditions set forth in this Agreement, each of the
parties hereto agrees to use its reasonable best efforts to
take, or cause to be taken, all actions that are necessary,
proper or advisable to consummate and make effective the Merger
and the other transactions contemplated by this Agreement,
including using its reasonable best efforts to accomplish the
following: (i) the satisfaction of the conditions precedent
set forth in Article VI, (ii) the obtaining of all
necessary actions or nonactions, waivers, consents, approvals,
orders and authorizations from, and the giving of any necessary
notices to, Governmental Entities and other persons and the
making of all necessary registrations, declarations and filings
(including filings under the HSR Act and other registrations,
declarations and filings with, or notices to, Governmental
Entities, if any), (iii) the taking of all reasonable steps
to provide any supplemental information requested by a
Governmental Entity, including participating in meetings with
officials of such entity in the course of its review of this
Agreement, the Merger or the other transactions contemplated by
this Agreement, (iv) the taking of all reasonable steps as
may be necessary to avoid any suit, claim, action, investigation
or proceeding by any Governmental Entity or third party and
(v) the obtaining of all necessary consents, approvals or
waivers from any third party, provided, that this
clause (v) shall not limit the rights of the Company or its
Board of Directors under Section 4.02(b). In connection
with and without limiting the generality of the foregoing, each
of the Company and its Board of Directors shall, if any state
takeover statute or similar statute or regulation is or becomes
applicable to this Agreement or any of the Merger and the other
transactions contemplated by this Agreement, take all actions
necessary to ensure that the Merger and the other transactions
contemplated by this Agreement may be consummated as promptly as
practicable on the terms contemplated by this Agreement and
otherwise to minimize the effect of such statute or regulation
on this Agreement, the Merger and the other transactions
contemplated by this Agreement. Notwithstanding the foregoing or
any other provision of this Agreement to the contrary, in no
event shall Parent or Sub be obligated to, and the Company and
its Subsidiaries shall not without the prior written consent of
Parent, agree or proffer to divest or hold separate, or enter
into any licensing, business restriction or similar arrangement
with respect to, any assets (whether tangible or intangible) or
any portion of any business of Parent, the Company or any of
their respective Subsidiaries. Notwithstanding the foregoing or
any other provision of this Agreement to the contrary, in no
event shall Parent or any of its Subsidiaries be obligated to
litigate or participate in the litigation of any suit, claim,
action or proceeding, whether judicial or administrative,
brought by any Governmental Entity (A) challenging or
seeking to restrain or prohibit the consummation of the Merger
or the other transactions contemplated by this Agreement;
(B) seeking to prohibit or limit in any respect, or place
any conditions on, the ownership or operation by the Company,
Parent or any of their respective Affiliates of all or any
portion of the business or assets or any product of the Company
or its Subsidiaries or Parent or its Subsidiaries or to require
any such person to dispose of, license (whether pursuant to an
exclusive or nonexclusive license) or hold separate all or any
portion of the business or assets or any product of the Company
or its Subsidiaries or Parent or its Subsidiaries, in each case
as a result of or in connection with the Merger or any of the
other transactions contemplated by this Agreement;
(C) seeking to directly or indirectly impose limitations on
the ability of Parent or any of its Affiliates to acquire or
hold, or exercise full rights of ownership of, any shares of
Company Common Stock or any shares of common stock of the
Surviving Corporation or any of Parent’s Subsidiaries,
including the right to vote Company Common Stock or the shares
of common stock of the Surviving Corporation or any of
Parent’s Subsidiaries on all matters properly presented to
the stockholders of the Company, the Surviving Corporation or
any of Parent’s Subsidiaries, respectively; or
(D) seeking to (1) directly or indirectly prohibit
Parent or any of its Affiliates from effectively controlling in
any respect any of the business or operations of the Company or
its or Parent’s Subsidiaries or (2) directly or
indirectly prevent the Company or its or Parent’s
Subsidiaries from operating any of their respective businesses
in substantially the same manner as operated by the Company and
its or Parent’s Subsidiaries prior to the date of this
39
Agreement. The Company and Parent shall provide such assistance,
information and cooperation to each other as is reasonably
required to obtain any such actions, nonactions, waivers,
consents, approvals, orders and authorizations and, in
connection therewith, shall notify the other person promptly
following the receipt of any comments from any Governmental
Entity and of any request by any Governmental Entity for
amendments, supplements or additional information in respect of
any registration, declaration or filing with, or notice to, such
Governmental Entity and shall supply the other person with
copies of all correspondence between such person or any of its
representatives, on the one hand, and any Governmental Entity,
on the other hand.
(b) (i) In connection with the continuing operation of
the business of the Company and its Subsidiaries between the
date of this Agreement and the Effective Time, subject to
applicable Law, the Company shall consult in good faith on a
reasonably regular basis with Parent to report material,
individually or in the aggregate, operational developments,
material changes in the status of relationships with material
customers and resellers, material changes in the status of
ongoing operations and other matters reasonably requested by
Parent pursuant to procedures reasonably requested by Parent;
provided, however, that no such consultation shall
operate as a waiver or otherwise affect any representation,
warranty, covenant, agreement or other provision in this
Agreement, or the obligations of the parties (or remedies with
respect thereto) or the conditions to the obligations of the
parties under this Agreement.
(ii) Except as prohibited by applicable Law, the Company
shall promptly notify Parent in writing upon the Company
obtaining knowledge of:
(A) the occurrence of any matter or event that has caused,
or that is reasonably likely to result in, any condition to the
transactions contemplated hereby and set forth in
Section 6.02 not being satisfied;
(B) any notice or other communication from any material
customer, distributor or reseller to the effect that such
customer, distributor or reseller is terminating or otherwise
materially adversely modifying its relationship with Company or
any of its Subsidiaries as a result of the Merger or the other
transactions contemplated by this Agreement;
(C) any material written notice or other material
communication from any Governmental Entity in connection with
the Merger or the other transactions contemplated by this
Agreement and all comment letters received by the Company from
the SEC and a copy of any such notice, communication or comment
letter shall be furnished to Parent, together with the
Company’s written notice;
(D) any filing or notice made by the Company with any
Governmental Entity in connection with the Merger or the other
transactions contemplated by this Agreement, and a copy of any
such filing or notice shall be furnished to Parent together with
the Company’s written notice; and
(E) any actions, suits, claims, investigations or
proceedings commenced or threatened against, relating to or
involving or otherwise affecting the Company or any of its
Subsidiaries that, if pending on the date of this Agreement,
would have been required to have been disclosed pursuant to
Section 3.01(h) or that relate to the consummation of the Merger
or the other transactions contemplated by this Agreement;
provided, however, that no such notification shall
operate as a waiver or otherwise affect any representation,
warranty, covenant, agreement or other provision in this
Agreement, or the obligations of the parties (or remedies with
respect thereto) or the conditions to the obligations of the
parties under this Agreement.
(iii) Parent shall promptly notify the Company in writing
upon Parent obtaining knowledge of the occurrence of any matter
or event that has caused, or that is reasonably likely to result
in, any condition to the transactions contemplated hereby and
set forth in Section 6.03 not being satisfied;
provided, however, that no such notification shall
operate as a waiver or otherwise affect any representation,
warranty, covenant, agreement or other provision in this
Agreement, or the obligations of the parties (or remedies with
respect thereto) or the conditions to the obligations of the
parties under this Agreement.
(c) Without limiting the generality of the foregoing, the
Company shall give Parent the opportunity to participate in the
defense, at its own cost, of any litigation against the Company
and/or its
directors relating to the Merger or the other transactions
contemplated by this Agreement, and will obtain the prior
written consent
40
of Parent prior to settling or satisfying any such claim, it
being understood and agreed that this Section 5.03(c) shall
not give Parent the right to direct such defense.
(d) Immediately following the execution and delivery of
this Agreement by each of the parties hereto, Parent, as the
sole stockholder of Sub, will adopt this Agreement.
Section 5.04.
Equity
Awards. (a) Except as otherwise
specifically agreed in writing by the Company and Parent, as
soon as practicable following the date of this Agreement, the
Board of Directors of the Company (or, if appropriate, any
committee administering the Company Stock Plans) shall adopt
such resolutions or take such other actions (including obtaining
any required consents) as may be required to effect the
following:
(i) subject to any provisions to the contrary in any Offer
Letter, at the Effective Time, each Cash-Out Stock Option shall
be canceled and each holder thereof shall be entitled to receive
in consideration for such cancelation an amount in cash equal to
the product of (A) the number of shares of Company Common
Stock that are subject to such Cash-Out Stock Option whether
vested or unvested, immediately prior to the Effective Time and
(B) the excess, if any, of the Merger Consideration over
the exercise price per share of Company Common Stock subject to
such Cash-Out Stock Option, which amount shall be payable to
such holder at or as soon as practicable following the Effective
Time;
(ii) subject to any provisions to the contrary in any Offer
Letter, each Rollover Stock Option shall be converted at the
Effective Time into an option to acquire, on substantially the
same terms and conditions as were applicable under such Rollover
Stock Option (other than with respect to exercisability prior to
vesting or the ability to pay the exercise price by tendering
previously owned shares of Company Common Stock), the number of
shares of Parent common stock, par value $0.20 per share
(“Parent Common Stock”) (rounded down to the
nearest whole share), determined by multiplying the number of
shares of Company Common Stock subject to such Rollover Stock
Option immediately prior to the Effective Time by the Exchange
Ratio, at an exercise price per share of Parent Common Stock
(rounded up to the nearest whole cent) equal to (A) the
exercise price per share of Company Common Stock otherwise
purchasable pursuant to such Rollover Stock Option divided by
(B) the Exchange Ratio;
(iii) each Restricted Share outstanding at the Effective
Time, whether vested or unvested, shall be converted at the
Effective Time into the vested right to receive an amount in
cash equal to the Merger Consideration in accordance with
Section 2.01(c);
(iv) subject to any provisions to the contrary in any Offer
Letter, at the Effective Time, each Cash-Out RSU outstanding
immediately prior to the Effective Time shall be canceled and
the holder thereof shall be entitled to receive in consideration
for such cancelation an amount in cash equal to the product of
(A) the number of shares of Company Common Stock that are
subject to such Cash-Out RSU, whether vested or unvested,
immediately prior to the Effective Time and (B) the Merger
Consideration, which amount shall be payable to such holder at
or as soon as practicable following the Effective Time;
(v) subject to any provisions to the contrary in any Offer
Letter, each Rollover RSU shall be converted at the Effective
Time into a restricted stock unit, subject to substantially the
same terms and conditions as were applicable under such Rollover
RSU, with respect to a number of shares of Parent Common Stock
determined by multiplying the number of shares of Company Common
Stock subject to such Rollover RSU immediately prior to the
Effective Time by the Exchange Ratio (rounded down to the
nearest whole share); provided, that with respect to any
Rollover RSUs that are Performance RSUs for which the
performance period is scheduled to end following the Effective
Time, the number of Rollover RSUs held by the applicable
Rollover RSU Holder shall be determined on the assumption that,
for each such performance period, the performance conditions
with respect thereto that are based on (A) “adjusted
operating income” (as defined in the applicable RSU
Agreement) are met at 143% of target performance and
(B) “revenue” (as defined in the applicable RSU
Agreement) are met at the greater of (1) 100% of target
performance and (2) actual performance by the Company and
its Subsidiaries, as determined by Parent, during the relevant
performance period (including periods both preceding and
following the Effective Time).
41
(vi) each provision in each Benefit Plan and Benefit
Agreement providing for the issuance, transfer or grant of any
shares of Company Common Stock or any Stock Options, Restricted
Shares, RSUs or any other interests in respect of any capital
stock (including any phantom stock or stock appreciation rights)
of the Company shall be deleted prior to the Effective Time, and
the Company shall ensure prior to the Effective Time that,
following the Effective Time, there shall be no rights to
acquire shares of Company Common Stock, Stock Options,
Restricted Shares, RSUs or any other interests in respect of any
capital stock (including any phantom stock or stock appreciation
rights) of the Company or the Surviving Corporation;
(vii) any shares of Company Common Stock that remain
available for issuance pursuant to any Company Stock Plan as of
the Effective Time (the “Residual Shares”)
shall be converted at the Effective Time into the number of
shares of Parent Common Stock equal to the product of the number
of such Residual Shares and the Exchange Ratio (such shares of
Parent Common Stock, the “Assumed
Shares”); and
(viii) As used in this Agreement, the following terms shall
have the meanings specified below:
‘‘Cash-Out RSU” means (a) any
RSU that is outstanding immediately prior to the Effective Time
to the extent vested and unsettled as of immediately prior to
the Effective Time (taking into account any acceleration of
vesting resulting from the transactions contemplated by this
Agreement (alone or in combination with any other event)
pursuant to the terms of such RSU as in effect on the date of
this Agreement) and (b) any RSU (whether vested or
unvested) that is outstanding immediately prior to the Effective
Time and is held by any Person who, as of immediately prior to
the Effective Time, is a non-employee director, consultant or
independent contractor of the Company or any of its Subsidiaries.
‘‘Cash-Out Stock Option” means
(a) any Stock Option that is outstanding immediately prior
to the Effective Time to the extent vested and unexercised as of
immediately prior to the Effective Time (taking into account any
acceleration of vesting resulting from the transactions
contemplated by this Agreement (alone or in combination with any
other event) pursuant to the terms of such Stock Option as in
effect on the date of this Agreement), (b) any Stock Option
(whether vested or unvested) that was granted pursuant to the
2000 Plan and that is outstanding immediately prior to the
Effective Time and (c) any Stock Option (whether vested or
unvested) that is outstanding immediately prior to the Effective
Time and is held by any Person who, as of immediately prior to
the Effective Time, is a non-employee director, consultant or
independent contractor of the Company or any of its Subsidiaries.
“Exchange Ratio” means a fraction, the
numerator of which is the Merger Consideration and the
denominator of which is the average closing price per share of
Parent Common Stock on the New York Stock Exchange Composite
Transactions Tape on the 20 trading days immediately preceding
the date on which the Effective Time occurs.
“Rollover RSU” means any RSU other than
a Cash-Out RSU that is outstanding immediately prior to the
Effective Time.
“Rollover RSU Holder” means any person
who is a holder of Rollover RSUs.
“Rollover Stock Option” means any Stock
Option other than a Cash-Out Stock Option that is outstanding
immediately prior to the Effective Time.
(b) The adjustments provided in Section 5.04(a)(ii)
with respect to any Stock Options that are “incentive stock
options” (as defined in Section 422 of the Code) are
intended to be effected in a manner that is consistent with
Section 424(a) of the Code.
(c) All amounts payable pursuant to this Section 5.04
shall be subject to any required withholding of taxes and shall
be paid without interest.
(d) The Company shall take all reasonable steps as may be
required to cause the transactions contemplated by this
Section 5.04 and any other dispositions of Company equity
securities (including derivative securities) in connection with
this Agreement by each individual who is a director or officer
of the
42
Company subject to Section 16 of the Exchange Act to be
exempt under
Rule 16b-3
promulgated under the Exchange Act.
(e) At the Effective Time, by virtue of the Merger and
without the need of any further corporate action, Parent shall
assume the Company Stock Plans, with the result that Parent may
issue the Assumed Shares after the Effective Time pursuant to
the exercise of options or other equity awards granted under the
Company Stock Plans or any other plan of Parent or any its
Affiliates.
Section 5.05.
Indemnification,
Exculpation and Insurance. (a) Parent
and Sub agree that all rights to indemnification, advancement of
expenses and exculpation from liabilities for acts or omissions
occurring at or prior to the Effective Time now existing in
favor of the current or former directors or officers of the
Company and its Subsidiaries as provided in their respective
certificates of incorporation or bylaws (or comparable
organizational documents) and any indemnification or other
agreements of the Company as in effect on the date of this
Agreement and set forth in Section 5.05 of the Company
Letter shall be assumed by the Surviving Corporation in the
Merger, without further action, at the Effective Time, and shall
survive the Merger and shall continue in full force and effect
in accordance with their terms, and Parent shall cause the
Surviving Corporation to comply with and honor the foregoing
obligations without termination or modification thereof.
(b) In the event that the Surviving Corporation or any of
its successors or assigns (i) consolidates with or merges
into any other person and is not the continuing or surviving
corporation or entity of such consolidation or merger or
(ii) transfers or conveys all or substantially all its
properties and assets to any person, or if Parent dissolves the
Surviving Corporation then, and in each such case, Parent shall
cause proper provision to be made so that the successors and
assigns of the Surviving Corporation assume the obligations set
forth in this Section 5.05 and Parent shall cause such
successors and assigns to comply with and honor the foregoing
obligations without termination or modification thereof.
(c) Parent shall obtain, or cause to be obtained, as of the
Effective Time a “tail” insurance policy with a claims
period of six years from the Effective Time with respect to
directors’ and officers’ liability insurance covering
each person currently covered by the Company’s
directors’ and officers’ liability insurance policy
for acts or omissions occurring prior to the Effective Time on
terms that are no less favorable than those of such policy of
the Company in effect on the date of this Agreement, which
insurance shall, prior to the Closing, be in effect and prepaid
for such six-year period; provided that in no event shall
Parent or the Surviving Corporation be required to pay, with
respect to the entire six-year period following the Effective
Time, premiums for insurance under this Section 5.05(c)
which in the aggregate exceed 300% of the aggregate premiums
paid by the Company for the period from July 19, 2010 to,
and including, July 18, 2011, for such purpose (which
premiums for such period are hereby represented and warranted by
the Company to be the amount set forth in Section 5.05(c)
of the Company Letter); provided that Parent shall
nevertheless be obligated to provide such coverage, with respect
to the entire six-year period following the Effective Time, as
may be obtained for such 300% amount. For the avoidance of
doubt, nothing in this Section 5.05(c) shall require Parent
to make expenditures for such insurance coverage exceeding in
the aggregate the amount set forth in Section 5.05(c) of
the Company Letter. If requested by Parent, the Company shall
issue a broker of record letter naming the insurance broker
selected by Parent to effect such runoff coverage, and the
Company shall provide all cooperation and information reasonably
requested by Parent and the selected insurance broker with
respect to the procurement of such runoff coverage.
(d) The provisions of this Section 5.05 (i) are
intended to be for the benefit of, and will be enforceable by,
each indemnified party, his or her heirs and his or her
representatives and (ii) are in addition to, and not in
substitution for, any other rights to indemnification or
contribution that any such person may have by contract or
otherwise. The obligations of Parent and the Surviving
Corporation under this Section 5.05 shall not be terminated
or modified in such a manner as to adversely affect the rights
of any indemnified party to whom this Section 5.05 applies
without the prior written consent of such affected indemnified
party.
Section 5.06.
Fees
and Expenses. (a) Except as expressly
set forth in this Section 5.06, all fees and expenses
incurred in connection with this Agreement and the transactions
contemplated by this Agreement shall be paid by the party
incurring such fees or expenses, whether or not the Merger is
consummated.
43
(b) In the event that (i) prior to the Stockholders
Meeting a Takeover Proposal has been made to the Company or its
stockholders or any person has announced an intention (whether
or not conditional and whether or not withdrawn) to make a
Takeover Proposal or a Takeover Proposal otherwise becomes known
to the Company or generally known to the stockholders of the
Company and thereafter (A) this Agreement is terminated by
either Parent or the Company pursuant to Section 7.01(b)(i)
or Section 7.01(b)(iii) and (B) prior to the date that
is 12 months after such termination, (x) the Company
or any of its Subsidiaries enters into an Acquisition Agreement
with respect to any Takeover Proposal or (y) any Takeover
Proposal is consummated (solely for purposes of this
Section 5.06(b)(i)(B), the term “Takeover
Proposal” shall have the meaning set forth in the
definition of Takeover Proposal contained in
Section 4.02(a) except that all references to 15% shall be
deemed references to 40%) or (ii) this Agreement is
terminated by Parent pursuant to Section 7.01(c), then the
Company shall pay Parent a fee equal to $56,000,000 (the
“Termination Fee”) by wire transfer of
same-day
funds (A) in the case of a termination by Parent pursuant
to Section 7.01(c), within two business days after such
termination and (B) in the case of a payment as a result of
any event referred to in Section 5.06(b)(i)(B), no later
than the first to occur of the events referred to in
clauses (x) and (y) above, in each case to an account
designated by Parent.
(c) The Company acknowledges that the agreements contained
in this Section 5.06 are an integral part of the
transactions contemplated by this Agreement and that, without
these agreements, Parent would not have entered into this
Agreement. Accordingly, if the Company fails promptly to pay the
amounts due pursuant to this Section 5.06 and, in order to
obtain such payment, Parent commences a suit that results in a
judgment against the Company for the amounts set forth in this
Section 5.06, the Company shall pay to Parent its
reasonable costs and expenses (including attorneys’ fees
and expenses) in connection with such suit and any appeal
relating thereto, together with interest on the amounts set
forth in this Section 5.06 at the prime rate of Citibank,
N.A. in effect on the date such payment was required to be made.
Section 5.07.
Public
Announcements. The parties agree that the
initial press release to be issued with respect to the
transactions contemplated by this Agreement, shall be in the
form heretofore agreed to by the parties. Parent and Sub, on the
one hand, and the Company, on the other hand, shall, to the
extent reasonably practicable, consult with each other before
making, and give each other a reasonable opportunity to review
and comment upon, any press release or other public statements
with respect to this Agreement, the Merger and the other
transactions contemplated by this Agreement, and shall not issue
any such press release or make any such public statement prior
to such reasonably practicable consultation, except as may be
required by applicable Law, court process or by obligations
pursuant to any listing agreement with any national securities
exchange or national securities quotation system;
provided,
however, that these restrictions shall
not apply to any Company communications regarding any Takeover
Proposal or Adverse Recommendation Change.
Section 5.08.
Sub
Compliance. Parent shall cause Sub to comply
with all of Sub’s obligations under this Agreement.
Section 5.09.
Certain
Pre-Closing Actions. Prior to the Closing,
the Company shall take the actions set forth on
Section 5.09 of the Company Letter.
ARTICLE VI
(b)
Antitrust. Any waiting period
(and any extension thereof) applicable to the Merger under the
HSR Act shall have been terminated or shall have expired. Any
other approval or waiting period under any other applicable
competition, merger control, antitrust or similar Law shall have
been obtained or terminated or shall have expired.
44
(c)
No Injunctions or Legal
Restraints. No temporary restraining order,
preliminary or permanent injunction or other Judgment issued by
any court of competent jurisdiction or other legal restraint or
prohibition (collectively, “
Legal Restraints”)
that has the effect of preventing the consummation of the Merger
shall be in effect.
Section 6.02.
Conditions
to Obligations of Parent and Sub. The
obligations of Parent and Sub to effect the Merger are further
subject to the satisfaction or waiver on or prior to the Closing
Date of the following conditions:
(a)
Representations and
Warranties. The representations and
warranties of the Company contained herein that are qualified as
to Material Adverse Effect shall be true and correct (as so
qualified) in all respects, and all other representations and
warranties of the Company contained herein, taken as a whole,
shall be true and correct in all material respects (without
regard to any materiality qualification contained therein), in
each case as of the date of this Agreement and as of the Closing
Date with the same effect as though made as of the Closing Date,
except that the accuracy of representations and warranties that
by their terms speak as of a specified date will be determined
as of such date. Parent shall have received a certificate signed
on behalf of the Company by the chief executive officer and
chief financial officer of the Company to such effect.
(b)
Performance of Obligations of the
Company. The Company shall have performed in
all material respects all obligations required to be performed
by it under this Agreement at or prior to the Closing Date, and
Parent shall have received a certificate signed on behalf of the
Company by the chief executive officer and the chief financial
officer of the Company to such effect.
(c)
No Litigation. There shall not
be pending any claim, suit, action or proceeding brought or
threatened by any Governmental Entity (i) challenging or
seeking to restrain or prohibit the consummation of the Merger
or the other transactions contemplated by this Agreement,
(ii) seeking to prohibit or limit in any respect, or place
any conditions on, the ownership or operation by the Company,
Parent or any of their respective Affiliates of all or any
portion of the business or assets or any product of the Company
or its Subsidiaries or Parent or its Subsidiaries or to require
any such person to dispose of, license (whether pursuant to an
exclusive or nonexclusive license) or hold separate all or any
portion of the business or assets or any product of the Company
or its Subsidiaries or Parent or its Subsidiaries, in each case
as a result of or in connection with the Merger or any of the
other transactions contemplated by this Agreement,
(iii) seeking to impose limitations on the ability of
Parent or any of its Affiliates to acquire or hold, or exercise
full rights of ownership of, any shares of Company Common Stock
or any shares of common stock of the Surviving Corporation or
any of Parent’s Subsidiaries, including the right to vote
Company Common Stock or the shares of common stock of the
Surviving Corporation or any of Parent’s Subsidiaries on
all matters properly presented to the stockholders of the
Company, the Surviving Corporation or any of Parent’s
Subsidiaries, respectively, or (iv) seeking to
(A) prohibit Parent or any of its Affiliates from
effectively controlling in any respect any of the business or
operations of the Company or its or Parent’s Subsidiaries
or (B) prevent the Company or its or Parent’s
Subsidiaries from operating any of their respective businesses
in substantially the same manner as operated by the Company and
its or Parent’s Subsidiaries prior to the date of this
Agreement.
(d)
Legal Restraint. No Legal
Restraint that is reasonably likely to result, directly or
indirectly, in any of the effects referred to in
clauses (i) through (iv) of Section 6.02(c) shall
be in effect.
(e)
Consents. Parent shall have
received evidence, in form and substance reasonably satisfactory
to it, that Parent or the Company shall have obtained all
material (individually or in the aggregate) consents, approvals,
authorizations, qualifications and orders of all Governmental
Entities legally required to effect the Merger.
(f)
No Material Adverse
Effect. Since the date of this Agreement,
there shall not have occurred a Material Adverse Effect. Parent
shall have received a certificate signed on behalf of the
Company by the chief executive officer and the chief financial
officer of the Company to such effect.
45
Section 6.03.
Conditions
to Obligation of the Company. The obligation
of the Company to effect the Merger is further subject to the
satisfaction or waiver on or prior to the Closing Date of the
following conditions:
(a)
Representations and
Warranties. The representations and
warranties of Parent and Sub contained herein, taken as a whole,
shall be true and correct in all material respects (without
regard to any materiality qualification contained therein), in
each case as of the date of this Agreement and as of the Closing
Date with the same effect as though made as of the Closing Date,
except that the accuracy of representations and warranties that
by their terms speak as of a specified date will be determined
as of such date. The Company shall have received a certificate
signed on behalf of Parent by an authorized signatory of Parent
to such effect.
(b)
Performance of Obligations of Parent and
Sub. Parent and Sub shall have performed in
all material respects all obligations required to be performed
by them under this Agreement at or prior to the Closing Date,
and the Company shall have received a certificate signed on
behalf of Parent by an authorized signatory of Parent to such
effect.
Section 6.04.
Frustration
of Closing Conditions. None of the Company,
Parent or Sub may rely on the failure of any condition set forth
in Section 6.01, 6.02 or 6.03, as the case may be, to be
satisfied if such failure was caused by such party’s
failure to use reasonable best efforts to consummate the Merger
and the other transactions contemplated by this Agreement, as
required by and subject to Section 5.03, or by such
party’s breach of any other provision of this Agreement.
ARTICLE VII
Section 7.01.
Termination. This
Agreement may be terminated, and the Merger contemplated hereby
may be abandoned, at any time prior to the Effective Time,
whether before or after the Stockholder Approval has been
obtained, upon written notice (other than in the case of
Section 7.01(a) below) from the terminating party to the
non-terminating party specifying the subsection of this
Section 7.01 pursuant to which such termination is effected:
(a) by mutual written consent of Parent, Sub and the
Company;
(b) by either Parent or the Company, if:
(i) the Merger shall not have been consummated by the date
that is six months from the date of this Agreement (the
“Termination Date”) for any reason;
(ii) any Legal Restraint having the effect set forth in
Section 6.01(c) shall be in effect and shall have become
final and nonappealable; or
(iii) the Stockholders Meeting shall have been held and the
Stockholder Approval shall not have been obtained thereat or at
any adjournment or postponement thereof;
(c) by Parent, in the event the Company has delivered an
Adverse Recommendation Change Notice or an Adverse
Recommendation Change has occurred;
(d) by Parent, if (i) the Company shall have breached
any of its representations or warranties or failed to perform
any of its covenants or other agreements contained in this
Agreement, which breach or failure to perform (A) would
give rise to the failure of a condition set forth in
Section 6.02(a) or 6.02(b) and (B) is incapable of
being cured by the Company by the date that is 30 business days
after such breach or failure or, if capable of being cured by
the Company by such date, the Company does not commence to cure
such breach or failure within 10 business days after its receipt
of written notice thereof from Parent and diligently pursue such
cure thereafter, or (ii) if any Legal Restraint having any
of the effects referred to in clauses (i) through
(iv) of Section 6.02(c) shall be in effect and shall
have become final and nonappealable; or
46
(e) by the Company, if Parent shall have breached any of
its representations or warranties or failed to perform any of
its covenants or other agreements contained in this Agreement,
which breach or failure to perform (i) would give rise to
the failure of a condition set forth in Section 6.03(a) or
6.03(b) and (ii) is incapable of being cured by Parent or
Sub by the date that is 30 business days after such breach or
failure or, if capable of being cured by Parent or Sub by such
date, Parent or Sub, as the case may be, does not commence to
cure such breach or failure within 10 business days after its
receipt of written notice thereof from the Company and
diligently pursue such cure thereafter.
Section 7.02.
Effect
of Termination. In the event of termination
of this Agreement by either the Company or Parent as provided in
Section 7.01, this Agreement shall forthwith become void
and have no effect, without any liability or obligation on the
part of Parent, Sub or the Company, other than the provisions of
Section 3.01(v), the last sentence of Section 5.02(a),
Section 5.06, this Section 7.02 and Article VIII
and except for any material, intentional breach by a party of
any of its representations, warranties, covenants or agreements
set forth in this Agreement (which material breach and liability
therefor shall not be affected by termination of this Agreement
or any payment of the Termination Fee pursuant to
Section 5.06(b)).
Section 7.03.
Amendment. This
Agreement may be amended by the parties hereto at any time,
whether before or after the Stockholder Approval has been
obtained;
provided,
however, that after the
Stockholder Approval has been obtained, there shall be made no
amendment that by Law requires further approval by stockholders
of the Company without the further approval of such
stockholders. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties
hereto.
Section 7.04.
Extension;
Waiver. At any time prior to the Effective
Time, the parties may (a) extend the time for the
performance of any of the obligations or other acts of the other
parties, (b) waive any inaccuracies in the representations
and warranties contained herein or in any document delivered
pursuant hereto or (c) waive compliance with any of the
agreements or conditions contained herein;
provided,
however, that after the Stockholder Approval has been
obtained, there shall be made no waiver that by Law requires
further approval by stockholders of the Company without the
further approval of such stockholders. Any agreement on the part
of a party to any such extension or waiver shall be valid only
if set forth in an instrument in writing signed on behalf of
such party which specifically sets forth the terms of such
extension or waiver. The failure or delay by any party to this
Agreement to assert any of its rights under this Agreement or
otherwise shall not constitute a waiver of such rights nor shall
any single or partial exercise by any party to this Agreement of
any of its rights under this Agreement preclude any other or
further exercise of such rights or any other rights under this
Agreement.
ARTICLE VIII
Section 8.01.
Nonsurvival
of Representations and Warranties. None of
the representations and warranties in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive
the Effective Time. This Section 8.01 shall not limit any
covenant or agreement of the parties which by its terms
contemplates performance after the Effective Time.
Section 8.02.
Notices. All
notices or other communications required or permitted to be
given hereunder shall be in writing and shall be delivered by
hand or sent by facsimile or sent, postage prepaid, by
registered, certified or express mail or reputable overnight
courier service and shall be deemed given when so delivered by
hand or sent by facsimile, or if mailed, three days after
mailing (one business day in the case of
47
express mail or overnight courier service), as follows (or at
such other address for a party as shall be specified by notice
given in accordance with this Section 8.02):
if to Parent or Sub, to:
International Business Machines Corporation
Xxx Xxxxxxx Xxxx
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
Vice President, Corporate Development
with a copy to:
International Business Machines Corporation
Xxx Xxxxxxx Xxxx
Xxxxxx, XX 00000
Facsimile:
(000) 000-0000
|
|
|
|
Attention:
|
Xxxxxxx X. Xxxxxxxxx
|
Vice President and Assistant
General Counsel, Corporate Development
and with a copy to:
Cravath, Swaine & Xxxxx LLP
Worldwide Plaza
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile:
(000) 000-0000
|
|
|
|
Attention:
|
Xxxxx X. Xxxxxxx, Esq.
|
Xxxxxx X. Xxxxxx, Esq.
if to the Company, to:
00 Xxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Facsimile:
(000) 000-0000
|
|
|
|
Attention:
|
Xxxxx X. XxXxxxxx
|
Vice President, General Counsel & Secretary
with a copy to:
Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Facsimile:
(000) 000-0000
|
|
|
|
Attention:
|
Xxx X. Xxxxxxxxx, Esq.
|
Xxxxx X. Xxxxxxxxxx, Esq.
Section 8.03.
Definitions. For
purposes of this Agreement:
(a) ‘‘Affiliate” means, with
respect to any person, any other person directly or indirectly
controlling, controlled by or under common control with such
first person;
(b) as it relates to the Company,
“knowledge” means, with respect to any matter
in question, the actual knowledge (after reasonable inquiry of
the officer of the Company who has primary responsibility for
the subject matter in question if such officer is not listed in
Section 8.03(b) of the Company Letter) of any officer or
employee of the Company identified in Section 8.03(b) of
the Company Letter;
48
(c) “Material Adverse Effect” means
any state of facts, change, development, event, effect,
condition or occurrence, that, individually or in the aggregate,
is reasonably likely to result in a material adverse effect on
the business, assets, properties, financial condition or results
of operations of the Company and its Subsidiaries, taken as a
whole; provided, however, that none of the
following shall be deemed either alone or in combination to
constitute, and none of the following shall be taken into
account in determining whether there has been or would be, a
Material Adverse Effect: (i) general, legal, market,
economic or political conditions affecting the industry in which
the Company operates, provided that such conditions do not
disproportionately affect the Company and its Subsidiaries,
taken as a whole, in relation to other companies in the industry
in which the Company operates; (ii) changes affecting
general worldwide economic or capital market conditions
(including changes in interest or exchange rates), provided that
such changes do not disproportionately affect the Company and
its Subsidiaries, taken as a whole, in relation to other
companies in the industry in which the Company and its
Subsidiaries operate; (iii) the pendency or announcement of
this Agreement or the anticipated consummation of the Merger,
including, without limitation, any reaction of any customer,
employee, supplier, reseller, partner or other constituency to
the identity of Parent or any of the transactions contemplated
by this Agreement; (iv) any suit, claim, action or
proceeding that does not have a reasonable likelihood of success
on the merits, whether commenced or threatened, which asserts
allegations of a breach of fiduciary duty relating to this
Agreement, violations of securities Laws in connection with the
Proxy Statement or otherwise in connection with any of the
transactions contemplated by this Agreement; (v) any
decrease in the market price or trading volume of the Company
Common Stock (it being understood that the underlying cause or
causes of any such decrease may be deemed to constitute, in and
of itself or themselves, a Material Adverse Effect and may be
taken into consideration when determining whether there has
occurred a Material Adverse Effect, in each case unless such
underlying cause or causes are otherwise specifically excluded
under this definition); (vi) the Company’s failure to
meet any internal or published projections, forecasts or other
predictions or published industry analyst expectations of
financial performance (it being understood that the underlying
cause or causes of any such failure may be deemed to constitute,
in and of itself or themselves, a Material Adverse Effect and
may be taken into consideration when determining whether there
has occurred a Material Adverse Effect, in each case unless such
underlying cause or causes are otherwise specifically excluded
under this definition); (vii) any change in GAAP or
applicable Laws which occurs or becomes effective after the date
of this Agreement; (viii) actions or omissions of the
Company or any of its Subsidiaries taken with the prior written
consent of Parent; and (ix) any natural disaster, any act
or threat of terrorism or war anywhere in the world, any armed
hostilities or terrorist activities anywhere in the world, any
threat or escalation of armed hostilities or terrorist
activities anywhere in the world to the extent they do not
disproportionately affect the Company and its Subsidiaries,
taken as a whole, in relation to other companies in the industry
in which the Company operates;
(d) “person” means any natural
person, corporation, limited liability company, partnership,
joint venture, trust, business association, Governmental Entity
or other entity; and
(e) a “Subsidiary” of any person
means any other person (i) more than 50% of whose
outstanding shares or securities representing the right to vote
for the election of directors or other managing authority of
such other person are, now or hereafter, owned or controlled,
directly or indirectly, by such first person, but such other
person shall be deemed to be a Subsidiary only so long as such
ownership or control exists, or (ii) which does not have
outstanding shares or securities with such right to vote, as may
be the case in a partnership, joint venture or unincorporated
association, but more than 50% of whose ownership interest
representing the right to make the decisions for such other
person is, now or hereafter, owned or controlled, directly or
indirectly, by such first person, but such other person shall be
deemed to be a Subsidiary only so long as such ownership or
control exists.
Section 8.04.
Exhibits;
Interpretation. The headings contained in
this Agreement or in any Exhibit hereto and in the table of
contents to this Agreement are for reference purposes only and
shall not affect the meaning or interpretation of this
Agreement. Any capitalized terms used in any Exhibit but not
otherwise defined therein shall have the meaning as defined in
this Agreement. When a reference is made in this
49
Agreement to an Article, Section, Subsection or Exhibit, such
reference shall be to a Section or Article of, or an Exhibit to,
this Agreement unless otherwise indicated. For all purposes
hereof, the terms “include”, “includes” and
“including” shall be deemed followed by the words
“without limitation”. The words “hereof”,
“hereto”, “hereby”, “herein” and
“hereunder” and words of similar import when used in
this Agreement shall refer to this Agreement as a whole and not
to any particular provision of this Agreement. The term
“or” is not exclusive. The word “extent” in
the phrase “to the extent” means the degree to which a
subject or other thing extends, and such phrase does not mean
simply “if”. For purposes of the third and fourth
paragraphs of Section 4.02, the word “binding”
shall mean binding and subject to acceptance by the Company
without revocation. Except as otherwise provided, any
information “made available” to Parent by the Company
or its Subsidiaries shall include only that information
contained in such documents stored on the hard disk reflecting
the contents of that certain virtual data room maintained by the
Company through Xxxxx & Co., Inc. and that
Parent’s representatives have been granted access to as of
6:00 p.m., New York City time, on September 19, 2010,
a copy of which shall be provided to Parent as promptly as
practicable following the date of this Agreement. The
definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms. Any
agreement or instrument defined or referred to herein or in any
agreement or instrument that is referred to herein means such
agreement or instrument as from time to time amended, modified
or supplemented. References to a person are also to its
permitted successors and assigns.
Section 8.05.
Counterparts. This
Agreement may be executed in one or more counterparts (including
by facsimile), all of which shall be considered one and the same
agreement and shall become effective when one or more such
counterparts have been signed by each of the parties and
delivered to the other parties.
Section 8.06.
Entire
Agreement; No Third-Party Beneficiaries. This
Agreement (a) together with the Exhibits hereto and the
Company Letter, constitutes the entire agreement, and supersedes
all prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter of this
Agreement, except for the Confidentiality Agreement,
provided,
however, that if the Company enters into
a confidentiality agreement with a person making a Takeover
Proposal in accordance with Section 4.02(a) which does not
contain a “standstill” provision substantially similar
to that contained in Section 7 of the Confidentiality
Agreement, then the Company shall be deemed to have waived
Section 7 of the Confidentiality Agreement, and
(b) except for the provisions of Section 5.05, is not
intended to confer upon any person other than the parties hereto
(and their respective successors and assigns) any rights (legal,
equitable or otherwise) or remedies, whether as third party
beneficiaries or otherwise.
Section 8.07.
Governing
Law. 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 Laws thereof.
Section 8.08.
Assignment. Neither
this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned, in whole or in part, by operation
of Law or otherwise by any of the parties without the prior
written consent of the other parties, except that Sub may
assign, in its sole discretion, any of or all its rights,
interests and obligations under this Agreement to Parent or to
any direct or indirect wholly owned Subsidiary of Parent, but no
such assignment shall relieve Sub of any of its obligations
hereunder. Subject to the preceding sentence, this Agreement
shall be binding upon, inure to the benefit of and be
enforceable by, the parties hereto and their respective
successors and assigns.
Section 8.09.
Consent
to Jurisdiction; Service of Process;
Venue. Each of the parties hereto irrevocably
and unconditionally submits to the exclusive jurisdiction of the
Delaware Court of Chancery (and if the
Delaware Court of
Chancery shall be unavailable, any
Delaware State court and the
Federal court of the United States of America sitting in the
State of Delaware) for the purposes of any suit, action or other
proceeding arising out of this Agreement or the Merger or any
other transaction contemplated by this Agreement (and agrees
that no such action, suit or proceeding relating to this
Agreement shall be brought by it or any of its Subsidiaries
except in such courts). Each of the parties further agrees that,
to the fullest extent permitted by applicable Law, service of
any process, summons, notice or document by U.S. registered
mail to such person’s respective address set forth above
shall be effective service of process for any action, suit or
proceeding in the State of Delaware with respect to any matters
to which it has submitted to jurisdiction as set
50
forth above in the immediately preceding sentence. Each of the
parties hereto irrevocably and unconditionally waives (and
agrees not to plead or claim), any objection to the laying of
venue of any action, suit or proceeding arising out of this
Agreement or the Merger or any of the other transactions
contemplated by this Agreement in the Delaware Court of Chancery
(and if the Delaware Court of Chancery shall be unavailable, in
any Delaware State court or the Federal court of the United
States of America sitting in the State of Delaware) or that any
such action, suit or proceeding brought in any such court has
been brought in an inconvenient forum.
Section 8.10.
WAIVER
OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT,
ACTION OR OTHER PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH PARTY
HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH PARTY WOULD NOT, IN THE EVENT OF ANY
ACTION, SUIT OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER
AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO
HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT, BY, AMONG OTHER
THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS IN THIS
SECTION 8.10.
Section 8.11.
Enforcement. The
parties 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. It is accordingly agreed that the parties hereto shall
be entitled to an injunction or injunctions to prevent breaches
of this Agreement and to enforce specifically the terms and
provisions of this Agreement in the Delaware Court of Chancery
(and if the Delaware Court of Chancery shall be unavailable, in
any Delaware State court or the Federal court of the United
States of America sitting in the State of Delaware), this being
in addition to any other remedy to which they are entitled at
Law or in equity. Each of the parties agrees that it will not
oppose the granting of an injunction, specific performance and
other equitable relief on the basis that (x) any party has
an adequate remedy at law or (y) an award of specific
performance is not an appropriate remedy for any reason at law
or equity.
Section 8.12.
Consents
and Approvals. For any matter under this
Agreement requiring the consent or approval of any party to be
valid and binding on the parties hereto, such consent or
approval must be in writing and executed and delivered to the
other parties by a person duly authorized by such party to do so.
Section 8.13.
Severability. If
any provision of this Agreement or the application of any such
provision to any person or circumstance shall be held invalid,
illegal or unenforceable in any respect by a court of competent
jurisdiction, such invalidity, illegality or unenforceability
shall not affect the validity, legality or enforceability of any
other provision hereof and the invalidity of a particular
provision in a particular jurisdiction shall not invalidate such
provision in any other jurisdiction.
51
INTERNATIONAL BUSINESS MACHINES CORPORATION,
Name: Xxxxx Xxxxxxx
Title: VP, Corporate Development
ONYX ACQUISITION CORP.,
Name: Xxxx Xxxxx
Title: Director, Corporate
Development
Name: Xxxxx X. Xxxx
Title: President and Chief
Executive Officer
52
EXHIBIT A
AMENDED AND
RESTATED
CERTIFICATE OF INCORPORATION
OF
SURVIVING CORPORATION
ARTICLE I
The name of the corporation (hereinafter called the
“
Corporation”) is
Netezza Corporation.
ARTICLE II
The address of the Corporation’s registered office in the
State of Delaware is 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx
Xxxxxx, Xxxxxxxx. The name of the registered agent at such
address is The Corporation Trust Company.
ARTICLE III
The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the
General Corporation Law of the State of Delaware.
ARTICLE IV
The total number of shares of all classes of stock that the
Corporation shall have authority to issue is 1,000 shares
of Common Stock having the par value of $0.01 per share.
ARTICLE V
The number of directors of the Corporation shall be fixed from
time to time by the Board of Directors of the Corporation.
ARTICLE VI
In furtherance and not in limitation of the powers conferred
upon it by law, the Board of Directors of the Corporation is
expressly authorized to adopt, amend or repeal the Bylaws of the
Corporation.
ARTICLE VII
Unless and except to the extent that the Bylaws of the
Corporation so require, the election of directors of the
Corporation need not be by written ballot.
ARTICLE VIII
To the fullest extent from time to time permitted by law, no
director of the Corporation shall be personally liable to any
extent to the Corporation or its stockholders for monetary
damages for breach of his fiduciary duty as a director.
ARTICLE IX
Each person who is or was or had agreed to become a director or
officer of the Corporation, and each such person who is or was
serving or who had agreed to serve at the request of the
Corporation as a director, officer, partner, member, employee or
agent of another corporation, partnership, limited liability
company, joint venture, trust or other enterprise (including the
heirs, executor, administrators or estate of such person), shall
be indemnified by the Corporation to the fullest extent
permitted from time to time by applicable law. Any repeal or
modification of this Article IX shall not adversely affect
any right to indemnification of any person existing at the time
of such repeal or modification with respect to any matter
occurring prior to such repeal or modification.