Additional Definitive Proxy Solicitation Material — Schedule 14A Filing Table of Contents
Document/ExhibitDescriptionPagesSize
1: DEFA14A Current Report of Material Events or Corporate HTML 53K
Changes
2: EX-2.1 Plan of Acquisition, Reorganization, Arrangement, HTML 776K Liquidation or Succession
3: EX-10.11.1 Material Contract HTML 28K
4: EX-10.27 Material Contract HTML 180K
5: EX-10.28 Material Contract HTML 98K
6: EX-99.5 Miscellaneous Exhibit HTML 26K
7: EX-99.6 Miscellaneous Exhibit HTML 13K
8: EX-99.7 Miscellaneous Exhibit HTML 17K
EX-2.1 — Plan of Acquisition, Reorganization, Arrangement, Liquidation or Succession
THIS AGREEMENT AND PLAN OF MERGER (this “Agreement”) is made and entered
into as of November 5, 2006, by and among NAVTEQ Corporation, a Delaware
corporation (“Parent”), NAVTEQ Holdings B.V., a
corporation organized under the laws of The Netherlands and a wholly-owned
subsidiary of Parent (“BV Sub”), NAVTEQ
Holdings Delaware, Inc., a Delaware corporation and a direct,
wholly-owned subsidiary of BV Sub (“Merger
Sub”), and Traffic.com, Inc., a Delaware corporation (the “Company”). All capitalized terms used in this Agreement
shall have the respective meanings ascribed thereto in Article I.
RECITALS
WHEREAS, the Boards
of Directors of Parent, BV Sub, Merger Sub and the Company deem it advisable
and in the best interest of their respective stockholders to consummate the
transactions contemplated by this Agreement on the terms and subject to the
conditions provided for herein;
WHEREAS, the Boards of Directors
of Parent, Merger Sub and the Company and the shareholder and managing director
of BV Sub have approved, in accordance with Applicable Law, this Agreement and
the transactions contemplated hereby, including the Merger, and the Board of
Directors of the Company has resolved to recommend to the stockholders of the
Company that they approve and adopt this Agreement and approve the Merger;
WHEREAS, it is proposed that the
acquisition be accomplished by the merger of the Company with and into Merger
Sub, with Merger Sub being the Surviving Corporation, in accordance with the
applicable provisions of Delaware Law, and each share of Company Common Stock
will thereupon be cancelled and converted into the right to receive the
consideration as set forth herein, all upon the terms and subject to the
conditions set forth herein;
WHEREAS, for United States
federal income tax purposes, the parties intend that the Merger qualify as a “reorganization”
within the meaning of Section 368(a) of the Code and that this Agreement
constitutes a “plan of reorganization” for purposes of Section 368(a) of the Code;
WHEREAS, concurrently with the
execution and delivery of this Agreement, as a condition and inducement to the
willingness of Parent, BV Sub and Merger Sub to enter into this Agreement, each
of the directors and executive officers of the Company who own shares of
Company Common Stock and who are identified on Schedule I hereto, in
their respective capacities as stockholders of the Company, and each of the
other stockholders of the Company identified on Schedule I hereto, have
entered into Voting Agreements with Parent substantially in the forms attached
hereto as Exhibit A-1 or Exhibit A-2 (each, a “Voting
Agreement” and collectively, the “Voting Agreements”); and
WHEREAS, the Company, Parent, BV
Sub and Merger Sub desire to make certain representations, warranties,
covenants and agreements in connection with the Merger and also to prescribe
various conditions to the Merger.
NOW, THEREFORE, in consideration
of the foregoing premises and the representations, warranties, covenants and
agreements set forth herein, as well as other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged and accepted, and
intending to be legally bound hereby, Parent, BV Sub, Merger Sub and the
Company hereby agree as follows:
Article I
DEFINITIONS
1.1. Certain Definitions. For all purposes of and under this
Agreement, the following capitalized terms shall have the following respective
meanings:
“Acquisition
Proposal” shall mean any offer, proposal or any third party
indication of interest or intent relating to any transaction or series of
related transactions involving: (i) any purchase or acquisition by any Person
or “group” (as defined under Section 13(d) of the Exchange Act and the rules
and regulations thereunder) of more than a 10% interest in the total
outstanding voting securities of the Company or any tender offer or exchange
offer that, if consummated, would result in any Person or group beneficially
owning 10% or more of the total outstanding voting securities of the Company,
(ii) any merger, consolidation, business combination or similar transaction
involving the Company or any of its Subsidiaries pursuant to which the
stockholders of the Company immediately preceding such transaction hold less
than 90% of the equity interests in the surviving or resulting entity of such
transaction or the parent of any such surviving or resulting entity, (iii) any
sale, lease (other than in the ordinary course of business), exchange,
transfer, license (other than in the ordinary course of business), acquisition
or disposition of more than 10% of the assets of the Company and its
Subsidiaries, taken as a whole (other than in a transaction involving not more
than 20% of the assets of the Company and its Subsidiaries, taken as a whole,
as may be consented to by Parent, which consent may not be unreasonably
withheld, conditioned or delayed), (iv) any liquidation or dissolution of the
Company (provided, however, that the transactions between Parent and the
Company contemplated by this Agreement shall not be deemed an Acquisition
Proposal), or (v) any combination of the foregoing.
“Affiliate”shall
mean, with respect to any Person, any other Person which directly or indirectly
controls, is controlled by or is under common control with such Person. For
purposes of the immediately preceding sentence, the term “control” (including,
with correlative meanings, the terms “controlling,”“controlled by” and “under
common control with”), as used with respect to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through
ownership of voting securities, by contract or otherwise.
“Applicable Law”shall
mean any and all applicable federal, state, local, municipal, foreign or other
law, statute, treaty, constitution, principle of common law, resolution,
ordinance, code, edict, decree, directive, guidance, order, rule, regulation,
ruling or requirement issued, enacted, adopted, promulgated, implemented or
otherwise put into effect by or under the authority of any Governmental
Authority.
2
“Business Day”shall
mean any day, other than a Saturday, Sunday and any day which is a legal
holiday under the laws of the State of Delaware.
“Code”shall
mean the Internal Revenue Code of 1986, as amended.
“Company Material Adverse Effect”
shall mean any change, circumstance, development, effect, event, fact or
occurrence that, individually, or when taken together with all such other
changes, circumstances, developments, effects, events, facts or occurrences
that exist or have occurred prior to the date of determination of the Company
Material Adverse Effect, has caused, resulted in or had, a material and adverse
effect on the business, financial condition, assets (whether real, personal or
mixed, tangible or intangible), properties, or results of operations of the
Company and its Subsidiaries, taken as a whole; provided, however, that, in no
event shall any of the following be deemed to constitute or be taken into
account in determining whether a Company Material Adverse Effect has
occurred: any change, circumstance,
development, effect, event, fact or occurrence primarily resulting (i) from
changes affecting the United States or world economy generally, which changes
do not affect the Company and its Subsidiaries, taken as a whole, in a
disproportionate manner, (ii) from changes affecting the industry in which the
Company and its Subsidiaries operate generally which changes do not affect the
Company and its Subsidiaries, taken as a whole, in a disproportionate manner,
(iii) from a change in the Company’s stock price or the trading volume in such
stock; provided, however, that
this clause (iii) shall not exclude any underlying effect which may have caused
such change in stock price or trading volume, (iv) from a failure to meet the
Company’s internal projections or securities analysts’ estimates of revenue,
earnings or other business or operating metrics for the Company for any period
ending on or after the date of this Agreement (or for such other period for
which estimates of revenues, earnings
or other business or operating metrics are released); provided, however, that this clause (iv) shall not exclude any
underlying effect which may have caused such failure to meet securities analysts’
estimates of revenue, earnings or other business or operating metrics, (v) from
changes in accounting requirements or principles imposed upon the Company and
its Subsidiaries pursuant to changes in GAAP or Applicable Law which changes
were first publicly disclosed after the date hereof, (vi) from any change in
Applicable Laws, or the interpretation thereof, (vii) from any litigation
brought by a holder of Company Common Stock arising from allegations of a
breach of fiduciary duty relating to this Agreement, or (viii) from the loss of
any single customer which, individually, accounted for $1,000,000 or less of
the Company’s net revenue during the preceding twelve (12) month period prior
to the date of this Agreement or any group of customers which, in the aggregate,
accounted for $1,000,000 or less of the Company’s net revenue during the
preceding twelve (12) month period prior to the date of this Agreement.
“Company Options”shall
mean any outstanding options to purchase shares of Company Common Stock under
any of the Company Stock Option Plans or otherwise.
“Company Securities”shall
mean the Company Common Stock and any other securities of the Company.
“Company Warrants”shall
mean any outstanding warrants to purchase shares of Company Common Stock.
3
“Contract”
shall mean any contract, subcontract, agreement, commitment, note, bond,
mortgage, indenture, lease, license, sublicense, permit, franchise or other
instrument, obligation or binding arrangement or understanding of any kind or
character, whether oral or in writing.
“Delaware Law”
shall mean the DGCL and any other applicable law of the State of Delaware.
“DGCL”shall
mean the General Corporation Law of the State of Delaware, or any successor
statute thereto.
“Environmental Law”
means any and all applicable federal, state and local statutes, laws,
regulations, ordinances, rules, judicial and administrative orders, injunctions
or decrees, or other legal requirements relating to occupational safety and
health, the environment, or emissions, discharges or releases of Hazardous
Substances into the environment, including ambient air, surface water,
groundwater or land, or otherwise relating to the handling of Hazardous
Substances or the investigation, clean-up or other remediation thereof.
“Environmental Matters”
means any liability or obligation arising under Environmental Law, whether
arising under theories of contract, tort, negligence, successor or enterprise
liability, strict liability or other legal or equitable theory, including (i)
any failure to comply with an applicable Environmental Law or Permit and (ii)
any liability or obligation arising from the manufacture, processing,
distribution, treatment, storage, disposal, transport, presence of, release or
threatened release of, or exposure of persons or property to, Hazardous
Substances.
“Hazardous Substance”
means any “hazardous substance,”“hazardous waste,”“pollutant,”“contaminant”
or “toxic substance” (as defined or regulated by any Environmental Law,
including the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. Section 9601 et seq., the Resources Conservation and Recovery
Act, 42 U.S.C. Section 6901 et seq., the Clean Water Act, 33 U.S.C. Section
1251 et seq., the Clean Air Act, 42 U.S.C. Section 7401 et seq., or the Toxic
Substances Control Act, 15 U.S.C. Section 2601 et seq., and regulations
promulgated thereunder, or any analogous state and local laws and regulations),
petroleum and petroleum products, polychlorinated biphenyls or asbestos.
“Knowledge”
shall mean (i) with respect to the Company and its Subsidiaries, with respect
to any matter in question, that any of the following persons has actual
knowledge of such matter after reasonable inquiry of the persons employed by
the Company and its Subsidiaries whose duties would, in the normal course of
the affairs of the Company and its Subsidiaries, result in such person having
knowledge of the matter in question: the Company’s Chief Executive Officer,
President, Chief Operating Officer, Chief Financial Officer, Chief Information
Officer, and General Counsel, and (ii) with respect to Parent, BV Sub, Merger
Sub and Parent’s other Subsidiaries, with respect to any matter in question,
that any of the following persons has actual knowledge of such matter after
reasonable inquiry of the persons employed by Parent and its Subsidiaries whose
duties would, in the normal course of the affairs of Parent and its
Subsidiaries, result in such person having knowledge of the matter in question:
Parent’s President and Chief Executive Officer, Chief Financial Officer, and
General Counsel.
4
“Legal Proceedings”
shall mean any action, claim, suit, litigation, arbitration, proceeding (public
or private), criminal prosecution, audit or investigation by or before any
Governmental Authority.
“Liability” or “Liabilities”shall
mean all indebtedness, obligations and other liabilities, whether direct or
indirect, and any loss, damage (including direct, incidental, consequential and
special damages), cost, deficiency, Lien, penalty, fine, cost or expense
(including any litigation expenses), or any diminution in value of any real or
personal property (excluding any depreciation), or contingent liability, loss
contingency, unpaid expense, claim, guaranty or endorsement (other than
endorsements for deposits or collection of checks in the ordinary course of
business).
“Lien”
shall mean any lien, pledge, hypothecation, charge, mortgage, security
interest, encumbrance, claim, interference, option, right of first refusal,
preemptive right, community property interest or restriction of any nature
(including any restriction on the voting of any security, any restriction on
the transfer of any security or other asset, any restriction on the possession,
exercise or transfer of any other attribute of ownership of any asset).
“NASDAQ”shall
mean the Nasdaq Global Market, any successor inter-dealer quotation system
operated by the Nasdaq Stock Market, Inc. or any successor thereto.
“NYSE”shall
mean the New York Stock Exchange.
“Parent Material Adverse Effect”
shall mean any change, circumstance, development, effect, event, fact or
occurrence that, individually, or when taken together with all such other
changes, circumstances, developments, effects, events, facts or occurrences
that exist or have occurred prior to the date of determination of the Parent
Material Adverse Effect, has caused, resulted in or had, a material and adverse
effect on the business, financial condition, assets (whether real, personal or
mixed, tangible or intangible), properties, or results of operations of Parent
and its Subsidiaries, taken as a whole; provided, however, that, in no event
shall any of the following be deemed to constitute or be taken into account in
determining whether a Parent Material Adverse Effect has occurred: any change, circumstance, development,
effect, event, fact or occurrence primarily resulting (i) from changes
affecting the United States or world economy generally, which changes do not
affect Parent and its Subsidiaries, taken as a whole, in a disproportionate
manner, (ii) from changes affecting the industry in which Parent and its
Subsidiaries operate generally which changes do not affect Parent and its
Subsidiaries, taken as a whole, in a disproportionate manner, (iii) from a
change in Parent’s stock price or the trading volume in such stock; provided, however, that this clause
(iii) shall not exclude any underlying effect which may have caused such change
in stock price or trading volume, (iv) from a failure to meet Parent’s internal
projections or securities analysts’ estimates of revenue, earnings or other
business or operating metrics for Parent for any period ending on or after the
date of this Agreement (or for such other period for which estimates of
revenues, earnings or other business or operating metrics are released); provided, however, that this clause
(iv) shall not exclude any underlying effect which may have caused such failure
to meet securities analysts’ estimates of revenue, earnings or other business
or operating metrics, (v) from changes in accounting requirements or principles
imposed upon Parent and its Subsidiaries pursuant to changes in GAAP or
Applicable Law which changes were first publicly disclosed after the date hereof,
(vi) any change in
5
Applicable Laws, or the interpretation thereof or
(vii) from any litigation brought by a holder of Parent Common Stock arising
from allegations of a breach of fiduciary duty relating to this Agreement.
“Parent Stock Option Plans”shall
mean all of Parent’s currently existing stock incentive plans.
“Person”shall
mean any individual, corporation (including any non-profit corporation),
general partnership, limited partnership, limited liability partnership, joint
venture, estate, trust, company (including any limited liability company or
joint stock company), firm or other enterprise, association, organization,
entity or Governmental Authority.
“Proxy Statement”shall
mean the proxy statement, letter to stockholders, notice of meeting and form of
proxy accompanying the proxy statement that will be provided to the
stockholders of the Company in connection with the solicitation of proxies for
use at the Company Stockholders’ Meeting, and any schedules required to be
filed with the SEC under the Exchange Act in connection therewith, and any
amendments or supplements thereto, which Proxy Statement will be included in
the Registration Statement and form part of the Proxy Statement/Prospectus.
“Registration Statement”shall
meanthe Registration Statement on Form
S-4 to be filed by Parent with the SEC under the Securities Act to register the
shares of Parent Common Stock issuable in connection with the Merger, and any
amendments or supplements thereto
“SEC”shall
mean the United States Securities and Exchange Commission, or any successor
thereto.
“Subsidiaries”
of any Person shall mean (i) a corporation more than fifty percent (50%) of the
combined voting power of the outstanding voting stock of which is owned,
directly or indirectly, by such Person or by one of more other Subsidiaries of
such Person or by such Person and one or more other Subsidiaries thereof, (ii)
a partnership of which such Person, or one or more other Subsidiaries of such
Person or such Person and one or more other Subsidiaries thereof, directly or
indirectly, is the general partner and has the power to direct the policies,
management and affairs of such partnership, (iii) a limited liability company
of which such Person or one or more other Subsidiaries of such Person or such
Person and one or more other Subsidiaries thereof, directly or indirectly, is
the managing member and has the power to direct the policies, management and
affairs of such company or (iv) any other Person (other than a corporation,
partnership or limited liability company) in which such Person, or one or more
other Subsidiaries of such Person or such Person and one or more other
Subsidiaries thereof, directly or indirectly, has at least a majority ownership
and power to direct the policies, management and affairs thereof.
“Superior Proposal”with
respect to the Company, shall mean an unsolicited, bona fide written offer made
by a third party to acquire, directly or indirectly, pursuant to a tender
offer, exchange offer, merger, consolidation or other business combination, a
majority of the assets of the Company (measured by either fair market value of
such assets or by revenue attributable to such assets) or all of the outstanding
voting securities of the Company, or otherwise enter into a
6
transaction as a result of which the stockholders of
the Company immediately preceding such transaction would hold less than 50% of
the equity interests in the surviving or resulting entity of such transaction
and any direct or indirect parent or subsidiary thereof, on terms that the
Board of Directors of the Company has reasonably concluded in good faith
(following the receipt of advice of its outside legal counsel and its financial
advisor, and taking into account, among other things, all legal, financial,
regulatory and other aspects of the offer and the Person making the offer,
including without limitation any proposed conditions to consummation, as well
as any counter-offer or counter-proposal made by Parent) to be more favorable,
from a financial point of view, to the Company’s stockholders (in their
capacities as stockholders) than the terms of the Merger, is reasonably likely
to be consummated and for which financing, to the extent required, is then
fully committed or reasonably determined by the Board of Directors in good
faith to be available.
1.2. List of Additional Defined Terms. The following capitalized terms shall
have the respective meanings ascribed thereto in the respective sections of
this Agreement set forth opposite each of the capitalized terms identified
below:
2.1. The Merger. Upon the terms and subject to the
conditions set forth in this Agreement and the applicable provisions of
Delaware Law, at the Effective Time, the Company shall be merged with and into
Merger Sub (the “Merger”), the separate corporate existence of the
Company shall thereupon cease and Merger Sub shall continue as the surviving
corporation of the Merger. (Merger Sub,
as the surviving corporation of the Merger, is sometimes hereinafter referred
to as the “Surviving Corporation”).
At the Effective Time, the effect of the Merger shall be as provided in
this Agreement and the applicable provisions of Delaware Law. Without limiting
the generality of the foregoing, at the Effective Time all of the property,
rights, privileges, powers and franchises of the Company and Merger Sub shall
vest in the Surviving Corporation, and all debts, liabilities and duties of the
Company and Merger Sub shall become the debts, liabilities and duties of the
Surviving Corporation.
2.2. Effective Time of the Merger. Upon the terms and subject to the
conditions set forth in this Agreement, on the Closing Date, Merger Sub shall
cause the Merger to be consummated under Delaware Law by filing a certificate
of merger in customary form and substance (the “Certificate of Merger”)
with the Secretary of State of the State of Delaware (the “Delaware
Secretary of State”) in accordance with the applicable provisions of
Delaware Law, with the time of such filing with the Delaware Secretary of
State, or such later time as may be agreed in writing by Parent and the Company
and specified in the Certificate of Merger, being referred to in this Agreement
as the “Effective Time.”
2.3. Closing. The consummation of the Merger (the “Closing”)
shall take place at a closing to occur at the offices of Pepper Hamilton LLP,
600 Fourteenth Street, N.W., Washington, D.C.20005, on a date and at a time to
be agreed upon by Parent, BV Sub, Merger Sub and the Company, which date shall
be no later than the second Business Day after the satisfaction or waiver (to
the extent permitted by this Agreement and Applicable Law) of the last to be
satisfied or waived of the conditions set forth in Article VII (other than
those conditions that by their terms are to be satisfied at the Closing, but
subject to the satisfaction or waiver, to the extent permitted by this
Agreement and Applicable Law, of such conditions), or at such other location,
date and time as Parent, BV Sub, Merger Sub and the Company shall mutually
agree upon in writing, with the date upon which the Closing shall actually
occur pursuant hereto being referred to in this Agreement as the “Closing
Date.”
2.5.Directors
and Officers. Unless
otherwise determined by Parent prior to the Effective Time, the directors and
officers of Merger Sub holding office immediately prior to the Effective Time
shall be the directors and officers of the Surviving Corporation as of and
after the Effective Time and shall continue as such until their respective
successors are duly elected or appointed and qualified.
2.6.Effect on
Capital Stock; Effect on Options and Warrants.
Upon the terms and subject to the conditions of this
Agreement, at the Effective Time, by virtue of the Merger and without any
action on the part of Parent, BV Sub, Merger Sub, the Company or the holders of
any shares of capital stock of the Company:
(a) Treasury Stock. All shares of Company Common Stock that
are held in the Company’s treasury shall be cancelled and cease to exist and no
cash, shares of Parent capital stock or other consideration shall be delivered
in exchange therefor.
(b) Subsidiary and Parent-Owned Stock. All shares
of Company Common Stock held by any direct or indirect wholly-owned Subsidiary
of the Company shall be cancelled and cease to exist and no cash, shares of
Parent capital stock or other consideration shall be delivered in exchange
therefor. All shares of Company Common Stock held by the Parent or any direct
or indirect wholly-owned Subsidiary of Parent shall be cancelled and cease to
exist and no cash, shares of Parent capital stock or other consideration shall
be delivered in exchange therefor.
(c) Conversion of Company Common Stock. Subject to the other
provisions of this Article II (including the election and pro-ration provisions
set forth in Section 2.7), each issued and outstanding share of Company Common
Stock shall be converted into the right to receive, at the election of the
holder thereof:
(i) 0.235 shares of Parent
Common Stock (the “Per Share Stock Consideration,” and the ratio of one share of
Company Common Stock to the Per Share Stock Consideration being the” Exchange Ratio”);
or
(ii) cash in the amount of
$8.00, without interest (the “Per Share Cash Consideration”).
All such shares of
Company Common Stock, when so converted, shall be retired, shall cease to be
outstanding and shall automatically be cancelled, and the holder of a
certificate (“Certificate”) that, immediately prior to the Effective Time
represented such shares of Company Common Stock shall cease to have any rights
with respect thereto, except the right to receive, upon the surrender of such
Certificate in accordance with Section 2.8(c): (A) the Per Share Stock
Consideration and/or the Per Share Cash Consideration, as the case may be, as
determined in accordance with Section 2.7, (B) certain dividends and other
distributions in accordance with Section 2.8(d), and (C) cash in lieu of
fractional shares of Parent Common Stock in accordance with Section 2.6(f), in
each case without interest (collectively, the “Merger Consideration”). All Merger
Consideration paid upon the surrender for exchange of shares of Company Common
Stock in accordance with the terms hereof shall be deemed to have been paid in
full satisfaction of all rights pertaining to such shares of Company Common
Stock, and there shall be no registration of transfers on the records of the
Surviving Corporation of shares of Company
11
Common Stock that
were outstanding immediately prior to the Effective Time. If, after the
Effective Time, Certificates are presented to the Surviving Corporation for any
reason, they shall be cancelled and exchanged as provided in this Article II.
Notwithstanding the foregoing,
if between the date hereof and the Effective Time the Parent Common Stock or
Company Common Stock is changed into a different number of shares or a
different class, because of any stock dividend, subdivision, reclassification,
recapitalization, split, combination or exchange of shares, the Exchange Ratio
and the Per Share Cash Consideration shall be correspondingly adjusted to
reflect such stock dividend, subdivision, reclassification, recapitalization,
split, combination or exchange of shares.
(d) Parent Common Stock. The Merger shall not affect any
shares of Parent Common Stock that are issued and outstanding immediately prior
to the Effective Time.
(e) Company Options; Company Warrants.
(i) At the Closing, each
Company Option then outstanding under any of the Company Stock Option Plans
shall be treated in accordance with the provisions of this Article II and Section
6.12. At the time of execution and delivery of this Agreement by the Company, the
Company shall deliver or cause to be delivered to Parent written evidence that
the Company’s Board of Directors or the Compensation Committee of the Board of
Directors has taken such action pursuant to the Company Stock Option Plans and
the stock option agreements pertaining to all outstanding Company Options so as
to cause all Company Options outstanding at the Closing to be cancelled, other
than those to be assumed by Parent in accordance with Section 6.12(a) and those
that become Exchanged Options in accordance with Section 6.12(b). With respect
to the Company’s 1999 Non-Employee Option Plan, the Company shall use all
commercially reasonable efforts to cause the holders of Company Options
outstanding under such plan to exercise such Company Options at or prior to
Closing. Subject to the other provisions of this Article II (including the
election and pro-ration provisions set forth in Section 2.7), each Exchanged
Option shall be converted (on a net basis, taking into account the exercise
price of such Exchanged Option) into the right to receive, at the election of
the holder thereof (A) the Per Share Stock Consideration or (B) the Per Share
Cash Consideration.
(ii) At the Closing, each
Company Warrant then outstanding shall be treated in accordance with the
provisions of Section 6.12(c), except that Exchanged Warrants shall be treated
in accordance with the provisions of this Article II and Section 6.12. Subject
to the other provisions of this Article II (but excluding the election and
pro-ration provisions set forth in Section 2.7), each Exchanged Warrant shall
be converted (on a net basis, taking into account the exercise price of such
Exchanged Warrant) into the right to receive the Per Share Stock Consideration.
(iii) All Exchanged Options
and Exchanged Warrants, when so converted, shall be retired, shall cease to be
outstanding and shall automatically be cancelled, and the holder thereof shall
cease to have any rights with respect thereto, except the right to receive,
upon the surrender of such Exchanged Option or Exchanged Warrant in accordance
with Section 2.8(c): (A) the Per Share Stock Consideration and/or the Per Share
Cash Consideration, as the case may be, as determined in accordance with
Section 2.7 (and, in the case of Exchanged
12
Warrants, the Per Share Stock Consideration
only), (B) certain dividends and other distributions in accordance with Section
2.8(d), and (C) cash in lieu of fractional shares of Parent Common Stock in
accordance with Section 2.6(f), in each case without interest. All such
consideration paid upon the surrender for exchange of Exchanged Options or
Exchanged Warrants in accordance with the terms hereof shall be deemed to have
been paid in full satisfaction of all rights pertaining to such Exchanged
Option or Exchanged Warrant.
(f) No Fractional Shares of Parent Common Stock. No
fractional shares of Parent Common Stock shall be issued in the Merger, but in
lieu thereof (i) each holder of shares of Company Common Stock and (ii) each
holder of a Company Option or Company Warrant which becomes an Exchanged Option
or Exchanged Warrant, who would otherwise be entitled to a fraction of a share
of Parent Common Stock (after aggregating all fractional shares of Parent
Common Stock that otherwise would be received by such holder) shall, upon
surrender of such holder’s Certificate(s), Company Option or Company Warrant,
as applicable, receive an amount of cash (rounded to the nearest whole cent),
without interest, less the amount of any withholding taxes as contemplated by
Section 2.8(f) which are required to be withheld with respect thereto, equal to
the product of: (i) such fraction, multiplied by (ii) the average closing price
of one share of Parent Common Stock for the ten (10) most recent trading days
that Parent Common Stock has traded ending on the trading day one day prior to
the Effective Time, as reported on the NYSE. As soon as practicable after the
determination of the amount of cash to be paid to such former holders in lieu
of any fractional interests, the Exchange Agent shall notify Parent, and Parent
shall cause BV Sub to deposit with the Exchange Agent and shall cause the
Exchange Agent to make available in accordance with this Agreement such amounts
to such former holders of Company Common Stock, Company Options and Company
Warrants.
2.7. Election and Allocation
Procedures.
(a) Cash and Stock Elections. Subject to the election and allocation
procedures set forth in this Section 2.7, the limitations imposed by the Cash
Consideration Cap and the Stock Consideration Cap and the agreements to make
Stock Elections set forth in Section 2.7(e), each record holder (or beneficial
owner through appropriate and customary documentation and instructions) of
shares of Company Common Stock immediately prior to the Effective Time and each
holder of a Company Option that has become an Exchanged Option in accordance
with Section 6.12(b) shall be entitled to:
(i) elect to receive the
Merger Consideration (A) in respect of each such share of Company Common Stock and
(B) in respect of each Exchanged Option (on a net basis, taking into account
the exercise price of such Exchanged Option) entirely in cash (a “Cash Election”),
(ii) elect to receive the
Merger Consideration (A) in respect of each such share of Company Common Stock
and (B) in respect of each Exchanged Option (on a net basis, taking into account
the exercise price of such Exchanged Option) entirely in shares of Parent
Common Stock (a “Stock Election”), or
(iii) indicate that such
holder has no preference as to the receipt of cash or shares of Parent Common
Stock with respect to such shares of Company Common
13
Stock or Exchanged Options (a “Non-Election;”
and any Cash Election, Stock Election or Non-Election shall be referred to
herein generally as an “Election”);
provided, however, that
no holder of Dissenting Shares shall be entitled to make an Election, and,
provided further, that the election made by each holder shall apply to all
shares of Company Common Stock and all Exchanged Options held by each holder
(except that a holder of Dissenting Shares who withdraws or waives such holder’s
dissent pursuant to Section 262 of the DGCL shall be entitled to make an
Election). All such Elections shall be made on a form furnished by Parent for
that purpose (a “Form of Election”) reasonably satisfactory to the Company. If
more than one Certificate shall be surrendered in accordance with Section 2.8(c)
and/or more than one Company Option that has become an Exchanged Option in
accordance with Section 6.12(b) for the account of the same holder, the number
of shares of Parent Common Stock, if any, to be issued to such holder in
exchange for the Certificates and Exchanged Options that have been surrendered and/or
exchanged in accordance with Section 2.8(c) and Section 6.12(b) shall be
computed on the basis of the aggregate number of shares of Company Common Stock
represented by all such Certificates and Exchanged Options surrendered and/or
exchanged for the account of such holder. Holders of record of shares of
Company Common Stock who hold such shares as nominees, trustees or in other
representative capacities may submit multiple Forms of Election, provided that
such nominee, trustee or representative certifies that each such Form of
Election covers all shares of Company Common Stock held for a particular
beneficial owner.
(b) Pro-ration – Excess Cash Elections. Notwithstanding the
Elections made pursuant to Section 2.7(a), the aggregate cash consideration
payable to all holders of shares of Company Common Stock and Company Options
that have become Exchanged Options in accordance with Section 6.12(b) shall not
exceed $49,000,000 minus the cash value of Dissenting Shares (the “Cash
Consideration Cap”). For purposes of the definition of Cash
Consideration Cap, the “cash value of Dissenting Shares” shall equal the Per
Share Cash Consideration multiplied by the number of shares of Company Common
Stock that are Dissenting Shares. If the product of (X) the Per Share Cash
Consideration and (Y) the aggregate number of shares of Company Common Stock (including
shares of Company Common Stock issued and outstanding and shares attributable
to Exchanged Options) with respect to which Cash Elections have been made would
exceed the Cash Consideration Cap, then:
(i) each share of Company
Common Stock with respect to which a Stock Election shall have been made (including
shares of Company Common Stock issued and outstanding and shares attributable
to Exchanged Options) shall be converted into the right to receive the Per
Share Stock Consideration;
(ii) each share of Company
Common Stock with respect to which a Non-Election shall have been made (or
deemed to have been made) (including shares of Company Common Stock issued and
outstanding and shares attributable to Exchanged Options) shall be converted
into the right to receive the Per Share Stock Consideration; and
(iii) each share of Company
Common Stock with respect to which a Cash Election shall have been made (including
shares of Company Common Stock issued and outstanding and shares attributable
to Exchanged Options) shall be converted into the
14
right to receive: (A) the amount in cash, without interest,
equal to the product of (1) the Per Share Cash Consideration and (2) a fraction
(the “Cash Fraction”), the numerator of which
shall be the Aggregate Cash Shares, and the denominator of which shall be the
aggregate number of shares of Company Common Stock with respect to which Cash
Elections shall have been made (including shares of Company Common Stock issued
and outstanding and shares attributable to Exchanged Options), and (B) the
number of shares of Parent Common Stock equal to the product of (1) the Per
Share Stock Consideration and (2) a fraction equal to one minus the Cash
Fraction.
For purposes of this
Article II, “Aggregate Cash Shares” means a number of shares of Company
Common Stock equal to the Cash Consideration Cap divided by the Per
Share Cash Consideration.
(c) Pro-ration – Excess Parent Stock Elections. Notwithstanding
the Elections made pursuant to Section 2.7(a), the aggregate number of shares
of Parent Common Stock payable to all holders of shares of Company Common Stock
(including shares of Company Common Stock issued and outstanding and shares
attributable to Exchanged Options) shall not exceed that number of shares equal
to 4,300,000 less the shares of Parent Common Stock payable to the holders of
Company Warrants that become Exchanged Warrants pursuant to Section 2.7(e) and
Section 6.12(c) (the “Stock Consideration Cap”). If the product of (X) the Per
Share Stock Consideration and (Y) the aggregate number of shares of Company
Common Stock with respect to which Stock Elections have been made, including
pursuant to the agreements described in Section 2.7(e) would exceed the Stock
Consideration Cap, then:
(i) each share of Company
Common Stock with respect to which a Cash Election shall have been made (including
shares of Company Common Stock issued and outstanding and shares attributable
to Exchanged Options) shall be converted into the right to receive the Per
Share Cash Consideration;
(ii) each share of Company
Common Stock with respect to which a Non-Election shall have been made (or
deemed to have been made) (including shares of Company Common Stock issued and
outstanding and shares attributable to Exchanged Options) shall be converted
into the right to receive the Per Share Cash Consideration; and
(iii) each share of Company
Common Stock with respect to which a Stock Election shall have been made (including
shares of Company Common Stock issued and outstanding and shares attributable
to Exchanged Options) shall be converted into the right to receive: (A) the number of shares of Parent Common
Stock equal to the product of (1) the Per Share Stock Consideration and (2) a
fraction (the “Stock Fraction”), the numerator of which shall be the
Aggregate Stock Shares, and the denominator of which shall be the aggregate
number of shares of Company Common Stock (including shares of Company Common
Stock issued and outstanding and shares attributable to Exchanged Options) with
respect to which Stock Elections have been made, and (B) the amount in cash,
without interest, equal to the product of (1) the Per Share Cash Consideration
and (2) a fraction equal to one minus the Stock Fraction.
15
For purposes of this
Article II, “Aggregate Stock Shares” means a number of shares of Company
Common Stock equal to the Stock Consideration Cap divided by the Per
Share Stock Consideration.
(d) No Pro-ration. In the event that Sections 2.7(b) and 2.7(c)
are not applicable, then:
(i) each share of Company
Common Stock with respect to which a Cash Election shall have been made (including
shares of Company Common Stock issued and outstanding and shares attributable
to Exchanged Options) shall be converted into the right to receive the Per
Share Cash Consideration;
(ii) each share of Company
Common Stock with respect to which a Stock Election shall have been made (including
shares of Company Common Stock issued and outstanding and shares attributable
to Exchanged Options) shall be converted into the right to receive the Per
Share Stock Consideration; and
(iii) each share of Company
Common Stock with respect to which a Non-Election shall have been made (or
deemed to have been made) (including shares of Company Common Stock issued and
outstanding and shares attributable to Exchanged Options) (the “Non-Electing
Shares”), if any, shall be converted into the right to receive a pro
rata share of the remaining Per Share Stock Consideration and Per Share Cash
Consideration.
(e) Exchanged Warrants; Agreement to Make Stock Election. Notwithstanding
the provisions of Sections 2.7(a), (b), (c) and (d), any Company Warrant that
becomes an Exchanged Warrant in accordance with Section 6.12(c) shall be
exchanged only for the Per Share Stock Consideration (on a net basis, taking
into account the exercise price of such Exchanged Warrant) and shall not be
entitled to make any Election. Further, the holders of shares of Company Common
Stock listed on Schedule III hereto have agreed and committed to make a
Stock Election with respect to all issued and outstanding shares of Company
Common Stock held by them and the holders of shares of Company Warrants listed
on Schedule IV hereto have agreed and committed to exchange their
Company Warrants in accordance with Section 6.12(c) so that such Company
Warrants become Exchanged Warrants. The parties acknowledge and agree that the
Stock Elections made pursuant to this Section 2.7(e) shall be treated as Stock
Elections for all purposes of Article II, including the determination as to
whether the Stock Consideration Cap has been exceeded.
(f) Form of Election; Delivery of Certificates.
A Form of Election and a letter of transmittal (the “Letter of Transmittal”)
shall be included with or mailed contemporaneously with each copy of the Proxy
Statement/Prospectus. Parent and Company shall each use commercially reasonable
efforts to mail or otherwise make available the Form of Election and the Letter
of Transmittal to all persons who become holders of shares of Company Common
Stock during the period between the record date for the Company Stockholders’
Meeting and the Effective Time. Elections shall be made by holders of shares of
Company Common Stock and holders of Company Options that have become Exchanged
Options by delivering the Form of Election to the Exchange Agent (as
hereinafter defined). To be effective, a Form of Election must be properly completed,
signed and submitted to and received by the Exchange Agent by no
16
later than 5:00 p.m. (Eastern time) on the
date that is five (5) Business Days after the Effective Time (the “Election
Deadline”), and accompanied by (i)(A) the Certificates as to which
the election is being made or (B) an appropriate guarantee of delivery of such
Certificates as set forth in such Form of Election from a firm that is a member
of a registered national securities exchange or of the NASDAQ or a commercial
bank or trust company having an office or correspondent in the United States,
provided such Certificates are in fact delivered to the Exchange Agent within
three NYSE trading days after the date of execution of such guarantee of
delivery (a “Guarantee of Delivery”), (ii) an agreement (“Exchange
Agreement”), with respect to Company Options that have become Exchanged
Options, and (iii) a properly completed and signed Letter of Transmittal.
(g) Failure to Deliver; Defects. Failure to deliver
Certificates covered by any Guarantee of Delivery within three (3) NYSE trading
days after the date of execution of such Guarantee of Delivery shall be deemed
to invalidate any otherwise properly made Cash Election or Stock Election. Parent
will have the discretion, which it may delegate in whole or in part to the
Exchange Agent, to determine whether Forms of Election have been properly
completed, signed and submitted or revoked and to disregard immaterial defects
in Forms of Election. The good faith decision of Parent (or the Exchange Agent)
in such matters shall be conclusive and binding. Neither Parent nor the
Exchange Agent will be under any obligation to notify any person of any defect
in a Form of Election submitted to the Exchange Agent. A Form of Election with
respect to Dissenting Shares shall not be valid. The Exchange Agent shall also
make all computations contemplated by this Section 2.7 and all such
computations shall be conclusive and binding on the holders of shares of
Company Common Stock, Exchanged Options and Exchanged Warrants in the absence
of manifest error. Any Form of Election may be changed or revoked prior to the
Election Deadline. In the event a Form of Election is revoked prior to the
Election Deadline, Parent shall, or shall cause the Exchange Agent to, cause the
Certificates representing shares of Company Common Stock covered by such Form
of Election to be promptly returned without charge to the Person submitting the
Form of Election upon written request to that effect from such Person.
(h) Non-Elections; Dissenting Shares. Subject to the
immediately succeeding sentence, for the purposes hereof, a holder of shares of
Company Common Stock who does not submit a Form of Election that is received by
the Exchange Agent prior to the Election Deadline (including a holder who
submits and then revokes his, her or its Form of Election and does not resubmit
a Form of Election that is timely received by the Exchange Agent and otherwise
complies with the terms and conditions hereof), or who submits a Form of
Election without the other documents required by this Section 2.7, shall be
deemed to have made a Non-Election. Holders of Dissenting Shares shall not be
entitled to make an Election other than a holder of Dissenting Shares who
withdraws or waives such holder’s dissent pursuant to Section 262 of the DGCL and
shall not be deemed to have made a Non-Election; the rights of such holders of
Dissenting Shares shall be determined in accordance with Section 262 of the
DGCL and Section 2.9. If any Form of Election is defective in any manner such
that the Exchange Agent cannot reasonably determine the election preference of
the stockholder submitting such Form of Election, the purported Cash Election
or Stock Election set forth therein shall be deemed to be of no force and
effect and the stockholder making such purported Cash Election or Stock
Election shall, for purposes hereof, be deemed to have made a Non-Election.
17
2.8. Exchange of
Certificates.
(a) Exchange Agent. As soon as practicable following the
date of this Agreement, Parent shall appoint Computershare Investor Services
LLC, or such other bank or trust company reasonably satisfactory to the
Company, to act as exchange agent (the “Exchange Agent”) for the purpose of (i) receiving Forms of
Election and determining, in accordance with this Article II, the form of
Merger Consideration to be received by each holder of shares of Company Common
Stock, Exchanged Options and Exchanged Warrants and (ii) exchanging the
applicable Merger Consideration for shares of Company Common Stock, Exchanged
Options and Exchanged Warrants.
(b) Parent to Cause Deposit of Merger Consideration. Prior
to or on the Closing Date, Parent shall cause BV Sub to deposit with the
Exchange Agent, for exchange in accordance with this Article II, the Merger
Consideration payable pursuant hereto. The Merger Consideration deposited with
the Exchange Agent shall hereinafter be referred to as the “Exchange Fund.”
For the purposes of such deposit, Parent shall assume that there will not be
any fractional shares of Parent Common Stock; provided, however, that at the
time Parent determines the number of fractional shares to be paid in cash, it
will promptly cause BV Sub to deposit with the Exchange Agent such additional
amount necessary to make such payments. The Exchange Agent shall, pursuant to
irrevocable instructions, deliver shares of Parent Common Stock and cash
contemplated to be issued out of the Exchange Fund on the terms set forth
herein. The Exchange Fund may not be used for any other purpose.
(c) Exchange Procedures. Upon surrender of a Certificate or
Certificates for cancellation to the Exchange Agent or to such other agent or
agents as may be appointed by Parent, together with a Letter of Transmittal,
duly completed and validly executed in accordance with the instructions thereto,
an Exchange Agreement (if required) and such other documents as may reasonably
be required by the Exchange Agent, the holder of such Certificate, holder of a
Company Option that has become an Exchanged Option or holder of a Company Warrant
that has become an Exchanged Warrant, as applicable, subject to Section 2.8(e),
shall be entitled to receive in exchange therefor the Merger Consideration to
which such holder is entitled pursuant to this Article II, and the Certificate
so surrendered shall forthwith be cancelled. The shares of Parent Common Stock
constituting part of such Merger Consideration (if any), at Parent’s option,
shall be in uncertificated book-entry form, unless a physical certificate is
requested by a holder or is otherwise required under Applicable Law. Until so
surrendered, outstanding Certificates will be deemed from and after the
Effective Time, for all corporate purposes, to evidence the ownership of the
Merger Consideration into which such shares of Company Common Stock shall have
been so converted.
(d) Dividends and Distributions With Respect to Unexchanged Shares.
No dividends or other distributions with respect to Parent Common Stock
constituting part of the Merger Consideration, and no cash payment in lieu of
fractional shares as provided in Section 2.6(f), shall be paid to the holder of
any Certificates not surrendered until such Certificates are surrendered or
transferred, as the case may be, as provided in this Section 2.8. Subject to
Applicable Law, following such surrender or transfer, there shall be paid,
without interest, to the Person in whose name the securities of Parent have
been registered, (i) at the time of such surrender or transfer, the amount of
any cash payable in lieu of fractional shares to which such
18
Person is entitled pursuant to Section 2.6(f),
and the amount of all dividends or other distributions with a record date after
the Effective Time previously paid or payable on the date of such surrender
with respect to such securities and (ii) at the appropriate payment date, the
amount of dividends or other distributions with a record date after the
Effective Time and prior to surrender or transfer and with a payment date
subsequent to surrender or transfer payable with respect to such securities.
(e) Payments to Persons Other than a Registered Holder.
If any portion of the Merger Consideration is to be paid to a Person other than
the Person in whose name the surrendered Certificate is registered or, in the
case of a Company Option that has become an Exchanged Option or a Company
Warrant that has become an Exchanged Warrant, to a Person other than the Person
named as the holder thereof, it shall be a condition to such payment that (i)
in the case of a holder of Company Common Stock, (A) either such Certificate
shall be properly endorsed or shall otherwise be in proper form for transfer
and (B) the Person requesting such payment shall pay to the Exchange Agent any
transfer or other Taxes required as a result of such payment to a Person other
than the registered holder of such Certificate or establish to the satisfaction
of Parent (or the Exchange Agent or any other agent designated by Parent) that
such transfer or other Taxes have been paid or are otherwise not payable or
(ii) in the case of an Exchanged Option or Exchanged Warrant, (A) the named
holder of such Exchanged Option or Exchanged Warrant shall provide written
instructions to the Exchange Agent authorizing such payment to such Person
requesting such payment and (B) the Person requesting such payment shall pay to
the Exchange Agent any transfer or other Taxes required as a result of such
payment to a Person other than the named holder or establish to the
satisfaction of Parent (or the Exchange Agent or any other agent designated by
Parent) that such transfer or other Taxes have been paid or are otherwise not
payable.
(f) Withholding. Each of the Exchange Agent, Parent, BV Sub
and the Surviving Corporation shall deduct and withhold from any consideration
payable or otherwise deliverable pursuant to this Agreement to any holder or
former holder of shares of Company Common Stock, Exchanged Options or Exchanged
Warrants such amounts as may be required to be deducted or withheld therefrom
under United States federal or state, local or foreign law. To the extent that
such amounts are so deducted or withheld pursuant to this Section 2.8(f), such
amounts shall be treated for all purposes under this Agreement as having been
paid to the Person to whom such amounts would otherwise have been paid.
(g) No Liability. Notwithstanding anything to the contrary
set forth in this Agreement, none of the Exchange Agent, Parent, BV Sub, the
Surviving Corporation or any other party hereto shall be liable to a holder of
shares of Parent Common Stock, Company Common Stock, Exchanged Options or
Exchanged Warrants for any amount properly paid to a public official pursuant
to any applicable abandoned property, escheat or similar Applicable Laws.
(h) Investment of Exchange Fund. The Exchange
Agent shall invest the cash included in the Exchange Fund in direct obligations
of the U.S. Treasury or otherwise with the consent of Parent, on a daily basis;
provided, however, that no such investment or loss thereon
19
shall affect the amounts payable to holders
of Company Common Stock, Exchanged Options or Exchanged Warrants pursuant to
this Article II. Any interest and other income resulting from such investment
shall become a part of the Exchange Fund, and any amounts in excess of the
amounts payable to holders of Company Common Stock, Exchanged Options or
Exchanged Warrants pursuant to this Article II shall promptly be paid to Parent
upon Parent’s request. If for any reason (including losses) the amount of cash
in the Exchange Fund shall be insufficient to fully satisfy all of the payment
obligations of Parent to be made in cash by the Exchange Agent hereunder,
Parent shall promptly deposit or cause to be deposited cash into the Exchange
Fund an amount equal to the deficiency in the amount of cash required to fully
satisfy such cash payment obligations.
(i) Termination of Exchange Fund.
Any portion of the Exchange Fund that remains undistributed twelve (12) months
after the Effective Time shall, at the request of the Surviving Corporation, be
delivered to the Surviving Corporation or otherwise according to the
instruction of the Surviving Corporation, and any holders of the Certificates
who have not surrendered such Certificates in compliance with this Section 2.8
shall after such delivery to Surviving Corporation look only to Parent and the
Surviving Corporation for payment of the Merger Consideration (and as a general
creditor for the cash constituting the Merger Consideration, which cash shall
not accrue interest) pursuant to Section 2.7, cash in lieu of any fractional
shares pursuant to Section 2.6(f) and any dividends or other distributions
pursuant to Section 2.8(d) with respect to the shares of Company Common Stock
formerly represented thereby. Any amounts remaining unclaimed by holders of
Company Common Stock after twenty-four (24) months following the Effective Time
shall become, to the extent permitted by Applicable Law, the property of
Parent, free and clear of any claims or interest of any Person previously
entitled thereto.
2.9.Dissenting
Shares. Notwithstanding
anything in this Agreement to the contrary, shares of Company Common Stock
issued and outstanding immediately prior to the Effective Time and held by a
holder who has not voted in favor of the Merger and who has delivered a written
demand for appraisal for such shares in accordance with Section 262 of the DGCL
(a “Dissenting
Stockholder”) shall not be converted into the right to receive the
Merger Consideration as provided in this Article II, unless and until such
holder fails to perfect or effectively withdraws or otherwise loses such holder’s
right to appraisal under applicable Delaware Law. A Dissenting Stockholder may
receive payment of the fair value of the shares of Company Common Stock issued
and outstanding immediately prior to the Effective Time and held by such
Dissenting Stockholder (“Dissenting Shares”) in accordance with the provisions of
applicable Delaware Law, provided that such Dissenting Stockholder complies
with Section 262 of the DGCL. At the Effective Time, all Dissenting Shares
shall be cancelled and cease to exist and shall represent only the right to
receive the fair value thereof in accordance with applicable Delaware Law. Any
Dissenting Shares as to which the holder later waives or withdraws a demand for
appraisal shall be entitled to make an Election, subject to pro-ration to the
same extent as if such holder surrendered such formerly Dissenting Shares
promptly following the Effective Time subject to a valid Election. The Company
shall provide Parent (a) prompt written notice of any written demands for appraisal,
withdrawals of demands for appraisal and any other instruments served under
applicable Delaware Law, and (b) the opportunity to participate in and direct
all negotiations, proceedings or settlements with respect to demands for
appraisal under applicable Delaware Law. The Company shall not voluntarily make
any payment with respect to
20
any demands for appraisal
and shall not, except with Parent’s prior written consent, settle or offer to
settle any such demands.
2.10.Lost, Stolen
or Destroyed Share Certificates. In
the event that any Certificates shall have been lost, stolen or destroyed, the
Exchange Agent shall issue in exchange for such lost, stolen or destroyed
Certificates, upon the making of a satisfactory affidavit of that fact by the
holder thereof, such shares of Parent Common Stock, cash for fractional shares,
if any, as may be required pursuant to Section 2.6(f) and any dividends or
distributions payable pursuant to Section 2.8(d); provided, however, that Parent may, in its discretion and as a
condition precedent to the issuance thereof, require the owners of such lost,
stolen or destroyed Certificates to deliver a bond in such sum as it may
reasonably direct as indemnity against any claim that may be made against
Parent, the Surviving Corporation or the Exchange Agent with respect to the
Certificates alleged to have been lost, stolen or destroyed.
2.11.Tax
Consequences. It is
intended by the parties hereto that the Merger constitute a “reorganization”
within the meaning of Section 368(a) of the Code. The parties hereto adopt this
Agreement as a “plan of reorganization” within the meaning of Treasury
Regulations Sections 1.368-2(g) and 1.368-3(a).
2.12.Further
Action. At and after the
Effective Time, the officers and directors of Parent, BV Sub and the Surviving
Corporation will be authorized to execute and deliver, in the name and on
behalf of the Company and Merger Sub, any deeds, bills of sale, assignments or
assurances and to take and do, in the name and on behalf of Company and Merger Sub,
any other actions and things to vest, perfect or confirm of record or otherwise
in the Surviving Corporation any and all right, title and interest in, to and
under any of the rights, properties or assets acquired or to be acquired by the
Surviving Corporation as a result of, or in connection with, the Merger.
2.13.Restriction
on Further Purchases of Shares. From the date of this Agreement until the earlier to occur
of the Effective Time or the termination of this Agreement, except pursuant to
or as contemplated by this Agreement, Parent shall not (and shall cause its
Subsidiaries not to) (i) acquire or make any proposal to acquire, directly or
indirectly, any beneficial interest in shares of Company Common Stock or any
options, warrants or other securities exercisable for shares of Company Common
Stock, (ii) make or participate in any solicitation of proxies to vote, or seek
to advise or influence any person with respect to the voting of any securities
of the Company, or (iii) form, join or participate in a “group” (within the
meaning of Section 13(d)(3) of the Securities Exchange Act of 1934) with
respect to any voting securities of the Company; provided, however, that the
restrictions imposed by this Section 2.13 shall not apply to the Voting
Agreements between Parent and the other parties thereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents
and warrants to Parent, BV Sub and Merger Sub, subject to the exceptions
specifically disclosed in the disclosure letter (referencing the appropriate
section or subsection of this Agreement, as applicable) supplied by the Company
to Parent dated as of the date hereof and certified by a duly authorized
executive officer of the Company (the “Company Disclosure Letter”), as follows:
21
3.1. Organization.
(a) Organization; Good Standing; Power and Authority.
The Company and each of its Subsidiaries is a corporation or other organization
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization, except where the failure to
be so organized, validly existing and in good standing would not reasonably be
expected to have a Company Material Adverse Effect, and has the requisite corporate
power and authority to own, lease and operate its properties and assets and to
carry on its business as currently conducted. The Company and each of its
Subsidiaries is duly qualified to do business as a foreign entity and is in
good standing in each jurisdiction where the character of its properties owned
or leased or the nature of its activities make such qualification necessary,
except where the failure to be so qualified or in good standing would not have
a Company Material Adverse Effect.
(b) Charter Documents. The Company has delivered
or made available to Parent (i) a true and correct copy of the certificate of
incorporation, including all certificates of designation thereto (the “Company
Charter”), and bylaws of the Company (the “Company Bylaws”), each as
amended and or restated to date (collectively, the “Company Charter Documents”) and (ii) the certificate of
incorporation and bylaws, or like organizational documents (collectively, “Subsidiary Charter Documents”),
of each of its Subsidiaries, and each such instrument is in full force and
effect. The Company is not in violation of any of the provisions of the Company
Charter Documents and each Subsidiary is not in violation of its respective
Subsidiary Charter Documents.
(c) Subsidiaries. Section 3.1(c) of the Company
Disclosure Letter sets forth each Subsidiary of the Company. The Company is the
owner of all of the outstanding shares of capital stock of, or other equity or
voting interests in, each such Subsidiary and all such shares have been duly
authorized, validly issued and are fully paid and nonassessable, free and clear
of all Liens or any other restrictions on the right to vote, sell or otherwise
dispose of such capital stock or other ownership interests, except for
restrictions imposed by applicable securities laws. Other than the Subsidiaries
of the Company, neither the Company nor any of its Subsidiaries owns any
capital stock of, or other equity or voting interests of any nature in, or any
interest convertible, exchangeable or exercisable for, capital stock of, or
other equity or voting interests of any nature in, any other Person.
3.2. Capitalization.
(a) Capital Stock. The authorized capital stock
of Company consists of: (i) 100,000,000 shares of Common Stock, par value $0.01
(the “Company Common Stock”) and (ii) 30,000,000 shares of Company
Preferred Stock, par value $0.01 (the “Company Preferred Stock”). At the
close of business on November 3, 2006:
(i) 20,597,273 shares of Company Common Stock were issued and
outstanding and (ii) no shares of Company Preferred Stock were issued or
outstanding. No shares of Company Common Stock are owned or held by any
Subsidiary of the Company. All outstanding shares of Company Common Stock are
duly authorized, validly issued, fully paid and non-assessable and are not
subject to preemptive rights created by statute, the Company Charter Documents,
or any agreement to which the Company is a party or by which it is bound.
22
(b) Company Options and Warrants. As of the close
of business on November 3, 2006: (i) 2,481,123 shares of Company Common Stock
are issuable upon the exercise of outstanding Company Options granted under the
Company’s Amended and Restated 1999 Long-term Incentive Plan, Amended and
Restated 1999 Non-Employees’ Stock Plan and 2005 Long-Term Incentive Plan
(collectively, the “Company Stock
Option Plans”) or otherwise, (ii) the weighted average exercise
price of such Company Options is $3.03 and 1,560,734 such Company Options are
vested and exercisable, (iii) 1,284,998 shares of Company Common Stock are
available for future grant under the Company Stock Option Plans, (iv) 0 shares
of Company Common Stock are issuable pursuant to Company Options that have been
granted other than pursuant to the Company Stock Option Plans, and (v) 1,073,122
shares of Company Common Stock are issuable pursuant to outstanding Company
Warrants. Section 3.2(b) of
the Company Disclosure Letter sets forth (A) a list of each outstanding Company
Option and Company Warrant, (B) the particular Company Stock Option Plan (if
any) pursuant to which any such Company Option was granted, (C) the name of the
holder of each Company Option or Company Warrant, (D) the number of shares of
Company Common Stock subject to each Company Option and Company Warrant, (E)
the exercise price of each Company Option and Company Warrant, (F) the date of
grant or issue for each Company Option and Company Warrant, (G) the applicable
vesting schedule, if any, and the extent to which each Company Option and
Warrant is vested and exercisable as of the date hereof, (H) the date on which
each Company Option and Company Warrant expires and (I) details regarding the
acceleration of vesting, if any. All shares of Company Common Stock subject to
issuance under the Company Stock Option Plans and underlying Company Warrants,
upon issuance on the terms and conditions specified in the instruments pursuant
to which they are issuable, would be duly authorized, validly issued, fully
paid and nonassessable. There are no commitments or agreements of any character
to which the Company is bound obligating the Company to accelerate the vesting
of any Company Option or Company Warrant as a result of the Merger (whether
alone or upon the occurrence of any additional or subsequent events). There are
no outstanding or authorized stock appreciation, phantom stock, profit
participation or other similar rights with respect to the Company.
(c) Other Securities. Except as described in this
Section 3.2 or in Section 3.2(c) of the Company Disclosure Letter, as of the
date hereof, there are no securities, options, warrants, calls, rights,
contracts, commitments, agreements, instruments, arrangements, understandings,
obligations or undertakings of any kind to which the Company or any of its
Subsidiaries is a party or by which any of them is bound obligating the Company
or any of its Subsidiaries to (including on a deferred basis) issue, deliver or
sell, or cause to be issued, delivered or sold, additional shares of capital
stock, or other voting securities of 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, commitment,
agreement, instrument, arrangement, understanding, obligation or undertaking. There
are no outstanding Contracts 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) dispose of any shares of the capital stock of, or other equity or voting
interests in, any of its Subsidiaries. The Company is not a party to any voting
agreement with respect to shares of the capital stock of, or other equity or
voting interests in, the Company or any of its Subsidiaries and, to the
Knowledge of the Company, other than the Voting Agreements and the irrevocable
proxies granted pursuant to the Voting Agreements, there are no irrevocable
proxies and no voting agreements, voting trusts, rights plans, anti-takeover
plans or registration rights
23
agreements with respect to any shares of the
capital stock of, or other equity or voting interests in, the Company or any of
its Subsidiaries.
3.3. Authority; No Conflict;
Necessary Consents.
(a) Authority. The Company has all requisite
power and authority to enter into this Agreement and to consummate the Merger
and the transactions contemplated hereby, subject, in the case of consummation
of the Merger, to obtaining the approval and adoption of this Agreement and the
approval of the Merger by the Company’s stockholders by the Requisite
Stockholder Approval. Assuming the accuracy of the representations and
warranties made by Parent, BV Sub and Merger Sub in Section 4.12, the execution
and delivery of this Agreement and the consummation of the Merger and the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company and no further action is required
on the part of the Company to authorize the execution and delivery of this
Agreement or to consummate the Merger and the other transactions contemplated
hereby, subject only to the Requisite Stockholder Approval and the filing of
the Certificate of Merger pursuant to Delaware law. Assuming the accuracy of
the representations and warranties made by Parent, BV Sub and Merger Sub in
Section 4.12, the affirmative vote of the holders of a majority of the
outstanding shares of Company Common Stock (the “Requisite Stockholder Approval”)
is the only vote of the holders of any class or series of Company capital stock
necessary to approve or adopt this Agreement, approve the Merger and consummate
the Merger and the other transactions contemplated hereby. The Board of
Directors of the Company has, by resolution adopted by unanimous vote at a
meeting of all Directors duly called and held and not subsequently rescinded or
modified in any way (except as may be permitted in accordance with Section
6.2), duly (i) determined that the Merger is fair to, and in the best interest
of, the Company and its stockholders and declared the Merger to be advisable,
(ii) approved this Agreement and the transactions contemplated hereby,
including the Merger, and (iii) recommended that the stockholders of the
Company approve and adopt this Agreement and approve the Merger and directed
that such matter be submitted to the Company’s stockholders at the Company
Stockholders’ Meeting. This Agreement has been duly executed and delivered by
the Company and assuming due authorization, execution and delivery by Parent,
BV Sub and Merger Sub, constitutes the valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except
as enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws affecting creditors’ rights generally
and except insofar as the availability of equitable remedies may be limited by Applicable
Law.
(b) No Conflict. The execution and delivery by
the Company of this Agreement, and the consummation of the transactions
contemplated hereby, will not (i) conflict with or violate any provision of the
Company Charter Documents or any Subsidiary Charter Documents, (ii) subject to
the Requisite Stockholder Approval and compliance with the requirements set
forth in Section 3.3(c), conflict with or violate any Applicable Law, or (iii)
result in any material breach of or constitute a material default (or an event
that with notice or lapse of time or both would become a material default)
under, or materially impair the Company’s rights or alter the rights or
obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a Lien on any of the properties or assets of the Company or any of
its Subsidiaries pursuant to, any Company Material Contract except, in the case
of each of the preceding clauses (i), (ii) and (iii) for any conflict,
violation,
24
beach, default, impairment, alteration,
giving of rights or Lien which would not reasonably be expected to result in a
Company Material Adverse Effect or materially adversely affect the ability of
the Company to consummate the Merger within the time frame in which the Merger
would otherwise be consummated in the absence of such conflict, violation,
beach, default, impairment, alteration, giving of rights or Lien.
(c) Necessary Consents. No consent, waiver,
approval, order or authorization of, or registration, declaration or filing
with any supranational, national, state, municipal, local or foreign
government, any instrumentality, subdivision, court, administrative agency or
commission or other governmental authority or instrumentality, or any
quasi-governmental or private body exercising any regulatory, taxing, importing
or other governmental or quasi-governmental authority (a “Governmental Authority”) or any
other Person is required to be obtained or made by the Company in connection
with the execution and delivery of this Agreement or the consummation of the
Merger and other transactions contemplated hereby and thereby, except for
(i) 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 and/or Parent are qualified to do
business, (ii) the filing of the Proxy Statement with the SEC in accordance
with the Securities Exchange Act or 1934, as amended (the “Exchange Act”),
(iii) the filing and effectiveness of the Registration Statement with the SEC
in accordance with the Securities Act of 1933, as amended (the “Securities Act”), (iv) the
filing of the Notification and Report Forms with the United States Federal
Trade Commission (“FTC”)
and the Antitrust Division of the United States Department of Justice (“DOJ”) required by the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“HSR Act”) and the expiration or
termination of the applicable waiting period under the HSR Act and such
consents, waivers, approvals, orders, authorizations, registrations,
declarations and filings as may be required under the foreign merger control
regulations identified in Section 4.3(c) of the Parent Disclosure Letter, (v)
such other consents, waivers, approvals, orders, authorizations, registrations,
declarations and filings which if not obtained or made would not be material to
the Company and its Subsidiaries taken as a whole or Parent and its
Subsidiaries taken as a whole or materially adversely affect the ability of the
parties hereto to consummate the Merger within the time frame in which the
Merger would otherwise be consummated in the absence of the need for such
consent, waiver, approval, order, authorization, registration, declaration or
filing. The consents, approvals, orders, authorizations, registrations,
declarations and filings set forth in (i) through (iv) above are referred to
herein collectively as the “Necessary
Governmental Consents.” Section 3.3(c)(i) and 3.3(c)(ii) of the
Company Disclosure Letter provides a list of all Persons, other than
Governmental Authorities, whose consent is required to be obtained by the Company
in connection with the execution and delivery of this Agreement or the
consummation of the Merger and other transactions contemplated hereby and
thereby, including all consents with respect to Material Contracts.
(a) SEC Filings. The Company has filed all
required registration statements, prospectuses, reports, schedules, forms,
statements and other documents (including exhibits and all other information
incorporated by reference) required to be filed by it with the SEC. All such
required registration statements, prospectuses, reports, schedules, forms,
statements and other documents (including those that the Company may file
subsequent to the date hereof) are
25
referred to herein as the “Company SEC Reports” As of their respective dates, the
Company SEC Reports (i) were prepared in accordance and complied in all
material respects with the requirements of the Securities Act or the Exchange
Act, as the case may be, and the rules and regulations of the SEC thereunder
applicable to such Company SEC Reports and (ii) did not at the time they were
filed (or if amended or superseded by a filing prior to the date of this
Agreement then on the date of such amended or superceding filing) contain any
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading. None of the Company’s Subsidiaries is
required to file any forms, reports or other documents with the SEC. The Company has previously furnished to
Parent a complete and correct copy of any amendments or modifications, which
have not yet been filed with the SEC but which are required to be filed, to
agreements, documents or other instruments which previously had been filed by
Company with the SEC pursuant to the Securities Act or the Exchange Act. The Company has responded to all comment
letters of the staff of the SEC relating to the Company SEC Reports, and the
SEC has not advised the Company that any final responses are inadequate,
insufficient or otherwise non-responsive. The Company has made available to
Parent true, correct and complete copies of all correspondence between the SEC,
on the one hand, and the Company and any of its Subsidiaries, on the other,
including all SEC comment letters and responses to such comment letters by or
on behalf of the Company. To the Company’s
Knowledge, none of the Company SEC Reports is the subject of ongoing SEC review
or outstanding SEC comment. The Company
and, to the Company’s Knowledge, each of its officers and directors are in
compliance with, and have complied, in each case in all material respects with
(i) the applicable provisions of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) and the
related rules and regulations promulgated under or pursuant to such act and
(ii) the applicable listing and corporate governance rules and regulations of
NASDAQ. Each required form, report and
document containing financial statements that has been filed with or submitted
to the SEC by the Company was accompanied by the certifications required to be
filed or submitted by the Company’s chief executive officer and/or chief
financial officer, as required, pursuant to the Sarbanes-Oxley Act and, at the
time of filing or submission of each such certification, such certification was
true and accurate and complied with the Sarbanes-Oxley Act. Neither the Company nor, to the Company’s
Knowledge, any of its executive officers has received notice from any
Governmental Authority challenging or questioning the accuracy, completeness,
form or manner of filing such certifications.
(b) Financial Statements. The consolidated financial statements
(including, in each case, any related notes thereto) of the Company contained
in the Company SEC Reports (the “Company Financials”) (i) comply as to form in all material
respects with the published rules and regulations of the SEC with respect
thereto, (ii) have been prepared in accordance with United States generally
accepted accounting principles (“GAAP”)
applied on a consistent basis throughout the periods involved (except as may be
indicated in the notes thereto or, in the case of unaudited interim financial
statements, as may be permitted by the SEC on Form 10-Q, Form 8-K or any
successor form under the Exchange Act), and (iii) fairly and accurately
presented in all material respects the consolidated financial position of the
Company and its consolidated Subsidiaries as of the respective date or dates
thereof and the consolidated results of the Company’s operations and cash flows
for the periods then ended. The Company
does not intend to correct or restate, nor is there any basis for any
correction or restatement of, any aspect of the Company Financials. The balance sheet of the Company contained in
the Company SEC
26
Reports as of December 31, 2005
is hereinafter referred to as the “Company Balance Sheet.” Except as disclosed in the Company
Financials, since the date of the Company Balance Sheet, neither the Company
nor any of its Subsidiaries has any liabilities (absolute, accrued, contingent
or otherwise) of a nature required to be disclosed on a consolidated balance
sheet or in the related notes to the consolidated financial statement prepared
in accordance with GAAP, except for liabilities incurred since the date of the
Company Balance Sheet in the ordinary course of business consistent with past
practices. The Company has not had any
unresolved dispute with any of its auditors regarding accounting matters or
policies during any of its past three full years or during the current fiscal
year-to-date. The books and records of
the Company and each Subsidiary have been, and are being maintained in all
material respects in accordance with applicable legal and accounting
requirements and the Company Financials are consistent with such books and
records. Neither the Company nor any of
its Subsidiaries is a party to, or has any commitment to become a party to, any
joint venture, off-balance sheet partnership or any similar Contract relating
to any transaction or relationship between or among the Company or any of its
Subsidiaries, on the one hand, and any unconsolidated affiliate, including any
structured finance, special purpose or limited purpose Person, on the other
hand, or any “off-balance sheet arrangements” (as defined in Item 303(a) of
Regulation S-K).
(c) Internal Controls.The Company and each of its Subsidiaries has
established and maintains, adheres to and enforces a system of internal
controls which are sufficient to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
in accordance with GAAP (including the Company Financials), including policies
and procedures that (i) require the maintenance of records that in reasonable
detail accurately and fairly reflect the transactions and dispositions of the
assets of the Company and its Subsidiaries, (ii) provide reasonable assurance
that material information relating to the Company and its Subsidiaries is
promptly made known to the officers responsible for establishing and
maintaining the system of internal controls, (iii) provide assurance that
transactions are recorded as necessary to permit preparation of financial
statements in accordance with GAAP, and that receipts and expenditures of the
Company and its Subsidiaries are being made only in accordance with appropriate
authorizations of management and the Board of Directors of the Company, (iv)
provide reasonable assurance that access to assets is permitted only in
accordance with management’s general or specific authorization, (v) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use or disposition
of the assets of the Company and its Subsidiaries, and (vi) provide reasonable
assurance that any significant deficiencies or material weaknesses in the
design or operation of internal controls which are reasonably likely to materially
and adversely affect the ability to record, process, summarize and report
financial information, and any fraud, whether or not material, that involves
the Company’s management or other Employees who have a role in the preparation
of financial statements or the internal controls utilized by the Company and
its Subsidiaries, are adequately and promptly disclosed to the Company’s
independent auditors and the audit committee of the Company’s Board of
Directors. Neither the Company nor any
of its Subsidiaries (including, to the Company’s Knowledge, any Employee
thereof) nor the Company’s independent auditors has identified or been made
aware of (A) any significant deficiency or material weakness in the system of
internal controls utilized by the Company and its Subsidiaries(other than a
significant deficiency or material weakness that has been disclosed to the
Audit Committee of the Board of Directors of the Company, and, in the case of a
material weakness, that has been disclosed as required in the Company SEC
Reports), (B) any fraud, whether or not material, that involves the
27
Company’s management or other
Employees who have a role in the preparation of financial statements or the
internal controls utilized by the Company and its Subsidiaries or (C) any claim
or allegation regarding any of the foregoing (other than claims or allegations
that have been duly investigated and found not to involve any of the
foregoing).
(d) Accounting and Auditing
Practices. Neither the Company nor any of its
Subsidiaries nor, to the Company’s Knowledge, any director, officer, employee,
auditor, accountant, consultant or representative of the Company or any of its
Subsidiaries has received or otherwise had or obtained knowledge of any
substantive complaint, allegation, assertion or claim, whether written or oral,
that the Company or any of its Subsidiaries has engaged in questionable
accounting or auditing practices. No
current or former attorney representing the Company or any of its Subsidiaries
has reported evidence of a material violation of securities laws, breach of
fiduciary duty or similar violation by the Company or any of its officers,
directors, employees or agents to the Board of Directors of the Company or any
committee thereof or to any director or executive officer of the Company.
(e) Section 806 of the
Sarbanes-Oxley Act. To the Company’s Knowledge, no employee of
the Company or any of its Subsidiaries has provided or is providing information
to any law enforcement agency regarding the commission or possible commission
of any crime or the violation or possible violation of any applicable legal
requirements of the type described in Section 806 of the Sarbanes-Oxley Act by
the Company or any of its Subsidiaries.
Neither the Company nor any of its Subsidiaries nor, to the Knowledge of
the Company, any director, officer, employee, contractor, subcontractor or
agent of the Company or any such Subsidiary has discharged, demoted, suspended,
threatened, harassed or in any other manner discriminated against an employee of
the Company or any of its Subsidiaries in the terms and conditions of
employment because of any lawful act of such employee described in Section 806
of the Sarbanes-Oxley Act.
3.5. Absence
of Certain Changes or Events. Other than as disclosed in Section
3.5 of the Company Disclosure Letter, from the date of the Company Balance
Sheet through the date of this Agreement, there has not been, accrued or
arisen:
(a) any Company Material Adverse Effect;
(b) any acquisition by the Company or any
Subsidiary of, or agreement by the Company or any Subsidiary to acquire by
merging or consolidating with, or by purchasing any assets or equity securities
of, or by any other manner, any business or corporation, partnership,
association or other business organization or division thereof, or other
acquisition or agreement to acquire any assets or any equity securities that
are material, individually or in the aggregate, to the business of the Company;
(c) any Contract, agreement in principle,
letter of intent, memorandum of understanding or similar agreement with respect
to any material joint venture, strategic partnership or alliance;
(d) 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
28
Subsidiaries’ capital stock, or
any purchase, redemption or other acquisition by the Company or any of its
Subsidiaries of any of the Company’s capital stock or any other securities of
the Company or its Subsidiaries or any options, warrants, calls or rights to
acquire any such shares or other securities;
(e) any split, combination or
reclassification of any of the Company’s or any of its Subsidiaries’ capital
stock;
(f) any granting by the Company or any
of its Subsidiaries, whether orally or in writing, of any increase in
compensation or fringe benefits or any payment by the Company or any of its
Subsidiaries of any bonus or any change by the Company or any of its
Subsidiaries of severance, termination or bonus policies and practices or any
entry by the Company or any of its Subsidiaries into any currently effective
employment, severance, termination or indemnification agreement or any
agreement the benefits of which are contingent or the terms of which are
materially altered upon the occurrence of a transaction involving the Company
of the nature contemplated hereby (either alone or upon the occurrence of
additional or subsequent events), other than such actions taken in the ordinary
course of business consistent with past practices with respect to Employees who
are not officers or directors of the Company;
(g) any amendment, termination or consent
with respect to any Company Material Contract, Contract required to be
disclosed in Section 3.17(b) of the Company Disclosure Letter;
(h) any material change by the Company in
its accounting methods, principles or practices, except as required by
concurrent changes in GAAP;
(i) any debt, capital lease or other
debt or equity financing transaction by the Company or any of its Subsidiaries
or entry into any agreement by the Company or any of its Subsidiaries in
connection with any such transaction, except for capital lease and receivables
financings entered into in the ordinary course of business consistent with past
practices which are not individually or in the aggregate material to the
Company and its Subsidiaries taken as a whole;
(j) any sale, lease, mortgage, pledge,
license, encumbrance or other disposition of any properties or assets except
the sale, lease, mortgage, pledge license, encumbrance or disposition of
property or assets which are not material, individually or in the aggregate to
the business of the Company;
(k) any material purchases of fixed
assets, spares or other long-term assets other than in the ordinary course of
business and in a manner consistent with past practices;
(l) any material revaluation, or any
indication that such a revaluation was merited under GAAP, by the Company of
any of its assets, including, writing down the value of capitalized inventory,
spares, long term or short-term investments, fixed assets, goodwill, intangible
assets, deferred tax assets, or writing off notes or accounts receivable other
than in the ordinary course of business consistent with past practices; or
29
(m) any damage, destruction or other
casualty loss (whether or not covered by insurance) with respect to any assets
that, individually or in the aggregate, are material to the Company and its
Subsidiaries taken as a whole.
3.6. Taxes.
(a) For purposes of this Agreement:
(i) “Relevant
Group”
means any affiliated, combined, consolidated, unitary or similar group of which
the Company or any of its Subsidiaries (or, with respect to Parent, BV Sub or
Merger Sub) is or was a member.
(ii) “Tax” or “Taxes” means all federal, state,
local or foreign, net or gross income, gross receipts, net proceeds, sales,
use, ad valorem, value added, franchise, bank shares, withholding, payroll,
employment, excise, property, deed, stamp, alternative or add-on minimum,
environmental, profits, windfall profits, transaction, license, lease, service,
use, occupation, severance, energy, unemployment, social security, worker’s
compensation, capital, premium, or other taxes, assessments, customs, duties,
fees, levies, or other governmental charges in the nature of a tax, whether
disputed or not, together with any interest, penalties, additions to tax, or
additional amounts with respect thereto.
(iii) “Tax
Return”
means any return, declaration, report, claim for refund, or information return
or statement relating to Taxes, including any schedule or attachment thereto,
and including any amendment thereof.
(iv) “Transfer
Taxes”
means sales, use, transfer, real property transfer, recording, documentary,
stamp, registration, stock transfer, and other similar taxes and fees
(including any penalties and interest).
(b) All
material Tax Returns required to have been filed by or with respect to the
Company and any of its Subsidiaries or a Relevant Group have been duly and
timely filed, and each such Tax Return is true and accurate in all material
respects and correctly and completely reflects in all material respects
liability for Taxes and all other information required to be reported
thereon. All material Taxes required to
be paid by the Company and any of its Subsidiaries or a Relevant Group (whether
or not shown on any Tax Return) have been timely paid. The Company and its Subsidiaries have
adequately provided for liabilities for all material unpaid Taxes in the
Company Financials, which liabilities represent current Taxes not yet due and
payable, in accordance with GAAP.
(c) There
is no action, audit, dispute or claim pending, or to the Company’s Knowledge,
threatened against, or with respect to, the Company or any of its Subsidiaries
in respect of any Taxes. None of the
Company or its Subsidiaries is the beneficiary of any extension of time within
which to file any Tax Return, nor have any of them made (or had made on their
behalf) any requests for such extensions.
No claim has ever been made in writing by a Governmental Authority in a
jurisdiction where the Company or any of its Subsidiaries does not file Tax
Returns that any of them is or may be subject to taxation by that jurisdiction
or that any of them must file Tax Returns.
There are no Liens on any of the capital or assets of the
30
Company or any of its Subsidiaries with respect to Taxes, other than
Liens for Taxes that are not yet due and payable.
(d) Each
of the Company and its Subsidiaries has withheld and timely paid all material
Taxes required to have been withheld and paid, and has collected and remitted
all Taxes (including all sales and use Taxes), required to be collected and
remitted, and has complied with all information reporting and backup
withholding requirements.
(e) Section
3.6 of the Company Disclosure Letter: (i) lists all federal, state, local, and
foreign Tax Returns filed with respect to the Company and its Subsidiaries for
taxable periods ended on or after December 31, 2001, (ii) indicates those Tax
Returns that have been audited, and (iii) indicates those Tax Returns that
currently are the subject of audit. The
Company has delivered or made available to Parent correct and complete copies
of all federal Tax Returns, examination reports, and statements of deficiencies
assessed against or agreed to by to the Company or its Subsidiaries since January1, 2001. None of the Company or its Subsidiaries has
waived (or is subject to a waiver of) any statute of limitations in respect of
Taxes or has agreed to (or is subject to) any extension of time with respect to
a Tax assessment or deficiency.
(f) None
of the Company or any of its Subsidiaries has ever been a United States real
property holding corporation within the meaning of Section 897(c)(2) of the
Code.
(g) None
of the Company or any of its Subsidiaries has agreed to or is required to make
by reason of a change in accounting method or otherwise,
or could be required to make by reason of a proposed change in accounting
method or otherwise, any adjustment under Section 481(a) of the Code. None of the Company or any of its
Subsidiaries has been the “distributing corporation” or the “controlled
corporation” with respect to a transaction described in Section 355 of the
Code. None of the Company or any of its
Subsidiaries has received (or is subject to) any private ruling from any taxing
authority or has entered into (or is subject to) any agreement with a taxing
authority. None of the Company or any of
its Subsidiaries has engaged in a “reportable transaction” as defined in
Treasury Regulation Section 1.6011-4.
(h) None
of the Company or any of its Subsidiaries is a party to any Tax allocation or
sharing agreement. None of the Company
or any of its Subsidiaries has any liability for the Taxes of any other Person,
other than under Section 1.1502-6 of the Treasury regulations (or any similar
provision of state, local, or foreign law) with respect to any Relevant Group
of which the Company or any of its Subsidiaries currently is a member, (i) as a
transferee or successor, (ii) by contract, (iii) under Section 1.1502-6 of the
Treasury regulations (or any similar provision of state, local or foreign law),
or (iv) otherwise. Except as set forth
in Section 3.6 of the Company Disclosure Letter, none of the Company or any of
its Subsidiaries is a party to any joint venture, partnership or other
arrangement that is treated as a partnership for federal income tax purposes.
(i) None
of the Company or any of its Subsidiaries will be required to include any item
of income in, or exclude any item of deduction from, taxable income for any
taxable period (or portion thereof) ending after the Closing Date as a result
of any: (i) intercompany transactions or
excess loss accounts described in Treasury regulations under Section 1502 of
the Code (or any similar provision of state, local, or foreign Tax law), (ii)
installment sale or open
31
transaction disposition made on or prior to the Closing Date or (iii)
prepaid amount received on or prior to the Closing Date.
3.7. Title
to Properties.
(a) Owned and Leased Properties. Neither the Company nor any of its
Subsidiaries has ever owned any real property.
Section 3.7(a) of the Company Disclosure Letter sets forth a separate
list of all real property currently leased, licensed or subleased by the
Company or any of its Subsidiaries or otherwise used or occupied by the Company
or any of its Subsidiaries (the “Real
Property”), the name of the lessor, licensor, sublessor, master
lessor and/or lessee and the date of the lease, license, sublease or other
occupancy right and each amendment thereto.
All such current leases which are material to the Company and its
Subsidiaries taken as a whole are in full force and effect, are valid and
effective in accordance with their respective terms, and there is not, under
any of such leases, any existing material default or material event of default
(or event which with notice or lapse of time, or both, would constitute a
material default) by the Company or any of its Subsidiaries, or, to the Company’s
Knowledge, by any other party thereto.
The Company or its Subsidiaries currently occupies all of the Real
Property for the operation of its business.
No parties other than the Company or any of its Subsidiaries have a
right to occupy any material Real Property, except for subleases described in
the Company Disclosure Letter pursuant to which third parties have the right to
occupy Real Property. The Real Property
and the physical assets of the Company and the Subsidiaries are, in all
material respects, in good condition and repair (ordinary wear and tear
excepted) and regularly maintained in accordance with standard industry
practices and, to the Company’s Knowledge, the Real Property is in compliance,
in all materials respects, with Applicable Laws. Neither the Company nor any of its
Subsidiaries will be required to incur any material cost or expense for any
restoration or surrender obligations, or any other costs otherwise qualifying
as asset retirement obligations under Financial Accounting Standards Board
Statement of Financial Accounting Standard No. 143 “Accounting for Asset
Retirement Obligations,” upon the expiration or earlier termination of any
leases or other occupancy agreements for the Real Property. The Company and each of its Subsidiaries has
performed all of its obligations under any material termination agreements
pursuant to which it has terminated any leases of real property that are no
longer in effect and has no material continuing liability with respect to such
terminated real property leases.
(b) Lease Documents.The Company has
provided Parent true, correct and complete copies of all leases, lease
guaranties, agreements for the leasing, use or occupancy of, or otherwise
granting to the Company and its Subsidiaries a right to occupy the Real
Property, including all amendments, terminations and modifications thereof (
the “Lease Documents”);
and there are no other Lease Documents affecting the Real Property or to which
the Company or any of its Subsidiaries is bound, other than those identified in
Section 3.7(b) of the Company Disclosure Letter.
(c) Title.The Company and each of its Subsidiaries has
good and marketable title to, or, in the case of leased properties and assets,
valid leasehold interests in, all of its material tangible properties and
assets, real, personal and mixed, used or held for use in its business, free
and clear of any Liens except (i) as reflected in the Company Balance Sheet,
(ii) Liens for Taxes not yet due and payable or delinquent or being contested
in good faith by appropriate proceedings for which reserves have been established
in accordance with GAAP and
32
(iii) easements, covenants,
conditions and restrictions and such other imperfections of title and
encumbrances, if any, which do not in any material respect detract from the
value or interfere with the present use of the property subject thereto or
affected thereby. The rights, properties
and assets presently owned, leased or licensed by the Company and its
Subsidiaries include all rights, properties and assets necessary to permit the
Company and its Subsidiaries to conduct their business in all material respects
in the same manner as their businesses have been conducted prior to the date
hereof.
3.8. Intellectual
Property.
(a) Definitions. For
all purposes of this Agreement, the following terms shall have the following
respective meanings:
“Company Intellectual Property”
shall mean any and all Intellectual Property Rights that are owned by, or
licensed to, the Company or its Subsidiaries.
“Company Products”
shall mean all products and services that have been developed by or for the
Company or any of its Subsidiaries and/or are owned, made, provided,
distributed, imported, sold or licensed to third Persons by or on behalf of the
Company or any of its Subsidiaries.
“Company Registered Intellectual
Property” shall mean the applications, registrations and filings
for Intellectual Property Rights that are owned by the Company or that have
been registered, filed, certified or otherwise perfected or recorded with or by
any Governmental Authority by or in the name of the Company or any of its
Subsidiaries or licensed to the Company or any of its Subsidiaries.
“Intellectual Property”
shall mean any or all of the following (i) works of authorship including
computer programs, source code, and executable code, whether embodied in
software, firmware or otherwise, architecture, documentation, designs, files,
records, and data, (ii) inventions (whether or not patentable), discoveries,
improvements, and technology, (iii) proprietary and confidential information,
trade secrets and know how, (iv) databases, data compilations and collections
and technical data, (v) logos, trade names, trade dress, trademarks and service
marks, (vi) domain names, web addresses and sites, (vii) tools, methods and
processes, (viii) devices, prototypes, schematics, breadboards, netlists,
maskworks, test methodologies, verilog files, emulation and simulation reports,
test vectors and hardware development tools, and (ix) any and all
instantiations of the foregoing in any form and embodied in any medium.
“Intellectual Property Rights”
shall mean worldwide common law and statutory rights associated with (i)
patents, patent applications and inventors’ certificates, (ii) copyrights,
copyright registrations and copyright applications, “moral” rights and mask
work rights, (iii) the protection of trade and industrial secrets and
confidential information (“Trade
Secrets”), (iv) trademarks, trade names and service marks, (vi)
divisions, continuations, renewals, reissuances, extensions and any foreign
equivalents of the foregoing (as applicable) and (vii) analogous rights to
those set forth above, including the right to enforce and recover remedies for
infringement or misappropriation of any of the foregoing.
33
“Shrink-Wrapped Code”
means (a) generally commercially available binary code (other than development
tools and development environments) where available for a cost of not more than
U.S. $20,000 for a perpetual license for a single user or work station (or
$150,000 in the aggregate for all users and work stations), and (b) generally
commercially available software programs that are not Company Products and are
used internally by the Company in the ordinary course of business.
“Source Code” shall
mean computer software and code, in form other than object code form,
including, to the extent currently prepared and in existence, any related
programmer comments and annotations, help text, data and data structures,
instructions and procedural, object-oriented and other code, which may be
printed out or displayed in human readable form.
(b) No Default/No Conflict. All unexpired written Contracts relating to
either (i) Company Intellectual Property, or (ii) Intellectual Property or
Intellectual Property Rights of a third Person licensed to the Company or any
of its Subsidiaries, are valid and in full force and effect, and enforceable in
accordance with their terms. The
consummation of the transactions contemplated by this Agreement will neither
violate nor by their terms result in the breach, modification, cancellation,
termination, suspension of, or acceleration of any payments with respect to,
such Contracts, subject to obtaining any consents and approvals as are set
forth inSection 3.8(b) of the Company Disclosure Letter. Each of the Company and its Subsidiaries is in
material compliance with, and has not breached any material term of any such
Contracts or committed or failed to perform any act which, with or without
notice, lapse of time or both would constitute a default under the provisions
of any such Contract and, to the Knowledge of the Company, all other parties to
such Contracts are in material compliance with, and have not breached any
material term of, such Contracts. Following the Closing Date, and subject to
obtaining any consents and approvals as are set forth in Section 3.8(b) of the Company Disclosure Letter, the Surviving
Corporation will be permitted to exercise all of the Company’s and its
Subsidiaries’ rights under such Contracts to the same extent the Company and
its Subsidiaries would have been able to had the transactions contemplated by
this Agreement not occurred and without the payment of any additional amounts
or consideration other than ongoing fees, royalties or payments which the
Company or any of its Subsidiaries would otherwise be required to pay.
(c) No Infringement. To the Knowledge of the Company, the
operation of the business of the Company and its Subsidiaries as it is
currently conducted or proposed to be conducted, including the design,
development, use, import, branding, advertising, promotion, marketing,
manufacture and sale of any Company Product, has not and does not infringe or
misappropriate any Intellectual Property Rights of any third Person, or
constitute unfair competition or trade practices under the laws of any jurisdiction.
(d) Notice. Neither the Company nor any of its
Subsidiaries has received notice, written or otherwise, from any third Person
claiming that any Company Product or the operation of the business of the
Company or its Subsidiaries infringes or misappropriates any Intellectual
Property Rights of any third Person or constitutes unfair competition or trade
practices under the laws of any jurisdiction. Neither the Company nor any of
its Subsidiaries has received notice, written or otherwise, from any third Person
challenging the complete and exclusive ownership of or right to use the Company
Intellectual Property, or suggesting that any third Person has any
34
claim of legal or beneficial
ownership with respect thereto. Neither
the Company nor any of its Subsidiaries has received any notice, written or
otherwise, challenging, terminating, amending or affecting the interest of the
Company or its Subsidiaries, in the Company Intellectual Property.
(e) Transaction. Neither this Agreement nor the transactions
contemplated by this Agreement, including any assignment to Parent by operation
of law as a result of the Merger of any material written contracts or
agreements to which the Company or any of its Subsidiaries is a party, will
result in Parent, any of its subsidiaries or the Surviving Corporation being
obligated under such written contracts or agreements to pay any royalties or
other material amounts, or offer any discounts, to any third party in excess of
those payable by, or required to be offered by, the Company or any of them,
respectively, its Subsidiaries in the absence of this Agreement or the
transactions contemplated hereby, subject to obtaining any consents and
approvals required to be obtained in connection with any such written contracts
and agreements.
(f) Intellectual Property. Each of the Company and its Subsidiaries has
taken commercially reasonable steps to obtain, maintain and protect the Company
Intellectual Property. Without limiting
the foregoing, each of the Company and its Subsidiaries has, and has
implemented, a policy requiring each current and former employee, consultant
and contractor to execute sufficient information and confidentiality agreements
and all current and former employees, consultants and contractors of the
Company or any Subsidiary that have created any material Company Intellectual
Property have executed such agreements and either: (i) is a party to a “work
made for hire” agreement or arrangement under which the Company or any
Subsidiary is deemed to be the original owner/author of all right, title and
interest in the Company Intellectual Property; or (ii) has executed a valid,
enforceable and irrevocable assignment of or a valid and enforceable agreement
to irrevocably assign in favor of the Company or any Subsidiary all right,
title and interest in the Company Intellectual Property. The Company or its Subsidiaries own all
right, title and interest in and to or otherwise have the right to use all
Company Intellectual Property, subject to the terms of any applicable Contracts
to which the Company or any of its Subsidiaries is a party and under which the
Company or any of its Subsidiaries has been granted or provided any rights to
Intellectual Property or Intellectual Property Rights by a third party, free
and clear of all Liens or claims of others.
(g) Section 3.8(g) of the Company Disclosure Letter lists all
Company Registered Intellectual Property.
To the Knowledge of the Company, the Company and its Subsidiaries is
current as of the date hereof and will be current as of the Closing Date in (A)
the payment of all necessary registration, maintenance and renewal fees owing
in connection with such Company Registered Intellectual Property and (B) the
filing of documents that are required to be filed with the relevant patent, copyright,
trademark or other authorities in the United States or foreign jurisdictions,
as the case may be, for the purposes of obtaining and maintaining such Company
Registered Intellectual Property.Section 3.8(g) of the Company Disclosure Letter lists all
actions, including the making of any payments that need to be taken with the
applicable registering governmental agency within 120 days of the date hereof
to maintain, renew or preserve the rights of Company in any of the Company
Registered Intellectual Property. To the
Knowledge of the Company, all of the Company Registered Intellectual Property
is valid and subsisting. To the Knowledge of the Company, the Company has not
taken or failed to take any action, including with respect to disclosure of
information in the application for or prosecution of any Company Registered
Intellectual Property that would render such Company Registered
35
Intellectual invalid or
unenforceable. No Company Registered
Intellectual Property is involved in any interference, reissue, reexamination,
opposition or cancellation proceeding or any other material Legal Proceeding of
any kind in the United States or in any other jurisdiction.
(h) No Order. The Company has not received any notice that
any Company Intellectual Property or Company Product is subject to any
proceeding or outstanding decree, order, judgment, settlement agreement,
forbearance to sue, consent, stipulation or similar obligation that restricts
in any manner the use, transfer or licensing thereof by the Company or any of
its Subsidiaries or may affect the validity, use or enforceability of such
Company Intellectual Property or Company Product.
(i) Open Source. No 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 or limited
general public license or other software that is licensed pursuant to a license
that purports to require the distribution of or access to Source Code or
purports to restrict a licensee’s ability to charge for distribution of or to
use software for commercial purposes (collectively “Open Source”), was incorporated into or integrated or
bundled with, any Company Products. Section 3.8(i) of the Company
Disclosure Letter sets forth a list of all Open Source that is incorporated
into or integrated or bundled with any Company Product and for each such use of
Open Source: (i) a description of the Open Source, (ii) name of the applicable
license, (iii) the applicable Company Product, and (iv) to the extent known by
the Company, the copyright holder of such Open Source.
(j) Source Code. Neither the Company, nor any of its
Subsidiaries, has disclosed, delivered or licensed to any third Person, agreed
to disclose, deliver or license to any third Person, or permitted the
disclosure or delivery to any escrow agent or other third Person of, any Source
Code for any Company Product that is owned by the Company or a Subsidiary of
the Company (“Company Source Code”).
No event has occurred, and no circumstance or condition exists, that (with or
without notice or lapse of time, or both) will, or would reasonably be expected
to, result in the disclosure or delivery by the Company, any of its
Subsidiaries or any third Person acting on their behalf to any third Person of
any Company Source Code. Section 3.8(j) of the Company
Disclosure Letter identifies each written Contract pursuant to which the
Company has deposited, or is or may be required to deposit, Company Source Code
with an escrow agent or any other Person.
The execution of this Agreement or any of the other transactions
contemplated by this Agreement will not result in the release from escrow of
any Company Source Code.
(k) Licenses-In. Other than (i) licenses to Shrink-Wrapped
Code, (ii) licenses to Open Source as set forth inSection 3.8(i) of the Company
Disclosure Letter and (iii) non-disclosure agreements entered into in the
ordinary course of business, Section
3.8(k) of the Company Disclosure Letter lists all written Contracts that
are material to the business of the Company to which the Company or any of its
Subsidiaries is a party and under which the Company or any of its Subsidiaries
has been granted or provided any rights to Intellectual Property or
Intellectual Property Rights by a third party.
Subsidiaries is a party and
pursuant to which Company or is Subsidiaries licenses, purchases or acquires
any Intellectual Property (including any parts, supplies and components) that
is material to the design, manufacture or support of the Company Products.
(m) Licenses-Out. Other than (i) written non-disclosure
agreements and (ii) non-exclusive licenses and related agreements with
respect thereto (including software and maintenance and support agreements) of
current Company Products to end-users (in each case, pursuant to written
agreements that have been entered into in the ordinary course of business that
do not materially differ in substance from the Company’s standard form(s) which
have been provided to Parent),Section 3.8(m) of the Company
Disclosure Letter lists all written contracts, licenses and agreements to which
the Company or any of its Subsidiaries is a party that have generated for the
Company or any of its Subsidiaries more than $150,000 in revenue in a fiscal
quarter in any of the last three fiscal years and under which the Company or
any of its Subsidiaries has granted any license to the Company Intellectual
Property.
(n) Customer Information. The Company and each of its Subsidiaries has
all necessary rights to, and has taken commercially reasonable steps to protect
the confidentiality of all customer lists, customer contact information,
customer correspondence and customer licensing and purchasing histories
relating to its customers (the “Customer
Information”). To the
Knowledge of the Company, the Company and its Subsidiaries are in full
compliance with all Applicable Laws, regulations and Contracts with respect to
the use and disclosure of Customer Information and the consummation of the
transactions contemplated by this Agreement will not violate such laws,
regulations and contracts with respect to such Customer Information.
(o) Third Person Infringement. No third Person has been put on notice of,
nor is the Company or its Subsidiaries aware of any facts which would indicate
a likelihood that a third Person has, will be, or currently is infringing,
misappropriating, diluting or otherwise misusing any of the Company
Intellectual Property.
3.9. Restrictions
on Business Activities. Neither the Company nor any of its
Subsidiaries is party to or bound by any Contract containing any covenant (a)
limiting in any respect the right of the Company or any of its Subsidiaries to
engage in any line of business, to make use of any Company Intellectual
Property or Company Product or compete with any Person in any line of business,
(b) granting any exclusive distribution rights, (c) providing “most favored
nations” or other preferential pricing terms for current Company Products or
(d) otherwise limiting or restricting the right of the Company and its
Subsidiaries to sell, distribute or manufacture any Company Products or Company
Intellectual Property or to purchase or otherwise obtain any software,
components, parts or subassemblies.
3.10. Governmental
Authorizations. Each material consent, license, permit, grant or
other authorization (i) pursuant to which the Company or any of its
Subsidiaries currently operates or holds any interest in any of their
respective properties or assets, or (ii) which is required for the operation of
the Company’s or any of its Subsidiaries’ business as currently conducted or
the holding of any such interest (collectively, “Company Permits”) has
been issued or granted to the Company or any of its Subsidiaries, as the case
may be. Each Company Permit is in full
force and effect. As of the date hereof,
no suspension or cancellation of any Company Permit is
37
pending or, to the Knowledge of
the Company, threatened. The Company and
its Subsidiaries are in compliance in all material respects with the terms of
all Company Permits.
3.11. Litigation.
There is no Legal Proceeding pending or, to the Knowledge of the Company,
threatened against the Company, any of its Subsidiaries or any of their
respective properties or assets (whether real, personal or mixed, tangible or
intangible). There is no investigation
or other proceeding pending or, to the Knowledge of the Company, threatened
against the Company, any of its Subsidiaries or any of their respective
properties or assets (whether real, personal or mixed, tangible or intangible)
by or before any Governmental Authority.
There has not been since January 1, 2003, nor are there currently, any
internal investigations or inquiries being conducted by the Company, the
Company’s Board of Directors (or any committee thereof) or, to the Knowledge of
the Company, any third party at the request of any of the foregoing concerning
any financial, accounting, tax, conflict of interest, illegal activity,
fraudulent or deceptive conduct or other misfeasance or malfeasance issues.
3.12. Compliance
with Laws. Neither the Company nor any of its Subsidiaries has
been or is in violation or default in any material respect of any Applicable
Law. There is no agreement, judgment,
injunction, order or decree binding upon the Company or any of its Subsidiaries
which has or would reasonably be expected to have the effect of prohibiting or
impairing any business practice of the Company or any of its Subsidiaries in
such a way as has resulted or would reasonably be expected to result in a
Company Material Adverse Effect.
3.13. Environmental
Matters. Section 3.13 of the Company Disclosure Letter sets
forth a complete list of all material Company Permits held by the Company or
any of its Subsidiaries which have been issued under Environmental Laws (the “Environmental
Permits”). The Environmental Permits
set forth in Section 3.13 of the Company Disclosure Letter constitute all of
the material Company Permits that relate to Environmental Matters, issued or
required under Environmental Laws by any Governmental Authority in connection
with the operation of the Company’s business.
The Company and its Subsidiaries are now and for the last five years
have been in material compliance with all Environmental Laws and all
Environmental Permits. There are no past
or present conditions, events, circumstances, facts, activities, practices,
incidents, actions, omissions or plans (i) that have given rise or could
reasonably be expected to give rise to any material Liabilities of the Company
and its Subsidiaries under any Environmental Laws or (ii) that have required or
could reasonably be expected to require the Company and its Subsidiaries to
incur any material cleanup, remediation, removal or other response costs
(including the cost of coming into compliance with Environmental Laws),
investigation costs (including fees of consultants, counsel and other experts
in connection with any environmental investigation, testing, audits or
studies), losses, Liabilities, payments, damages (including any actual,
punitive or consequential damages under any Environmental Laws or to third
parties for personal injury or property damage), civil or criminal fines or
penalties, judgments or amounts paid in settlement under Environmental
Laws. Neither the Company nor any of its
Subsidiaries has received any written notice or other written communication:
(x) that any of them is or may be a potentially responsible Person or otherwise
materially liable in connection with any waste disposal site or other location
allegedly containing any Hazardous Substances; (y) of any failure by any of
them to materially comply with any Environmental Laws or the requirements of
any Environmental Permits; or (z) that any of them is requested or required by
any Governmental
38
Authority to perform any
material investigatory or remedial activity or other action in connection with
any actual or alleged release of Hazardous Substances or any other
environmental matters.
3.14. Brokers’
and Finders’ Fees. Except for fees payable to Allen &
Company, Inc. and Susquehanna Financial Group, LLLP pursuant to engagement
letters, copies of which have been provided to Parent, neither the Company nor
any of its Subsidiaries has (i) incurred, nor will it incur, directly or
indirectly, any liability for brokerage or finders’ fees or agents’
commissions, fees related to investment banking or similar advisory services or
any similar charges in connection with this Agreement or any transaction
contemplated hereby, nor (ii) entered into any indemnification agreement or
arrangement with any Person in connection with this Agreement and the
transactions contemplated hereby.
3.15. Transactions
with Affiliates. Except as set forth in the Company SEC Reports
filed on or prior to the date of this Agreement, since the date of the Company’s
last proxy statement filed with the SEC, no event has occurred as of the date
hereof that would be required to be reported by the Company pursuant to Item
404 of Regulation S-K promulgated by the SEC.
3.16. Employee
Benefit Plans and Compensation.
(a) Definitions. For
all purposes of this Agreement, the following terms shall have the following
respective meanings:
“Company Benefit Plan”
means any Plan established by the Company or any of its Subsidiaries, or any
predecessor of the Company or any of its Subsidiaries, to which the Company or
any of its Subsidiaries contributes or has contributed on behalf of any
Employee, or under which any Employee, or any beneficiary thereof, is covered,
is eligible for coverage or has benefit rights, or for which the Company or any
of its Subsidiaries has any Liability.
“ERISA” means the Employee
Retirement Income Security Act of 1974, as amended.
“ERISA Affiliate” means,
as to any person, any trade or business, whether or not incorporated, which
together with such person would be deemed, at any time through the Closing
Date, a single employer within the meaning of Section 4001 of ERISA or Section
414(b), (c), (m) or (o) of the Code.
“Plan” means any bonus,
incentive compensation, deferred compensation, pension, profit sharing,
retirement, stock purchase, stock option, stock ownership, stock appreciation
rights, phantom stock, leave of absence, layoff, vacation or holiday pay, day
or dependent care, legal services, cafeteria, life, health, accident, sickness,
disability, workmen’s compensation, medical, life, dental or other insurance,
severance, separation or other employee benefit, fringe benefit, plan, program,
trust, contract, practice, policy or arrangement of any kind, whether written
or oral, including any “employee benefit plan” within the meaning of Section
3(3) of ERISA whether or not in the nature of formal or informal understandings
and whether or not included in or described in any employment manual or
handbook.
(b) Section 3.16 of the Company
Disclosure Letter is a current, correct and complete list of all Company
Benefit Plans.
39
(c) All the Company Benefit Plans conform
(and at all times have conformed) in all material respects to, and are being
administered and operated (and have at all times been administered and
operated) in material compliance with, the requirements of ERISA, the Code and
all other Applicable Laws. All returns,
reports and disclosure statements required to be made under ERISA and the Code
with respect to all such Company Benefit Plans have been timely filed or
delivered. There have not been any “prohibited
transactions” (as such term is defined in Section 4975 of the Code or Section
406 of ERISA) involving any of the Benefit Plans that could subject the Company
to any penalty or tax under ERISA or the Code.
(d) Each Company Benefit Plan that is
intended to be qualified under Section 401(a) of the Code and exempt from tax
under Section 501(a) of the Code has been determined by the Internal Revenue
Service to be so qualified and exempt.
Any such Internal Revenue Service determination remains in effect and
has not been revoked. Nothing has
occurred since the date of any such determination that is reasonably likely to
affect adversely such qualification or exemption, or result in the imposition
of an excise, income or unrelated business income taxes under the Code or ERISA
with respect to any such Company Benefit Plan.
(e) The Company and ERISA Affiliates do
not sponsor or contribute to, and have not in the past sponsored or contributed
to, and have no Liabilities with respect to, any defined benefit plan subject
to Title IV of ERISA or any “multi-employer plan” (as defined in Section 3(37)
of ERISA).
(f) The Company has delivered or made
available to Purchaser current, correct and complete copies of the following
documents: (i) all plan documents, amendments and trust agreements relating to
each Company Benefit Plan; (ii) the most recent annual and periodic accountings
of plan assets; (iii) the most recent Internal Revenue Service determination or
notification letter for each Company Benefit Plan that is an “employee pension
benefit plan” (as that term is defined in ERISA Section 3(2)) and a list
identifying any amendment not covered by such determination or notification
letter; (iv) annual reports filed on Form 5500 (including accompanying
schedules) for each Company Benefit Plan for the last three (3) years, if such
reports were required to be filed; (v) the current summary plan description, if
any is required by ERISA, for each Company Benefit Plan; (vi) all insurance
contracts, annuity contracts, investment management or advisory agreements,
administration contracts, service provider agreements, audit reports, fidelity
bonds and fiduciary liability policies relating to any Company Benefit Plan;
and (vii) all material correspondence with any Governmental Authority relating
to any Company Benefit Plan.
(g) To the Knowledge of the Company and
any of its Subsidiaries, all communications regarding each Company Benefit Plan
by the Company, any of its Subsidiaries or by an Employee or agent of the
Company reflect and have always reflected accurately the material terms of that
Company Benefit Plan.
(h) There are no pending or, to the
Knowledge of the Company or any of its Subsidiaries, threatened claims by or on
behalf of any Company Benefit Plan, or by or on behalf of any individual
participants or beneficiaries of any Company Benefit Plan, alleging any
violation of ERISA or any other Applicable Laws, or claiming payments (other
than benefit claims made in the ordinary course of the operation of such
plans), nor is there, to the knowledge
40
of the Company or any of its
Subsidiaries, any basis for such claim.
No Company Benefit Plan is the subject of any pending (or, to the
Knowledge of the Company, any threatened) investigation or audit by the
Internal Revenue Service , the U.S. Department of Labor, the Pension Benefit
Guaranty Corporation or any other regulatory agency, foreign or domestic.
(i) All required payments and
contributions under the Company Benefit Plans, including the payment of all
insurance premiums, have been timely made.
All such payments and contributions have been fully deducted by the
Company or any of its Subsidiaries for federal income tax purposes. Such deductions have not been challenged or
disallowed by any Governmental Authority and neither the Company nor any of its
Subsidiaries has any reason to believe that such deductions are not properly
allowable. There is no contract,
agreement, plan or arrangement to which the Company or any of its Subsidiaries
is a party, including the provisions of this Agreement, covering any Employee
of the Company or any of its Subsidiaries, which, individually or collectively,
could give rise to the payment of any amount that would not be deductible
pursuant to Section 162(m) of the Code.
Neither the Company nor any of its Subsidiaries has incurred any
Liabilities for any tax, excise tax, penalty or fee with respect to any Company
Benefit Plan, and no event has occurred and no circumstance exists or has
existed that could give rise to any such Liabilities.
(j) The execution and performance of the
transactions contemplated by this Agreement will not (either alone or upon the
occurrence of any additional or subsequent events) result in any payment,
acceleration, vesting or increase in benefits with respect to any employee or
former employee of the Company or any of its Subsidiaries. Furthermore, the execution of and performance
of the transactions contemplated by this Agreement will not result in any
payment, acceleration, vesting or increase in benefits with respect to any
Employee or former Employee of the Company or its Subsidiaries that would be an
“excess parachute payment” under Section 280G of the Code.
(k) Neither the Company nor any of its
Subsidiaries maintains any plan or arrangement that provides post retirement
medical benefits, post retirement death benefits or other post retirement
welfare benefits, other than to the extent required by Part 6 of Title I of
ERISA.
(l) There has been no amendment to,
written interpretation or announcement (whether or not written) relating to, or
change in employee participation or coverage under, any Company Benefit Plan
which would increase materially the expense of maintaining such Company Benefit
Plan above the level of the expense incurred in respect thereof for the fiscal
year of the Company ending immediately prior to the date hereof. Each Company Benefit Plan may be amended or
terminated, at any time determined by the Company in its sole discretion.
(ii) any agreement pursuant to which the
Company or any of its Subsidiaries have continuing obligations to jointly
develop any Intellectual Property or Intellectual Property Rights that will not
be owned, in whole or in part, by the Company or any of its Subsidiaries and
which may not be terminated without penalty to the Company or any of its
Subsidiaries upon notice of 30 days or less;
(iii) Any agreement granting, licensing,
sublicensing or otherwise transferring any Intellectual Property Rights of the
Company or its Subsidiaries other than in the ordinary course of business and
consistent with past practices;
(iv) any mortgages, indentures, guarantees,
loans or credit agreements, security agreements or other agreements relating to
the borrowing of money or extension of credit, other than accounts receivables
and payables in the ordinary course of business and consistent with past
practices;
(v) any material settlement agreement
entered into within three years prior to the date of this Agreement;
(vi) any Company Government Contract or
Company Government Subcontract;
(vii) any agreement, or group of agreements
with a Person (or group of affiliated Persons), the termination or breach of
which could reasonably be expected to have a material adverse effect on any
Company Product or otherwise have a Company Material Adverse Effect; or
(viii) any other agreement in effect at any
time during the past three years which provided for any obligations to make
payments or entitlement to receive payments on behalf of the Company or any of
its Subsidiaries of $250,000 or more within a 12-month period.
(b) Schedule of Material Contracts.Section 3.17(b) of the Company
Disclosure Letter sets forth a list of all Company Material Contracts to which the
Company or any of its Subsidiaries is a party or by which any of them is bound
as of the date hereof which are described in Section 3.17(a), setting forth for
each such Company Material Contract, the subsections of Section 3.17(a)
applicable to such Company Material Contract.
(c) No Breach. All Company Material Contracts are valid and
in full force and effect in all material respects, except to the extent they
have previously expired in accordance with their terms. Neither the Company nor any of its Subsidiaries
has violated any provision of, or committed or failed to perform any act which,
with or without notice, lapse of time or both would constitute a material
default under the provisions of, any Company Material Contract.
3.18. Insurance.
Section 3.18 of the Company Disclosure Letter sets forth a list of all
insurance policies, including worker’s compensation, title, fire, general
liability, fiduciary
42
liability, directors’ and
officers’ liability, malpractice liability, theft and other forms of property
and casualty insurance held by the Company and each of its Subsidiaries. Except for policies that have been, or are
scheduled to be, terminated in the ordinary course of business and consistent
with past practices of the Company and in accordance with the terms thereof,
each of the insurance policies set forth in Section 3.18 of the Company
Disclosure Letter is in full force and effect.
To the Knowledge of the Company, there is no existing default or event
which, with the giving of notice, lapse of time or both, would constitute a
default, by any insured under any policy listed in Section 3.18 of the Company
Disclosure Letter, except where the existence of such default would not be
reasonably likely to be material to the Company and its Subsidiaries taken as a
whole. All premiums and other amounts
due on such policies have been paid, and the Company and its Subsidiaries have
complied in all material respect with the provisions of such policies. The Company and its Subsidiaries have
reported to their insurers all claims and pending circumstances that could
potentially result in a claim, except where the failure to report such a claim
would not be reasonably likely to be material to the Company and its
Subsidiaries taken as a whole.
3.19. Accounts
Receivable. The Company has delivered or made available to
Parent a list of all accounts receivable of the Company as of September 30,2006, together with a range of days elapsed since invoice. All of the Company’s accounts receivable
arose in the ordinary course of business, are carried at values determined in
accordance with GAAP consistently applied, and are reasonably believed by the
Company to be collectible except to the extent of reserves therefor set forth
in the Company Financial Statements, or, for receivables arising subsequent to
September 30, 2006, as reflected on the books and records of the Company (which
are prepared in accordance with GAAP and the reserve practices and methodology
used in preparation of the Company Balance Sheet). No Person has any Lien on any of the Company’s
accounts receivable, and no request or agreement for deduction or discount has
been made with respect to any of the Company’s accounts receivable.
3.20. Warranties;
Products Liability. Neither the Company nor any Subsidiary has
incurred any material expenses not reflected in the Company Financials in
connection with any claims made by customers under the Company’s or any
Subsidiary’s obligations under their guaranty, warranty, right of return and
indemnity provisions during each of the last 3 fiscal years and the interim
period covered by the Company Financials; and to the Company’s Knowledge, there
is no reason why a material amount of any such expenses would be incurred in
the future. During the last 3 fiscal
years and the interim period covered by the Company Financials, neither the
Company nor any Subsidiary has incurred any material liability arising out of
any injury to any individual or property as a result of the ownership,
possession, or use of any product or service manufactured, sold, leased or
delivered by the Company or its Subsidiaries.
3.21. Customers.
Section 3.21 of the Company Disclosure Letter lists the customers who, in the
Company’s nine months ended September 30, 2006, were the fifteen (15) largest
customers, as measured by gross revenue, of Company and its Subsidiaries (each,
a “Significant Customer”).
Neither the Company nor any Subsidiary intends to (a) terminate its
relationship or any Contract between any Significant Customer and the Company
or its Subsidiaries, (b) stop, or materially decrease the rate of supplying
products or services (in each case, as measured against the Company’s
historical rate of supplying products or services since January 1, 2003, or
such shorter period of time the Company has been supplying products or services
to such Significant
43
Customer) to such Significant
Customer, or (c) seek the exercise of any remedy against any such Significant
Customer. The Company has no Knowledge
of any intent on the part of a Significant Customer to (a) terminate its
relationship or any Contract between such Significant Customer and the Company
or its Subsidiaries, (b) stop, or materially decrease the rate of buying
products or services (in each case, as measured against the Significant Customer’s
historical rate of buying products or services since January 1, 2003, or such
shorter period of time the Company has been supplying products or services to
such Significant Customer) from the Company or any Subsidiary, (c) refuse to
pay any amount due from such Significant Customer to the Company or its
Subsidiaries (other than non-material, bona fide disputes), (d) return products
of the Company or its Subsidiaries, or (e) seek the exercise of any remedy
against the Company or any Subsidiary.
The Company has not since the Balance Sheet Date been engaged in a
material dispute with any Significant Customer.
3.22. Suppliers.
Section 3.22 of the Company Disclosure Letter lists the suppliers who, in the
nine months ended September 30, 2006, were the ten (10) largest suppliers of
goods and services to the Company and its Subsidiaries, based on amounts paid
by the Company and its Subsidiaries to such suppliers (each, a “Significant Supplier”).
Neither the Company nor any Subsidiary has any intent of (a) terminating
any Contract with any Significant Supplier, (b) stop, or materially decrease
the rate of buying products or services (in each case, as measured against the
Company’s historical rate of buying products or services since January 1, 2003)
from any Significant Supplier, (c) refusing to pay any amount due to any
Significant Supplier, (d) returning any products to any Significant Supplier or
(e) seeking to exercise any remedy against any Significant Supplier. The Company has no Knowledge that any Significant
Supplier intends to (a) terminate any Contract between such Significant
Supplier and the Company or any of its Subsidiaries, (b) stop, or materially
decrease the rate of supplying products or services (in each case, as measured
against such Significant Supplier’s historical rate of supplying products or
services since January 1, 2003) to the Company or any Subsidiary, (c) or seek
to exercise any remedy against the Company or any of its Subsidiaries. The Company has not within the past year been
engaged in a material dispute with any Significant Supplier.
3.23. Export
Control Laws. The Company and each of its Subsidiaries has at
all times conducted its export transactions in accordance with (i) all
applicable U.S. export and re-export controls, including the United States
Export Administration Act and Regulations and Foreign Assets Control
Regulations and (ii) all other applicable import/export controls in other
countries in which the Company conducts business. The Company and each of its Subsidiaries has
obtained all export licenses, license exceptions and other consents, notices,
waivers, approvals, orders, authorizations, registrations, declarations,
classifications and filings with any Governmental Authority required for (i)
the export and reexport of products, services, software and technologies and
(ii) releases of technologies and software to foreign nationals located in the
United States and abroad (“Export Approvals”). The Company and each of its Subsidiaries is
in compliance with the terms of all applicable Export Approvals, There are no
pending or, to the Company’s Knowledge, threatened claims against the Company
or any Subsidiary with respect to such Export Approvals, and no Export
Approvals for the transfer of export licenses to Parent or the Surviving
Corporation are required. To the Company’s
Knowledge, there are no actions, conditions or circumstances pertaining to the
Company’s or any Subsidiary’s export transactions that may give rise to any
future claims.
44
3.24. Foreign
Corrupt Practices Act. Neither the Company nor any of its
Subsidiaries (including any of their officers, directors, agents, distributors,
employees or other Person associated with or acting on their behalf) has,
directly or indirectly, taken any action which would cause it to be in
violation of the Foreign Corrupt Practices Act of 1977, as amended, or any
rules or regulations thereunder or any similar anti-corruption or Applicable
Law with respect to anti-bribery in any jurisdiction other than the United
Sates (collectively, the “FCPA”), used any corporate funds for unlawful
contributions, gifts, entertainment or other unlawful expenses relating to
political activity, made, offered or authorized any unlawful payment to foreign
or domestic government officials or employees, whether directly or indirectly,
or made, offered or authorized any bribe, rebate, payoff, influence payment,
kickback or other similar unlawful payment, whether directly or
indirectly. The Company has established
sufficient internal controls and procedures to ensure compliance with the FCPA
and has made available to Parent all documentation relating to ethical business
practices.
3.25. Information
Supplied. None of the information supplied or to be supplied by
or on behalf of the Company for inclusion or incorporation by reference in the
Registration Statement (including the Proxy Statement to be included therein)
or any amendment or supplement thereto shall (a) at the time the Registration
Statement is declared effective by the SEC (or, with respect to any
post-effective amendment or supplement, at the time such post-effective
amendment or supplement becomes effective) or (b) on the date of mailing to the
Company’s stockholders and at the time of the Company Stockholders’ Meeting,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they are made, not
misleading. Notwithstanding any of the
foregoing in thisSection 3.25,
the Company makes no representation or warranty with respect to any information
supplied by Parent, BV Sub or Merger Sub for inclusion or incorporation by
reference in the Registration Statement.
3.26. Fairness
Opinion. The Company’s Board of Directors has received a written
opinion from Allen & Company, dated as of November 5, 2006, a copy of which
has been delivered to Parent, that, as of such date and subject to the
assumptions and qualifications made therein, the Merger Consideration is fair
to the Company’s stockholders from a financial point of view (the “Company
Fairness Opinion”). The special
committee of the Company’s Board of Directors (the “Special Committee”)
has received a written opinion from Susquehanna Financial Group, LLLP, dated as
of November 5, 2006, a copy of which has been delivered to Parent, that, as of
such date and subject to the assumptions and qualifications made therein, the
Merger Consideration is fair to the Company’s stockholders from a financial
point of view (the “Committee Fairness Opinion” and together with the
Company Fairness Opinion, the “Fairness Opinions”).
3.27. Government
Contracts. With respect to each Contract between the Company or
any Subsidiary of the Company, on the one hand, and any U.S. federal
governmental entity, on the other hand, and each outstanding bid, quotation or
proposal by the Company or any Subsidiary of the Company (each, a “Bid”)
that if accepted or awarded could lead to a Contract between the Company or any
Subsidiary of the Company, on the one hand, and any U.S. federal governmental
entity, on the other hand, (each such Contract or Bid, a “Company Government
Contract”) and each Contract between the Company or any Subsidiary of the
Company, on the one hand, and any prime contractor or upper-tier subcontractor,
on the other hand, relating to a Contract between such person and any U.S.
federal governmental entity, and each outstanding
45
Bid that if accepted or awarded
could lead to a Contract between the Company or a Subsidiary of the Company, on
the one hand, and a prime contractor or upper-tier subcontractor, on the other
hand, relating to a Contract between such person and any U.S. federal
governmental entity (each such Contract or Bid, a “Company Government
Subcontract”):
(a) Each such Company Government Contract
or Company Government Subcontract (other than Bids) was, to the Knowledge of
the Company, legally awarded, is binding on the parties thereto, and is in full
force and effect in all material respects, except to the extent such Company
Government Contract or Company Government Subcontract (other than Bids) has
previously expired in accordance with their terms. Neither the Company nor any of its
Subsidiaries has violated any provision of, or committed or failed to perform
any act which, with or without notice, lapse of time or both would constitute a
material default under the provisions of, any Company Government Contract or
Company Government Subcontract.
(b) There are no material Legal
Proceeding pending or, to the Knowledge of the Company, threatened, in
connection with any Company Government Contract or Company Government
Subcontract, against the Company or any of its Subsidiaries alleging fraud or
under the United States False Claims Act, the United States Procurement
Integrity Act or the United States Truth in Negotiations Act. Neither the
Company, any Company Subsidiary or any cost incurred by the Company or any
Subsidiary of the Company pertaining to a Company Government Contract or
Company Government Subcontract is the subject of any audit or, to the Knowledge
of the Company, investigation or has been disallowed by any Governmental
Authority, except any investigation, audit or disallowance (i) that,
individually or in the aggregate, is not reasonably likely to result in a
material liability to the Company and its Subsidiaries taken as a whole or (ii)
which commenced prior to the three-year period prior to the date hereof and is
closed and no longer pending.
(c) The Company and its Subsidiaries have
complied in all material respects with all requirements of the Company
Government Contracts or Company Government Subcontracts and any material
Applicable Law relating to the safeguarding of, and access to, classified
information. The execution, delivery and
performance of this Agreement will not and the Company is not aware of any
facts that are reasonably likely to give rise to the revocation of any security
clearance of the Company, any Subsidiary of the Company or any Employee of the
Company or any Company Subsidiary.
3.28. Takeover
Statutes and Rights Plans. Assuming the accuracy of the
representations and warranties made by Parent, BV Sub and Merger Sub in Section
4.12, the Board of Directors of the Company has taken all actions so that the
restrictions contained in Section 203 of the DGCL and any other similar
Applicable Law, will not apply to Parent, BV Sub or Merger Sub or any Affiliate
of any of them during the pendency of this Agreement, including the execution,
delivery or performance of this Agreement and the consummation of the Merger
and the other transactions contemplated hereby.
3.29. Tax-Free
Reorganization. Neither the Company, nor to the Knowledge of the
Company, any of its Affiliates has taken or agreed to take any action that
would prevent the Merger from constituting a reorganization within the meaning
of Section 368(a) of the Code.
46
3.30. Change
of Control; Severance; Bonus Payments. The Company is not a
party to any agreement that would require any change of control, severance or
bonus payment, or acceleration of vesting of any options, warrants or similar
rights to acquire Company Securities in connection with the consummation of the
Merger and the consummation of the transactions contemplated by this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT, BV Sub AND MERGER SUB
Parent, BV Sub and Merger
Sub represent and warrant to the Company, subject to the exceptions
specifically disclosed in the disclosure letter (referencing the appropriate
section or subsection of this Agreement, as applicable) supplied by Parent to
the Company dated as of the date hereof and certified by a duly authorized
executive officer of the Parent (the “Parent Disclosure Letter”) as follows:
4.1. Organization
(a) Organization; Good Standing;
Power and Authority. Each
of Parent, BV Sub and Merger Sub is a corporation or other organization duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization, except where the failure to
be so organized, validly existing and in good standing would not reasonably be
expected to have a Parent Material Adverse Effect, and has the requisite
corporate power and authority to own, lease and operate its properties and
assets and to carry on its business as currently conducted. Each of Parent, BV Sub and Merger Sub is duly
qualified to do business as a foreign entity and is in good standing in each
jurisdiction where the character of its properties owned or leased or the
nature of its activities make such qualification necessary, except where the
failure to be so qualified or in good standing would not have a Parent Material
Adverse Effect.
(b) Charter Documents. Parent has delivered to the
Company true and complete copies of the certificate of incorporation of Parent,
as amended and restated to the date of this Agreement (as so amended and
restated, the “Parent
Charter”), the bylaws of Parent, as amended and restated to the date
of this Agreement (as so amended and restated, the “Parent Bylaws”), the certificate of incorporation of Merger
Sub (“Merger Sub Charter”)
and the bylaws of Merger Sub (“Merger
Sub Bylaws”), and the governing documents of BV Sub (“BV Sub
Governing Documents”) and each such instrument is in full force and
effect. Parent is not in violation of
any of the provisions of the Parent Charter or Parent Bylaws, Merger Sub is not
in violation of any of the provisions of the Merger Sub Charter or Merger Sub
Bylaws and BV Sub is not in violation of the BV Sub Governing Documents.
4.2. Capitalization.
As of the date hereof, the authorized capital stock of Parent
consists of: (a) 400,000,000 shares of Parent Common Stock, $0.001 par value (“Parent
Common Stock”), and (b) 10,000,000 shares of undesignated preferred stock,
$0.001 par value (“Parent Preferred Stock”). At the close of business on November 3, 2006
(i) 93,472,470 shares of Parent Common Stock were issued and outstanding, (ii)
no shares of Parent Common Stock were issued and held by the Parent in its
treasury, (iii) an aggregate of 4,825,439 shares of Parent Common Stock were
issuable upon exercise of Parent Stock Options, (iv) an aggregate of 565,615
shares of Parent
47
Common Stock were issuable upon
lapsing of outstanding restricted stock units granted under the Parent Stock
Option Plans, (v) an aggregate of 8,922,106 shares of Parent Common Stock were
reserved for future issuance pursuant to the Parent Stock Option Plans, and
(vi) no shares of Parent Preferred Stock were issued or outstanding. All outstanding shares of Parent Common Stock
are, and all such shares that may be issued prior to the Effective Time will be
when issued, duly authorized, validly issued, fully paid and non-assessable and
are not subject to preemptive rights created by statute, the Parent Charter, or
any agreement to which Parent is a party or by which it is bound. Except as set forth above or as otherwise
contemplated by this Agreement, there are not any options, warrants, rights,
convertible or exchangeable securities, “phantom” stock rights, stock
appreciation rights, stock-based performance units, commitments, Contracts,
arrangements or undertakings of any kind to which Parent or any Parent
Subsidiary is a party or by which any of them is bound (x) obligating Parent or
any Parent Subsidiary to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock or other equity interest
in, or any security convertible or exercisable for or exchangeable into any
capital stock of or other equity interest in, Parent or any Parent Subsidiary,
(y) obligating Parent or any Parent Subsidiary to issue, grant, extend or enter
into any such option, warrant, call, right, security, commitment, Contract,
arrangement or undertaking or (z) that give any person the right to receive any
economic benefit or right similar to or derived from the economic benefits and
rights occurring to holders of Parent Common Stock. As of the date of this Agreement, there are
not any outstanding contractual obligations of Parent or any Parent Subsidiary
to repurchase, redeem or otherwise acquire any shares of capital stock of
Parent or any Parent Subsidiary. The authorized capital stock of Merger Sub
consists of 1,000 shares of Merger Sub Common Stock, 1,000 of which are issued
and outstanding and all of which are owned by BV Sub. The authorized capital stock of BV Sub
consists of 90,000 shares of BV Sub Common Stock, 18,000 of which are issued
and outstanding and all of which are owned by Parent. The shares of Parent Common Stock to be
issued and delivered in the Merger pursuant to Article II shall be, at the time
of such issuance and delivery, duly authorized, validly issued, fully paid and
non-assessable. Parent is in control of
Merger Sub for purposes of Section 368(a)(2)(D) of the Code.
4.3. Authority;
No Conflict; Necessary Consents.
(a) Authority. Each of Parent, BV Sub and Merger Sub has all
requisite corporate power and authority to enter into this Agreement and to
consummate the Merger and the transactions contemplated hereby. The execution and delivery by each of Parent,
BV Sub and Merger Sub of this Agreement and the consummation of the Merger and
the transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Parent, BV Sub and Merger Sub and no other
action is required on the part of Parent, BV Sub and Merger Sub to authorize
the execution and delivery of this Agreement or to consummate the Merger and
the other transactions contemplated hereby, subject only to the filing of the
Certificate of Merger pursuant to the DGCL.
This Agreement has been duly executed and delivered by Parent, BV Sub
and Merger Sub and, assuming due execution and delivery of this Agreement by
the Company, constitutes the valid and binding obligations of Parent, BV Sub
and Merger Sub, enforceable against each of Parent, BV Sub and Merger Sub in
accordance with its terms, except as enforcement may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other laws affecting
creditors’ rights generally and except insofar as the availability of equitable
remedies may be limited by Applicable Law.
48
(b) No Conflict. The execution and delivery by Parent, BV Sub
and Merger Sub of this Agreement and the consummation of the transactions
contemplated hereby, will not (i) conflict with or violate any provision of the
Parent Charter Documents, Merger Sub Charter Documents or BV Sub Governing
Documents, (ii) subject to compliance with the requirements set forth in
Section 4.3(c), conflict with or violate any material Applicable Law or (iii)
result in any breach of or constitute a default (or an event that with notice
or lapse of time or both would become a default) under, or materially impair
Parent’s, Merger Sub’s or BV Sub’s rights or alter the rights or obligations of
any third party under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of a Lien on any of
the properties or assets of Parent, BV Sub or Merger Sub pursuant to, any
contract filed with the SEC in the Parent SEC Reports pursuant to Item
601(b)(10) of Regulation S-K of the SEC; except, in the case of each of the
preceding clauses (i), (ii) and (iii) for any conflict, violation, beach,
default, impairment, alteration, giving of rights or Lien which would not
reasonably be expected to result in a Parent Material Adverse Effect or
materially adversely affect the ability of Parent, BV Sub or Merger Sub to
consummate the Merger within the time frame in which the Merger would otherwise
be consummated in the absence of such conflict, violation, beach, default,
impairment, alteration, giving of rights or Lien.
(c) Necessary Consents.
No consent, waiver, approval, order, authorization, registration, declaration
or filing with any Governmental Authority, or any Person, is required to be
made or obtained by Parent, BV Sub or Merger Sub in connection with the
execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby, except for (i) the Necessary Governmental
Consents, (ii) any required filings under applicable state securities law, and
(iii) such consents, waivers, approvals, orders, authorizations, registrations,
declarations and filings which, if not obtained or made, would not be material
to Parent, BV Sub and Merger Sub taken as a whole or materially adversely
affect the ability of the parties hereto to consummate the Merger within the
time frame in which the Merger would otherwise be consummated in the absence of
the need for such consent, waiver, approval, order, authorization, registration,
declaration or filing. No vote of Parent’s
stockholders is required in connection with the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby.
4.4. SEC
Filings. Parent has filed all required registration statements,
prospectuses, reports, schedules, forms, statements and other documents
(including exhibits and all other information incorporated by reference)
required to be filed by it with the SEC since January 1, 2004. All such required registration statements,
prospectuses, reports, schedules, forms, statements and other documents
(including those that Parent may file subsequent to the date hereof) are
referred to herein as the “Parent SEC Reports.” As of their respective dates, the Parent SEC
Reports (i) were prepared in accordance and complied in all material respects
with the requirements of the Securities Act or the Exchange Act, as the case
may be, and the rules and regulations of the SEC thereunder applicable to such
Parent SEC Reports and (ii) did not at the time they were filed (or if amended
or superseded by a filing prior to the date of this Agreement then on the date
of such amended or superceding filing) contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. None of Parent’s
Subsidiaries is required to file any forms, reports or other documents with the
SEC. Parent has previously furnished to
the Company a complete and correct copy of any amendments or
49
modifications, which have not
yet been filed with the SEC but which are required to be filed, to agreements,
documents or other instruments which previously had been filed by Parent with
the SEC pursuant to the Securities Act or the Exchange Act. Parent has responded to all comment letters
of the staff of the SEC relating to Parent SEC Reports, and the SEC has not advised
Parent that any final responses are inadequate, insufficient or otherwise
non-responsive. Parent has made available to the Company true, correct and
complete copies of all correspondence between the SEC, on the one hand, and
Parent and any of its Subsidiaries, on the other, including all SEC comment
letters and responses to such comment letters by or on behalf of Parent. To Parent’s Knowledge, none of Parent’s SEC
Reports is the subject of ongoing SEC review or outstanding SEC comment. Parent and, to the Parent’s Knowledge, each
of its officers and directors are in compliance with, and have complied, in
each case in all material respects with (i) the applicable provisions of the
Sarbanes-Oxley Act and the related rules and regulations promulgated under or
pursuant to such act and (ii) the applicable listing and corporate governance
rules and regulations of NYSE. Each
required form, report and document containing financial statements that has
been filed with or submitted to the SEC by Parent was accompanied by the
certifications required to be filed or submitted by Parent’s chief executive
officer and/or chief financial officer, as required, pursuant to the
Sarbanes-Oxley Act and, at the time of filing or submission of each such
certification, such certification was true and accurate and complied with the
Sarbanes-Oxley Act. Neither Parent nor,
to Parent’s Knowledge, any of its executive officers has received notice from
any Governmental Authority challenging or questioning the accuracy,
completeness, form or manner of filing such certifications.
4.5. Financial
Statements. (a) Financial Statements. The consolidated financial statements of
Parent included in Parent SEC Reports (the “Parent Financials”) comply
as to form in all material respects with applicable accounting requirements and
the published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with GAAP (except as may be indicated in the notes
thereto, or in the case of unaudited statements, as permitted by the SEC on
Form 10-Q or Form 8-K or any successor form under the Exchange Act) applied on
a consistent basis during the periods involved (except as may be indicated in
the notes thereto), and fairly present, in conformity with GAAP applied on a
consistent basis (except as may be indicated in the notes thereto), the
consolidated financial position of Parent and its consolidated Subsidiaries as
of the dates thereof and their consolidated results of operations and cash
flows for the periods then ended. Parent does not intend to correct or restate,
nor is there any basis for any correction or restatement of, any aspect of the
Parent Financials. The books and records
of Parent and Parent’s Subsidiaries have been, and are being, maintained in all
material respects in accordance with applicable legal and accounting
requirements, and the Parent Financials are consistent with such books and
records. Except as and to the extent
disclosed or reserved against on Parent’s most recent balance sheet (or in the
notes thereto) included in the Parent SEC Reports, neither Parent nor any
Parent Subsidiary has any liabilities (absolute, accrued, contingent or
otherwise) of a nature required to be disclosed on a consolidated balance sheet
or in the related notes to a consolidated financial statement prepared in
accordance with GAAP, except for liabilities incurred since the date of Parent’s
most recent balance sheet in the ordinary course of business consistent with
past practices. Parent has not had any
unresolved dispute with any of its auditors regarding accounting matters or
policies during any of its past three full years or during the current fiscal
year-to-date. Neither Parent nor any of
its Subsidiaries is a party to, or has any commitment to become a party to, any
joint venture, off-balance sheet partnership or any similar Contract relating
to any transaction or
50
relationship between or among
Parent or any of its Subsidiaries, on the one hand, and any unconsolidated
affiliate, including any structured finance, special purpose or limited purpose
Person, on the other hand, or any “off-balance sheet arrangements” (as defined
in Item 303(a) of Regulation S-K).
(b) Internal Controls. Parent and each of its Subsidiaries has
established and maintains, adheres to and enforces a system of internal
controls which are sufficient to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
in accordance with GAAP (including the Parent Financials), including policies
and procedures that (i) require the maintenance of records that in reasonable
detail accurately and fairly reflect the transactions and dispositions of the
assets of Parent and its Subsidiaries, (ii) provide reasonable assurance that
material information relating to Parent and its Subsidiaries is promptly made
known to the officers responsible for establishing and maintaining the system
of internal controls, (iii) provide assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance with
GAAP, and that receipts and expenditures of Parent and its Subsidiaries are
being made only in accordance with appropriate authorizations of management and
the Board of Directors of Parent, (iv) provide reasonable assurance that access
to assets is permitted only in accordance with management’s general or specific
authorization, (v) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use or disposition of the assets of
Parent and its Subsidiaries, and (vi) provide reasonable assurance that any
significant deficiencies or material weaknesses in the design or operation of
internal controls which are reasonably likely to materially and adversely
affect the ability to record, process, summarize and report financial
information, and any fraud, whether or not material, that involves Parent’s
management or other Employees who have a role in the preparation of financial
statements or the internal controls utilized by Parent and its Subsidiaries,
are adequately and promptly disclosed to Parent’s independent auditors and the
audit committee of Parent’s Board of Directors.
Neither Parent nor any of its Subsidiaries (including, to Parent’s
Knowledge, any Employee thereof) nor Parent’s independent auditors has
identified or been made aware of (A) any significant deficiency or material
weakness in the system of internal controls utilized by Parent and its
Subsidiaries (other than a significant deficiency or material weakness that has
been disclosed to the Audit Committee of the Board of Directors of Parent, and,
in the case of a material weakness, that has been disclosed as required in the
Parent SEC Reports), (B) any fraud, whether or not material, that involves
Parent’s management or other Employees who have a role in the preparation of
financial statements or the internal controls utilized by Parent and its
Subsidiaries or (C) any claim or allegation regarding any of the foregoing
(other than claims or allegations that have been duly investigated and found
not to involve any of the foregoing).
(c) Accounting and Auditing
Practices. Neither Parent
nor any of its Subsidiaries nor, to Parent’s Knowledge, any director, officer,
employee, auditor, accountant, consultant or representative of Parent or any of
its Subsidiaries has received or otherwise had or obtained knowledge of any
substantive complaint, allegation, assertion or claim, whether written or oral,
that the Company or any of its Subsidiaries has engaged in questionable
accounting or auditing practices. No
current or former attorney representing the Company or any of its Subsidiaries
has reported evidence of a material violation of securities laws, breach of
fiduciary duty or similar violation by the Company or any of its officers,
directors, employees or agents to the Board of
51
Directors of the Company or any
committee thereof or to any director or executive officer of the Company.
(d) Section 806 of the
Sarbanes-Oxley Act. To
Parent’s Knowledge, no employee of Parent or any of its Subsidiaries has
provided or is providing information to any law enforcement agency regarding
the commission or possible commission of any crime or the violation or possible
violation of any applicable legal requirements of the type described in Section
806 of the Sarbanes-Oxley Act by Parent or any of its Subsidiaries. Neither Parent nor any of its Subsidiaries
nor, to the Knowledge of Parent, any director, officer, employee, contractor,
subcontractor or agent of Parent or any such Subsidiary has discharged,
demoted, suspended, threatened, harassed or in any other manner discriminated
against an employee of Parent or any of its Subsidiaries in the terms and
conditions of employment because of any lawful act of such employee described
in Section 806 of the Sarbanes-Oxley Act.
4.6. Absence
of Changes. Other than as disclosed in Section 4.6 of the Parent
Disclosure Letter or in the Parent Financials, from January 1, 2006 through the
date of this Agreement, Parent has conducted its business in all material
respects only in the ordinary course, and since such date there has not been
(a) any event or development, condition or occurrence that, individually or in
the aggregate, has had a Parent Material Adverse Effect, (b) any material
change in accounting methods, principles or practices by Parent or any Parent
Subsidiary, except insofar as may have been required by a change in GAAP, (c)
any settlement or compromise by Parent or any Parent Subsidiary of any material
Tax liability or refund, (d) any material revaluation, or any indication that
such a revaluation was merited under GAAP, by Parent of any of its assets,
including, writing down the value of capitalized inventory, spares, long term
or short-term investments, fixed assets, goodwill, intangible assets, deferred
tax assets, or writing off notes or accounts receivable other than in the
ordinary course of business consistent with past practices; or (e) any damage,
destruction or other casualty loss (whether or not covered by insurance) with
respect to any assets that, individually or in the aggregate, are material to
the Parent and its Subsidiaries taken as a whole.
4.7. Governmental
Authorizations. Each material consent, license, permit, grant or
other authorization (i) pursuant to which Parent or any of its Subsidiaries
currently operates or holds any interest in any of their respective properties
or assets, or (ii) which is required for the operation of Parent’s or any of
its Subsidiaries’ business as currently conducted or the holding of any such
interest (collectively, “Parent Permits”) has been issued or granted to
Parent or any of its Subsidiaries, as the case may be. Each Parent Permit is in full force and
effect. As of the date hereof, no
suspension or cancellation of any Parent Permit is pending or, to the Knowledge
of the Company, threatened. Parent and
its Subsidiaries are in compliance in all material respects with the terms of
all Parent Permits.
4.8. Litigation.
There is no material Legal Proceeding pending or, to the
Knowledge of the Parent, threatened against the Parent, any of its Subsidiaries
or any of their respective properties or assets (whether real, personal or
mixed, tangible or intangible). There is
no investigation or other proceeding pending or, to the Knowledge of the
Parent, threatened against the Parent, any of its Subsidiaries or any of their
respective properties or assets (whether real, personal or mixed, tangible or
intangible) by or before any Governmental Authority.
52
4.9. Compliance
with Laws. Neither the Parent nor any of its Subsidiaries has
been or is in violation or default in any material respect of any Applicable
Law, except for such violations or defaults as would not result in a Parent
Material Adverse Change. There is no
agreement, judgment, injunction, order or decree binding upon the Parent or any
of its Subsidiaries which has or would reasonably be expected to have the
effect of prohibiting or impairing any business practice of the Parent or any
of its Subsidiaries in such a way as to result in a Parent Material Adverse
Effect.
4.10. Tax-Free
Reorganization. Neither Parent, nor to the Knowledge of Parent,
any of its Affiliates has taken or agreed to take any action that would prevent
the Merger from constituting a reorganization within the meaning of Section
368(a) of the Code.
4.11. Information
Supplied. None of the information supplied or to be supplied by
or on behalf of Parent, BV Sub or Merger Sub for inclusion or incorporation by
reference in the Registration Statement (including the Proxy Statement to be
included therein) or any amendment or supplement thereto, or the Proxy
Statement/Prospectus or any amendment or supplement thereto, shall (a) at the
time the Registration Statement is declared effective by the SEC (or, with
respect to any post-effective amendment or supplement, at the time such
post-effective amendment or supplement becomes effective) or (b) on the date of
mailing to the stockholders of the Company of the Proxy Statement/Prospectus
and at the time of the Company Stockholders’ Meeting, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they are made, not misleading. Notwithstanding any of the foregoing in thisSection 4.11, Parent, BV Sub and Merger
Sub make no representation or warranty with respect to any information supplied
by the Company for inclusion or incorporation by reference in the Registration
Statement.
4.12. Ownership
of Company Common Stock. Neither Parent nor any of Parent’s “affiliates”
or “associates” directly or indirectly “owns,” and at all times since September1, 2003 neither Parent nor any of parent’s affiliates directly or indirectly
has “owned,” beneficially or otherwise, any Company Common Stock, as those
terms are defined in Section 203 of the DGCL.
4.13. Taxes.
(a) All
material Tax Returns required to have been filed by or with respect to the
Parent and any of its Subsidiaries or a Relevant Group have been duly and
timely filed, and each such Tax Return is true and accurate in all material
respects and correctly and completely reflects in all material respects
liability for Taxes and all other information required to be reported
thereon. All material Taxes required to
be paid by the Parent and any of its Subsidiaries or a Relevant Group (whether
or not shown on any Tax Return) have been timely paid. The Parent and its Subsidiaries have
adequately provided for liabilities for all material unpaid Taxes in the Parent
Financials, which liabilities represent current Taxes not yet due and payable,
in accordance with GAAP.
(b) There
is no action, audit, dispute or claim now pending, or to the Parent’s
Knowledge, threatened against, or with respect to, the Parent and any of its
Subsidiaries in respect of any Taxes.
None of the Parent or its Subsidiaries is the beneficiary of any
extension of time within which to file any Tax Return, nor have any of them
made (or had made on their
53
behalf) any requests for such extensions. No claim has ever been made in writing by a
Governmental Authority in a jurisdiction where the Parent or any of its
Subsidiaries does not file Tax Returns that any of them is or may be subject to
taxation by that jurisdiction or that any of them must file Tax Returns. There are no Liens on any of the capital or
assets of the Parent and any of its Subsidiaries with respect to Taxes, other
than Liens for Taxes that are not yet due and payable.
(c) Each
of the Parent and its Subsidiaries has withheld and timely paid all material
Taxes required to have been withheld and paid, and has collected and remitted
all Taxes (including all sales and use Taxes), required to be collected and
remitted, and has complied with all information reporting and backup
withholding requirements.
(d) None of the Parent or its Subsidiaries has waived (or is
subject to a waiver of) any statute of limitations in respect of Taxes or has
agreed to (or is subject to) any extension of time with respect to a Tax
assessment or deficiency.
(e) None
of the Parent or any of its Subsidiaries has any liability for the Taxes of any
Person, other than under Section 1.1502-6 of the Treasury regulations (or any
similar provision of state, local, or foreign law) with respect to any Relevant
Group of which the Parent or any of its Subsidiaries currently is a member, (i)
as a transferee or successor, (ii) by contract, (iii) under Section 1.1502-6 of
the Treasury regulations (or any similar provision of state, local or foreign
law), or (iv) otherwise.
(f) None of the Parent or any of
its Subsidiaries will be required to include any item of income in, or exclude
any item of deduction from, taxable income for any taxable period (or portion
thereof) ending after the Closing Date as a result of any: (i) intercompany transactions or excess loss
accounts described in Treasury regulations under Section 1502 of the Code (or
any similar provision of state, local, or foreign Tax law), (ii) installment
sale or open transaction disposition made on or prior to the Closing Date or
(iii) prepaid amount received on or prior to the Closing Date.
Article V
CONDUCT OF BUSINESS PRIOR TO THE EFFECTIVE TIME
5.1. Conduct
of Business by the Company. Except as otherwise expressly
contemplated by this Agreement, as set forth in Section 5.1 of the Company
Disclosure Letter, or as required by Applicable Law, or to the extent that
Parent shall otherwise consent in writing, during the period from the date
hereof and continuing until the earlier of the termination of this Agreement
pursuant to Article VIII or the Effective Time, the Company shall and shall
cause each of its Subsidiaries to, carry on its business in the usual, regular
and ordinary course, in substantially the same manner as heretofore conducted
and in material compliance with all Applicable Laws, pay its debts and Taxes
when due, pay or perform other material obligations when due, and use
commercially reasonable efforts consistent with past practices and policies to
preserve substantially intact its present business organization, keep available
the services of its present executive officers and Employees and consultants,
and preserve its relationships with its Employees, consultants, customers,
suppliers, licensors, licensees, lessors and others with which it has
significant business dealings. The
Company also shall promptly notify in writing Parent of
54
the occurrence of any Company
Material Adverse Effect or the occurrence of any event which is reasonably
likely to result in a Company Material Adverse Effect. Without limiting the generality of the
foregoing, without the prior written consent of Parent (which consent shall not
be unreasonably withheld, conditioned or delayed), during the period from the
date hereof and continuing until the earlier of the termination of this
Agreement pursuant to Article VIII or the Effective Time, except as set forth
in Section 5.1 of the Company Disclosure Letter, the Company shall not do any
of the following, and shall not permit any of its Subsidiaries to do any of the
following:
(a) Enter into any new line of business
material to the Company and its Subsidiaries taken as a whole;
(b) Declare, set aside or pay any
dividends on or make any other distributions in respect of any capital stock,
or combine, split or reclassify any capital stock or issue or authorize the
issuance of any other securities in respect of, in lieu of or in substitution
for any capital stock, other than dividends and distributions made by any
Subsidiary of the Company to the Company in the ordinary course of business
consistent with past practices;
(c) Authorize for issuance, issue,
deliver, sell, pledge or otherwise encumber (whether through the issuance or
granting of options, warrants, commitments, subscriptions, rights (including
stock appreciation rights), rights to purchase or otherwise) any Company
Securities or Subsidiary Securities or rights to acquire such securities, or
enter into any other agreements or commitments of any character obligating it
to issue any such securities or rights, or enter into any amendment of any term
of any currently outstanding Company Securities or Subsidiary Securities or
rights to acquire such securities, other than issuances of Company Common Stock
upon the exercise of Company Options or Company Warrants existing on the date
hereof in accordance with their present terms;
(d) Purchase, redeem or otherwise acquire
or offer to redeem, purchase, or otherwise acquire, directly or indirectly, any
Company Securities or Subsidiary Securities;
(e) Cause, permit or propose to adopt any
amendments to Company Charter Documents or the Subsidiary Charter Documents;
(f) Adopt or implement any stockholder
rights plan, “poison pill,” or other anti-takeover plan, arrangement or
mechanism that, in each case, is applicable to Parent, BV Sub or Merger Sub or
the transactions contemplated by this Agreement;
(g) Acquire or agree to acquire by
merging or consolidating with, or by purchasing any equity or voting interest
in or purchasing a portion or all of the assets of, or by any other manner, any
business or any Person or any division thereof, or otherwise acquire or agree
to acquire any assets that are or are expected to be material, individually or
in the aggregate, to the business of the Company or its Subsidiaries, or
solicit or participate in any negotiations with respect to any of the
foregoing;
(h) Enter into, modify or amend in a
manner materially adverse to the Company and its Subsidiaries taken as a whole,
or terminate any Company Material Contract or waive, release
55
or assign any material rights
or claims thereunder, in each case, in a manner materially adverse to the
Company and its Subsidiaries taken as a whole;
(i) Enter into any binding
agreement, agreement in principle, letter of intent, memorandum of understanding
or similar agreement with respect to any material joint venture, strategic
partnership or alliance;
(j) Sell, lease, license,
mortgage, pledge, encumber or otherwise dispose of any properties or assets
except for the sale, lease, license, encumbrance or disposition of property or
assets that are not material, individually or in the aggregate, to the business
of the Company and its Subsidiaries, in each case, in the ordinary course of
business and in a manner consistent with past practices, including with respect
to the terms and conditions of any such sale, lease, license, encumbrance or
other disposition;
(k) With the exception of
the Merger, adopt a plan of complete or partial liquidation dissolution,
merger, consolidation, recapitalization, reorganization, or other restructuring
of the Company or any of its Subsidiaries, or alter, pursuant to the foregoing
or other event, the corporate structure or ownership of any Subsidiary of the
Company;
(l) Incur, assume or
prepay any indebtedness for borrowed money or assume, guarantee, endorse or
otherwise become liable or responsible (whether directly, contingently or
otherwise) for, any such indebtedness of another Person, guarantee any debt
securities of another Person, or enter into any arrangement having the economic
effect of any of the foregoing, other than in connection with the financing of
ordinary course trade payables consistent with past practices;
(m) Make any payments,
loans, extensions of credit or financing, advances or capital contributions to,
or investments in, any other Person, other than (i) payments, loans or
investments by the Company or a wholly-owned Subsidiary of the Company to or in
the Company or any wholly-owned Subsidiary of the Company, (ii) employee loans,
advances, or payments for bona fide travel and entertainment expenses
reimbursement made in the ordinary course of business consistent with past
practices, or (iii) extensions of credit or financing to, or extended payment
terms for, customers made in the ordinary course of business consistent with
past practices;
(n) Sell, transfer or lease
any properties or assets (whether real, personal or mixed, tangible or
intangible) to, or enter into any contract, arrangement or understanding with
or on behalf of, any officer, director or employee of the Company, any of its
Subsidiaries, any Affiliate of any of them, or any business entity in which the
Company, any Subsidiary or any Affiliate of any of them, or any relative of any
such Person, has any material, direct or indirect interest;
(o) Commit any capital
expenditure or expenditures in excess of $250,000 in the aggregate above the
capital expenditures set forth in the Company’s fiscal 2006 budget forecasts.
(p) Except as required by
changes in GAAP or Applicable Law, and as concurred in by its independent
auditors, (i) make any change in the Company’s methods or principles of
56
accounting or (ii) revalue any
of the Company’s assets, including writing down the value of inventory or
writing-off notes or accounts receivable;
(q) (i) Fail to file on a
timely basis, including allowable extensions, with the appropriate Governmental
Authorities, all Tax Returns required to be filed by or with respect to the
Company and each of its Subsidiaries for taxable years or periods ending on or
before the Closing Date and due on or prior to the Closing Date, (ii) fail to
timely pay or remit (or cause to be paid or remitted) any Taxes due in respect
of such Tax Returns, other than payments that are the subject of a good-faith
dispute, (iii) adopt or change any accounting method in respect of Taxes, (iv)
enter into any agreement or settle or compromise any material claim or
assessment in respect of Taxes, or (v) file any material Tax Election or
material amended Tax Return or consent to any extension or waiver of the
statutory period of limitations period applicable to any claim or assessment in
respect of Taxes;
(r) Commence, settle or
compromise any pending or threatened Legal Proceeding, or pay, discharge or
satisfy or agree to pay, discharge or satisfy any claim, liability, obligation
(whether absolute, accrued, asserted or unasserted, contingent or otherwise) by
or against the Company or any Subsidiary of the Company or relating to any of
their businesses, properties or assets (whether real, personal or mixed,
tangible or intangible) , other than the settlement, compromise, payment,
discharge or satisfaction of Legal Proceedings, claims or other Liabilities (i)
reflected or reserved against in full in the Company Financials or (ii) the
settlement, compromise, discharge 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 Effective Time and that does not involve the
payment, individually or in the aggregate, of an amount exceeding $250,000;
(s) Except as required by
Applicable Law or any contract or agreement currently binding on the Company or
its Subsidiaries, (i) adopt, amend, modify, or increase in any manner the
amount of compensation or fringe benefits of, pay or grant any bonus, change of
control, severance or termination pay to any officer, Employee or director of
the Company or any Subsidiary of the Company, (ii) adopt or amend in any
manner, any Company Stock Option Plan, Company Benefit Plan or other employee
benefit agreement, trust, plan, fund or other arrangement for the compensation,
benefit or welfare of any director, officer or Employee (each, a “Company
Employee Plan”), (iii) fail to make any required contribution to any
Company Employee Plan, (iv) make any contribution, other than regularly
scheduled contributions, to any Company Employee Plan, (v) waive any stock
repurchase rights, accelerate, amend or change the period of exercisability of
any Company Options or reprice any Company Options, (vi) authorize cash
payments in exchange for any Company Options, (vii) allocate bonus awards under
a Company Employee Plan in a manner or amount not consistent with past
practices, (viii) enter into any employment agreement, arrangement or
understanding with any Employee or director or any indemnification agreement or
arrangement with any Employee or director (other than offer letters and letter
agreements entered into in the ordinary course of business consistent with past
practices with employees who are terminable “at will”), (ix) enter into any
collective bargaining or amend or extend any existing collective bargaining
agreement, or (x) hire any employees or retain any consultant other than in the
ordinary course of business consistent with past practices or hire, elect or
appoint any officers or directors;
57
(t) (i) Grant any
exclusive rights with respect to any Company Intellectual Property, (ii) divest
any Company Intellectual Property, except if such divestiture or divestures,
individually or in the aggregate, are not material to the Company, (iii) enter
into any material contract, agreement or license that adversely affects, or
could reasonably be expected to adversely affect, any patents or applications
therefor, in each case, of the Company and its Subsidiaries, any parent of the
Company or any other affiliates of such entity, or (iv) abandon or permit to
lapse any rights to any United States patent or patent application;
(u) Take any action that
would or could reasonably be expected to disqualify the Merger as a
reorganization within the meaning of Section 368(a) of the Code;
(v) Enter into any
contract, agreement, arrangement or understanding with a customer that contains
any non-competition, exclusivity or “most favored nations” or similar terms or
restrictions on the Company or its business, except for such terms or
restrictions that would not restrict the business or assets of Parent and its
Subsidiaries (other than the Surviving Corporation) in any way following
completion of the Merger and are entered into in the ordinary course of
business consistent with past practices; or
(w) Enter into any contract,
arrangement or understanding to do any of the foregoing and, except as
specifically permitted by this Agreement, authorize, recommend, take, commit,
or agree in writing or otherwise to take, or announce an intention to take, any
of the actions described in this Section 5.1, or any other action that results
or is reasonably likely to (i) result in any of the conditions to the Merger
set forth in Article VII hereof not being satisfied, (ii) result in any
representation or warranty of the Company contained in this Agreement that is
qualified as to materiality becoming untrue or incorrect or any representation
or warranty not so qualified becoming untrue or incorrect in any material
respect (provided that representations made as of a specific date shall be
required to be so true and correct, subject to qualifications, as of such date
only), (iii) prevent the Company from performing, or cause the Company not to
perform, its covenants or agreements hereunder, or (iv) otherwise materially
impair the ability of the Company to consummate the transactions contemplated
hereby in accordance with the terms hereof or materially delay such
consummation.
5.2. Conduct of Business by Parent. Parent also shall promptly
notify in writing the Company of the occurrence of any Parent Material Adverse
Effect or the occurrence of any event which is reasonably likely to result in a
Parent Material Adverse Effect.. Except
as otherwise expressly contemplated by this Agreement, as described in Section
5.2 of the Parent Disclosure Letter, or as required by Applicable Law, or to
the extent that the Company shall otherwise consent in writing, during the
period from the date hereof and continuing until the earlier of the termination
of this Agreement pursuant to Article VIII or the Effective Time (except as
otherwise provided for in Section 5.2(d)), Parent, BV Sub and Merger Sub shall
not do any of the following:
(a) Adopt or propose to
adopt any amendments to Parent Charter or Parent Bylaws that would reasonably
be expected to interfere materially with the consummation of the Merger;
(b) With respect to Parent
only, split, combine or reclassify any shares of its capital stock, declare, set
aside or pay any dividend or other distribution (whether in cash, stock, other
58
securities, or property) in
respect of its capital stock or otherwise make any payments to stockholders in
their capacity as such (except for purchases of Parent Common Stock pursuant to
stock repurchase plans), unless the Exchange Ratio is proportionately adjusted,
in which case the prior written consent of the Company shall not be required,
but the Company shall be entitled to written notice of such event;
(c) Adopt a plan of
complete or partial liquidation or dissolution of Parent;
(d) Take any action that
would or could reasonably be expected to disqualify the Merger as a
reorganization within the meaning of Section 368(a) of the Code, which covenant
shall continue to apply after the Effective Time; or
(e) Enter into any
contract, arrangement or understanding to do any of the foregoing, and except
as specifically permitted by this Agreement, authorize, recommend, take,
commit, or agree in writing or otherwise to take, or announce an intention to
take, any of the actions described in this Section 5.2, or any other action
that results or is reasonably likely to (i) result in any of the conditions to
the Merger set forth in Article VII not being satisfied, (ii) result in any representation
or warranty of Parent, BV Sub or Merger Sub contained in this Agreement that is
qualified as to materiality becoming untrue or incorrect or any representation
or warranty not so qualified becoming untrue or incorrect in any material
respect (provided that representations made as of a specific date shall be
required to be so true and correct, subject to qualifications, as of such date
only), (iii) prevent Parent, BV Sub or Merger Sub from performing, or cause
Parent, BV Sub or Merger Sub not to perform, its covenants or agreements
hereunder, or (iv) otherwise materially impair the ability of Parent, BV Sub or
Merger Sub to consummate the transactions contemplated hereby in accordance
with the terms hereof or materially delay such consummation.
5.3. Control
of Other Party’s Business. Nothing
contained in this Agreement shall give Parent, BV Sub or Merger Sub, directly
or indirectly, the right to control the Company’s operations prior to the
Effective Time. Prior to the Effective
Time, each of Parent, BV Sub, Merger Sub and the Company shall exercise,
consistent with the terms and conditions of this Agreement, complete control
and supervision over its respective business operations.
Article VI
ADDITIONAL AGREEMENTS
6.1. No
Solicitation; Unsolicited Acquisition Proposals.
(a) Termination of Certain Activities. The Company and its Subsidiaries shall
immediately cease and cause to be terminated any and all existing activities,
discussions or negotiations with any third parties conducted heretofore with
respect to any Acquisition Proposal and shall use commercially reasonable
efforts to cause any such third parties (including their employees, agents and
representatives) in possession of confidential information about the Company in
connection with an Acquisition Proposal to return or destroy all such
information and all materials, documents, analyses and other work product
containing or derived from that information.
59
(b) No Solicitation.
At all times during the period commencing with the execution and
delivery of this Agreement and continuing until the earlier to occur of the
termination of this Agreement pursuant to Article VIII and the Effective Time,
the Company and its Subsidiaries shall not, nor shall they authorize or permit
any of their respective directors, officers or other employees, affiliates, or
any investment banker, attorney or other advisor or representative retained by
any of them to, directly or indirectly, (i) solicit, initiate or knowingly
encourage the making, submission or announcement of, an Acquisition Proposal,
(ii) furnish to any Person (other than Parent, BV Sub, Merger Sub or any
designees of Parent, BV Sub or Merger Sub) any non-public information relating
to the Company or any of its Subsidiaries, or afford access to the business,
properties, assets, books or records of the Company or any of its Subsidiaries
to any Person (other than Parent, BV Sub, Merger Sub or any designees of
Parent, BV Sub or Merger Sub) in connection with any proposal that constitutes
or could reasonably be expected to lead to an Acquisition Proposal, or take any
other action intended to assist or facilitate any inquiries or the making of
any proposal that constitutes or could reasonably be expected to lead to an
Acquisition Proposal, (iii) participate or engage in discussions or
negotiations with any Person with respect to an Acquisition Proposal (other
than to notify such Person as to the existence of the provisions of this
Section 6.1), (iv) approve, endorse or recommend an Acquisition Proposal, (v) enter
into any letter of intent, memorandum of understanding or other agreement,
contract or arrangement contemplating or otherwise relating to an Acquisition
Proposal (except as permitted by Sections 6.1(c) or 8.1(j), or (vi) terminate,
amend or waive any rights under any “standstill” or other similar agreement
between the Company or any of its Subsidiaries and any Person (other than
Parent).
(c) Unsolicited Acquisition Proposals. Notwithstanding any other provision of this
Agreement, prior to the receipt
of the Requisite Stockholder Approval, the Company may, at the direction of the
Board of Directors or the Special Committee, directly or indirectly through
advisors, agents or other intermediaries, subject to the Company’s compliance
with the provisions of this Section 6.1(c), (A) engage or participate in
discussions or negotiations with any Person that has made (and not withdrawn) a bona fide, unsolicited Acquisition
Proposal in writing that the Board of Directors of the Company or the Special
Committee reasonably determines in good faith (after consultation with its
respective financial advisor) constitutes or is reasonably likely to lead to a
Superior Proposal and/or (B) furnish to any Person that has made (and not
withdrawn) a bona fide,
unsolicited Acquisition Proposal in writing that the Board of Directors of the
Company or the Special Committee reasonably determines in good faith (after
consultation with its respective financial advisor) constitutes or is
reasonably likely to lead to a Superior Proposal any non-public information
relating to the Company or any of its Subsidiaries pursuant to a
confidentiality agreement the terms of which are no less favorable to the
Company than those contained in the Confidentiality Agreement, provided
further, that in the case of any action taken pursuant to the foregoing clauses
(A) or (B), (1) none of the Company, its Subsidiaries or any representative of
the Company or its Subsidiaries shall have materially breached or violated the
terms of Section 6.1, (2) the Board of Directors of the Company or the Special
Committee determines in good faith (after receiving the advice of its
respective outside legal counsel) that such action is required in order to
comply with its fiduciary duties to the stockholders of the Company under
Delaware Law, (3) at least twenty-four (24) hours prior to engaging or
participating in any such discussions or negotiations with, or furnishing any
non-public information to, such Person, the Company provides Parent written
notice of the identity of such Person and the material terms and conditions of
such Acquisition Proposal (unless such
60
Acquisition Proposal is in
written form, in which case the Company shall provide Parent a copy thereof)
and of the Company’s intention to engage or participate in discussions or
negotiations with, or furnish non-public information to, such Person, (4)
promptly following receipt of any written communications from such Person in
connection with such Acquisition Proposal, the Company provides Parent a copy
of all written materials provided by or on behalf of such Person, and (5)
contemporaneously with furnishing any non-public information to such Person,
the Company furnishes such non-public information to Parent (but only to the
extent such information has not been previously furnished by the Company to
Parent). Until any such Acquisition
Proposal has been withdrawn, the Company shall promptly provide Parent a copy
of all written materials subsequently provided to, by or on behalf of such
Person in connection with such Acquisition Proposal, request or inquiry,
including material amendments or proposed material amendments to such
Acquisition Proposal, request or inquiry (but only to the extent such
information has not been previously furnished by the Company to Parent).
(d) Actions by Others.
Without limiting the generality of the foregoing, it is understood and
agreed by the parties hereto that any material breach or violation of the
restrictions set forth above in this Section 6.1 by any officer, director,
agent, representative or affiliate of the Company shall be deemed to be a
material breach of this Agreement by the Company.
6.2.Board Recommendation.
(a) Recommendation to Company Stockholders. Subject to the terms of Section 6.2(b), the
Board of Directors of the Company shall recommend that the stockholders of the
Company adopt and approve this Agreement and approve the Merger in accordance
with the applicable provisions of Delaware Law (the “Board Recommendation”)
and the Proxy Statement/Prospectus shall include a statement to that effect.
(b) Changes to Board Recommendation. Subject to the terms of this Section 6.2(b),
neither the Board of Directors of the Company nor any committee thereof shall
withhold, withdraw, amend or modify in a manner adverse to Parent, or publicly
propose to withhold, withdraw, amend or modify in a manner adverse to Parent,
the Board Recommendation (a “Board Recommendation Change”); provided, however, that
notwithstanding the foregoing, at any time prior to the receipt of the
Requisite Stockholder Approval, the Board of Directors of the Company and the
Special Committee may effect a Board Recommendation Change if and only if
either:
(i) (A) the Company has
received an Acquisition Proposal that constitutes a Superior Proposal, (B) the
Board of Directors of the Company or the Special Committee determines in good
faith (after receiving the advice of its respective outside legal counsel and
after considering in good faith any counter-offer or proposal made by Parent
pursuant to clause (D) below), that, in light of such Superior Proposal, the
Board of Directors of the Company or the Special Committee is required, in
order to comply with its fiduciary duties to the stockholders of the Company
under Delaware Law, to effect a Board Recommendation Change, (C) prior to
effecting such Board Recommendation Change, the Company shall have given Parent
at least two (2) Business Days notice thereof and the opportunity to meet with
the Board of Directors of the Company and the Special Committee and their outside
legal counsel,
61
all with the purpose and intent
of enabling Parent and the Company to discuss in good faith a modification of
the terms and conditions of this Agreement so that the transactions
contemplated hereby may be effected, and (D) Parent shall not have made, within
two (2) Business Days after receipt of the Company’s written notice of its
intention to effect a Board Recommendation Change pursuant to this Section
6.2(b)(i), a counter-offer or proposal that the Board of Directors of the
Company or the Special Committee reasonably determines in good faith, after
consultation with its respective financial advisor and outside legal counsel,
is at least as favorable to the stockholders of the Company as such Superior
Proposal; or
(ii) except for a Board
Recommendation Change that is effected (or that is proposed to be effected) in
response to or in connection with a Superior Proposal (it being understood and
agreed by the parties that any Board Recommendation Change that is effected or
that is proposed to be effected in response to or in connection with a Superior
Proposal may be made only pursuant to Section 6.2(b)(i) immediately above), (A)
the Board of Directors of the Company or the Special Committee determines in
good faith (after receiving the advice of its respective outside legal counsel)
that it is required to effect a Board Recommendation Change in order to comply
with its fiduciary duties to the stockholders of the Company under Delaware
Law, and (B) prior to effecting such Board Recommendation Change, the Company
shall have given Parent at least two (2) Business Days notice thereof and the
opportunity to meet with the Board of Directors of the Company and the Special
Committee and their outside legal counsel, all with the purpose and intent of
enabling Parent and the Company to discuss in good faith the purported basis
for the proposed Board Recommendation Change, Parent’s reaction thereto and any
possible modification of the terms and conditions of this Agreement in response
thereto.
(c) Nothing in this
Agreement is intended to or shall prohibit the Board of Directors of the
Company or the Special Committee from taking and disclosing to the stockholders
of the Company a position in accordance with Rule 14e-2(a) under the Exchange
Act or complying with the provisions of Rule 14d-9 under the Exchange Act;
provided, however, that, in each case, any statement(s) made by the Board of
Directors of the Company or the Special Committee pursuant to Rule 14e-2(a)
under the Exchange Act or Rule 14d-9 under the Exchange Act shall be subject to
the terms and conditions of this Agreement, including the provisions of Article
VIII.
6.3. Meeting
of Company Stockholders.
(a) Call of Meeting; Solicitation of Proxies. Subject to Section 6.4(a), the Company will take
all action necessary to call, hold and convene a meeting of its stockholders,
as promptly as practicable following the date hereof, for the purposes of
voting on the adoption and approval of this Agreement and approval of the
Merger (the “Company Stockholders’
Meeting”). The Company shall
solicit proxies from the stockholders of the Company with respect to the
adoption and approval of this Agreement and approval of the Merger and,
consistent with its fiduciary duties, use its best efforts to secure the
Requisite Stockholder Vote at the Company Stockholders’ Meeting. Unless this Agreement is earlier terminated
pursuant to Article VIII, the Company shall establish a record date for, call,
give notice of, convene and hold the Company Stockholders’ Meeting for the
purpose of voting upon the adoption and approval of this Agreement and approval
of the Merger in accordance with Delaware Law, whether or not the
62
Board of Directors of the
Company or the Special Committee at any time subsequent to the date hereof
shall have effected a Board Recommendation Change or otherwise shall determine
that this Agreement is no longer advisable or recommends that the stockholders
of the Company reject this Agreement and the Merger. Notwithstanding anything to the contrary set
forth in this Agreement, the Company’s obligation to establish a record date
for, call, give notice of, convene and hold the Company Stockholders’ Meeting
pursuant to this Section 6.3 shall not be limited to, or otherwise affected by,
the commencement, disclosure, announcement or submission to the Company of any
Acquisition Proposal.
(b) Postponement or Adjournment. The Company may adjourn or postpone the
Company Stockholders’ Meeting to the extent necessary to ensure that any
necessary supplement or amendment to the Proxy Statement/Prospectus or
Registration Statement is provided to its stockholders in advance of a vote on
the adoption and approval of this Agreement and approval of the Merger, or, if
as of the time the Company Stockholders’ Meeting is originally scheduled to be
convened (as set forth in the Proxy Statement/Prospectus) there are
insufficient shares of Company Common Stock represented (either in person or by
proxy) to constitute a quorum necessary to conduct the business of the Company
Stockholders’ Meeting.
(c) Compliance with Law.
The Company shall ensure that the Company Stockholders’ Meeting is
called, noticed, convened, held and conducted, and that all proxies solicited
by it in connection with the Company Stockholders’ Meeting are solicited, in
compliance with the Exchange Act, Delaware Law, the Company’s Charter
Documents, applicable listing and corporate governance rules and regulations of
NASDAQ, and all other provisions of Applicable Law.
6.4. Proxy
Statement and Registration Statement.
(a) Preparation and Filing.
As promptly as practicable after the execution of this Agreement, the
Company and Parent shall prepare, and Parent shall file with the SEC the
Registration Statement in accordance with the applicable requirements of the Securities
Act (and, in which the Proxy Statement will be included) and the Company shall
prepare the Proxy Statement in accordance with the applicable requirements of
the Exchange Act (the Proxy Statement and the Prospectus included as part of
the Registration Statement are referred to herein as the “Proxy
Statement/Prospectus”). The Proxy
Statement/Prospectus shall include the notice to stockholders required under
Delaware Law with respect to the availability of appraisal rights to the
stockholders of the Company. Each of the
Company and Parent shall use commercially reasonable efforts to have the
Registration Statement declared effective by the SEC under the Securities Act
as promptly as practicable after such filing.
Parent and the Company shall use their commercially reasonable efforts
to cause the Proxy Statement/Prospectus to be mailed to the stockholders of the
Company as promptly as practicable after the Registration Statement has been
declared effective under the Securities Act.
Parent shall also take any action required to be taken under any
applicable state securities laws in connection with the issuance of shares of
Parent Common Stock in the Merger, and each of Parent and the Company shall
furnish all information as may be reasonably requested by the other in
connection with any such action and the preparation and filing of the
Registration Statement and the preparation, filing and distribution of the
Proxy Statement/Prospectus.
63
(b) Cooperation and Consultation; Amendments and Supplements. No preparation or filing of the Registration
Statement (including any amendments or supplements thereto) will be made by
Parent, no preparation, filing or distribution of the Proxy Statement
(including any amendments or supplements thereto) will be made by the Company,
and no distribution of the Proxy Statement/Prospectus will be made by either
Parent or the Company, in each case without providing the other party hereto
with a reasonable opportunity to review and comment thereon. Parent and the Company each will notify the
other party promptly upon the receipt of any comments from the SEC or its staff
in connection with the initial filing of, or amendments or supplements to, the
Registration Statement or Proxy Statement, as applicable, and shall supply each
other with copies of all correspondence between Parent or the Company or any of
their representatives, on the one hand, and the SEC or its staff, on the other
hand, with respect to the Registration Statement and the Proxy Statement. If at any time prior to the Effective Time,
Parent or the Company becomes aware of any information that should be set forth
in an amendment or supplement to the Registration Statement, the Proxy
Statement or the Proxy Statement/Prospectus, so that either such document would
not include any misstatement of material fact or omit to state any material
fact necessary to make the statements therein, in light of the circumstances
under which they are made, not misleading, the party becoming aware of such
information shall promptly notify the other parties hereto and an appropriate
amendment or supplement describing such information shall be promptly filed
with the SEC and, to the extent required by Applicable Law or SEC staff
request, disseminated to the stockholders of the Company.
(c) Effective Date; Notice of Certain Actions. The parties shall notify each other promptly
of the time when the Registration Statement has become effective. The parties also shall notify each other
promptly of the issuance of any stop order affecting the Registration Statement
or suspension of the qualification of the Parent Common Stock issuable in
connection with the Merger for offering or sale in any jurisdiction, or
injunction or other action of the SEC or other Governmental Authority
prohibiting or limiting the use of the Proxy Statement/Prospectus in connection
with the solicitation of proxies from the stockholders of the Company with
respect to the adoption and approval of this Agreement and approval of the
Merger and the offer and issuance of Parent Common Stock in connection
therewith.
6.5. Confidentiality; Access to
Information; No Modification of Representations, Warranties or Covenants.
(a) Confidentiality.
The parties acknowledge that Parent and the Company have previously
executed a Confidentiality/Non-Disclosure Agreement dated May 31, 2006 (the “Confidentiality
Agreement”), which Confidentiality Agreement shall be deemed incorporated
herein as if it were set forth in its entirety and shall continue in full force
and effect in accordance with its terms and be unaffected by any termination of
this Agreement.
(b) Access to Information.
The Company shall afford Parent and its accountants, counsel and other
representatives, reasonable access during the period from the date hereof and
prior to the Effective Time to (i) all of the properties, assets, books,
contracts, commitments and records of the Company and its Subsidiaries,
including all Intellectual Property used by the Company (including access to
design processes and methodologies and all source code), (ii) all other
information concerning the business, properties and personnel (subject to
restrictions
64
imposed by Applicable Law) of
the Company and its Subsidiaries as Parent may reasonably request, and (iii)
all Employees of the Company and its Subsidiaries as identified by Parent. The Company agrees to provide to Parent and
its accountants, attorneys, bankers and financial advisors and other
representatives copies of internal financial statements (including Tax Returns
and supporting documentation) promptly upon request. Parent shall afford the Company and its
accountants, counsel and other representatives, reasonable access during the
period from the date hereof and prior to the Effective Time to (i) properties,
assets, books, contracts, commitments and records of the Parent and its
Subsidiaries and (ii) all other information concerning the business, properties
and personnel (subject to restrictions imposed by Applicable Law) of Parent and
its Subsidiaries as the Company may reasonably request. Parent agrees to provide to the Company and
its accountants, attorneys, bankers and financial advisors and other
representatives copies of internal financial statements (including Tax Returns
and supporting documentation) promptly upon request. No information or knowledge obtained in any
investigation or notification pursuant to this Section 6.5 or otherwise shall
affect or be deemed to modify any representation or warranty contained herein,
the covenants or agreements of the parties hereto, the conditions to the
obligations of the parties hereto under this Agreement, or the remedies
available to the parties hereto under this Agreement. The terms and conditions
of the Confidentiality Agreement shall apply to any information provided to the
parties pursuant to this Section 6.5.
6.6. Public Disclosure.From
the date hereof until the earlier of the Effective Time or the termination of
this Agreement in accordance with Article VIII, Parent and the Company will
consult with each other before issuing, and provide each other the opportunity
to review, comment upon and concur with, and use reasonable efforts to agree on
any press release or public statement with respect to this Agreement and the
transactions contemplated hereby, including the Merger and any Acquisition
Proposal, and will not issue any such press release or make any such public
statement prior to such consultation and agreement, except as may be required
by Applicable Law or any listing agreement with, in the case of Parent, the
NYSE, and in the case of the Company, NASDAQ (in which case reasonable efforts
to consult with the other party hereto shall be made prior to any such release
or public statement). The parties have
agreed to the text of the joint press release announcing the signing of this
Agreement.
6.7. Regulatory
Filings.
(a) Regulatory Filings. Each of Parent, BV
Sub, Merger Sub and the Company shall coordinate and cooperate with one another
and shall each use all reasonable efforts to comply with, and shall each
refrain from taking any action that would impede compliance with, all
Applicable Law, and as promptly as practicable after the date hereof, each of
Parent, BV Sub, Merger Sub and the Company shall make all filings, notices,
petitions, statements, registrations, submissions of information, application
or submission of other documents required by any Governmental Authority in
connection with the Merger and the transactions contemplated hereby, including:
(i) Notification and Report Forms with the FTC and the DOJ as required by the
HSR Act, (ii) filings under any other comparable pre-merger notification forms
reasonably determined by Parent to be required by the Antitrust Laws of any
applicable jurisdiction, as agreed by the parties hereto and (iii) any filings
required under the Securities Act, the Exchange Act, any applicable state or
securities or “blue sky” laws and the securities laws of any foreign country,
or any other legal requirement relating to the Merger. For purposes of this Agreement,
65
“Antitrust Law” means the Sherman
Act, as amended, the Clayton Act, as amended, Council Regulation (EC) 139/2004,
the HSR Act, the Federal Trade Commission Act, as amended, and all other
national, provincial, and state (U.S. and non-U.S.) statutes, rules,
regulations, orders, decrees, administrative and judicial doctrines and other
laws that are designed or intended to prohibit, restrict or regulate actions
having the purpose or effect of monopolization or restraint of trade or
impeding or lessening of competition through merger or acquisition, in any case
that are applicable to the transactions contemplated by this Agreement. Each of Parent and the Company will cause all
documents that it is responsible for filing with any Governmental Authority under
this Section 6.7(a) to comply in all material respects with all Applicable Law.
(b) Exchange of Information.
Parent, BV Sub, Merger Sub and the Company each shall promptly supply
the other with any information that may be required in order to effectuate any
filings or application pursuant to Section 6.7(a). Except where prohibited by Applicable Law,
and subject to the Confidentiality Agreement, each of the Company and Parent
shall (i) consult with the other prior to taking a position with respect to any
such filing, (ii) permit the other to review and discuss in advance, and
consider in good faith the views of the other in connection with any analyses,
appearances, presentations, memoranda, briefs, white papers, arguments,
opinions and proposals before making or submitting any of the foregoing to any
Governmental Authority by or on behalf of any party hereto in connection with
any investigations or proceedings in connection with this Agreement or the
transactions contemplated hereby (including under any applicable antitrust or
fair trade law or regulation), (iii) coordinate with the other in preparing and
exchanging such information and promptly provide the other and/or its counsel
with copies of all filings, presentations or submissions (and a summary of any
oral presentations) made by such party with any Governmental Authority in
connection with this Agreement or the transactions contemplated hereby,
provided, however, that with respect to any such filing, presentation or
submission, each of Parent and the Company need not supply the other (or its
counsel) with copies (or in the case of oral presentations, a summary) to the
extent that any law, treaty, rule or regulation of any Governmental Authority
applicable to such party requires such party or its Subsidiaries to restrict or
prohibit access to any such properties or information, and (iv) cooperate in
all respects with each other in connection with any investigation or other
inquiry, including any proceeding initiated by a private party, and permit the
other party to review any communication given by it to, and consult with each
other in advance of any meeting or conference with, the FTC, the DOJ or any
other Governmental Authority or, in connection with any proceeding by a private
party, with any other Person, and to the extent permitted by the FTC, the DOJ
or other applicable Governmental Authority or other Person, give the other
party the opportunity to attend and participate in such meetings and
conferences if permitted under Antitrust Laws.
Notwithstanding the foregoing, except as may be agreed in connection
with any joint defense agreement executed between counsel for Parent and
counsel for the Company, Parent, BV Sub, Merger Sub and the Company will not be
required to share with each other any documents covered by Item 4(c) of filings
prepared in connection with the HSR Act.
(c) Notification. Each of Parent, BV Sub, Merger Sub and the
Company will notify the other promptly upon the receipt of (i) any
communications from any staff members or officials of any Governmental
Authority in connection with any filings made pursuant to Section 6.7 hereof,
(ii) any request by any officials of any Governmental Authority for amendments
or supplements to any filings made pursuant to, or information provided to
comply in all material
66
respects with, any Applicable
Law and (iii) any communication received or given in connection with any
proceeding by a private party seeking to enjoin the Merger under any Antitrust
Law. Whenever any event occurs that is
required to be set forth in an amendment or supplement to any filing made
pursuant to Section 6.7(a), Parent, BV Sub, Merger Sub or the Company, as the
case may be, will promptly inform the other of such occurrence and cooperate in
filing with the applicable Governmental Authority such amendment or supplement.
(d) Limitation on Divestiture. In
furtherance and not in limitation of the covenants of the parties contained in
Sections 6.7(a) through (c), if any objections are asserted with respect to the
transactions contemplated by this Agreement under any Antitrust Law or if any
suit is instituted (or threatened to be instituted) by the FTC, the DOJ or any
other applicable Governmental Authority or any private party challenging any of
the transactions contemplated hereby as violative of any Antitrust Law or otherwise
brought under any Antitrust Law that would otherwise prohibit or materially
impair or materially delay the consummation of the transactions contemplated
hereby, each of Parent, BV Sub, Merger Sub and the Company shall use its
commercially reasonable best efforts to resolve any such objections or suits so
as to permit consummation of the transactions contemplated by this
Agreement. The Company shall not take or
agree to take any Action of Divestiture that would reasonably be likely to
adversely and materially impact Parent and its Subsidiaries taken as a whole,
the Company and its Subsidiaries taken as a whole, or the benefits Parent
expects to derive from the Merger and the transactions contemplated by this
Agreement, without the prior written consent of Parent. For purposes of this Agreement, an “Action of Divestiture” shall
mean (i) any license, sale or other
disposition or holding separate (through establishment of a trust or otherwise)
of any shares of capital stock or of any material business, assets or
properties of Parent, its Subsidiaries or affiliates or of the Company or its
Subsidiaries, (ii) the imposition of any material limitation on the ability of
Parent, its Subsidiaries or affiliates or the Company or its Subsidiaries to
conduct their respective businesses or own any capital stock or material assets
or to acquire, hold or exercise all material rights of ownership of their
respective businesses and, in the case of Parent, the businesses of the Company
and its Subsidiaries, or (iii) the imposition of any material impediment on
Parent, its Subsidiaries or affiliates or the Company or its Subsidiaries under
any statute, rule, regulation, executive order, decree, order or other legal
restraint governing competition, monopolies or restrictive trade practices.
6.8. Other SEC Filings. Each of Parent and the Company
shall file with the SEC all annual, quarterly and current reports required to
be filed by Parent and the Company under the Exchange Act for any and all
periods ending prior to the Effective Time, which such annual, quarterly and
current reports shall (i) be made on a timely basis pursuant to the
requirements applicable to each such type of report and (ii) comply in all
material respects with the rules and regulations of the SEC applicable to each
such type of report.
6.9. State Anti-Takeover Law. In the event that any state
anti-takeover or other similar statute or regulation is or becomes applicable
to this Agreement, the Merger or any of the transactions contemplated by this
Agreement, the Company, at the direction of the Board of Directors of the
Company, shall use its best efforts to ensure that the Merger and the other
transactions contemplated by this Agreement may be consummated as promptly as
practicable on the terms and subject to the conditions set forth in this
Agreement, and otherwise to minimize the
67
effect of any such statute or
regulation on this Agreement, the Merger and the other transactions
contemplated hereby.
6.10. Third-Party Consents. As soon as practicable following the date
hereof, the Company will use all commercially reasonable efforts to obtain the
consents, waivers and approvals under any of its or its Subsidiaries’
respective Contracts required to be obtained in connection with the
consummation of the transactions contemplated hereby, all of which consents,
waivers and approvals are set forth in Section 3.3(c)(ii) of the Company
Disclosure Letter. As soon as
practicable following the date hereof, Parent will use all commercially
reasonable efforts to obtain the consents, waivers, and approvals under any of
its or its Subsidiaries’ respective contracts required to be obtained in
connection with the consummation of the transactions contemplated hereby, all
of which consents, waivers and approvals are set forth in Section 4.3(b) of the
Parent Disclosure Letter. The Company’s
consents, waivers and approvals shall be in a form reasonably acceptable to
Parent and Parent’s consents, waivers and approvals shall be in a form
reasonably acceptable to the Company.
(i) At all times
commencing with the execution and delivery of this Agreement and continuing
until the earlier of the termination of this Agreement pursuant to Article VIII
hereof and the Effective Time, the Company shall give prompt notice to Parent,
BV Sub and Merger Sub (A) of any representation or warranty made by it
contained in this Agreement becoming untrue or inaccurate in any material
respect, or of any failure of the Company to comply with or satisfy in any
material respect any covenant, condition or agreement to be complied with or
satisfied by it under this Agreement, (B) of the occurrence of any Company
Material Adverse Effect or the occurrence of any event which is reasonably
likely to result in a Company Material Adverse Effect, or (C) any Legal
Proceedings commenced or threatened in writing by any Person (including a
Governmental Authority) that seek to prohibit or materially impair the
consummation of the Merger and the transactions contemplated in this Agreement,
including any Legal Proceeding commenced after the date hereof against the
Company or any of its directors by any stockholders of the Company (on their
own behalf or on behalf of the Company) relating to this Agreement or the
transactions contemplated hereby, and the Company shall give Parent the
opportunity to consult with the Company regarding the defense or settlement of
any such stockholder Legal Proceeding and shall consider Parent’s views with
respect to such stockholder Legal Proceeding and shall not settle any such
stockholder Legal Proceeding without the prior written consent of Parent. No notification and no information or
knowledge obtained through notification pursuant to this Section 6.11(a)(i) or
otherwise shall affect or be deemed to modify any representation or warranty
contained herein, the covenants or agreements of the parties hereto, the
conditions to the obligations of the parties hereto under this Agreement, or
the remedies available to the parties hereto under this Agreement. The terms and conditions of the
Confidentiality Agreement shall apply to any information provided to Parent
pursuant to this Section 6.11(a)(i).
(ii) At all times commencing
with the execution and delivery of this Agreement and continuing until the
earlier of the termination of this Agreement pursuant
68
to Article VIII and the
Effective Time, the Company shall give prompt notice to Parent of (A) any
notice or other communication received by it from any third party, subsequent
to the date of this Agreement and prior to the Effective Time, alleging any
material breach of or material default under any Material Contract to which the
Company or any of its Subsidiaries is a party or (B) any notice or other
communication received by the Company or any of its Subsidiaries from any third
party, subsequent to the date of this Agreement and prior to the Effective
Time, alleging that the consent of such third party is or may be required in
connection with the transactions contemplated by this Agreement. No notification and no information or
knowledge obtained through notification pursuant to this Section 6.11(a)(ii) or
otherwise shall affect or be deemed to modify any representation or warranty
contained herein, the covenants or agreements of the parties hereto, the
conditions to the obligations of the parties hereto under this Agreement, or
the remedies available to the parties hereto under this Agreement. The terms and conditions of the
Confidentiality Agreement shall apply to any information provided to Parent
pursuant to this Section 6.11(a)(ii).
(b) By Parent, BV Sub and Merger Sub. At all times commencing with the execution
and delivery of this Agreement and continuing until the earlier of the
termination of this Agreement pursuant to Article VIII and the Effective Time,
Parent, BV Sub and Merger Sub shall give prompt notice to the Company (A) of
any representation or warranty made by them contained in this Agreement
becoming untrue or inaccurate in any material respect, or of any failure of Parent,
BV Sub or Merger Sub to comply with or satisfy in any material respect any
covenant, condition or agreement to be complied with or satisfied by them under
this Agreement or (B) of the occurrence of any Parent Material Adverse Effect
or the occurrence of any event which is reasonably likely to result in a Parent
Material Adverse Effect, or (C) any Legal Proceedings commenced or threatened
in writing by any Person (including a Governmental Authority) that seek to
prohibit or materially impair the consummation of the Merger and the
transactions contemplated in this Agreement, including any Legal Proceeding
commenced after the date hereof against Parent or any of its directors by any
stockholders of Parent (on their own behalf or on behalf of Parent) relating to
this Agreement or the transactions contemplated hereby. No notification and no information or
knowledge obtained through notification pursuant to this Section 6.11(b) or
otherwise shall affect or be deemed to modify any representation or warranty contained
herein, the covenants or agreements of the parties hereto, the conditions to
the obligations of the parties hereto under this Agreement, or the remedies
available to the parties hereto under this Agreement. The terms and conditions of the Confidentiality
Agreement shall apply to any information provided to either party pursuant to
this Section 6.11(b).
6.12. Options and Warrants.
(a) Assumption of Certain Options. At the Effective Time, each
then-outstanding Company Option that is (i) not yet vested and exercisable by
its terms, and regardless of the exercise price thereof, (ii) vested, with a
per share exercise price that is greater than the market price per share of the
Company’s Common Stock on the day immediately prior to the Closing Date, or
(iii) issued under the Company’s 1999 Non-Employee Option Plan, is vested and
currently exercisable (including Company Options which vest in connection with
the Merger under applicable “change of control” provisions of the Company Stock
Option Plans or other agreements identified in Section 3.2 of the Company
Disclosure Letter) and which has a per share exercise price that is less than
or equal to the market price per share of the Company’s
69
Common Stock on the day
immediately prior to the Closing Date and which has not been exercised prior to
the Effective Date (each, an “Assumed Option”) will be assumed by the
Parent. Each Assumed Option will
continue to have, and be subject to, the same terms and conditions set forth in
the applicable Company Option (including any applicable stock option agreement
or other document evidencing such Company Option) immediately prior to the
Effective Time (including any repurchase rights or vesting provisions and
including qualification as an incentive stock option under Section 422 of the
Code if the Assumed Company Option so qualified), except that (i) each such
Assumed Option will be exercisable (or will become exercisable in accordance
with its terms) for that number of whole shares of Parent Common Stock equal to
the product of (A) the number of shares underlying such Assumed Option and (B)
0.235and (ii) the per share
exercise price for the shares of Parent Common Stock issuable upon exercise of
such Assumed Option will be equal to the quotient of (X) the exercise price of
such Assumed Option and (Y) 0.235. With
respect to each Assumed Option, the same vesting schedule as was applicable to
the Assumed Option prior to the Effective Time will be applicable to the
Assumed Option following the Effective Time.
As soon as reasonably practicable, Parent will use all reasonable
efforts to issue to each Person who holds an Assumed Option a document
evidencing the foregoing assumption of such Company Option by Parent and, as a
condition to such assumption, each former holder of a Company Option so assumed
by Parent shall acknowledge the receipt of the same in exchange for such holder’s
Company Option. Prior to the
Closing Date, the Company shall take all action necessary to permit
Parent to assume the Company Options identified in this Section 6.12, including
the adoption of amendments to the Company Stock Option Plans and/or the stock
option agreements pertaining to such outstanding Company Options intended to
become Assumed Options and shall use commercially reasonable efforts to obtain
the amendments or consents of, or acknowledgments and releases from the holders
of such Company Options, if so requested by Parent, which such amendments,
consents, acknowledgments or releases shall be in form reasonably satisfactory
to Parent.
(b) Company Options Not Assumed.
(i) Except as otherwise
provided in this Section 6.12(b), all outstanding Company Options which are
vested and currently exercisable (including Company Options which shall vest in
connection with the Merger under applicable “change of control” provisions of
the Company Stock Option Plans or other agreements identified in Section 3.2 of
the Company Disclosure Letter) and which have a per share exercise price that
is less than or equal to the market price per share of the Company’s Common
Stock on the day immediately prior to the Closing Date shall be cancelled, with
such cancellation effective immediately prior to the Effective Time, and the Company
shall promptly following the date of this Agreement (i) inform all affected holders
of Company Options of the requirement to cause all of such Company Options to
be cancelled and (ii) take all action necessary to cause such
cancellation, including the adoption of amendments to the Company Stock Option
Plans and/or the stock option agreements pertaining to all outstanding Company
Options that are to be cancelled pursuant to this Section 6.12, and shall use
commercially reasonable efforts to obtain the amendments or consents of, or
acknowledgments and releases from the holders of such Company Options, if so
requested by Parent, which such amendments, consents, acknowledgments or
releases shall be in form reasonably satisfactory to Parent. With respect to the Company’s 1999
Non-Employee Option Plan, the Company’s obligation shall be limited to using
all commercially reasonable efforts to cause the holders of Company Options
outstanding under such plan to exercise such Company
70
Options at or prior to
Closing. The Company shall, promptly
following the date of this Agreement, notify the holders of Company Options
which may be affected by this Section 6.12(b) of the terms hereof.
(ii) Notwithstanding the provisions of
Section 5.1 and Section 6.12(b)(i), following the date of this Agreement and
prior to the Closing Date, the Company, through action of its Board of
Directors or Compensation Committee, may provide that the Company Options
identified above in Section 6.12(b)(i) may, at the election of the holder of
such Company Options and in lieu of exercising such Company Options for shares
of Company Common Stock, elect to exchange such Company Options for the Merger
Consideration by making a Cash Election, a Stock Election or a Non-Election and
agreeing that such Election shall be subject to the provisions of Article II
applicable to holders of Company Common Stock generally. Such Company Options as to which the holders
thereof choose to make an Election are referred to herein as “Exchanged
Options.”
(c) Company Warrants.
Notwithstanding the provisions of Section 5.1, the Company, shall
provide that all outstanding Company Warrants may, at the election of the
holder of such Company Warrants and in lieu of exercising such Company Warrants
for shares of Company Common Stock or having such Company Warrants continue in
effect following consummation of the Merger, elect to exchange such Company
Warrants for the Per Share Stock Consideration (on a net basis, taking into
account the exercise price of such Company Warrants). Such Company Warrants as to which the holders
thereof choose to receive the Per Share Stock Consideration are referred to
herein as “Exchanged Warrants.” The Company shall
promptly following the date of this Agreement obtain and deliver to
Parent written agreements, in form agreed to by Parent, from each holder
of outstanding Company Warrants identified on Schedule II, which
agreements shall provide that such holder will (i) exercise such Company
Warrants in full at or prior to Closing, (ii) agree to have such Company
Warrants become Exchanged Warrants pursuant to this Section 6.12(c), or (iii)
be subject to a new warrant or warrants in replacement of such Company
Warrants, in form agreed to by Parent and such holders; provided, however, that
holders of all Company Warrants identified on Schedule IV shall agree to
have such Company Warrants become Exchanged Warrants pursuant to this Section
6.12(c).
6.13. Form
S-8. Parent agrees to
file a registration statement on Form S-8 (or any successor or other
appropriate form) promptly after the Effective Time with respect to the shares
of Parent Common Stock issuable with respect to any Company Options assumed by
Parent in connection with the Merger, and shall use commercially reasonable
efforts to maintain the effectiveness of such registration statement or
registration statements (and maintain the current status of the prospectus or
prospectuses contained therein) for so long as the Company Options assumed by
Parent in accordance with this Agreement remain outstanding.
6.14. Option
Information. Prior to the
Effective Time, the Company shall provide to Parent with an update of the
information required to be provided by the Company in accordance with Section
3.2(b) with respect to Company Options and Company Warrants, with such
information to be as of the date immediately preceding the Effective Time.
71
6.15. Indemnification.
(a) Indemnity. For a period of six (6) years after the
Effective Time, Parent shall, and shall cause the Surviving Corporation and its
Subsidiaries to, to the extent permitted by Applicable Law, honor and fulfill
in all respects the obligations of the Company and its Subsidiaries under any
and all indemnification agreements (true and correct copies of which have been
provided to Parent) in effect as of the date hereof between the Company or any
of its Subsidiaries and any of their respective current or former directors and
officers and any person who becomes a director or officer of the Company or any
of its Subsidiaries prior to the Effective Time (collectively, the “Indemnified
Parties”), with respect to any matter arising out of, relating to, or in
connection with any acts or omissions occurring or alleged to have occurred
prior to the Effective Time. In addition,
for a period of six (6) years following the Effective Time, Parent shall (and
shall cause the Surviving Corporation and its Subsidiaries to), to the extent
permitted by Applicable Law, cause the certificate of incorporation and bylaws
(and other similar organizational documents) of the Surviving Corporation and
its Subsidiaries to contain provisions with respect to indemnification and
exculpation in favor of such Indemnified Parties, with respect to any matter
arising out of, relating to, or in connection with any acts or omissions
occurring or alleged to have occurred prior to the Effective Time, that are at
least as favorable as the indemnification and exculpation provisions contained
in the Company Charter Documents and the Subsidiaries Charter Documents as in
effect on the date hereof. Further,
during such six-year period, neither Parent nor the Surviving Corporation shall
settle, compromise or consent to the entry of any judgment in any proceeding or
threatened action, suit, proceeding, investigation or claim, with respect to
any matter arising out of, relating to, or in connection with any acts or
omissions occurring or alleged to have occurred prior to the Effective Time (in
which indemnification could be sought by such Indemnified Party under the indemnification
provisions in the Company Charter Documents or his or her indemnification
agreement), brought against any Indemnified Party, unless such settlement,
compromise or consent includes an unconditional release of such Indemnified
Party from all liability arising out of such action, suit, proceeding,
investigation or claim or such Indemnified Party otherwise consents and Parent
and the Surviving Corporation shall (and shall cause its or their Subsidiaries
to), cooperate in the defense of any such matter; provided, however, that an
unconditional release or consent from such Indemnified Party will not be
required for the settlement, compromise or consent to the entry of any judgment
by Parent or the Surviving Corporation in any pending or threatened action,
suit, proceeding, investigation or claim in connection with liability of such
Indemnified Party (i) for any breach of a director’s duty of loyalty to the
Company or its Subsidiaries, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the DGCL, or (iv) any transaction from which a director derived
an improper personal benefit.
(b) Insurance. For a period of six (6) years after the
Effective Time, Parent will cause the Surviving Corporation to cause to be
maintained directors’ and officers’ liability insurance covering those persons
who are covered by the Company’s directors’ and officers’ liability insurance
policy as of the date hereof for events occurring on or prior to the Effective
Time in an amount and scope at least as favorable as those in the current
directors’ and officers’ insurance policy of the Company; provided, however,
that in no event will Parent and/or the Surviving Corporation be required to pay
annual premiums in excess of 250% of the current annual insurance premium. In the event that the annual premium would
exceed 250% of the current annual insurance premium the Parent will cause the
Surviving Corporation to cause to be maintained, for such amount the maximum
amount of coverage as is available.
Notwithstanding
72
the foregoing, Parent may
satisfy its and the Surviving Corporation’s obligations under this Section
6.15(b) by purchasing a “tail” policy, or prior to the Effective Time or
consenting to the purchase of a “tail” policy by the Company (which consent
will not be unreasonably withheld, conditioned or delayed) (x) under the
Company’s existing directors’ and officers’ insurance policy or otherwise from
Parent’s insurance carrier on the date hereof or (y) from an insurance carrier
with a financial rating of AX or better as rated by A.M. Best , which, in
either case has an effective term of six (6) years from the Effective Time,
covers those persons who are currently covered by the Company’s directors’ and
officers’ insurance policy in effect as of the date hereof for actions and
omissions occurring on or prior to the Effective Time, and is written in an
amount and scope at least as favorable as those in the Company’s directors’ and
officers’ insurance policy in effect as of the date hereof.
(c) Third–Party Beneficiaries. This Section 6.15 is intended to be for the
benefit of, and shall be enforceable by the Indemnified Parties and their heirs
and personal representatives and shall be binding on Parent and the Surviving
Corporation and their respective successors and assigns.
(d) Tolling. Notwithstanding anything herein to the
contrary, if any claim, action, suit, proceeding or investigation (whether
arising before, at or after the Effective Time) is made against any Indemnified
Party on or prior to the sixth anniversary of the Effective Time, the
provisions of this Section 6.15 shall continue in effect until the final
disposition of such claim, action, suit, proceeding or investigation.
(e) Continuing Obligation. In the event that the Surviving Corporation
or Parent or any of their respective successors or assigns (i) consolidates
with or merges into any other person and shall not be the continuing or
surviving corporation or entity of such consolidation or merger or (ii)
transfers or conveys all or a majority of its properties and assets to any
person, then, and in each such case, proper provision shall be made so that the
successors and assigns of the Surviving Corporation or Parent, as the case may
be, shall succeed to the obligations set forth in this Section 6.15.
6.16. Affiliates. The Company shall identify in
a letter to Parent all Persons who are, on the date hereof, “affiliates” of the
Company, as such term is used in Rule 145 under the Securities Act. The Company shall cause its respective
affiliates to deliver to Parent, not later than ten (10) days prior to the date
of the Company Stockholders’ Meeting, a written agreement substantially in the
form attached as Exhibit B (the “Affiliate Letter”), and shall to
cause Persons who become “affiliates” after such date but prior to the Closing
Date to execute and deliver such Affiliate Letters at least five (5) days prior
to the Closing Date.
6.17. Section
16 Matters. Prior to the
Effective Time, the Company shall take all such steps as may be required (to
the extent permitted under Applicable Law) to cause any dispositions of Company
Common Stock (including derivative securities with respect to Company Common
Stock) resulting from the transactions contemplated by this Agreement by each
individual who is subject to the reporting requirements of Section 16(a) of the
Exchange Act with respect to the Company to be exempt under Rule 16b-3
promulgated under the Exchange Act.
73
6.18. Tax
Matters. Each party shall
use all commercially reasonable efforts to cause the Merger to qualify, and
shall not take, and shall use all commercially reasonable efforts to prevent
any Affiliate of such party from taking, any actions which could prevent the
Merger from qualifying, as a reorganization under the provisions of Section
368(a) of the Code.
6.19. FIRPTA
Compliance. On the
Closing Date, the Company shall deliver to Parent a properly executed statement
in a form reasonably acceptable to Parent for purposes of satisfying Parent’s
obligations under Treasury Regulation Section 1.1445-2(c)(3).
6.20. NYSE
Listing. Parent shall use
commercially reasonable efforts to cause the shares of Parent Common Stock to
be issued in connection with the Merger to be approved for listing on the NYSE,
subject to official notice of issuance, prior to the Effective Time.
6.21. Termination
or Exchange of Certain Agreements and Plans.
(a) Termination of Investor Rights Agreement. Prior to the Effective Time, the Company
shall take all action necessary to cause the termination of the Fourth Amended
and Restated Investor Rights Agreement dated August 30, 2005 and shall provide
Parent with written documentation of such action.
(b) Termination of Loan and Security Agreement. Prior to the Effective Time, the Company
shall take all action necessary to cause the cancellation or termination of the
Loan and Security Agreement, dated as of August 28, 2006, by and between the
Company and Square 1 Bank and shall provide Parent with written documentation
of such action.
(c) Termination of 401(k) Plan. Effective as of no later than the day
immediately preceding the Closing Date, each of the Company, its Subsidiaries
and any ERISA Affiliate shall terminate any and all Company Employee Plans
intended to include an arrangement under Section 401(k) of the Code (each a “401(k) Plan”) unless Parent
provides written notice to the Company that any such 401(k) plan shall not be
terminated. Unless, no later than ten
(10) Business Days prior to the Closing Date, Parent provides such written
notice to the Company, then the Company shall provide Parent with evidence that
such 401(k) Plan(s) have been terminated (effective as of no later than the day
immediately preceding the Closing Date) pursuant to resolutions of the Board of
Directors of the Company, its Subsidiaries or such ERISA Affiliate, as the case
may be. Parent shall take all steps
necessary to permit each Employee who has received an eligible rollover
distribution (as defined in Section 402(c)(4) of the Code) from each 401(k)
Plan, if any, to roll such eligible rollover distribution as part of any lump
sum distribution to the extent permitted by each 401(k) Plan into an account
under Parent’s 401(k) plan (the “Parent’s
401(k) Plan”), to the extent permitted by Parent’s 401(k) Plan.
(d) Warrant Agreements. At or prior to the Closing, the Company shall
have delivered to Parent written agreements, in form agreed to by Parent and
the Company prior to the date hereof, from each holder of outstanding Company
Warrants set forth on Schedule II, which agreement shall provide that
such holder will either exercise such Company Warrants in full at or prior to
Closing or be subject to a new warrant or warrants in replacement of such
Company Warrants, in form agreed to by Parent and such holders.
74
6.22. Additional
Actions; Further Assurances. Subject
to the terms and conditions of this Agreement, each party agrees to use all
commercially reasonable efforts to take, or cause to be taken, all action and
to do, or cause to be done, all things necessary, proper or advisable under
Applicable Law, or to remove any injunctions or other impediments or delays, to
consummate and make effective the Merger and transactions contemplated hereby,
subject, however, to the Requisite Stockholder Approval. Each of the parties agrees further shall take
such additional action to deliver or cause to be delivered to other parties at
the Closing and at such other times thereafter as shall be reasonably agreed by
such parties such additional agreements or instruments as any of them may
reasonably request for the purpose of carrying out this Agreement and the
transactions contemplated hereby. At and
after the Effective Time, the officers and directors of the Surviving
Corporation will be authorized to execute and deliver, in the name and on
behalf of the Company or Merger Sub, any deeds, bills of sale, assignments or
assurances and to take and do, in the name and on behalf of the Company or
Merger Sub, any other actions and things to vest, perfect or confirm of record
or otherwise in the Surviving Corporation any and all right, title and interest
in, to and under any of the rights, properties or assets of the Company.
Article VII
CONDITIONS TO THE MERGER
7.1. Conditions
to the Obligations of Each Party to Effect the Merger. The respective obligations of
each of Parent, BV Sub, Merger Sub and the Company to effect the Merger shall
be subject to the satisfaction, or, to extent permitted by Applicable Law, the
waiver at or prior to the Closing Date of each of the following conditions:
(a) Company Stockholder Approval. This Agreement shall have been approved and
adopted, and the Merger shall have been duly approved, by the Requisite
Stockholder Approval.
(b) No Legal Prohibition. No Governmental Authority of competent
jurisdiction shall have (i) adopted or issued a statute, rule, regulation or
order or taken any other action (including the failure to have taken an action)
that is in effect, in any case having the effect (or which reasonably could be
expected to have the effect) of (A) making illegal the Merger or the
transactions contemplated hereby or prohibiting or otherwise preventing the
consummation of the Merger or any of the transactions contemplated hereby, (B)
prohibiting or limiting in any material respect Parent’s ability to vote,
receive dividends with respect to or otherwise exercise ownership rights with
respect to the stock of the Surviving Corporation, or (C) compelling the
Company, Parent or any Subsidiary of Parent to take an Action of Divestiture as
a result of the Merger or any of the transactions contemplated by this
Agreement, or (ii) issued or granted or threatened in writing to issue or grant
any judgment, injunction, order, decree, ruling or similar action (whether
temporary, preliminary or permanent in character) that is in effect and has (or
which reasonably could be expected to have) the effect of (A) making illegal
the Merger or the transactions contemplated hereby or prohibiting or otherwise
preventing the consummation of the Merger or any of the transactions
contemplated hereby, (B) seeking to prohibit or limit or prohibiting or
limiting in any material respect Parent’s ability to vote, receive dividends
with respect to or otherwise exercise ownership rights with respect to the
stock of the Surviving Corporation, or (C) seeking to compel or compelling the
Company, Parent or any Subsidiary of
75
Parent to take an Action of
Divestiture as a result of the Merger or any of the transactions contemplated
by this Agreement.
(c) HSR Act.
All waiting periods (and any extensions thereof) under the HSR Act
relating to the transactions contemplated hereby shall have expired or shall
have terminated.
(d) Other Governmental Consents. Each of the parties shall have obtained all
other Necessary Governmental Consents required to consummate the Merger and the
transactions contemplated thereby.
(e) Registration Statement. The Registration Statement shall have been
declared effective by the SEC in accordance with the applicable provisions of the
Securities Act, no stop order suspending the effectiveness of the Registration
Statement shall have been issued by the SEC, and no proceedings for such
purpose shall have been initiated or threatened by the SEC and not concluded or
withdrawn.
(f) Dissenting Shares. The number of shares of Company capital stock
which, as of the Closing, have become or could reasonably be expected to become
Dissenting Shares shall not exceed ten percent (10%)of
the aggregate number of shares of Company capital stock outstanding as of the
record date for the Company Stockholders’ Meeting.
(g) NYSE Listing.
The shares of Parent Common Stock to be issued in connection with the
Merger shall have been approved for listing on the NYSE, subject to official
notice of issuance.
7.2. Additional
Conditions to the Obligations of Parent, BV Sub and Merger Sub.
The obligations of
Parent, BV Sub and Merger Sub to effect the Merger shall be subject to the
satisfaction, or, to extent permitted by Applicable Law, the waiver by Parent,
BV Sub and Merger Sub, at or prior to the Closing Date of each of the following
conditions:
(a) Representations and Warranties. Each of the
representations and warranties of the Company set forth in this Agreement or in
any other document delivered pursuant hereto, without giving effect to any “material,”“materially” or Company Material Adverse Effect qualification contained in such
representations and warranties, shall be true and correct in each case as of
the date hereof and as of the Effective Time with the same effect as if made
anew at and as of the Effective Time (except to the extent such representations
and warranties specifically relate to a different date, in which case such
representations and warranties shall be true and correct as of such different
date), except where the failure to be true and correct has not had, and would
not reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect. In
addition, for purposes of determining the accuracy of the Company’s
representations and warranties under this Section 7.2(a), any update of or
modification to the Company Disclosure Letter made or purported to have been
made after the date of this Agreement shall be disregarded.
(b) Agreements and Covenants. The
Company shall have performed or complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by the Company at
or prior to the Closing Date.
76
(c) No Company Material Adverse Effect. From the date hereof through the Effective
Time, there shall not have occurred and be continuing any change, event,
occurrence, development or circumstance which, individually or in the
aggregate, has had or would reasonably be
expected to have, a Company Material Adverse Effect.
(d) Tax Opinion.
Parent shall have received an opinion of Pepper Hamilton LLP, dated as
of the Closing Date, to the effect that (i) the Merger will be treated as a
reorganization within the meaning of Section 368(a) of the Code, (ii) Parent and
the Company shall each be a party to that reorganization, and (iii) no gain or
loss shall be recognized by Parent or the Company because of the Merger. The issuance of such opinion shall be
conditioned upon the receipt by such counsel of customary representation
letters from each of Parent, BV Sub, Merger Sub, and the Company, in each case,
in form and substance reasonably satisfactory to such counsel. Each such representation letter shall be
dated on or before the date of such opinion and shall not have been withdrawn
or modified in any material respect. In
the event that counsel to Parent shall not render the opinion contemplated by
this Section 7.2(d), this condition shall nonetheless be deemed satisfied if counsel
to the Company shall render such opinion to Parent, in form and substance
reasonably satisfactory to Parent; provided,
however, that in rendering such opinion, such counsel may rely upon the
representations letters referred to in this Section 7.2(d).
(e) Third Party Consents.
The Company shall have delivered to Parent all of the consents, waivers
and approvals set forth in Section 3.3(c)(i) of the Company Disclosure Letter.
(f) Rule 145. Parent
shall have received the Affiliate Letters from all Persons who are “affiliates”
of the Company, as such term is used in Rule 145 under the Securities Act.
(g) Company Warrants.
The Company shall have obtained and delivered to
Parent promptly following the date of this Agreement, written
agreements, in form agreed to by Parent, from each holder of outstanding
Company Warrants identified on Schedule II, which agreements shall
provide that such holder will (i) exercise such Company Warrants in full at or
prior to Closing, (ii) agreed to have such Company Warrants become Exchanged
Warrants pursuant to Section 6.12(c), or (iii) be subject to a new warrant or
warrants in replacement of such Company Warrants, in form agreed to by Parent
and such holders; provided, however, that holders of all Company Warrants
identified on Schedule IV shall agree to have such Company Warrants
become Exchanged Warrants pursuant to Section 6.12(c).
(h) Closing Deliveries. All documents, instruments, certificates or
other items required hereunder to be delivered at the Closing by or on behalf
of the Company shall have been delivered.
(i) Officers’ Certificates.
Parent shall have received a certificate, dated as of the Closing Date,
signed on behalf of the Company by the Company’s Chief Executive Officer and
Chief Financial Officer to the effect that the conditions set forth in Sections
7.2(a) and 7.2(b) have been satisfied.
(j) Termination of Certain Agreements; Termination of 401(k) Plan. Parent shall have received evidence,
satisfactory to Parent, of termination of (i) the Fourth Amended and
77
Restated Investor Rights Agreement
dated August 30, 2005, as amended among the Company and the parties listed
therein, (ii) the Loan and Security Agreement, dated as of August 28, 2006, by
and between the Company and Square 1 Bank, (iii) the 401(k) Plan and (iv) the
Comerica Letter of Credit.
7.3. Additional
Conditions to the Obligations of the Company.
The obligations of the Company to effect the Merger shall
be subject to the satisfaction, or, to extent permitted by Applicable Law, the
waiver by the Company, at or prior to the Closing Date of each of the following
conditions:
(a) Representations and Warranties. Each of the
representations and warranties of Parent, BV Sub and Merger Sub set forth in
this Agreement or in any other document delivered pursuant hereto, without
giving effect to any “material,”“materially” or Parent Material Adverse Effect
qualification contained in such representations and warranties, shall be true
and correct in each case as of the Effective Time (except to the extent such
representations and warranties specifically related to a different date, in
which case such representations and warranties shall be true and correct as of
such different date), except where the failure to be true and correct has not
had, and would not reasonably be expected to have, individually or in the
aggregate, a Parent Material Adverse Effect.
In addition, for purposes of determining the accuracy of the
Parent’s representations and warranties under this Section 7.3(a), any update
of or modification to the Parent Disclosure Letter made or purported to have
been made after the date of this Agreement shall be disregarded.
(b) Agreements and Covenants. Parent, BV Sub and Merger Sub shall have
performed or complied in all material respects with all agreements and
covenants required by this Agreement to be performed or complied with by them
at or prior to the Closing Date.
(c) No Parent Material Adverse Effect. From the date hereof through the Effective
Time, there shall not have occurred and be continuing any change, event,
occurrence, development or circumstance which, individually or in the
aggregate, has had or would reasonably be
expected to have, a Parent Material Adverse Effect.
(d) Tax Opinion. The
Company shall have received an opinion of Klehr, Harrison, Harvey, Branzburg
& Ellers, LLP, dated as of the Closing Date, to the effect that (i) the
Merger will be treated as a reorganization within the meaning of Section 368(a)
of the Code, (ii) Parent and the Company shall each be a party to that
reorganization, (iii) no gain or loss shall be recognized by a holder of
Company Common Stock who exchanges shares of Company Common Stock solely for
shares of Parent Common Stock except for any gain or loss recognized with
respect to any cash received in lieu of fractional share interests, (iv) with
respect to a holder of Company Common Stock who exchanges shares of Company
Common Stock for shares of Parent Common Stock and cash, gain or income
realized (if any), but not loss, will be recognized on the exchange, but only
to the extent such gain or income does not exceed the amount of cash received,
and (v) with respect to a holder of Company Common Stock who exchanges shares
of Company Common Stock solely for cash, gain or loss will be recognized equal
to the difference, if any, between the amount of cash received and the tax
basis of exchanged shares of Company Common Stock. The issuance of such opinion shall be
conditioned upon the receipt by such counsel of customary representation
letters from each of Parent, BV Sub, Merger Sub, and the
78
Company, in each case, in form
and substance reasonably satisfactory to such counsel. Each such representation letter shall be
dated on or before the date of such opinion and shall not have been withdrawn
or modified in any material respect. In
the event that counsel to the Company shall not render the opinion contemplated
by this Section 7.3(d), this condition shall nonetheless be deemed satisfied if
counsel to the Parent shall render such opinion to the Company, in form and
substance reasonably satisfactory to the Company; provided, however, that in rendering such opinion, such counsel
may rely upon the representations letters referred to in this Section 7.3(d).
(e) Third Party Consents Parent shall
have delivered to the Company all of the consents, waivers and approvals set
forth in Section 4.3(c) of the Parent Disclosure Letter.
(f) Closing Deliveries. All documents, instruments, certificates or
other items required to be delivered at the Closing by or on behalf of Parent,
BV Sub and Merger Sub.
(g) Officers’ Certificates.
The Company shall have received a certificate, dated as of the Closing
Date, signed on behalf of Parent by an authorized executive officer of Parent
(with respect to the representations, warranties, covenants and agreements of
Parent) and signed on behalf of Merger Sub by an authorized executive officer
of Merger Sub (with respect to the representations, warranties, covenants and
agreements of Merger Sub) to the effect that the conditions set forth in
Sections 7.3(a) and 7.3(b) have been satisfied.
Article VIII
TERMINATION, AMENDMENT AND WAIVER
8.1. Termination. This Agreement may be
terminated at any time prior to the Effective Time, by action taken by the
terminating party or parties, and except as provided below, whether before or after
the Requisite Stockholder Approval:
(a) by mutual written consent of each of
Parent and the Company;
(b) by either Parent or the Company if
the Merger shall not have been consummated by May 31, 2007 (the “End Date”); provided, however, that the right to terminate this Agreement pursuant to
this Section 8.1(b) shall not be available to any party whose action or failure
to act has been a principal cause of or resulted in the failure of the Merger
to occur on or before such date and such action or failure to act constitutes a
material breach of this Agreement;
and, provided further that, in the event that the conditions set forth
in Sections 7.1(c) or 7.1(d) shall not have been satisfied by May 31, 2007, and
all other conditions set forth in Article VII have been satisfied (other than
those conditions that by their terms are to be satisfied or waived at Closing),
either Parent or the Company may unilaterally extend the End Date until June30, 2007 upon written notice to the other by May 31, 2007, in which case the
Termination Date shall be deemed for all purposes to be June 30, 2007;
(c) by either Parent or the Company if
any Governmental Authority of competent jurisdiction shall have (i) adopted or
issued a statute, rule, regulation or order or taken any other action
(including the failure to have taken an action) that is in effect, in any case
having the effect (or which reasonably could be expected to have the effect) of
(A) making illegal the Merger or the transactions contemplated hereby or
prohibiting or otherwise preventing the
79
consummation of the Merger or
any of the transactions contemplated hereby, (B) prohibiting or limiting in any
material respect Parent’s ability to vote, receive dividends with respect to or
otherwise exercise ownership rights with respect to the stock of the Surviving
Corporation, or (C) compelling the Company, Parent or any Subsidiary of Parent
to take an Action of Divestiture as a result of the Merger or any of the
transactions contemplated by this Agreement, or (ii) issued or granted any
judgment, injunction, order, decree, ruling or similar action (whether
temporary, preliminary or permanent in character) that is in effect and has (or
which reasonably could be expected to have) the effect of (A) making illegal
the Merger or the transactions contemplated hereby or prohibiting or otherwise
preventing the consummation of the Merger or any of the transactions
contemplated hereby, (B) seeking to prohibit or limit or prohibiting or
limiting in any material respect Parent’s ability to vote, receive dividends
with respect to or otherwise exercise ownership rights with respect to the
stock of the Surviving Corporation, or (C) seeking to compel or compelling the
Company, Parent or any Subsidiary of Parent to take an Action of Divestiture as
a result of the Merger or any of the transactions contemplated by this
Agreement, which judgment, injunction, order, decree, ruling or other action is
final and nonappealable; provided, however, that the right to terminate
this Agreement pursuant to this Section 8.1(c) shall not be available to any
party whose breach of any provision of this Agreement results in or has been
the primary cause of the imposition of such judgment, injunction, order,
decree, ruling or other action; and provided, further, that the right to
terminate this agreement pursuant to this Section 8.1(c) shall not be available
to any party who has not used all commercially reasonable efforts to lift any such judgment, injunction, order, decree,
ruling or other action;
(d) by either Parent or the Company if
the Requisite Stockholder Approval shall not have been obtained by reason of
the failure to obtain the required vote at the Company Stockholders’ Meeting
(including any postponement or adjournment thereof); provided, however, that the
right to terminate this Agreement under this Section 8.1(d) shall not be
available to the Company in the event that the failure to obtain such
stockholder approval shall have been caused by the action or failure to act of
the Company in accordance with its obligations under Sections 6.3 and 6.4
hereof;
(e) by Parent, in the event a Triggering
Event with respect to the Company shall have occurred; for the purposes of this
Agreement, a “Triggering
Event,” with respect to the Company, shall be deemed to have
occurred if: (i) the Company shall have materially breached (or be deemed,
pursuant to the terms thereof, to have breached) the provisions of Section 6.1
or Section 6.2, (ii) the Company’s Board of Directors or any committee thereof
shall for any reason have taken action (or failed to have taken action) such
that a Change of Recommendation has occurred, (ii) the Company shall have
failed to include in the Proxy Statement/Prospectus the Board Recommendation,
(iii) the Company’s Board of Directors or any committee thereof shall have for
any reason approved or recommended that the stockholders of the Company approve
any Acquisition Proposal (whether or not a Superior Proposal), (iv) the Company
shall have entered into any letter of intent or similar document with respect
to, or any agreement, contract or commitment accepting or agreeing to discuss,
any Acquisition Proposal (whether or not a Superior Proposal), except for a
confidentiality agreement entered into in accordance with Section 6.1, or (v)
an Acquisition Proposal (whether or not a Superior Proposal) shall have been
made by a Person unaffiliated with Parent, and the Company shall have sent to
the stockholders of the Company, pursuant to Rule 14e-2 under the Exchange Act,
a statement of the Board of Directors of the Company or any committee thereof
recommending that the stockholders of the
80
Company accept such Acquisition
Proposal and tender shares of Company stock into such Acquisition Proposal, if
made in the form of a tender or exchange offer;
(f) by Parent, if since the date of this
Agreement, there shall have been any event, circumstance or fact that,
individually or in the aggregate, has had or would reasonably be expected to
have a Company Material Adverse Effect (it being understood and agreed by the
parties that if a Company Material Adverse Effect shall occur following the
date of this Agreement and Parent chooses to terminate the Agreement in
accordance with this Section 8.1(f), the Company shall not have any right to
cure the Company Material Adverse Effect pursuant to Section 8.1(g);
(g) by Parent, if the Company shall have
breached any of its covenants or obligations under this Agreement or if any
representation or warranty of the Company under this Agreement shall have been
untrue or incorrect, such that the conditions set forth in Sections 7.2(a)or 7.2(b) would not be satisfied as of the time of such
breach or as of the time such representation or warranty shall have become
untrue or incorrect, provided,
however, that if such inaccuracy in the Company’s representations and
warranties or breach by the Company is curable by the Company prior to the
Closing Date through the exercise of all commercially reasonable efforts, then
Parent may not terminate this Agreement under this Section 8.1(g) prior to 20
days following the receipt of written notice from Parent to the Company of such
breach, as long as the Company continues to exercise all commercially
reasonable efforts to cure such breach during such 20 day period (it being
understood that Parent may not terminate this Agreement pursuant to this
Section 8.1(g) if it shall have materially breached this Agreement or if such
breach by the Company is cured within such 20 day period; provided, however,
that if the Closing Date is to occur on a date which is less than 20 days
following the date of receipt of written notice by Parent to the Company, then
such breach must be cured at or prior to the Closing Date);
(h) by the Company, if since the date of
this Agreement, there shall have been any event, circumstance or fact that,
individually or in the aggregate, has had or would reasonably be expected to
have a Parent Material Adverse Effect (it being understood and agreed by the
parties that if a Parent Material Adverse Effect shall occur following the date
of this Agreement and the Company chooses to terminate the Agreement in
accordance with this Section 8.1(h), Parent shall not have any right to cure
the Parent Material Adverse Effect pursuant to Section 8.1(i);
(i) by the Company, if Parent, BV Sub or
Merger Sub shall have breached any of its respective covenants or obligations
under this Agreement or if any representation or warranty of Parent, BV Sub or
Merger Sub under this Agreement shall have been untrue or incorrect, such that
the conditions set forth in Sections 7.3(a)or 7.3(b) would not be satisfied as of the time of such
breach or as of the time such representation or warranty shall have become
untrue or incorrect, provided,
however, that if such inaccuracy in the Parent, BV Sub or Merger Sub’s representations
and warranties or breach by the Parent, BV Sub or Merger Sub is curable by
Parent, BV Sub or Merger Sub prior to the Closing Date through the exercise of
all commercially reasonable efforts, then the Company may not terminate this
Agreement under this Section 8.1(i) prior to 20 days following the receipt of
written notice from the Company to Parent, BV Sub and Merger Sub of such
breach, as long as Parent, BV Sub and Merger Sub continue to exercise all
commercially reasonable efforts to cure such breach during such 20 day period
(it being understood that the Company may not terminate this Agreement pursuant
to this Section 8.1(i) if
81
it shall have materially
breached this Agreement or if such breach by Parent, BV Sub or Merger Sub is
cured within such 20 day period; provided, however, that if the Closing Date is
to occur on a date which is less than 20 days following the date of receipt of
written notice by the Company to Parent, then such breach must be cured at or
prior to the Closing Date); or
(j) by the Company, if prior to approval
of the Merger and this Agreement by the stockholders of the Company in
accordance with this Agreement and concurrently with the termination, the
Company shall enter into a definitive binding agreement with respect to a
Superior Proposal (other than as a result of a breach or violation of the terms
of Section 6.1) and the Company shall have paid to Parent the Termination Fee.
8.2. Notice
of Termination; Effect of Termination. Any
valid termination of this Agreement under Section 8.1 will be effective
immediately upon the delivery of a valid written notice of the terminating
party to the other party or parties hereto, as applicable. In the event of the valid termination of this
Agreement as provided in Section 8.1, this Agreement shall be of no further
force or effect without liability of any party or parties hereto, as applicable
(or any stockholder, director, officer, employee, agent, consultant or
representative of such party or parties) to the other party or parties hereto,
as applicable, except as set forth in Section 6.5(a), Section 8.2, Section 8.3
and Article IX, each of which shall survive the termination of this Agreement;
provided, however, that nothing herein shall relieve any party from liability
to another party for any fraud or willful breach of this Agreement. In addition, the parties acknowledge and
agree that no termination of this Agreement shall affect the obligations of the
parties contained in the Confidentiality Agreement, all of which obligations
shall survive termination of this Agreement in accordance with their terms.
8.3. Fees
and Expenses.
(a) General. Except as otherwise set forth in this Section
8.3, all fees and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such fees and expenses, whether or
not the Merger is consummated; provided, however, that Parent and the Company
shall share equally the filing fees and related expenses (but not attorneys’
fees and expenses) in connection with (i) the filing of the Notification and
Report Forms filed with the FTC and DOJ under the HSR Act and all premerger
notification and reports forms under similar Applicable Laws of other
jurisdictions, and (ii) the filing, printing and mailing of the Proxy
Statement/Prospectus (including any preliminary materials related thereto) and
the Registration Statement (including financial statements and exhibits) and
any amendments or supplements thereto.
(b) Termination Fee.
(i) The Company shall pay to Parent a
fee equal to $6,250,000 (the “Termination Fee”), by wire transfer of
immediately available funds to an account or accounts designated in writing by
Parent, within one Business Day after demand by Parent, in the event that
(A)(1) this Agreement is terminated by Parent or the Company pursuant to
Section 8.1(b)or Section
8.1(d) or (2) this Agreement is terminated by Parent pursuant to Section
8.1(g), (B) following the execution and delivery of this Agreement and prior to
the termination of this Agreement a bona fide Acquisition Proposal shall have
been publicly announced or shall have
82
become publicly known, or shall
have been communicated or otherwise made known to the stockholders of the
Company and not withdrawn (a “Prior Acquisition Proposal”), and (C) within
twelve (12) months following the termination of this Agreement, either (X) an
Acquisition is consummated with the Person having made a Prior Acquisition
Proposal (whether or not the Prior Acquisition Proposal referenced in the
preceding clause (B)), or (Y) the Company enters into a letter of intent,
memorandum of understanding or other agreement or understanding providing for
an Acquisition Proposal with the Person having made such Prior Acquisition
Proposal (whether or not the Prior Acquisition Proposal referenced in the
preceding clause (B)), or (Z) the Person having made a Prior Acquisition
Proposal acquires beneficial ownership or the right to acquire beneficial
ownership of, or any “group” (as such term is defined under Section 13(d) of
the Exchange Act and the rules and regulations promulgated hereunder), shall
have been formed which included such Person that beneficially owns, or has the
right to acquire beneficial ownership of, outstanding shares of capital stock
of the Company then representing 50% or more of the combined power to vote
generally for the election of directors and the Company’s Board of Directors
has taken any action for the benefit of such Person or group, that facilitates
the acquisition by such Person or group of such beneficial ownership (whether
or not the transaction or transactions through which such beneficial ownership
was obtained was the Prior Acquisition Proposal referenced in the preceding
clause (B)). For the purpose of this
Section 8.3(b)(i), the percentage “50%” shall be substituted for “10%” and “90%”
in the definition of Acquisition Proposal with respect to any transaction which
does not involve a Person who, as of the date hereof or at any time prior to
the Effective Time, holds or has the right to acquire any shares of capital
stock of the Company (other than Parent).
(ii) In the event that this Agreement is
terminated by the Company pursuant to Section 8.1(j), the Company shall pay to
Parent a fee equal to the Termination Fee by wire transfer of immediately
available funds to an account or accounts designated in writing by Parent
within one Business Day after demand by Parent; provided, however, that if this
Agreement is terminated by Parent pursuant to Section 8.1(e)(ii) and the publicly-stated
reason for the Board Recommendation Change is the occurrence and continuation
of a Parent Material Adverse Effect, no Termination Fee pursuant to this
Section 8.3(b)(ii) shall be payable.
(iii) In the event that this Agreement is
terminated by the Company pursuant to Section 8.1(j), the Company shall pay to
Parent a fee equal to the Termination Fee by wire transfer of immediately
available funds to an account or accounts designated in writing by Parent
within one Business Day after demand by Parent.
(c) Enforcement. The
Company acknowledges that the agreements contained in this Section 8.3 are an integral part of the
transactions contemplated by this Agreement, and that, without these
agreements, Parent, BV Sub and Merger Sub would not enter into this
Agreement. Accordingly, if the Company
fails to pay in a timely manner the amounts due pursuant to Section 8.3(b),
and, in order to obtain such payment, the Parent makes a claim that results in
a judgment against the Company for the amounts set forth in Section 8.3(b), the
Company shall pay to the Parent the reasonable costs and expenses of the Parent
(including reasonable attorneys’ fees and expenses) in connection with such
suit, together with interest on the amounts set forth in Section 8.3(b) at the
prime rate published by The Wall Street Journal (Eastern Edition) and in effect
on the date such payment was required to be made. Payment of the Termination Fee described in
83
this Section 8.3 shall not be in lieu of damages
incurred in the event of any breach of this Agreement.
8.4. Amendment. Subject to Applicable Law,
this Agreement may be amended by the parties hereto at any time before or after
approval of the Merger by the stockholders of the Company; provided, however,
that after approval of the Merger by the stockholders of the Company, no
amendment to this Agreement may be made which under Applicable Law or the
applicable listing and corporate governance rules and regulations of NASDAQ
further approval by the stockholders of the Company is required, unless such
further stockholder approval is so obtained.
This Agreement may amended only by execution of an instrument in writing
signed on behalf of each of Parent, BV Sub, Merger Sub and the Company.
8.5. Extension;
Waiver. At any time prior
to the Effective Time any party hereto may, to the extent legally permitted,
extend the time for the performance of any of the obligations or other acts of
the other parties hereto, waive any inaccuracies in the representations and
warranties made to such party in this Agreement or in any document delivered
pursuant hereto, and waive compliance with any of the agreements or conditions
for the benefit of such party contained herein.
Any agreement to any such extension or waiver shall be valid only if set
forth in an instrument in writing signed on behalf of the party agreeing to
such extension or waiver. Any delay by a
party in exercising any right under this Agreement shall not constitute a
waiver of such right.
Article IX
GENERAL PROVISIONS
9.1. Non-Survival
of Representations and Warranties. The
representations and warranties of the Company, Parent, BV Sub and Merger Sub
contained in this Agreement, or any instrument delivered pursuant to this
Agreement, shall terminate at the Effective Time, and only the covenants that
by their terms survive the Effective Time and this Article IX shall survive the
Effective Time.
9.2. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed duly given (i) on the date of
delivery if delivered personally and/or by messenger service, (ii) on the date
of confirmation of receipt (or, the first Business Day following such receipt
if the date is not a Business Day) of transmission by facsimile, or (iii) on
the date of confirmation of receipt (or, the first Business Day following such
receipt if the date is not a Business Day) if delivered by a nationally
recognized courier service. All notices
hereunder shall be delivered as set forth below, or pursuant to such other
instructions as may be designated in writing by the party to receive such
notice:
9.3. Interpretation. When a reference is made in
this Agreement to Exhibits or the Schedules, such reference shall be to the
corresponding Exhibit or Schedule to this Agreement, unless otherwise
indicated. When a reference is made in
this Agreement to Articles or Sections, such reference shall be to the
corresponding Article or Section of this Agreement, unless otherwise
indicated. For purposes of this
Agreement, the words “include,”“includes” and
85
“including,” when used herein, shall be deemed in each
case to be followed by the words “without limitation.” Unless the
context otherwise requires, all defined terms contained herein shall include
the singular and plural and the conjunctive and disjunctive forms of such
defined terms. The table of
contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.
9.4.Counterparts. This
Agreement may be executed in two or more counterparts, all of which shall be
considered one and the same agreement and shall become effective when one or
more counterparts have been signed by each of the parties and delivered to the
other party, it being understood that all parties need not sign the same
counterpart.
9.5.Attorneys’ Fees. If any action at law or equity, including an
action for declaratory relief, is brought to enforce or interpret any provision
of this Agreement, the prevailing party shall be entitled to recover reasonable
attorneys’ fees and expenses from the other party, which fees and expenses
shall be in addition to any other relief which may be awarded.
9.6. Entire Agreement; Third-Party Beneficiaries. This Agreement and the
documents and instruments and other agreements among the parties hereto as
contemplated by or referred to herein, including the Company Disclosure Letter,
the Parent Disclosure Letter and the Voting Agreements and other Exhibits and
Schedules hereto constitute the entire agreement among the parties with respect
to the subject matter hereof and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof, it being understood that the Confidentiality Agreement
shall continue in full force and effect in accordance with its terms and shall
survive any termination of this Agreement.
This Agreement is not intended to confer upon any other Person any
rights or remedies hereunder, except as specifically provided, following the
Effective Time, in Section 6.15.
9.7.Severability. In
the event that any provision of this Agreement or the application thereof,
becomes or is declared by a court of competent jurisdiction to be illegal, void
or unenforceable, the remainder of this Agreement shall continue in full force
and effect and the application of such provision to other Persons or
circumstances will be interpreted so as reasonably to effect the intent of the
parties hereto. The parties further
agree to replace such void or unenforceable provision of this Agreement with a
valid and enforceable provision that will achieve, to the greatest extent
possible, the economic, business and other purposes of such void or
unenforceable provision.
9.8.Other Remedies. Except
as otherwise provided herein, any and all remedies herein expressly conferred
upon a party will be deemed cumulative with and not exclusive of any other
remedy conferred hereby, or by law or equity upon such party, and the exercise
by a party of any one remedy will not preclude the exercise of any other
remedy. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached.
9.9.Rules of Construction. The
parties hereto agree that they have been represented by counsel during the
negotiation and execution of this Agreement and, therefore, waive the
application of any law, regulation, holding or rule of construction providing
that ambiguities in
86
an agreement or other document will be construed
against the party drafting such agreement or document.
9.10.Assignment. This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and permitted assigns. No party may assign either this Agreement or
any of its rights, interests, or obligations hereunder without the prior
written approval of the other parties, except that Parent may assign its rights
and delegate its obligations hereunder to its affiliates as long as Parent
remains ultimately liable for all of Parent’s obligations hereunder. Any purported assignment in violation of thisSection
9.10 shall be void.
9.11.Specific Performance. The
parties hereby acknowledge and agree that the failure of any party to perform
its agreements and covenants hereunder, including its failure to take all
actions pursuant thereto as are necessary on its part to the consummation of
the Merger, will cause irreparable injury to the other parties. It is accordingly agreed that the parties
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 any Delaware state court or, if under Applicable Law exclusive
jurisdiction over such matter is vested in the federal courts, any court of the
United States located in the State of Delaware, this being in addition to any
other remedy to which such party is entitled at law or in equity.
9.12.Governing Law; Jurisdiction. This
Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware, regardless of the laws that might otherwise govern under
applicable principles of conflicts of law thereof. Each of the parties hereto (i) irrevocably
consents to the jurisdiction and venue of the Delaware Court of Chancery or any
court of the United States located in the State of Delaware in the event any
dispute arises out of this Agreement or any of the transactions contemplated hereby,
(ii) agrees that it will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court, (iii)
agrees that it will not bring any action relating to this Agreement or any of
the transactions contemplated by this Agreement in any court other than the
Delaware Court of Chancery or, if under Applicable Law exclusive jurisdiction
over such matter is vested in the federal courts, any court of the United
States located in the State of Delaware and (iv) consents to service being made
through the notice procedures set forth in Section 9.2. Each of the Company, Parent, BV Sub and
Merger Sub hereby agrees that service of any process, summons, notice or
document by U.S. registered mail to the respective addresses set forth in
Section 9.2 shall be effective service of process for any Legal Proceeding in
connection with this Agreement or the transactions contemplated hereby.
9.13.Waiver of Jury Trial. EACH
OF PARENT, MERGER SUB AND THE COMPANY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
THE ACTIONS OF PARENT, MERGER SUB OR THE COMPANY IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.
[remainder of
page intentionally blank; signature page follows]
87
IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be executed by their duly
authorized respective officers as of the date first written above.
PARENT:
NAVTEQ
Corporation
By:
/s/ David B.
Mullen
Name:
David B. Mullen
Title:
Executive Vice President and
Chief Financial Officer
B.V.
SUB:
NAVTEQ
Holdings B.V.
By:
/s/ David B.
Mullen
Name:
David B. Mullen
Title:
Executive Vice
President and
Chief Financial Officer
MERGER
SUB:
NAVTEQ
Holdings Delaware, Inc.
By:
/s/ David B.
Mullen
Name:
David B. Mullen
Title:
Executive Vice
President and
Chief Financial Officer
COMPANY:
Traffic.com,
Inc.
By:
/s/ Robert N.
Verratti
Name:
Robert N.
Verratti
Title:
CEO
88
Exhibit A-1
STOCKHOLDER
VOTING AGREEMENT
This STOCKHOLDER VOTING
AGREEMENT (this “Agreement”) is made and entered into as of November 6,2006 by and among NAVTEQ Corporation, a Delaware corporation (the “Parent”),
NAVTEQ Holdings B.V., a corporation organized under the laws of The Netherlands
(“BV Sub”), NAVTEQ Holdings Delaware, Inc., a Delaware corporation and
wholly-owned subsidiary of Parent (“Merger Sub”), Traffic.com, Inc., a
Delaware corporation (the “Company”), and the person whose name appears
on the signature page hereto as a Stockholder (the “Stockholder”) of the
Company. Capitalized terms used and not
otherwise defined herein, and defined in the Merger Agreement (as defined
below), shall have the respective meanings ascribed to them in the Merger
Agreement.
RECITALS
WHEREAS,
concurrently with the execution of this Agreement, the Company, Parent, BV Sub
and Merger Sub are entering into an Agreement and Plan of Merger of even date
herewith (the “Merger Agreement”), pursuant to which the parties thereto
have agreed, upon the terms and subject to the conditions set forth therein, to
the Merger;
WHEREAS, the
Stockholder is the beneficial owner of such number of shares of common stock of
the Company, par value $0.01 per share (the “Company Common Stock”), set
forth on the signature page hereto, and options, warrants or other rights to
acquire such number of shares of Company Common Stock as set forth on the
signature page hereto; and
WHEREAS, as a
material inducement and a condition to Parent, BV Sub and Merger Sub entering
into the Merger Agreement, Parent has requested that the Stockholder agree, and
the Stockholder has agreed (in the Stockholder’s capacity as such), for the
benefit of Parent, BV Sub and Merger Sub, to enter into this Agreement to facilitate
the consummation of the Merger;
NOW, THEREFORE, in
consideration of the foregoing premises and the representations, warranties,
covenants and agreements set forth herein, as well as other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged and
accepted, and intending to be legally bound hereby, Parent, BV Sub, Merger Sub
and the Stockholder hereby agree as follows:
1. Certain Definitions. For purposes of this Agreement:
“Expiration Date” shall mean the
earlier to occur of (a) such date and time as the Merger Agreement shall have
been validly terminated pursuant to its terms, (b) the Effective Time, or (c)
the occurrence of a Material Adverse Amendment.
“Material
Adverse Amendment” means an amendment to the Merger Agreement that (i)
materially and adversely affects the Stockholder and (ii) is approved by the
Company’s Board of
89
Directors notwithstanding the fact that in such vote
the Stockholder’s nominee on the Company’s Board of Directors voted against
such amendment.
“Shares”
means (a) all equity securities of the Company (including all shares of Company
Common Stock, and all options, warrants and other rights to acquire shares of
Company Common Stock) beneficially owned by the Stockholder as of the date of this
Agreement and (b) all additional equity securities of the Company (including
all additional options, warrants and other rights to acquire shares of Company
Common Stock) of which Stockholder acquires beneficial ownership during the
period commencing with the execution and delivery of this Agreement until the
Expiration Date.
“Voting Period”
means the period commencing on the date of this Agreement and continuing until
the Expiration Date.
2. Representations
and Warranties of Stockholder.
The Stockholder represents and warrants to Parent, BV Sub and Merger Sub
as follows:
(a) The Stockholder is the beneficial
owner (as such term is defined in Rule 13d-3 under the Exchange Act, provided,
however, that for the purposes of this Agreement, such term shall include any
Shares that may be acquired more than sixty (60) days from the date hereof) of
all of the Shares. The Stockholder has
sole voting power and the sole power of disposition with respect to all of the
Shares, with no limitations, qualifications or restrictions on such rights
(subject to applicable federal securities laws and the terms of this
Agreement). Such Shares constitute all
of the Shares beneficially owned by the Stockholder. The Shares are held by the Stockholder, or by
a nominee or custodian for the benefit of the Stockholder, free and clear of
all mortgages, claims, charges, liens, security interests, pledges, options,
proxies, voting trusts or agreements (“Encumbrances”), except for any
such Encumbrances arising hereunder and Encumbrances applicable to all
securityholders alike, such as the restrictions upon resale imposed by the
Securities Act.
(b) The Stockholder has the legal
capacity, power and authority, as applicable, to enter into and perform all of
the Stockholder’s obligations under this Agreement. This Agreement has been duly and validly
executed and delivered by the Stockholder and constitutes (assuming due
execution and delivery of this Agreement by Parent, BV Sub and Merger Sub) a
valid and binding agreement of the Stockholder, enforceable against the
Stockholder in accordance with its terms, except to the extent that its
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting the enforcement of creditors’
rights generally or by general equitable principles. The execution, delivery and performance of
this Agreement by the Stockholder will not violate any agreement or court order
to which the Stockholder is a party or is subject, including, without
limitation, any voting agreement or voting trust, except for any of the
foregoing as would not impair the Stockholder’s ability to perform its
obligations under this Agreement in any material respect.
(c) Except for any applicable filings
under the Exchange Act, no filing with, and no permit, authorization, consent
or approval of, any Governmental Authority or any other Person is
90
required to be made or obtained by the Stockholder for
the execution of this Agreement by the Stockholder, compliance by the
Stockholder with the provisions hereof or performance of the Stockholder’s
obligations hereunder.
(d) If the Stockholder is married and the
Shares constitute community property, this Agreement has been duly authorized,
executed and delivered by, and constitutes a valid and binding agreement of,
the Stockholder’s spouse, enforceable against such person in accordance with
its terms.
(e) The Stockholder understands and
acknowledges that Parent is entering into, and causing BV Sub and Merger Sub to
enter into, the Merger Agreement in reliance upon the Stockholder’s concurrent
execution and delivery of this Agreement, including Parent’s reliance on the
Stockholder’s representations and warranties contained herein.
3. Representations and Warranties of the Company. The Company hereby represents and warrants to
Parent, BV Sub and Merger Sub as follows:
(a) The Company has the corporate power
and authority to enter into and perform all of its obligations under this
Agreement. This Agreement has been duly
and validly executed and delivered by the Company and constitutes a valid and
binding agreement of the Company, enforceable against the Company in accordance
with its terms, except to the extent that its enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting the enforcement of creditors’ rights generally or by general
equitable principles.
(b) Except for filings under the Exchange
Act, no filing with, and no permit, authorization, consent or approval of, any
Governmental Authority is necessary for the execution of this Agreement by the
Company, compliance by the Company with the provisions hereof or performance of
its obligations hereunder.
4. Representations and Warranties of Parent, BV Sub and Merger Sub. Parent and Merger Sub hereby represent and
warrant to the Stockholder as follows:
(a) Parent, BV Sub and Merger Sub have
the corporate power and authority to enter into and perform all of their
respective obligations under this Agreement.
This Agreement has been duly and validly executed and delivered by
Parent, BV Sub and Merger Sub and constitutes a valid and binding agreement of
each of them, enforceable against them in accordance with its terms, except to
the extent that its enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting the enforcement
of creditors’ rights generally or by general equitable principles.
(b) Except for filings under the Exchange
Act, no filing with, and no permit, authorization, consent or approval of, any
Governmental Authority is necessary for the execution of this Agreement by
Parent, BV Sub or Merger Sub, compliance by Parent, BV Sub and Merger Sub with
the provisions hereof or performance of their obligations hereunder.
91
5. Voting Agreement.
(a) The Stockholder hereby irrevocably
and unconditionally agrees that, during the Voting Period, the Stockholder
shall (i) appear (in person or by proxy) at any meeting (whether annual or
special and whether or not an adjourned or postponed meeting) of the holders of
Company Common Stock, properly called, or otherwise cause the Shares then
beneficially owned by the Stockholder to be counted as present thereat for
purposes of establishing a quorum, and (ii) vote or provide a written consent
with respect to all Shares (or will cause all Shares to be voted, or cause a
written consent to be provided with respect to all Shares) (A) in favor of
adoption and approval of the Merger Agreement and approval of the Merger, not
including any Material Adverse Amendment, (B) against any action, proposal,
transaction or agreement that would result, or could reasonably be expected to
result, in any material respect in a breach of any covenant, representation or
warranty or any other obligation or agreement of the Company contained in the
Merger Agreement, and (C) against any proposal made in opposition to, or in
competition with, consummation of the Merger and the other transactions
contemplated by the Merger Agreement, including any Acquisition Proposal. In all other matters, the Shares shall be
voted by and in the manner determined by the Stockholder.
(b) Notwithstanding any other provision
of this Agreement, if the Stockholder is a director or officer of the Company,
it is expressly understood and agreed that this Agreement shall not limit or
restrict any actions taken by the Stockholder in his or her capacity as a
director or officer of the Company either (i) pursuant to Applicable Law or
(ii) in exercising the Company’s rights or fulfilling the Company’s obligations
under the Merger Agreement (to the extent permitted or required by the Merger
Agreement).
6. Grant of Irrevocable Proxy. Concurrently with the execution and delivery
of this Agreement, the Stockholder has delivered to Parent a proxy in the form
attached hereto as Exhibit A (the “Proxy”) with respect to the
Shares. Such Proxy shall be irrevocable
to the fullest extent permitted by Applicable Law and shall terminate upon the
termination of this Agreement.
7. No Solicitation. The Stockholder shall, and shall cause its
affiliates that it controls and its and its control affiliates’ respective
directors, officers, employees, investment bankers, attorneys, financial and
other advisors or other representatives not to, directly or indirectly, (i)
solicit, initiate, knowingly encourage, or induce the making, submission or
announcement of, an Acquisition Proposal, (ii) furnish to any Person (other
than Parent, BV Sub, Merger Sub or any designees of Parent, BV Sub or Merger
Sub) any non-public information relating to the Company or any of its
Subsidiaries, or afford access to the business, properties, assets, books or
records of the Company or any of its Subsidiaries to any Person (other than
Parent, BV Sub, Merger Sub or any designees of Parent, BV Sub or Merger Sub),
or take any other action intended to assist or facilitate any inquiries or the
making of any proposal that constitutes or could reasonably be expected to lead
to an Acquisition Proposal, (iii) participate or engage in discussions or
negotiations with any Person with respect to an Acquisition Proposal (other
than to notify such Person as to the existence of this provision), (iv)
approve, endorse or recommend an Acquisition Proposal, (v) enter into any
letter of intent, memorandum of understanding or other agreement, contract or
arrangement contemplating or otherwise relating to an Acquisition Transaction,
or (vi) terminate, amend or waive any rights under any “standstill” or other
similar
92
agreement between the
Stockholder and any Person (other than Parent).
The Stockholder shall immediately cease any and all existing activities,
discussions or negotiations with any persons (other than Parent and its
affiliates and representatives) conducted heretofore with respect to any
Acquisition Proposal. Without limiting
the generality of the foregoing, the Stockholder acknowledges and hereby agrees
that any violation of the restrictions set forth in this Section 7 by the
Stockholder or any representatives of the Stockholder shall be deemed to be a
breach of this Section 7 by the Stockholder.
The Stockholder shall not enter into any letter of intent or similar
document or any agreement contemplating or otherwise relating to an Acquisition
Proposal unless and until this Agreement is terminated pursuant to its terms.
8.No Transfers During Voting Period. The Stockholder agrees that during the Voting
Period, except as expressly contemplated by the terms of this Agreement, such
Stockholder shall not, directly or indirectly,
(i) sell, transfer, tender, pledge, encumber, assign or otherwise
dispose of (including by merger, testamentary disposition, interspousal
disposition pursuant to spousal domestic relations proceedings or otherwise, or
otherwise by operation of law) (collectively, “Transfer”) any of the
Shares, or enter into any contract, option or other agreement to Transfer any
of the Shares, or otherwise cause or permit the Transfer of any Shares, (ii)
grant any proxies or powers of attorney or enter into any voting trust or other
similar agreements or arrangements with respect to any Shares; (iii) request
that the Company register the Transfer of any certificate or uncertificated
interest representing any of the Shares, or (iv) take any action that would
have the effect of preventing, impeding, interfering with or adversely
affecting its ability to perform its obligations under this Agreement. The Stockholder hereby agrees that, in order
to ensure compliance with the restrictions referred to herein, the Company may
issue appropriate “stop transfer” instructions to its transfer agent in respect
of the Shares. Notwithstanding the
foregoing or anything to the contrary set forth in this Agreement, the
Stockholder may surrender shares in connection with “cashless” or net exercise
provisions of Company Options or Warrants to the extent necessary to effect
exercises thereof (including the payment of any taxes required to be withheld
and paid with respect to such exercises).
9. Acquisition of Additional
Shares.
(a) At all times during the period
commencing with the execution and delivery of this Agreement and continuing
until the Expiration Date, the Stockholder shall promptly notify Parent of the
number of any additional shares of Company Common Stock and the number and type
of any other voting securities of the Company acquired by the Stockholder, if
any, after the date hereof.
Notwithstanding anything to the contrary in this Agreement, nothing in
this Agreement shall obligate the Stockholder to exercise any option, warrant
or other right to acquire Shares.
(b) In the event of a stock dividend or
distribution, or any change in the Shares by reason of any stock dividend or
distribution, split-up, recapitalization, combination, exchange of shares or
the like, the term “Shares” shall be deemed to refer to and include the Shares
as well as all such stock dividends and distributions and any securities into
which or for which any or all of the Shares may be changed or exchanged or
which are received in such transaction.
93
10. No Ownership Interest. Nothing contained in this Agreement shall be
deemed to vest in Parent any direct or indirect ownership or incidence of
ownership of or with respect to any Shares.
Except as provided in this Agreement, all rights, ownership and economic
benefits relating to the Shares shall remain vested in and belong to the
Stockholder.
11. Disclosure.
The Stockholder hereby agrees to permit Parent to publish and disclose
in the Registration Statement and the Proxy Statement/Prospectus (including all
documents and schedules filed with the SEC), and in any press release or other
disclosure document which Parent reasonably determines to be necessary or
desirable to comply with applicable law or the rules and regulations of The New
York Stock Exchange in connection with the Merger and any transactions related
thereto, the Stockholder’s identity and ownership of the Shares and the nature
of the Stockholder’s commitments, arrangements and understandings under this
Agreement, provided that any public announcement or disclosure is made in
accordance with the terms of the Merger Agreement and the requirements of
Applicable Law, subject to Parent using its reasonable best efforts to consult
with the Stockholder and giving the Stockholder the right to review and comment
upon any such disclosure. In addition,
the Stockholder will cooperate with Parent in connection with the filing of any
Schedule 13D or amendment thereto that Parent reasonably determines is required
under the Exchange Act in connection with this Agreement.
12. Consent and Waiver. The Stockholder hereby gives any consents
or waivers that are reasonably required for the consummation of the Merger
under the terms of any agreement or instrument to which the Stockholder is a
party. Without limiting the generality
of or effect of the foregoing, the Stockholder hereby waives any and all rights
to contest or object to the execution and delivery of the Merger Agreement, the
actions of the Board of Directors of the Company in approving and recommending
the Merger, the consummation of the Merger and the other transactions
contemplated by the Merger Agreement, or to seek damages or other legal or
equitable relief in connection therewith.
From and after the Effective Time, the Stockholder’s right to receive
its portion of the Merger Consideration on the terms and subject to the
conditions set forth in the Merger Agreement shall constitute the Stockholder’s
sole and exclusive right against the Company and/or Parent or Merger Sub in
respect of the Stockholder’s status as a stockholder of the Company.
13. Confidentiality. The Stockholder shall hold any
information regarding this Agreement and the Merger in strict confidence and
shall not divulge any such information to any third person (except to
affiliates and to its limited partners, investment bankers, attorneys,
financial and other advisors) until the Parent has publicly disclosed the
Merger, except for disclosures which the Stockholder’s legal counsel advises
are necessary in order to fulfill such Stockholder’s obligations imposed by
law, in which event the Stockholder shall give prior notice of such disclosure
to Parent as promptly as practicable.
Subject to the exception in the immediately preceding sentence, neither
the Stockholder, nor any of its affiliates shall issue or cause the publication
of any press release or other public announcement with respect to this
Agreement, the Merger, the Merger Agreement or other transactions contemplated
thereby.
14. Termination. This
Agreement shall automatically terminate (without requirement of further action
or notice) on the Expiration Date.
94
15. Miscellaneous.
(a) This Agreement may be amended,
modified or supplemented only by written agreement of the parties.
(b) Any failure of the Stockholder, on
the one hand, or Parent and Merger Sub, on the other hand, to comply with any
obligation, covenant, agreement or condition herein may be waived by Parent
(with respect to any failure by the Stockholder) or the Stockholder (with
respect to any failure by Parent or Merger Sub), respectively, only by a
written instrument signed by the party granting such waiver, but such waiver or
failure to insist upon strict compliance with such obligation, covenant,
agreement or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure.
Whenever this Agreement requires or permits consent by or on behalf of
any party hereto, such consent shall be given in writing in a manner consistent
with the requirements for a waiver of compliance as set forth in this Section
15(b).
(c) All notices and other communications
hereunder shall be in writing and shall be delivered personally by overnight
courier or similar means or sent by facsimile with written confirmation of
receipt, to the parties at the addresses specified below (or at such other
address for a party as shall be specified by like notice. Any such notice shall
be effective upon receipt, if personally delivered or on the next business day
following transmittal if sent by confirmed facsimile. Notices, including oral
notices, shall be delivered as follows:
if to the Stockholder, at the address set forth on the
signature page, with a copy to the address provided
thereto (if blank no such copy shall be required).
if to Parent, BV
Sub or Merger Sub, to:
NAVTEQ Corporation
222 Merchandise Mart, Suite 900 Chicago, Illinois60654
Attention: Lawrence M. Kaplan
Facsimile: 312-894-7212
with a copy to:
Pepper Hamilton LLP
600 Fourteenth Street, N.W. Washington, D.C.20005
Attention: Thomas L. Hanley
Facsimile: 202-220-1665
(d) Neither this Agreement nor any right,
interest or obligation hereunder shall be assigned by either of the parties
hereto without the prior written consent of the other party. This Agreement
shall be binding upon and inure to the benefit of Parent and Merger Sub and its
and their successors and permitted assigns and shall be binding upon the
Stockholder and the
95
Stockholder’s heirs, successors and assigns by will or
by the laws of descent. This Agreement is not intended to confer any rights or
remedies hereunder upon any other person except the parties hereto.
(e) This agreement shall be governed by
and construed in accordance with the laws of the State of Delaware, without
giving effect to any conflicts of law provisions.
(f) EACH PARTY HEREBY IRREVOCABLY WAIVES
AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR
OTHERWISE) ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE,
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING IN WHOLE OR IN PART UNDER,
RELATED TO, BASED ON, OR IN CONNECTION WITH, THIS AGREEMENT OR THE SUBJECT
MATTER HEREOF, WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER SOUNDING
IN TORT OR CONTRACT OR OTHERWISE.
(g) Each of the parties hereto (i)
irrevocably consents to the jurisdiction and venue of the Delaware Court of
Chancery or any court of the United States located in the State of Delaware in
the event any dispute arises out of this Agreement or any of the transactions
contemplated hereby, (ii) agrees that it will not attempt to deny or defeat
such personal jurisdiction by motion or other request for leave from any such
court, (iii) agrees that it will not bring any action relating to this
Agreement or any of the transactions contemplated by this Agreement in any
court other than the Delaware Court of Chancery or, if under Applicable Law
exclusive jurisdiction over such matter is vested in the federal courts, any
court of the United States located in the State of Delaware and (iv) consents
to service being made through the notice procedures set forth in Section 15(c). Each party hereby agrees that service of any
process, summons, notice or document by U.S. registered mail to the respective
addresses set forth herein for the delivery of notices generally shall be
effective service of process for any legal proceeding in connection with this
Agreement or the transactions contemplated hereby.
(h) This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
(i) In case any one or more of the
provisions contained in this Agreement should be finally determined to be
invalid, illegal or unenforceable in any respect against a party hereto, it
shall be adjusted if possible to effect the intent of the parties. In any event, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any
way be affected or impaired thereby, and such invalidity, illegality or
unenforceability shall only apply as to such party in the specific jurisdiction
where such final determination shall have been made.
(j) The section headings contained in
this Agreement are solely for the purpose of reference and shall not in any way
affect the meaning or interpretation of this Agreement. The word “including”
shall be deemed to mean “including without limitation.”
96
(k) This Agreement embodies the entire
agreement and understanding of the parties hereto in respect of the subject
matter contained herein. There are no
representations, promises, warranties, covenants, or undertakings, other than
those expressly set forth or referred to herein and therein.
(l) The parties hereby acknowledge and
agree that the failure of any party to perform its agreements and covenants
hereunder, including its failure to take all actions as are necessary on its
part in accordance with the terms and conditions of this Agreement to
facilitate the Merger, will cause irreparable injury to the other parties, for
which damages, even if available, will not be an adequate remedy. Accordingly, each party hereby consents to
the issuance of injunctive relief by any court of competent jurisdiction to
compel performance of such party’s obligations and to the granting by any court
of the remedy of specific performance of its obligations hereunder.
(m) Except as otherwise provided herein,
any and all remedies herein expressly conferred upon a party shall be deemed
cumulative with and not exclusive of any other remedy conferred hereby, or by
law or equity upon such party, and the exercise by a party of any one remedy
shall not preclude the exercise of any other remedy.
(n) All costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall
be paid by the party incurring such expenses.
(o) Each party to this Agreement has been
represented by counsel during the preparation and execution of this Agreement,
and therefore waives any rule of construction that would construe ambiguities
against the party drafting the agreement.
(p) From time to time, at the other party’s
request and without further consideration, each party hereto shall execute and
deliver such additional documents and take all such further action as may be
reasonably necessary to consummate and make effective, in the most expeditious
manner practicable, the transactions contemplated by this Agreement.
[signature page
follows]
97
IN WITNESS WHEREOF, the parties hereto have signed
this Stockholder Voting Agreement, in the case of each of Parent, BV Sub and
Merger Sub, by its duly authorized officer, as of the date first above written.
NAVTEQ CORPORATION
NAVTEQ Holdings B.V.
By:
By:
Name:
Name:
Title:
Title:
NAVTEQ Holdings Delaware, Inc.
By:
Name:
Title:
STOCKHOLDER
SPOUSE SIGNATURE (if applicable)
Name (print)
Name (print)
Signature
Signature
Stockholder Address:
with a copy to:
Shares Beneficially Owned:
NUMBER OF OUTSTANDING SHARES OF COMMON STOCK BENEFICIALLY OWNED BY
STOCKHOLDER:
______________
NUMBER OF SHARES SUBJECT TO
COMPANY OPTIONS HELD BY STOCKHOLDER:
______________
NUMBER OF SHARES SUBJECT TO COMPANY WARRANTS
HELD BY STOCKHOLDER:
______________
98
EXHIBIT A
IRREVOCABLE PROXY
The undersigned Stockholder (the “Stockholder”) of Traffic.com, Inc., a Delaware corporation
(the “Company”), hereby
irrevocably (to the fullest extent permitted by law) appoints each of Judson D.
Green, David Mullen and Lawrence M. Kaplan of NAVTEQ Corporation, as the sole
and exclusive attorneys and proxies of the undersigned, with full power of
substitution and resubstitution, to vote and exercise all voting and related
rights (to the full extent that the undersigned is entitled to do so) with
respect to all of the shares of capital stock of the Company that now are or
hereafter may be beneficially owned by the undersigned, and any and all other
shares or securities of the Company issued or issuable in respect thereof on or
after the date hereof (collectively, the “Shares”), in accordance with
the terms of this Proxy. The Shares
beneficially owned by the Stockholder as of the date of this Proxy are listed
on the signature page of this Proxy, along with the number(s) of the stock
certificate(s) representing such Shares.
Upon the Stockholder’s execution of this Proxy, any and all prior
proxies given by the undersigned with respect to any Shares are hereby revoked
and terminated, and the Stockholder agrees not to grant any subsequent proxies
with respect to the Shares until after the Expiration Date (as defined below).
This Proxy is irrevocable (to the fullest extent permitted by law), is
coupled with an interest and is granted pursuant to that certain Stockholder
Voting Agreement of even date herewith (the “Voting Agreement”) by and
among NAVTEQ Corporation, a Delaware corporation (the “Parent”), NAVTEQ
Holdings B.V., a corporation organized under the laws of The Netherlands (“BV
Sub”), NAVTEQ Holdings Delaware, Inc., a Delaware corporation and
wholly-owned subsidiary of Parent (“Merger Sub”), the Company and the
undersigned Stockholder of the Company, and is granted in consideration of
Parent, BV Sub and Merger Sub entering into that certain Agreement and Plan of
Merger of even date herewith (as it may hereafter be amended from time to time
in accordance with the provisions thereof, the “Merger Agreement”) by and among Parent, BV Sub, Merger Sub and
the Company. The Merger Agreement
provides for the merger of the Company with and into Merger Sub (the “Merger”),
and Stockholder will be entitled to receive a portion of the consideration
payable in connection with the Merger.
The term “Expiration Date”,
as used in this Proxy, shall mean the earlier to occur of (i) such date and
time as the Merger Agreement shall have been validly terminated pursuant to its
terms, (ii) such date and time as the Merger shall become effective in
accordance with the terms and conditions set forth in the Merger Agreement or
(iii) the occurrence of a Material Adverse Amendment. The term “Material Adverse Amendment”
means an amendment to the Merger Agreement that (i) materially and adversely
affects the Stockholder and (ii) is approved by the Company’s Board of
Directors notwithstanding the fact that in such vote the Stockholder’s nominee
on the Company’s Board of Directors voted against such amendment.
The attorneys and proxies named above, and each of them, are hereby
authorized and empowered by the Stockholder, at any time prior during the
Voting Period (as defined in the Voting Agreement), to act as the Stockholder’s
attorney and proxy to vote all of the Shares, and to exercise all voting,
consent and similar rights of the undersigned with respect to all of the Shares
(including, without limitation, the power to execute and deliver written
consents) at every
annual
or special meeting of stockholders of the Company (and at every adjournment or
postponement thereof), and in every written consent in lieu of such meeting:
(a) in favor of the
approval and adoption of the Merger Agreement and approval of the Merger, not
including any Material Adverse Amendment;
(b) against the approval
of any action, proposal, transaction or agreement that would result, or could
reasonably be expected to result, in any material respect in a breach of any
covenant, representation or warranty or any other obligation or agreement of
the Company contained in the Merger Agreement; and
(c) against any proposal
made in opposition to, or in competition with, consummation of the Merger and
the other transactions contemplated by the Merger Agreement, including any
Acquisition Proposal (as defined in the Merger Agreement).
The attorneys and proxies named above may not exercise this Proxy on
any other matter except as provided in clauses (a), (b) and (c) above. The Stockholder may vote the Shares on all
other matters. Notwithstanding anything
in this Proxy to the contrary, if the Stockholder is a director or officer of
the Company, nothing contained in this Proxy shall not limit or restrict any
actions taken by the Stockholder in his or her capacity as a director or
officer of the Company either (i) pursuant to Applicable Law or (ii) in
exercising the Company’s rights or fulfilling the Company’s obligations under
the Merger Agreement (to the extent permitted or required by the Merger
Agreement).
Any obligation of Stockholder hereunder shall be binding upon the
successors and assigns of Stockholder.
This Proxy shall terminate, and be of no further force and effect,
automatically upon the Expiration Date.
[signature page follows]
2
IN WITNESS WHEREOF, the Stockholder has caused this Irrevocable Proxy
to be duly executed as of the day and year first above written.
STOCKHOLDER:
Signature:
Name:
Address
Shares
Beneficially Owned:
NUMBER OF OUTSTANDING SHARES OF
COMMON STOCK BENEFICIALLY OWNED BY STOCKHOLDER:
______________
NUMBER OF SHARES SUBJECT TO
COMPANY OPTIONS HELD BY STOCKHOLDER:
______________
NUMBER OF SHARES SUBJECT TO
COMPANY WARRANTS HELD BY STOCKHOLDER:
______________
Exhibit A-2
STOCKHOLDER
VOTING AGREEMENT
This STOCKHOLDER VOTING
AGREEMENT (this “Agreement”) is made and entered into as of November 5,2006 by and among NAVTEQ Corporation, a Delaware corporation (the “Parent”),
NAVTEQ Holdings B.V., a corporation organized under the laws of The Netherlands
(“BV Sub”), NAVTEQ Holdings Delaware, Inc., a Delaware corporation and
wholly-owned subsidiary of Parent (“Merger Sub”), Traffic.com, Inc., a
Delaware corporation (the “Company”), and the person whose name appears
on the signature page hereto as a Stockholder (the “Stockholder”) of the
Company. Capitalized terms used and not
otherwise defined herein, and defined in the Merger Agreement (as defined
below), shall have the respective meanings ascribed to them in the Merger
Agreement.
RECITALS
WHEREAS,
concurrently with the execution of this Agreement, the Company, Parent, BV Sub
and Merger Sub are entering into an Agreement and Plan of Merger of even date
herewith (the “Merger Agreement”), pursuant to which the parties thereto
have agreed, upon the terms and subject to the conditions set forth therein, to
the Merger;
WHEREAS, the
Stockholder is the beneficial owner of such number of shares of common stock of
the Company, par value $0.01 per share (the “Company Common Stock”), set
forth on the signature page hereto, and options, warrants or other rights to
acquire such number of shares of Company Common Stock as set forth on the
signature page hereto;
WHEREAS, the
Stockholder has expressed its intention to elect to receive the Merger
Consideration in respect of such Shares (as defined below) beneficially owned
by such Stockholder entirely in shares of Parent Common Stock through the
making of a Stock Election;
WHEREAS, as a
material inducement and a condition to Parent, BV Sub and Merger Sub entering
into the Merger Agreement, Parent has requested that the Stockholder agree, and
the Stockholder has agreed (in the Stockholder’s capacity as such), for the
benefit of Parent, BV Sub and Merger Sub, to enter into this Agreement to facilitate
the consummation of the Merger;
NOW, THEREFORE, in
consideration of the foregoing premises and the representations, warranties,
covenants and agreements set forth herein, as well as other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged and
accepted, and intending to be legally bound hereby, Parent, BV Sub, Merger Sub
and the Stockholder hereby agree as follows:
1. Certain Definitions. For purposes of this Agreement:
“Expiration Date” shall mean the earlier
to occur of (a) such date and time as the Merger Agreement shall have been
validly terminated pursuant to its terms, (b) the Effective Time, or (c) the
occurrence of a Material Adverse Amendment; provided, however, that the
obligations of the
99
Stockholder pursuant to Section 9 hereof shall survive
the Expiration Date and continue for such time as provided in Section 9.
“Material
Adverse Amendment” means an amendment to the Merger Agreement that (i)
materially and adversely affects the Stockholder and (ii) is approved by the
Company’s Board of Directors notwithstanding the fact that in such vote the
Stockholder’s nominee on the Company’s Board of Directors voted against such
amendment.
“Shares”
means (a) all equity securities of the Company (including all shares of Company
Common Stock, and all options, warrants and other rights to acquire shares of
Company Common Stock) beneficially owned by the Stockholder as of the date of
this Agreement and (b) all additional equity securities of the Company (including
all additional options, warrants and other rights to acquire shares of Company
Common Stock) of which Stockholder acquires beneficial ownership during the
period commencing with the execution and delivery of this Agreement until the
Expiration Date; provided, however, that nothing herein shall obligate the
holder to acquire additional equity securities of the Company, by exercise of
options, warrants or other rights to acquire, or otherwise.
“Voting Period”
means the period commencing on the date of this Agreement and continuing until
the Expiration Date.
2. Representations
and Warranties of Stockholder.
The Stockholder represents and warrants to Parent, BV Sub and Merger Sub
as follows:
(a) The Stockholder is the beneficial
owner (as such term is defined in Rule 13d-3 under the Exchange Act, provided,
however, that for the purposes of this Agreement, such term shall include any
Shares that may be acquired more than sixty (60) days from the date hereof) of
all of the Shares. The Stockholder has
sole voting power and the sole power of disposition with respect to all of the
Shares, with no limitations, qualifications or restrictions on such rights
(subject to applicable federal securities laws and the terms of this
Agreement). Such Shares constitute all of
the Shares beneficially owned by the Stockholder. The Shares are held by the Stockholder, or by
a nominee or custodian for the benefit of the Stockholder, free and clear of
all mortgages, claims, charges, liens, security interests, pledges, options, proxies,
voting trusts or agreements (“Encumbrances”), except for any such
Encumbrances arising hereunder and Encumbrances applicable to all
securityholders alike, such as the restrictions upon resale imposed by the
Securities Act.
(b) The Stockholder has the legal
capacity, power and authority, as applicable, to enter into and perform all of
the Stockholder’s obligations under this Agreement. This Agreement has been duly and validly
executed and delivered by the Stockholder and constitutes (assuming due execution
and delivery of this Agreement by Parent, BV Sub and Merger Sub) a valid and
binding agreement of the Stockholder, enforceable against the Stockholder in
accordance with its terms, except to the extent that its enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting the enforcement of creditors’ rights generally or by
general equitable principles. The
execution, delivery and performance of this Agreement by the Stockholder will
not violate any agreement
100
or court order to which the Stockholder is a party or
is subject, including, without limitation, any voting agreement or voting
trust, except for any of the foregoing as would not impair the Stockholder’s
ability to perform its obligations under this Agreement in any material
respect.
(c) Except for any applicable filings
under the Exchange Act, no filing with, and no permit, authorization, consent
or approval of, any Governmental Authority or any other Person is required to
be made or obtained by the Stockholder for the execution of this Agreement by
the Stockholder, compliance by the Stockholder with the provisions hereof or
performance of the Stockholder’s obligations hereunder.
(d) The Stockholder understands and
acknowledges that Parent is entering into, and causing BV Sub and Merger Sub to
enter into, the Merger Agreement in reliance upon the Stockholder’s concurrent
execution and delivery of this Agreement, including Parent’s reliance on the
Stockholder’s representations and warranties contained herein.
3. Representations and Warranties of the Company. The Company hereby represents and warrants to
Parent, BV Sub and Merger Sub as follows:
(a) The Company has the corporate power
and authority to enter into and perform all of its obligations under this
Agreement. This Agreement has been duly
and validly executed and delivered by the Company and constitutes a valid and
binding agreement of the Company, enforceable against the Company in accordance
with its terms, except to the extent that its enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting the enforcement of creditors’ rights generally or by general
equitable principles.
(b) Except for filings under the Exchange
Act, no filing with, and no permit, authorization, consent or approval of, any
Governmental Authority is necessary for the execution of this Agreement by the
Company, compliance by the Company with the provisions hereof or performance of
its obligations hereunder.
4. Representations and Warranties of Parent, BV Sub and Merger Sub. Parent, BV Sub and Merger Sub hereby
represent and warrant to the Stockholder as follows:
(a) Parent, BV Sub and Merger Sub have
the corporate power and authority to enter into and perform all of their
respective obligations under this Agreement.
This Agreement has been duly and validly executed and delivered by
Parent, BV Sub and Merger Sub and constitutes a valid and binding agreement of
each of them, enforceable against them in accordance with its terms, except to
the extent that its enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting the enforcement
of creditors’ rights generally or by general equitable principles.
(b) Except for filings under the Exchange
Act, no filing with, and no permit, authorization, consent or approval of, any
Governmental Authority is necessary for the execution of this Agreement by
Parent, BV Sub or Merger Sub, compliance by Parent, BV Sub and Merger Sub with
the provisions hereof or performance of their obligations hereunder.
101
5. Voting Agreement.
(a) The Stockholder hereby irrevocably
and unconditionally agrees that, during the Voting Period, the Stockholder
shall (i) appear (in person or by proxy) at any meeting (whether annual or
special and whether or not an adjourned or postponed meeting) of the holders of
Company Common Stock, properly called, or otherwise cause the Shares then
beneficially owned by the Stockholder to be counted as present thereat for
purposes of establishing a quorum, and (ii) vote or provide a written consent
with respect to all Shares (or will cause all Shares to be voted, or cause a
written consent to be provided with respect to all Shares) (A) in favor of
adoption and approval of the Merger Agreement and approval of the Merger, not
including any Material Adverse Amendment, (B) against any action, proposal,
transaction or agreement that would result, or could reasonably be expected to
result, in any material respect in a breach of any covenant, representation or
warranty or any other obligation or agreement of the Company contained in the
Merger Agreement, and (C) against any proposal made in opposition to, or in
competition with, consummation of the Merger and the other transactions
contemplated by the Merger Agreement, including any Acquisition Proposal. In all other matters, the Shares shall be
voted by and in the manner determined by the Stockholder.
(b) Notwithstanding any other provision
of this Agreement, if the Stockholder is a director or officer of the Company,
it is expressly understood and agreed that this Agreement shall not limit or
restrict any actions taken by the Stockholder in his or her capacity as a
director or officer of the Company either (i) pursuant to Applicable Law or
(ii) in exercising the Company’s rights or fulfilling the Company’s obligations
under the Merger Agreement (to the extent permitted or required by the Merger
Agreement).
6. Grant of Irrevocable Proxy. Concurrently with the execution and delivery
of this Agreement, the Stockholder has delivered to Parent a proxy in the form
attached hereto as Exhibit A (the “Proxy”) with respect to the
Shares. Such Proxy shall be irrevocable
to the fullest extent permitted by Applicable Law and shall terminate upon the
termination of this Agreement.
7. No Solicitation. The Stockholder shall, and shall cause its
affiliates that it controls and its and its control affiliates’ respective
directors, officers, employees, investment bankers, attorneys, financial and
other advisors or other representatives not to, directly or indirectly, (i)
solicit, initiate, knowingly encourage, or induce the making, submission or
announcement of, an Acquisition Proposal, (ii) furnish to any Person (other
than Parent, BV Sub, Merger Sub or any designees of Parent, BV Sub or Merger
Sub) any non-public information relating to the Company or any of its
Subsidiaries, or afford access to the business, properties, assets, books or
records of the Company or any of its Subsidiaries to any Person (other than
Parent, BV Sub, Merger Sub or any designees of Parent, BV Sub or Merger Sub),
or take any other action intended to assist or facilitate any inquiries or the
making of any proposal that constitutes or could reasonably be expected to lead
to an Acquisition Proposal, (iii) participate or engage in discussions or
negotiations with any Person with respect to an Acquisition Proposal (other
than to notify such Person as to the existence of this provision), (iv)
approve, endorse or recommend an Acquisition Proposal, (v) enter into any
letter of intent, memorandum of understanding or other agreement, contract or
arrangement contemplating or otherwise relating to an Acquisition
102
Transaction, or (vi)
terminate, amend or waive any rights under any “standstill” or other similar
agreement between the Stockholder and any Person (other than Parent). The Stockholder shall immediately cease any
and all existing activities, discussions or negotiations with any persons
(other than Parent and its affiliates and representatives) conducted heretofore
with respect to any Acquisition Proposal.
Without limiting the generality of the foregoing, the Stockholder
acknowledges and hereby agrees that any violation of the restrictions set forth
in this Section 7 by the Stockholder or any representatives of the Stockholder
shall be deemed to be a breach of this Section 7 by the Stockholder. The Stockholder shall not enter into any
letter of intent or similar document or any agreement contemplating or
otherwise relating to an Acquisition Proposal unless and until this Agreement
is terminated pursuant to its terms.
8.No Transfers During Voting Period. The Stockholder agrees that during the Voting
Period, except as expressly contemplated by the terms of this Agreement, such
Stockholder shall not, directly or indirectly,
(i) sell, transfer, tender, pledge, encumber, assign or otherwise
dispose of (including by merger, testamentary disposition, interspousal
disposition pursuant to spousal domestic relations proceedings or otherwise, or
otherwise by operation of law) (collectively, “Transfer”) any of the
Shares, or enter into any contract, option or other agreement to Transfer any
of the Shares, or otherwise cause or permit the Transfer of any Shares, (ii)
grant any proxies or powers of attorney or enter into any voting trust or other
similar agreements or arrangements with respect to any Shares; (iii) request
that the Company register the Transfer of any certificate or uncertificated
interest representing any of the Shares, or (iv) take any action that would
have the effect of preventing, impeding, interfering with or adversely
affecting its ability to perform its obligations under this Agreement. The Stockholder hereby agrees that, in order
to ensure compliance with the restrictions referred to herein, the Company may
issue appropriate “stop transfer” instructions to its transfer agent in respect
of the Shares. Notwithstanding the
foregoing or anything to the contrary set forth in this Agreement, the
Stockholder may surrender shares in connection with “cashless” or net exercise
provisions of Company Options or Warrants to the extent necessary to effect
exercises thereof (including the payment of any taxes required to be withheld
and paid with respect to such exercises).
9. Agreement Regarding Stock
Election; Lock-Up.
(a) The Stockholder agrees that, in
connection with the consummation of the Merger, it shall elect to receive the
Merger Consideration in respect of such Shares beneficially owned by such
Stockholder entirely in shares of Parent Common Stock (the “Acquired Parent
Shares”) through the making of a Stock Election under the Merger
Agreement. The Stockholder agrees that
it shall submit one or more Form(s) of Election designating a Stock Election
with respect to all of the Shares and, in the event that the Stockholder should
fail to submit a Form or Form(s) of Election with such designation with respect
to any or all of the Shares, the Stockholder authorizes Parent and the Exchange
Agent to submit a Form or Form(s) of Election with such designation in the name
and on behalf of the Stockholder.
(b) The Stockholder agrees that from the
Effective Time and continuing for a period of six (6) months following the
Effective Time (the “Lock-Up Expiration Date”), such Stockholder shall
not, directly or indirectly, (i) Transfer any of the Acquired Parent Shares, or
enter into any contract, option or other agreement to Transfer any of the
Acquired Parent Shares,
103
or otherwise cause or permit the Transfer of any
Acquired Parent Shares or (ii) request that the Company register the Transfer
of any certificate or uncertificated interest representing any of the Acquired
Parent Shares. The Stockholder hereby
agrees that, in order to ensure compliance with the restrictions referred to
herein, the Company may issue appropriate “stop transfer” instructions to its
transfer agent in respect of the Acquired Parent Shares. The restrictions on transfer provided in this
Section 9(b) shall be in addition to any restrictions on transfer of the
Acquire Parent Shares imposed by Applicable Law.
(c) Notwithstanding anything to the
contrary contained herein, the Stockholder may Transfer Acquired Parent Shares
(i) if such transfer occurs by operation of law or statutes governing the
effects of a merger, (ii) as a distribution to limited partners of the
Stockholder (provided, however, that such limited partners agree in writing to
be bound by the applicable terms of this Section 9), (iii) at any time after
Parent consummates a transaction, or enters into an agreement, that would cause
or result in a Change In Control of Parent; or (iv) at any time after any
agreement that imposes a Transfer restriction on Parent Acquired Shares by any
other stockholder of the Company has terminated or been amended, or any rights
of Parent or obligations of such stockholder under such agreement have been
waived. In addition, the Stockholder may
Transfer up to that number of shares (A) not in excess of five percent (5%) of
the Acquired Parent Shares beneficially owned by the Stockholder at the
Effective Time if the price per share of Parent common stock as reported on the
New York Stock Exchange (“NYSE”) on the date of initiation of such
Transfer is not less than $40, (B) not in excess of 15 percent (15%) (including
any shares Transferred pursuant to the immediately preceding clause (A)) of the
Acquired Parent Shares beneficially owned by the Stockholder at the Effective
Time if the price per share of Parent common stock as reported on the NYSE on
the date of the initiation of such Transfer is not less than $45, and (C) not
in excess of 25 percent (25%) (including any shares Transferred pursuant to the
immediately preceding clauses (A) and (B)) of the Acquired Parent Shares
beneficially owned by the Stockholder at the Effective Time if the price per
share of Parent common stock as reported on the NYSE on the date of the
initiation of such Transfer is not less than $50. For purposes of this paragraph, “Change In
Control” means (a) the direct or indirect acquisition (except for
transactions described in clause (b) of this paragraph below), whether in one
or a series of transactions by any person, or related persons of (i) ownership,
beneficial or otherwise, of issued and outstanding shares of capital stock of a
party, the result of which acquisition is that such person or such group
possesses 50% or more of the combined voting power of all then-issued and
outstanding capital stock of such party, or (ii) the power to elect, appoint,
or cause the election or appointment of at least a majority of the members of
the board of directors (or such other governing body in the event a party or
any successor entity is not a corporation); (b) a merger, consolidation or
other reorganization or recapitalization of a party with a person or a direct
or indirect subsidiary of such person, provided
that the result of such merger, consolidation or other
reorganization or recapitalization, whether in one or a series of related
transactions, is that the holders of the outstanding voting stock of such party
immediately prior to such consummation do not possess, whether directly or
indirectly, immediately after the consummation of such transaction, in excess
of 50% of the combined voting power of all then-issued and outstanding
stock of the merged, consolidated, reorganized or recapitalized person, its
direct or indirect parent, or the surviving person of such transaction; (c) the
stockholders of a party approve a plan of complete liquidation of such party;
or (d) a sale
104
or disposition, whether
in one or a series of transactions, of all or substantially all of a party’s
assets.
10. Acquisition of Additional
Shares.
(a) At all times during the period
commencing with the execution and delivery of this Agreement and continuing
until the Expiration Date, the Stockholder shall promptly notify Parent of the
number of any additional shares of Company Common Stock and the number and type
of any other voting securities of the Company acquired by the Stockholder, if
any, after the date hereof.
Notwithstanding anything to the contrary in this Agreement, nothing in
this Agreement shall obligate the Stockholder to exercise any option, warrant
or other right to acquire Shares.
(b) In the event of a stock dividend or
distribution, or any change in the Shares by reason of any stock dividend or
distribution, split-up, recapitalization, combination, exchange of shares or
the like, the term “Shares” shall be deemed to refer to and include the Shares
as well as all such stock dividends and distributions and any securities into
which or for which any or all of the Shares may be changed or exchanged or
which are received in such transaction.
11. No Ownership Interest. Nothing contained in this Agreement shall be
deemed to vest in Parent any direct or indirect ownership or incidence of ownership
of or with respect to any Shares. Except
as provided in this Agreement, all rights, ownership and economic benefits
relating to the Shares shall remain vested in and belong to the Stockholder.
12. Disclosure.
The Stockholder hereby agrees to permit Parent to publish and disclose
in the Registration Statement and the Proxy Statement/Prospectus (including all
documents and schedules filed with the SEC), and in any press release or other
disclosure document which Parent reasonably determines to be necessary or
desirable to comply with applicable law or the rules and regulations of The New
York Stock Exchange in connection with the Merger and any transactions related
thereto, the Stockholder’s identity and ownership of the Shares and the nature
of the Stockholder’s commitments, arrangements and understandings under this
Agreement, provided that any public announcement or disclosure is made in
accordance with the terms of the Merger Agreement and the requirements of
Applicable Law, subject to Parent using its reasonable best efforts to consult
with the Stockholder and giving the Stockholder the right to review and comment
upon any such disclosure. In addition,
the Stockholder will cooperate with Parent in connection with the filing of any
Schedule 13D or amendment thereto that Parent reasonably determines is required
under the Exchange Act in connection with this Agreement.
13. Consent and Waiver. The Stockholder hereby gives any consents
or waivers that are reasonably required for the consummation of the Merger
under the terms of any agreement or instrument to which the Stockholder is a
party. Without limiting the generality
of or effect of the foregoing, the Stockholder hereby waives any and all rights
to contest or object to the execution and delivery of the Merger Agreement, the
actions of the Board of Directors of the Company in approving and recommending
the Merger, the consummation of the Merger and the other transactions
contemplated by the Merger Agreement, or to seek damages or other legal or equitable
relief in connection therewith. From and
after the Effective Time, the Stockholder’s
105
right to receive its
portion of the Merger Consideration on the terms and subject to the conditions
set forth in the Merger Agreement shall constitute the Stockholder’s sole and
exclusive right against the Company and/or Parent or Merger Sub in respect of
the Stockholder’s status as a stockholder of the Company.
14. Confidentiality. The Stockholder shall hold any
information regarding this Agreement and the Merger in strict confidence and
shall not divulge any such information to any third person (except to
affiliates and to its limited partners, investment bankers, attorneys,
financial and other advisors) until the Parent has publicly disclosed the
Merger, except for disclosures which the Stockholder’s legal counsel advises
are necessary in order to fulfill such Stockholder’s obligations imposed by
law, in which event the Stockholder shall give prior notice of such disclosure
to Parent as promptly as practicable.
Subject to the exception in the immediately preceding sentence, neither
the Stockholder, nor any of its affiliates shall issue or cause the publication
of any press release or other public announcement with respect to this
Agreement, the Merger, the Merger Agreement or other transactions contemplated
thereby.
15. Termination. This
Agreement shall automatically terminate (without requirement of further action
or notice) on the Expiration Date; provided, however, that the provisions of
Section 9(b) shall continue in effect after the Expiration Date until the
Lock-Up Expiration Date and the provisions of Section 13 and Section 16 shall
continue in effect with respect to Section 9(b) until the Lock-Up Termination
Date.
16. Miscellaneous.
(a) This Agreement may be amended,
modified or supplemented only by written agreement of the parties.
(b) Any failure of the Stockholder, on
the one hand, or Parent and Merger Sub, on the other hand, to comply with any
obligation, covenant, agreement or condition herein may be waived by Parent
(with respect to any failure by the Stockholder) or the Stockholder (with
respect to any failure by Parent or Merger Sub), respectively, only by a
written instrument signed by the party granting such waiver, but such waiver or
failure to insist upon strict compliance with such obligation, covenant,
agreement or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure.
Whenever this Agreement requires or permits consent by or on behalf of
any party hereto, such consent shall be given in writing in a manner consistent
with the requirements for a waiver of compliance as set forth in this Section
16(b).
(c) All notices and other communications
hereunder shall be in writing and shall be delivered personally by overnight
courier or similar means or sent by facsimile with written confirmation of
receipt, to the parties at the addresses specified below (or at such other
address for a party as shall be specified by like notice. Any such notice shall
be effective upon receipt, if personally delivered or on the next business day
following transmittal if sent by confirmed facsimile. Notices, including oral
notices, shall be delivered as follows:
if to the Stockholder, at the address set forth on the
signature page, with a copy to the address provided
106
thereto.
if to Parent, BV
Sub or Merger Sub, to:
NAVTEQ Corporation
222 Merchandise Mart, Suite 900 Chicago, Illinois60654
Attention: Lawrence M. Kaplan
Facsimile: 312-894-7212
with a copy to:
Pepper Hamilton LLP
600 Fourteenth Street, N.W. Washington, D.C.20005
Attention: Thomas L. Hanley
Facsimile: 202-220-1665
(d) Neither this Agreement nor any right,
interest or obligation hereunder shall be assigned by either of the parties
hereto without the prior written consent of the other party. This Agreement
shall be binding upon and inure to the benefit of Parent and Merger Sub and its
and their successors and permitted assigns and shall be binding upon the
Stockholder and the Stockholder’s heirs, successors and assigns by will or by
the laws of descent. This Agreement is not intended to confer any rights or
remedies hereunder upon any other person except the parties hereto.
(e) This agreement shall be governed by
and construed in accordance with the laws of the State of Delaware, without
giving effect to any conflicts of law provisions.
(f) EACH PARTY HEREBY IRREVOCABLY WAIVES
AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR
OTHERWISE) ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE,
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING IN WHOLE OR IN PART UNDER,
RELATED TO, BASED ON, OR IN CONNECTION WITH, THIS AGREEMENT OR THE SUBJECT
MATTER HEREOF, WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER SOUNDING
IN TORT OR CONTRACT OR OTHERWISE.
(g) Each of the parties hereto (i)
irrevocably consents to the jurisdiction and venue of the Delaware Court of
Chancery or any court of the United States located in the State of Delaware in
the event any dispute arises out of this Agreement or any of the transactions
contemplated hereby, (ii) agrees that it will not attempt to deny or defeat
such personal jurisdiction by motion or other request for leave from any such
court, (iii) agrees that it will not bring any action relating to this
Agreement or any of the transactions contemplated by this Agreement in any
court other than the Delaware Court of Chancery or, if under Applicable Law
exclusive jurisdiction over such matter is vested in the federal courts, any
court of the United
107
States located in the State of Delaware and (iv)
consents to service being made through the notice procedures set forth in
Section 16(c). Each party hereby agrees
that service of any process, summons, notice or document by U.S. registered
mail to the respective addresses set forth herein for the delivery of notices
generally shall be effective service of process for any legal proceeding in
connection with this Agreement or the transactions contemplated hereby.
(h) This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
(i) In case any one or more of the
provisions contained in this Agreement should be finally determined to be
invalid, illegal or unenforceable in any respect against a party hereto, it
shall be adjusted if possible to effect the intent of the parties. In any event, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any
way be affected or impaired thereby, and such invalidity, illegality or
unenforceability shall only apply as to such party in the specific jurisdiction
where such final determination shall have been made.
(j) The section headings contained in
this Agreement are solely for the purpose of reference and shall not in any way
affect the meaning or interpretation of this Agreement. The word “including”
shall be deemed to mean “including without limitation.”
(k) This Agreement embodies the entire
agreement and understanding of the parties hereto in respect of the subject
matter contained herein. There are no
representations, promises, warranties, covenants, or undertakings, other than
those expressly set forth or referred to herein and therein.
(l) The parties hereby acknowledge and
agree that the failure of any party to perform its agreements and covenants
hereunder, including its failure to take all actions as are necessary on its
part in accordance with the terms and conditions of this Agreement to
facilitate the Merger, will cause irreparable injury to the other parties, for
which damages, even if available, will not be an adequate remedy. Accordingly, each party hereby consents to
the issuance of injunctive relief by any court of competent jurisdiction to
compel performance of such party’s obligations and to the granting by any court
of the remedy of specific performance of its obligations hereunder.
(m) Except as otherwise provided herein,
any and all remedies herein expressly conferred upon a party shall be deemed
cumulative with and not exclusive of any other remedy conferred hereby, or by
law or equity upon such party, and the exercise by a party of any one remedy
shall not preclude the exercise of any other remedy.
(n) All costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall
be paid by the party incurring such expenses; provided, however, that Parent
shall reimburse the reasonable legal fees and expenses incurred by Stockholder
up to a maximum of $20,000.
108
(o) Each party to this Agreement has been
represented by counsel during the preparation and execution of this Agreement,
and therefore waives any rule of construction that would construe ambiguities
against the party drafting the agreement.
(p) From time to time, at the other party’s
request and without further consideration, each party hereto shall execute and
deliver such additional documents and take all such further action as may be
reasonably necessary to consummate and make effective, in the most expeditious
manner practicable, the transactions contemplated by this Agreement.
[signature page
follows]
109
IN WITNESS WHEREOF, the
parties hereto have signed this Stockholder Voting Agreement, in the case of
each of Parent, BV Sub and Merger Sub, by its duly authorized officer, as of
the date first above written.
NAVTEQ CORPORATION
NAVTEQ Holdings B.V.
By:
By:
Name:
Name:
Title:
Title:
NAVTEQ Holdings Delaware, Inc.
By:
Name:
Title:
STOCKHOLDER
Name (print)
Signature
Stockholder Address:
with a copy to:
Shares
Beneficially Owned:
NUMBER OF OUTSTANDING SHARES OF COMMON STOCK BENEFICIALLY OWNED BY
STOCKHOLDER:
______________
NUMBER OF SHARES SUBJECT TO
COMPANY OPTIONS HELD BY STOCKHOLDER:
______________
NUMBER OF SHARES SUBJECT TO COMPANY WARRANTS
HELD BY STOCKHOLDER:
______________
110
EXHIBIT A
IRREVOCABLE PROXY
The undersigned Stockholder (the “Stockholder”) of Traffic.com, Inc., a Delaware corporation
(the “Company”), hereby
irrevocably (to the fullest extent permitted by law) appoints each of Judson D.
Green, David Mullen and Lawrence M. Kaplan of NAVTEQ Corporation, as the sole
and exclusive attorneys and proxies of the undersigned, with full power of
substitution and resubstitution, to vote and exercise all voting and related
rights (to the full extent that the undersigned is entitled to do so) with
respect to all of the shares of capital stock of the Company that now are or
hereafter may be beneficially owned by the undersigned, and any and all other
shares or securities of the Company issued or issuable in respect thereof on or
after the date hereof (collectively, the “Shares”), in accordance with
the terms of this Proxy. The Shares
beneficially owned by the Stockholder as of the date of this Proxy are listed
on the signature page of this Proxy, along with the number(s) of the stock
certificate(s) representing such Shares.
Upon the Stockholder’s execution of this Proxy, any and all prior
proxies given by the undersigned with respect to any Shares are hereby revoked
and terminated, and the Stockholder agrees not to grant any subsequent proxies
with respect to the Shares until after the Expiration Date (as defined below).
This Proxy is irrevocable (to the fullest extent permitted by law), is
coupled with an interest and is granted pursuant to that certain Stockholder
Voting Agreement of even date herewith (the “Voting Agreement”) by and
among NAVTEQ Corporation, a Delaware corporation (the “Parent”), NAVTEQ
Holdings B.V., a corporation organized under the laws of The Netherlands (“BV
Sub”), NAVTEQ Holdings Delaware, Inc., a Delaware corporation and
wholly-owned subsidiary of Parent (“Merger Sub”), the Company and the
undersigned Stockholder of the Company, and is granted in consideration of
Parent, BV Sub and Merger Sub entering into that certain Agreement and Plan of
Merger of even date herewith (as it may hereafter be amended from time to time
in accordance with the provisions thereof, the “Merger Agreement”) by and among Parent, BV Sub, Merger Sub and
the Company. The Merger Agreement
provides for the merger of the Company with and into Merger Sub (the “Merger”),
and Stockholder will be entitled to receive a portion of the consideration
payable in connection with the Merger.
The term “Expiration Date”,
as used in this Proxy, shall mean the earlier to occur of (i) such date and
time as the Merger Agreement shall have been validly terminated pursuant to its
terms, (ii) such date and time as the Merger shall become effective in
accordance with the terms and conditions set forth in the Merger Agreement or
(iii) the occurrence of a Material Adverse Amendment. The term “Material Adverse Amendment”
means an amendment to the Merger Agreement that (i) materially and adversely
affects the Stockholder and (ii) is approved by the Company’s Board of
Directors notwithstanding the fact that in such vote the Stockholder’s nominee
on the Company’s Board of Directors voted against such amendment.
The attorneys and proxies named above, and each of them, are hereby
authorized and empowered by the Stockholder, at any time prior during the
Voting Period (as defined in the Voting Agreement), to act as the Stockholder’s
attorney and proxy to vote all of the Shares, and to exercise all voting,
consent and similar rights of the undersigned with respect to all of the Shares
(including, without limitation, the power to execute and deliver written
consents) at every
annual
or special meeting of stockholders of the Company (and at every adjournment or
postponement thereof), and in every written consent in lieu of such meeting:
(a) in favor of the
approval and adoption of the Merger Agreement and approval of the Merger, not
including any Material Adverse Amendment;
(b) against the approval
of any action, proposal, transaction or agreement that would result, or could
reasonably be expected to result, in any material respect in a breach of any
covenant, representation or warranty or any other obligation or agreement of
the Company contained in the Merger Agreement; and
(c) against any proposal
made in opposition to, or in competition with, consummation of the Merger and
the other transactions contemplated by the Merger Agreement, including any
Acquisition Proposal (as defined in the Merger Agreement).
The attorneys and proxies named above may not exercise this Proxy on
any other matter except as provided in clauses (a), (b) and (c) above. The Stockholder may vote the Shares on all
other matters. Notwithstanding anything
in this Proxy to the contrary, if the Stockholder is a director or officer of
the Company, nothing contained in this Proxy shall not limit or restrict any
actions taken by the Stockholder in his or her capacity as a director or
officer of the Company either (i) pursuant to Applicable Law or (ii) in
exercising the Company’s rights or fulfilling the Company’s obligations under
the Merger Agreement (to the extent permitted or required by the Merger
Agreement).
Any obligation of Stockholder hereunder shall be binding upon the
successors and assigns of Stockholder.
This Proxy shall terminate, and be of no further force and effect,
automatically upon the Expiration Date.
[signature page follows]
2
IN WITNESS WHEREOF, the Stockholder has caused this Irrevocable Proxy
to be duly executed as of the day and year first above written.
STOCKHOLDER:
Signature:
Name:
Address
Shares
Beneficially Owned:
NUMBER OF OUTSTANDING SHARES OF
COMMON STOCK BENEFICIALLY OWNED BY STOCKHOLDER:
______________
NUMBER OF SHARES SUBJECT TO
COMPANY OPTIONS HELD BY STOCKHOLDER:
______________
NUMBER OF SHARES SUBJECT TO
COMPANY WARRANTS HELD BY STOCKHOLDER:
The
undersigned has been advised that as of the date hereof the undersigned may be
deemed to be an “affiliate” of Traffic.com, Inc., a Delaware corporation (the “Company”),
as the term “affiliate” is defined for purposes of Rule 145 of the Rules and
Regulations (the “Rules and
Regulations”) of the Securities and Exchange Commission
(the “Commission”) under the Securities Act of 1933, as amended (the “Act”). Pursuant to the terms of the Agreement and
Plan of Merger, dated as of November 6, 2006 (the “Agreement”), by and
among NAVTEQ Holdings B.V., a corporation organized under the laws of
The Netherlands (“BV Sub”), NAVTEQ Holdings Delaware, Inc., a Delaware
corporation and wholly-owned subsidiary of Parent (“Merger Sub”) and the
Company, the Company will be merged with and into Merger Sub (the “Merger”).
As
a result of the Merger, the undersigned will be entitled to receive cash and
shares of Common Stock, par value $0.001 per share, of Parent (the “Parent
Common Stock”) in exchange for shares of common stock of the Company owned
by the undersigned. In connection
therewith, the undersigned hereby represents and warrants to, and covenants
with, Parent as set forth below and acknowledges and agrees that the execution
and delivery of this Affiliate Agreement by the undersigned is a material
inducement to Parent, BV Sub and Merger Sub to enter into the Merger Agreement.
(a) The undersigned shall not make any
sale, transfer or other disposition of the Parent Common Stock in violation of
the Act or the Rules and Regulations.
(b) The undersigned has carefully read
this Affiliate Agreement and discussed its requirements and other applicable
limitations upon the undersigned’s ability to offer, sell, transfer or
otherwise dispose of the Parent Common Stock, to the extent the undersigned
believes necessary, with the undersigned’s counsel.
(c) The undersigned has been advised that
the issuance of shares of Parent Common Stock to the undersigned in connection
with the Merger is expected to be registered by Parent under the Act through
the filing by Parent of a Registration Statement with the Commission on Form
S-4. However, the undersigned has
also been advised that because at the time the Merger was submitted to a vote
of the stockholders of the Company, the undersigned may be deemed an
111
affiliate of the Company, and
the distribution by the undersigned of the Parent Common Stock has not been
registered under the Act, the undersigned may not offer, sell, transfer or
otherwise dispose of Parent Common Stock issued to the undersigned in
connection with the Merger unless (i) such offer, sale, transfer or other
disposition has been registered under the Act, (ii) such offer, sale, transfer
or other disposition is made in conformity with the volume and other applicable
limitations imposed by Rule 145 under the Act, or (iii) in the opinion of
counsel, in form and substance reasonably acceptable to Parent or under a “no-action”
letter or interpretative letter obtained by the undersigned from the staff of
the Commission, such offer, sale, transfer or other disposition is otherwise
exempt from registration under the Act.
(d) The undersigned understands that
Parent will be under no obligation to register the offer, sale, transfer or
other disposition of the Parent Common Stock by the undersigned or on the
undersigned’s behalf under the Act.
(e) The undersigned understands that stop
transfer instructions will be given to Parent’s transfer agent with respect to
the Parent Common Stock owned by the undersigned and that there may be placed
on the certificates for the Parent Common Stock issued to the undersigned, or
any substitutions therefor, a legend substantially in the following form:
“THE
SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A TRANSACTION TO WHICH
RULE 145 UNDER THE SECURITIES ACT OF 1933 APPLIES. THE SHARES REPRESENTED BY THIS CERTIFICATE
MAY ONLY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 COVERING THE RESALE OF
SUCH SHARES OR IN ACCORDANCE WITH AN APPLICABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT OF 1933.”
(f) The undersigned also understands
that unless undersigned certifies to Parent that the transfer by the
undersigned of the undersigned’s Parent Common Stock has been registered under
the Act or is a transfer made in conformity with the provisions of this
Affiliate Agreement, Parent reserves the right, in its sole discretion, to
place the a substantially similar legend as that set forth in (e) above on the
certificates issued to any transferee of shares from the undersigned.
(g) By Parent’s execution of this
Affiliate Agreement, Parent hereby agrees with the undersigned as follows:
(1) For so long as Parent is obligated to
file reports pursuant to Section 13 or 15(d) of the Exchange Act of 1934, as
amended (the “Exchange Act”), Parent shall (a) use its commercially
reasonable efforts to (i) file, on a timely basis, all reports and data
required to be filed with the Commission by it pursuant to Section 13 of the
Exchange Act and (ii) furnish to the undersigned upon request a written
statement as to whether
112
Parent has complied with
such reporting requirements during the 12 months preceding any proposed sale of
the Parent Common Stock by the undersigned under Rule 145, and (b) otherwise
use its commercially reasonable efforts to permit such sales pursuant to Rule
145 and Rule 144. Parent hereby
represents to the undersigned that it has filed all reports required to be
filed with the Commission under Section 13 of the Exchange Act during the 12
months preceding the date of this Affiliate Agreement.
(2) It is understood and agreed that an
offer, sale or other transfer of the shares of Parent Common Stock shall be
permitted and the legends in paragraph (e) or (f) above shall be removed in
connection therewith by delivery of substitute certificates without such legend
if the undersigned shall have delivered to Parent (i) a copy of a “no action”
or interpretive letter from the staff of the Commission, or an opinion of
counsel, in form and substance reasonably satisfactory to Parent, to the effect
that such offer sale or other transfer is permissible under the Act and/or such
legend is not required for purposes of the Act, (ii) an opinion of counsel, in
form and substance reasonably satisfactory to Parent, to the effect that the
offer, sale or other transfer of such shares by the holder thereof is no longer
subject to Rule 145, or (iii) satisfactory evidence that the shares of Parent
Common Stock represented by such certificates are being or have been
transferred in a transaction made in conformity with the provisions of Rule
145.
(3) It is understood and agreed that an
offer, sale or other transfer of the shares of Parent Common Stock shall be
permitted and the legends in paragraph (e) or (f) above shall be removed in
connection therewith by delivery of substitute certificates without such legend
if (i) one year shall have elapsed from the date the undersigned acquired the
Parent Common Stock received in the Merger and the provisions of Rule 145(d)(2)
are then available to the undersigned or (ii) two years shall have elapsed from
the date the undersigned acquired the Parent Common Stock received in the
Merger and the provisions of Rule 145(d)(3) are then applicable to the
undersigned.
Execution
of this Affiliate Agreement should not be considered an admission on the
undersigned’s part that the undersigned is an “affiliate” of the Company as
described in the first paragraph of this Affiliate Agreement or as a waiver of
any rights the undersigned may have to object to any claim that the undersigned
is such an affiliate on or after the date of this Affiliate Agreement.
Very truly yours,
[Print Name]
Acknowledged
this day of ,
2006.
113
NAVTEQ Corporation
By:
Name:
Title:
114
SCHEDULE
I
Parties
to Voting Agreement
· TL Ventures III,
L.P.
· TL Ventures III
Offshore, L.P.
· TL Ventures III
Interfund, L.P.
· TL Ventures IV,
L.P.
· TL Ventures IV
Interfund, L.P.
· Robert N.
Verratti
· David L.
Jannetta
· The Jannetta
Family Trust
· Mark J. DeNino
· Christopher M.
Rothey
115
SCHEDULE
II
List of
Company Warrants
· Safeguard
Delaware, Inc. (Warrant for 17,565 shares of Common Stock of the Company dated
April 22, 2005)
· National
Electrical Benefit Fund (Warrant for 116,666 shares of Common Stock of the
Company dated April 22, 2005)
· PA Early Stage
Partners, L.P. (Warrant for 66,666 shares of Common Stock of the Company dated
August 24, 2005)
· Comerica Bank
(Warrant for 100,000 shares of Series E Preferred Stock of the Company
convertible into 33,333 shares of Common Stock of the Company dated December 7,2003 and Warrant for 25,000 shares of Series E Preferred Stock of the Company
convertible into 8,333 shares of Common Stock of the Company dated July 8,2003)
· Potomac
Technology Development, LLC (Warrant for 41,666 shares of Common Stock of the
Company dated April 17,2002)
· PNC Bank,
National Association (Warrant for 10,000 shares of Common Stock of the Company
dated January 26, 2001)
· Hearst
Communications, Inc. (Warrant for 13,333 shares of Common Stock of the Company
dated March 16, 2001)
116
SCHEDULE
III
Holders
Making Stock Elections
· TL Ventures III,
L.P.
· TL Ventures III
Offshore, L.P.
· TL Ventures III
Interfund, L.P.
· TL Ventures IV,
L.P.
· TL Ventures IV
Interfund, L.P.
117
SCHEDULE
IV
Holders
of Exchanged Warrants
· TL Ventures IV,
L.P.
· TL Ventures IV
Interfund, L.P.
· TL Ventures III,
L.P.
· TL Ventures III
Interfund, L.P.
· TL Ventures III
Offshore, L.P.
118
Dates Referenced Herein and Documents Incorporated by Reference
