AGREEMENT AND PLAN OF MERGER

Exhibit 2.1

EXECUTION COPY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AGREEMENT AND PLAN OF MERGER

BY AND AMONG

GOOGLE INC.,

WHOPPER ACQUISITION CORP.

AND

CLICK HOLDING CORP.

DATED AS OF APRIL 13, 2007

 

TABLE OF CONTENTS

 

 

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INDEX OF EXHIBITS

Exhibit A—Form of Stockholder Written Consent

Exhibit B—Form of Amended and Restated Certificate of Incorporation

Exhibit C—Form of Letter of Transmittal

 

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INDEX OF DEFINED TERMS

 

 

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AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER (this “ Agreement ”) is entered into as of April 13, 2007, by and among Google Inc., a Delaware corporation (the “ Buyer ”), Whopper Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of the Buyer (the “ Transitory Subsidiary ”), and Click Holding Corp., a Delaware corporation (the “ Company ”).

WHEREAS , the Boards of Directors of the Buyer and the Company deem it advisable and in the best interests of each corporation and their respective stockholders that the Buyer acquire the Company;

WHEREAS , the acquisition of the Company shall be effected through a merger (the “ Merger ”) of the Transitory Subsidiary with and into the Company in accordance with the terms of this Agreement and the Delaware General Corporation Law (the “ DGCL ”), as a result of which the Company shall become a wholly owned subsidiary of the Buyer;

WHEREAS , immediately following the execution and delivery of this Agreement by the parties hereto and as a material inducement to the Buyer and the Transitory Subsidiary to enter into this Agreement, the Company shall obtain and shall deliver to the Buyer a true, correct and complete copy of an Action by Written Consent evidencing the adoption and approval of the Merger, this Agreement and the transactions contemplated hereby (and, as such, adoption of the Company Voting Proposal), in the form attached hereto as Exhibit A (the “ Stockholder Written Consent ”), signed by certain stockholders constituting the Requisite Company Stockholder Vote (as defined below); and

WHEREAS , the respective Boards of Directors of the Buyer, the Transitory Subsidiary and the Company deem it advisable and in the best interests of their respective stockholders to consummate the Merger on the terms and conditions set forth in this Agreement.

NOW, THEREFORE , in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth below, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Buyer, the Transitory Subsidiary and the Company agree as follows:

ARTICLE I

THE MERGER

1.1. Effective Time of the Merger . Subject to the provisions of this Agreement, at or prior to the Closing, the Buyer and the Company shall jointly prepare and cause to be filed with the Secretary of State of the State of Delaware a certificate of merger (the “ Certificate of Merger ”) in such form as is required by, and executed by the Company in accordance with, the relevant provisions of the DGCL and shall make all other filings or recordings required under the DGCL. The Merger shall become effective upon the filing and acceptance of the Certificate of Merger with the Secretary of State of the State of Delaware or at such later time as is established by the Buyer and the Company and set forth in the Certificate of Merger (the “ Effective Time ”).

 

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1.2. Closing . The closing of the Merger (the “ Closing ”) shall take place at 10:00 a.m., California time, on a date to be specified by the Buyer and the Company (the “ Closing Date ”), which shall be no later than the second Business Day after satisfaction or waiver of the conditions set forth in Article VII (other than delivery of items to be delivered at the Closing and other than satisfaction of those conditions that by their nature are to be satisfied at the Closing, it being understood that the occurrence of the Closing shall remain subject to the delivery of such items and the satisfaction or waiver of such conditions at the Closing), at the offices of Wilson, Sonsini, Goodrich & Rosati, 650 Page Mill Road, Palo Alto, California, unless another date, place or time is agreed to in writing by the Buyer and the Company. For purposes of this Agreement, a “ Business Day ” shall be any day other than (a) a Saturday or Sunday or (b) a day on which banking institutions located in New York, New York are permitted or required by law, executive order or governmental decree to remain closed.

1.3. Effects of the Merger . At the Effective Time, the separate existence of the Transitory Subsidiary shall cease and the Transitory Subsidiary shall be merged with and into the Company (the Company surviving the Merger is sometimes referred to herein as the “ Surviving Corporation ”). The Merger shall have the effects set forth in Section 259 of the DGCL.

1.4. Certificate of Incorporation . At the Effective Time, the certificate of incorporation of the Company (as amended), as in effect immediately prior to the Effective Time, shall be amended and restated to read in its entirety as set forth in Exhibit B attached hereto and, as so amended and restated, shall be the certificate of incorporation of the Surviving Corporation until thereafter amended in accordance with the DGCL and as provided in such certificate of incorporation.

1.5. By-laws . At the Effective Time, the By-laws of the Transitory Subsidiary, as in effect immediately prior to the Effective Time, shall become the By-laws of the Surviving Corporation until thereafter amended as provided by applicable law, the Certificate of Incorporation of the Surviving Corporation and such By-laws.

1.6. Directors and Officers of the Surviving Corporation .

(a) The directors of the Transitory Subsidiary immediately prior to the Effective Time shall be the initial directors of the Surviving Corporation, each to hold office in accordance with the Certificate of Incorporation and By-laws of the Surviving Corporation.

(b) The officers of the Company immediately prior to the Effective Time shall be the initial officers of the Surviving Corporation, each to hold office in accordance with the Certificate of Incorporation and By-laws of the Surviving Corporation.

ARTICLE II

CONVERSION OF SECURITIES

2.1. Conversion of Capital Stock . As of the Effective Time, by virtue of the Merger and without any action on the part of the holder of any shares of the capital stock of the Company or capital stock of the Transitory Subsidiary:

 

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(a) Capital Stock of the Transitory Subsidiary . Each share of the common stock, par value $0.01 per share, of the Transitory Subsidiary issued and outstanding immediately prior to the Effective Time shall be converted into and become one fully paid and nonassessable share of common stock, $0.01 par value per share, of the Surviving Corporation.

(b) Cancellation of Treasury Stock and Buyer-Owned Stock . All shares of common stock, $0.01 par value per share, of the Company (“ Company Common Stock ”) that are owned by the Company as treasury stock and any shares of Company Common Stock owned by the Buyer, the Transitory Subsidiary or any other wholly-owned Subsidiary of the Buyer immediately prior to the Effective Time shall be cancelled and shall cease to exist, and no stock of the Buyer or other consideration shall be delivered in exchange therefor.

(c) Merger Consideration for Company Common Stock . Subject to Section 2.2, each share of Company Common Stock (other than (i) shares to be cancelled in accordance with Section 2.1(b) and (ii) Dissenting Shares (as defined in Section 2.4(a) below) issued and outstanding immediately prior to the Effective Time shall be automatically converted into the right to receive the Per Share Amount. As of the Effective Time, all such shares of Company Common Stock shall no longer be outstanding and shall automatically be cancelled and shall cease to exist, and each holder of a certificate representing any such shares of Company Common Stock shall cease to have any rights with respect thereto, except the right to receive the Per Share Amount pursuant to this Section 2.1(c) upon the surrender of such certificate in accordance with Section 2.2, without interest.

(d) Definitions . For all purposes of this Agreement, the following terms shall have the following respective meanings:

(i) “ Aggregate Exercise Price ” shall mean the aggregate of the exercise prices of the Company Stock Options and Company SARs (other than Excluded Company Stock Options and Excluded Company SARs) issued and outstanding as of immediately prior to the Effective Time, whether or not then vested or exercisable.

(ii) “ Buyer Common Stock ” shall mean shares of Class A Common Stock (as defined in the Buyer’s certificate of incorporation), par value $0.001 per share, of the Buyer.

(iii) “ Calculation Amount ” shall mean an amount of cash equal to (A) the Equity Value, plus (B) the Aggregate Exercise Price, plus (C) the amount of all cash and cash equivalents held by the Company and its Subsidiaries as of immediately prior to the Effective Time, if any, plus (D) an amount equal to the interest on the Equity Value compounded daily at an annual rate of 10% from (and including) the twelve-month anniversary of the date hereof to (but excluding) the date that is the earlier of (I) the termination of this Agreement in accordance with Section 8.1 or (II) the Effective Time, minus (E) the amount of all unpaid Third Party Expenses as of immediately prior to the Effective Time, if any, minus (F) all Closing Indebtedness.

 

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(iv) “ Closing Indebtedness ” shall mean the principal, accrued and unpaid interest on all outstanding indebtedness for borrowed money of the Company and its Subsidiaries as of immediately prior to the Effective Time, including any penalties or premiums that would be associated with the full repayment and retirement of such indebtedness immediately after the Effective Time, but excluding, for the avoidance of doubt, any amounts in respect of any letters of credit so long as such amounts are not outstanding.

(v) “ Company SAR ” shall mean a stock appreciation right with respect to Company Common Stock granted under any stock option plans or other equity-related plans of the Company.

(vi) “ Company Stock Option ” shall mean an option to purchase Company Common Stock granted under any stock option plans or other equity-related plans of the Company.

(vii) “ Equity Value ” means an amount equal to $3,110,000,000 (Three Billion One Hundred Ten Million Dollars); provided , however , that if the Company has not incurred Third Party Expenses in the aggregate (whether paid or unpaid at the Effective Time) of at least $30 million, then such amount shall be reduced by the amount by which $30 million exceeds such Third Party Expenses.

(viii) “ Excluded Company SARs ” shall mean those Company SARs for which the exercise price exceeds the Per Share Amount.

(ix) “ Excluded Company Stock Options ” shall mean those Company Stock Options for which the exercise price exceeds the Per Share Amount.

(x) “ Fully Diluted Share Number ” shall mean the sum of (A) the aggregate number of shares of Company Common Stock outstanding as of immediately prior to the Effective Time, plus (B) the number of shares of Company Common Stock underlying all Company Stock Options (other than Excluded Company Stock Options) outstanding as of immediately prior to the Effective Time, whether or not then vested or exercisable, plus (C) the number of shares of Company Common Stock relating to all Company SARs (other than Excluded Company SARs) outstanding as of immediately prior to the Effective Time, whether or not then vested or exercisable.

(xi) “ Merger Consideration ” shall mean the aggregate Per Share Amount payable to holders of Company Common Stock pursuant to this Article II.

(xii) “ Per Share Amount ” shall mean an amount of cash equal to the quotient obtained by dividing (x) the Calculation Amount by (y) the Fully Diluted Share Number, rounded to the nearest hundred thousandth (0.00001) (with amounts of 0.000005 and above rounded up).

(xiii) “ Third Party Expenses ” shall mean all fees and expenses incurred by or behalf of the Company in connection with the Merger, including all legal,

 

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accounting, financial advisory, consulting and all other fees and expenses of third parties incurred by or on behalf of the Company in connection with the negotiation and effectuation of the terms and conditions of this Agreement and the transactions contemplated hereby (including, but not limited to, any payments made or anticipated to be made by the Company as a brokerage or finders’ fee, agents’ commission or any similar charge in connection with the Merger) and shall be based on the Payments Spreadsheet to be delivered to the Buyer pursuant to Section 6.13 of this Agreement.

2.2. Exchange of Certificates . The procedures for exchanging certificates representing shares of Company Common Stock for the applicable portion of the Merger Consideration pursuant to the Merger are as follows:

(a) Exchange Agent . Prior to the Effective Time, the Buyer shall deposit with U.S. Bank, National Association or another bank or trust company mutually acceptable to the Buyer and the Company (the “ Exchange Agent ”), for the benefit of the holders of shares of Company Common Stock outstanding immediately prior to the Effective Time and for payment through the Exchange Agent in accordance with this Section 2.2, cash in an amount sufficient to make payment of the portions of the Merger Consideration payable pursuant to Section 2.1(c) in exchange for all of the outstanding shares of Company Common Stock (the “ Exchange Fund ”).

(b) Exchange Procedures .

(i) At least two (2) Business Days prior to the Effective Time, the Buyer shall cause the Exchange Agent to make available at the Company’s offices to each holder of record of Company Common Stock (A) a letter of transmittal (a “ Letter of Transmittal ”) in the form attached hereto as Exhibit C and (B) instructions for receiving the Merger Consideration payable with respect thereto. Any such holder who delivers a duly executed Letter of Transmittal and certificate which immediately prior to the Effective Time represented outstanding shares of Company Common Stock (each, a “ Certificate ”) to the Exchange Agent at the Closing shall receive, in exchange therefor at the Closing, the Merger Consideration that such holder has the right to receive pursuant to the provisions of this Article II and the Certificate so surrendered shall be immediately cancelled. All amounts delivered to such holders of Company Common Stock shall be payable by wire transfer of immediately available funds to an account designated by such holder in the Letter of Transmittal or, if an account is not designated by in the Letter of Transmittal, by check.

(ii) At or promptly after the Effective Time (and in any event within two (2) Business Days thereafter), the Buyer shall cause the Exchange Agent to mail to each holder of record of Company Common Stock who did not deliver a duly executed Letter of Transmittal and Certificate to the Exchange Agent at the Closing (A) a Letter of Transmittal and (B) instructions for receiving the Merger Consideration payable with respect thereto. Upon surrender of a duly executed Letter of Transmittal and Certificate to the Exchange Agent, such holder shall be entitled to receive in exchange therefor the applicable portion of the Merger Consideration that such holder has the right to receive pursuant to the provisions of this Article II, and the Certificate so surrendered shall

 

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immediately be cancelled. All amounts delivered to such holders of Company Common Stock shall be payable by wire transfer of immediately available funds within two (2) Business Days after delivery of the duly executed Letter of Transmittal and Certificate to an account designated by such holder in the Letter of Transmittal or, if an account is not designated by in the Letter of Transmittal, by check.

(iii) In the event of a transfer of ownership of Company Common Stock which is not registered in the transfer records of the Company, the applicable portion of the Merger Consideration may be paid to a person other than the person in whose name the Certificate so surrendered is registered, if such Certificate is presented to the Exchange Agent, accompanied by all documents required to evidence and effect such transfer and by evidence that any applicable stock transfer taxes have been paid.

(iv) Until surrendered as contemplated by this Section 2.2, each Certificate shall be deemed at any time after the Effective Time to represent only the right to receive upon such surrender the applicable portion of the Merger Consideration as contemplated by this Section 2.2.

(c) Termination of Exchange Fund . Any portion of the Exchange Fund which remains undistributed to the holders of Company Common Stock for one year after the Effective Time shall be delivered to the Buyer upon demand, and any holder of Company Common Stock who has not previously complied with this Section 2.2 shall look only to the Buyer (subject to abandoned property, escheat and similar laws) for payment of its claim for the applicable portion of the Merger Consideration, without interest.

(d) No Liability . To the extent permitted by applicable law, none of the Buyer, the Transitory Subsidiary, the Company, the Surviving Corporation or the Exchange Agent shall be liable to any holder of shares of Company Common Stock delivered to a public official pursuant to any applicable abandoned property, escheat or similar law.

(e) Withholding Rights . Each of the Buyer and the Surviving Corporation shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement to any holder of shares of Company Common Stock such amounts as it is required to deduct and withhold with respect to the making of such payment under the Internal Revenue Code of 1986, as amended (the “ Code ”), or any other applicable state, local or foreign Tax law. To the extent that amounts are so deducted and withheld by the Surviving Corporation or the Buyer, as the case may be, such deducted and withheld amounts (i) shall be remitted by the Buyer or the Surviving Corporation, as the case may be, to the applicable Governmental Entity and (ii) shall be treated for all purposes of this Agreement as having been paid to the holder of the shares of Company Common Stock in respect of which such deduction and withholding was made by the Surviving Corporation or the Buyer, as the case may be.

(f) Lost Certificates . If any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such Certificate to be lost, stolen or destroyed, the Exchange Agent shall issue in exchange for such lost, stolen or destroyed Certificate the applicable portion of the Merger Consideration deliverable in respect thereof pursuant to this Agreement.

 

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(g) Stock Transfer Books; No Further Ownership Rights in Company Common Stock . At the Effective Time, the stock transfer books of the Company shall be closed, and there shall be no further registration of transfers of shares thereafter on the records of the Company. From and after the Effective Time, the holders of Certificates representing shares of Company Common Stock outstanding immediately prior to the Effective Time shall cease to have any rights with respect to such shares, except as otherwise provided in this Agreement or by applicable law. On or after the Effective Time, any Certificates presented to the Exchange Agent or the Buyer for any reason shall be canceled against delivery of the applicable portion of the Merger Consideration to which the holders thereof are entitled pursuant to this Article II.

2.3. Company Stock Options and Company SARs .

(a) The Company shall take such action, including providing any notices and obtaining any consents, as shall be required:

(i) to effectuate the cancellation, as of the Effective Time, of all Company Stock Options and Company SARs that are vested by their terms at the Effective Time (including those that are vested by their terms at the Effective Time as a result of the transactions contemplated hereby) (each individually a “ Vested Company Stock Option ” or “ Vested Company SAR ,” as applicable, and collectively the “ Vested Company Stock Options ” and “ Vested Company SARs ,” as applicable) that are outstanding immediately prior to the Effective Time (without regard to the exercise price thereof); and

(ii) to cause each outstanding Vested Company Stock Option and Vested Company SAR upon such cancellation to represent as of the Effective Time solely the right to receive from the Buyer, in accordance with this Section 2.3, a lump sum cash payment in the amount of the Vested Option and SAR Consideration (as defined below), if any, with respect to such Vested Company Stock Option or Vested Company SAR and to no longer represent the right to purchase (or, in the case of a Vested Company SAR, to receive a cash payment based on the value of) any Company Common Stock or any other equity security of the Company, the Buyer, the Surviving Corporation or any other person or any other consideration.

(b) Each holder of a Vested Company Stock Option or Vested Company SAR shall receive from the Buyer, in respect and in consideration of each Vested Company Stock Option and Vested Company SAR so cancelled, on the first Business Day following the Effective Time, an amount (net of applicable taxes) equal to the product of (i) the excess, if any, of (A) the Per Share Amount over (B) the exercise price per share of the Company Common Stock subject to such Vested Company Stock Option or Vested Company SAR, multiplied by (ii) the total number of shares of Company Common Stock subject to or underlying such Vested Company Stock Option or Vested Company SAR, without any interest thereon (the “ Vested Option and SAR Consideration ”). The Vested Option and SAR Consideration shall be

 

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delivered to the recipient thereof on the first Business Day following the Effective Time through (x) the Company’s payroll system or (y) if such recipient is not employed by the Company on such date, by check or wire transmittal, as elected by the recipient. In the event that the per share exercise price of any Vested Company Stock Option or Vested Company SAR is equal to or greater than the Per Share Amount, such Vested Company Stock Option or Vested Company SAR shall be cancelled without consideration therefor and shall have no further force or effect.

(c) At the Effective Time, each then outstanding Company Stock Option and Company SAR that is not vested by its terms at the Effective Time (including any such outstanding unvested Company Stock Option that is exercisable prior to vesting pursuant to the terms of an option award which permits such early exercise subject to a related right of repurchase at cost for termination prior to vesting (“ Early Exercise Repurchase Rights ”), if any such Company Stock Option exists at the Effective Time) (individually an “ Unvested Company Stock Option ” or “ Unvested Company SAR ,” as applicable, and collectively the “ Unvested Company Stock Options ” and “ Unvested Company SARs, ” as applicable), regardless of the respective exercise price thereof, will be converted by the Buyer as set forth herein. Each Unvested Company Stock Option and Unvested Company SAR so converted by Buyer under this Agreement will continue to have the same terms and conditions set forth in the applicable Unvested Company Stock Option or Unvested Company SAR (including any applicable award agreement or other document evidencing such security, but other than any repurchase rights that are not Early Exercise Repurchase Rights) immediately prior to the Effective Time, except that (i) each such Unvested Company Stock Option or Unvested Company SAR will be converted into a stock option that will become exercisable in accordance with its terms for that number of whole shares of Buyer Common Stock equal to the product of (A) the number of shares of Company Common Stock underlying such Unvested Company Stock Option or Unvested Company SAR immediately prior to the Effective Time multiplied by (B) the Exchange Ratio (as defined below), rounded down to the nearest whole number of shares of Buyer Common Stock, and (ii) the per share exercise price for the shares of Buyer Common Stock underlying such assumed or converted Unvested Company Stock Option or Unvested Company SAR will be equal to the quotient determined by dividing the exercise price per share of Company Common Stock underlying such Unvested Company Stock Option or Unvested Company SAR immediately prior to the Effective Time by the Exchange Ratio, rounded up to the nearest whole cent. Each converted Unvested Company Stock Option and Unvested Company SAR shall be subject to the same vesting schedule following the Effective Time as to which it was subject prior to the Effective Time. For the purposes of this Agreement, the term “ Exchange Ratio ” shall be equal to the quotient of (1) the Per Share Amount divided by (2) the volume weighted average of the daily closing prices of Buyer Common Stock over the ten (10) trading days ending on the Business Day prior to the Effective Time. The Exchange Ratio shall be adjusted to reflect appropriately the effect of any stock split, reverse stock split, stock dividend (including any dividend or distribution of securities convertible into Buyer Common Stock or Company Common Stock), reorganization, recapitalization, reclassification or other like change with respect to Buyer Common Stock or Company Common Stock occurring during the ten (10) trading days with respect to Buyer Common Stock ending on the Business Day prior to the Effective Time.

 

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(d) The Buyer agrees to file with the Securities and Exchange Commission as soon as reasonably practicable (but in any event within 15 days) after the Effective Time a registration statement on Form S-8 (or a post-effective amendment to a registration statement on Form S-8 or other appropriate form) for the shares of Buyer Common Stock issuable upon exercise of the options to purchase Buyer Common Stock issued pursuant to this Section 2.3 and shall use its reasonable best efforts to cause such registration statement to become effective as soon thereafter as practicable and to maintain such registration statement in effect until the exercise or expiration of the options to purchase Buyer Common Stock issued pursuant to this Section 2.3. The Buyer further agrees (i) to reserve out of its reserved but unissued shares of Buyer Common Stock a sufficient number of shares of Buyer Common Stock to provide for the issuance of Buyer Common Stock upon exercise of the options to purchase Buyer Common Stock issued pursuant to this Section 2.3 and (ii) to cause, at or prior to the Effective Time, all shares of Buyer Common Stock issuable upon the exercise of such options to purchase Buyer Common Stock to be approved for listing on The Nasdaq Global Market.

(e) As soon as reasonably practicable (but no later than 30 days) following the execution of this Agreement, the Company shall mail to each person who is a holder of a Company Stock Option or Company SAR a letter describing the treatment of such security pursuant to this Section 2.3 and, with respect to Vested Company Stock Options and Vested Company SARs, describing the payment for, and providing instructions for use in obtaining payment for, such cancelled security. In addition, as soon as reasonably practicable after the Effective Time, the Buyer shall issue to each person who holds an assumed or converted Unvested Company Stock Option or Unvested Company SAR a document evidencing the foregoing assumption and conversion of such security by the Buyer, which document shall set forth the resulting exercise price and underlying number of shares of Buyer Common Stock.

(f) Except as specifically set forth in this Section 2.3, any equity securities of any class of the Company, and any securities exchangeable into or exercisable for such equity securities (including options, warrants, calls, rights, commitments or Contracts obligating the Company or any of its Subsidiaries to issue, exchange, transfer, deliver or sell, or cause to be issued, exchanged, transferred, delivered or sold, additional shares of capital stock or other equity interests of the Company) and any security or rights convertible into or exchangeable or exercisable for any such shares or other equity interests, if any, shall be canceled and extinguished at the Effective Time. Subject to the review and approval of the Buyer, which approval shall not be unreasonably withheld, the Company shall take all actions necessary to effect the provisions set forth in this Section 2.3(g), including without limitation any necessary amendments to any Contracts or other instruments and the delivery of all required notice, as applicable.

2.4. Dissenting Shares .

(a) Notwithstanding anything to the contrary contained in this Agreement, shares of Company Common Stock held by a holder who is entitled to demand and has made a demand for appraisal of such shares of Company Common Stock in accordance with the DGCL and has not voted in favor of the adoption of the Merger Agreement (any such shares being referred to as “ Dissenting Shares ” until such time as such holder fails to perfect or otherwise

 

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loses such holder’s appraisal rights under the DGCL with respect to such shares) shall not be converted into or represent the right to receive the applicable portion of the Merger Consideration in accordance with Section 2.1, but shall be entitled only to such rights as are granted by the DGCL to a holder of Dissenting Shares.

(b) If any Dissenting Shares shall lose their status as such (through failure to perfect or otherwise), then, as of the later of the Effective Time or the date of loss of such status, such shares shall automatically be converted into and shall represent only the right to receive the applicable portion of the Merger Consideration in accordance with Section 2.1, without interest thereon, upon surrender of the Certificates representing such shares.

(c) The Company shall give the Buyer: (i) prompt notice of any written demand for appraisal received by the Company prior to the Effective Time pursuant to the DGCL, any withdrawal of any such demand and any other demand, notice or instrument delivered to the Company prior to the Effective Time pursuant to the DGCL that relate to such demand; and (ii) the opportunity to participate in and direct all negotiations and proceedings with respect to any such demand, notice or instrument. The Company shall not make any payment or settlement offer prior to the Effective Time with respect to any such demand, notice or instrument unless the Buyer shall have given its written consent to such payment or settlement offer.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to the Buyer and the Transitory Subsidiary that the statements contained in this Article III are true and correct, except as set forth in the disclosure schedule delivered by the Company to the Buyer and the Transitory Subsidiary and dated as of the date of this Agreement (the “ Company Disclosure Schedule ”). The Company Disclosure Schedule shall be arranged in sections and paragraphs corresponding to the numbered and lettered sections and paragraphs contained in this Article III, and the disclosure in any section or paragraph shall qualify (a) the corresponding section or paragraph in this Article III and (b) the other sections and paragraphs in this Article III to the extent that it is reasonably apparent from a reading of such disclosure that it also qualifies or applies to such other sections and paragraphs.

3.1. Organization, Standing and Power .

(a) The Company (i) is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, (ii) has all requisite corporate power and authority to own, lease and operate its properties and assets and to carry on its business as now being conducted and (iii) is duly qualified to do business and, where applicable as a legal concept, is in good standing as a foreign corporation in each jurisdiction in which the character of the properties it owns, operates or leases or the nature of its activities makes such qualification necessary, except for such failures that, individually or in the aggregate, are not reasonably likely to have a Company Material Adverse Effect. For purposes of this Agreement, the term “ Company Material Adverse Effect ” means any material adverse change,

 

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event, circumstance or development with respect to, or material adverse effect on, the business, financial condition or results of operations of the Company and its Subsidiaries, taken as a whole, or any material adverse effect on the ability of the Company to consummate the transactions contemplated by this Agreement; provided , however , that none of the following shall constitute, or shall be considered in determining whether there has occurred, a Company Material Adverse Effect:

(i) changes, events, circumstances, developments or effects that are the result of economic or political factors affecting the national, regional or world economy or acts of war or terrorism, except to the extent that such changes, events, circumstances, developments or effects have a materially disproportionate effect on the Company and its Subsidiaries relative to other similarly situated participants in the industries or markets in which they operate;

(ii) changes, events, circumstances, developments or effects that are the result of factors generally affecting the industries or markets in which the Company operates, except to the extent that such changes, events, circumstances, developments or effects have a materially disproportionate effect on the Company and its Subsidiaries relative to other similarly situated participants in the industries or markets in which they operate; and

(iii) changes, events, circumstances, developments or effects (including loss of customers or delays or cancellations of orders for products or services) that are the result of the execution, announcement, pendency or consummation of this Agreement or the transactions contemplated hereby (other than with respect to the representations and warranties contained in Section 3.4);

(iv) changes in law, rule or regulations or generally accepted accounting principles or the interpretation thereof;

(v) any action taken pursuant to or in accordance with this Agreement (including, without limitation, Section 6.4) or at the request of the Buyer; and

(vi) any failure by the Company to meet any projections, budgets or estimates of revenues or earnings for any period ending on or after the date of this Agreement (it being understood that the facts and circumstances giving rise to such failure may be taken into account in determining whether there has been a Company Material Adverse Effect (except to the extent such facts or circumstances are excluded from being taken into account by clauses (i) through (v) of this proviso)).

(b) The Company has delivered or made available to the Buyer: (i) a true and correct copy of the Certificate of Incorporation and Bylaws of the Company, each as amended, as of the date hereof (together, the “ Company Charter Documents ”), and, as of the date hereof, each such instrument is in full force and effect and no other organizational documents are applicable to or binding upon the Company. The Company is not in violation in any material respect of any of the provisions of the Company Charter Documents.

 

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3.2. Capitalization .

(a) The authorized capital stock of the Company as of the date of this Agreement consists of one (1) billion shares of Company Common Stock, consisting of (I) 300,000,000 shares that are designated as “Click Holding Corp. – Data Common Stock” (the “ Data Common Stock ”), (II) 300,000,000 shares that are designated as “Click Holding Corp. – TechSolutions Common Stock” (the “ Tech Common Stock ”) and (III) 400,000,000 shares that are designated as “Click Holding Corp. – CHC Common Stock” (the “ CHC Common Stock ”). As of the date hereof, (i) 213,432,439 shares of Company Common Stock were issued and outstanding, consisting of (A) no shares of Data Common Stock, (B) 1,450,000 shares of Tech Common Stock and (C) 211,982,439 shares of CHC Common Stock, (ii) no shares of Company Common Stock were held in the treasury of the Company and (iii) 36,774,566 shares of Company Common Stock were reserved for issuance under stock option plans or other equity-related plans of the Company (the “ Company Stock Plans ”), consisting of (A) 18,112,565 shares of Data Common Stock, (B) 10,868,601 shares of Tech Common Stock and (C) 7,793,400 shares of CHC Common Stock. As of the date hereof, the Company has not authorized any shares of preferred stock, and no shares of preferred stock are issued or outstanding. As of the date hereof, the Company Common Stock is held by the persons and entities in the amounts set forth in Section 3.2(a) of the Company Disclosure Schedule, which further sets forth for each such person or entity the number of shares (including whether such share is Tech Common Stock or CHC Common Stock) held by such person or entity and the number of the applicable Certificates representing such shares.

(b) Section 3.2(b) of the Company Disclosure Schedule sets forth a complete and accurate list, as of the date hereof, of: (i) all Company Stock Plans, indicating for each Company Stock Plan, as of such date, (A) the number of shares of Company Common Stock subject to outstanding Company Stock Options and Company SARs under such Plan and (B) the number of shares of Company Common Stock reserved for future issuance under such Plan; and (ii) all outstanding Company Stock Options and Company SARs, indicating with respect to each such security the holder thereof, the Company Stock Plan under which it was granted, the number of shares of Tech Common Stock or CHC Common Stock subject to such security, the exercise price, the date of grant and the vesting schedule thereof.

(c) Except (i) as set forth in Sections 3.2(a) or 3.2(b) or (ii) as reserved for future grants under the Company Stock Plan as of the date of this Agreement, as of the date of this Agreement, (A) there are no equity securities of any class of the Company, or any security exchangeable into or exercisable for such equity securities, issued, reserved for issuance or outstanding and (B) there are no options, warrants, equity securities, calls, rights, commitments or Contracts obligating the Company or any of its Subsidiaries to issue, exchange, transfer, deliver or sell, or cause to be issued, exchanged, transferred, delivered or sold, additional shares of capital stock or other equity interests of the Company or any security or rights convertible into or exchangeable or exercisable for any such shares or other equity interests, or obligating the Company or any of its Subsidiaries to grant, extend, accelerate the vesting of, otherwise modify or amend or enter into any such option, warrant, equity security, call, right, commitment or agreement. Except for the Company SARs, the Company does not have any outstanding stock appreciation rights, phantom stock, performance based rights or similar rights or obligations.

 

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Except for (i) the Amended and Restated Stockholders’ Agreement dated as of September 19, 2005 (the “ HoldCo Stockholders’ Agreement ”) by and among the Company and the stockholders party thereto and (ii) the award agreements (the “ Award Agreements ”) and Company Stock Plan pursuant to which the Company Stock Options and the Company SARs were issued, neither the Company nor any of its Subsidiaries is a party to or is bound by any agreements or understandings with respect to the voting (including voting trusts and proxies) or sale or transfer (including agreements imposing transfer restrictions) of any shares of capital stock or other equity interests of the Company. Except for (A) the HoldCo Stockholders’ Agreement, (B) the Award Agreements and Company Stock Plans or (C) as contemplated by this Agreement with respect to the assumed or converted Unvested Company Stock Options and Unvested Company SARs, there are no registration rights with respect to any equity security of any class of the Company.

(d) All outstanding shares of Company Common Stock are, and all shares of Company Common Stock subject to issuance as specified in Section 3.2(b) above, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, will be, duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the DGCL, the Company Charter Documents or any agreement to which the Company is a party or is otherwise bound.

(e) Except for the HoldCo Stockholders’ Agreement and the Company Charter Documents, there are no obligations, commitments or arrangements, contingent or otherwise, of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of Company Common Stock or any other capital stock of the Company.

(f) Section 3.2(f) of the Company Disclosure Schedule sets forth a complete and correct list, as of the date of this Agreement, of each Contract pursuant to which any Indebtedness (as defined below) of the Company or its Subsidiaries is outstanding or may be incurred or guaranteed in an amount in excess of $250,000, together with the amount outstanding thereunder as of the date of this Agreement. For purposes of this Agreement, “ Indebtedness ” means (i) indebtedness for borrowed money, whether secured or unsecured, (ii) obligations under conditional or installment sale or other title retention agreements or arrangements relating to purchased property, (iii) capitalized lease obligations and (iv) guarantees of any of the foregoing. No event has occurred which either entitles, or could entitle (with or without notice or lapse of time or both) the holder of any Indebtedness described in Section 3.2(f) of the Company Disclosure Schedule to accelerate, or which does accelerate, the maturity of any such Indebtedness.

3.3. Subsidiaries .

(a) Section 3.3(a) of the Company Disclosure Schedule sets forth, as of the date of this Agreement, for each Subsidiary of the Company: (i) its name; (ii) the jurisdiction of organization; and (iii) the percentage ownership that the Company owns (directly or indirectly) of such Subsidiary. For purposes of this Agreement, the term “ Subsidiary ” means, with respect to any party, any corporation, partnership, trust, limited liability company or other non-corporate

 

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business enterprise in which such party (or another Subsidiary of such party) holds stock or other ownership interests representing (A) more than 50% of the voting power of all outstanding stock or ownership interests of such entity, (B) the right to receive more than 50% of the net assets of such entity available for distribution to the holders of outstanding stock or ownership interests upon a liquidation or dissolution of such entity or (C) a general or managing partnership interest in such entity.

(b) Each Subsidiary of the Company is a corporation, partnership or other entity duly organized, validly existing and in good standing (to the extent such concepts are applicable) under the laws of the jurisdiction of its incorporation or organization, has all requisite corporate or similar power and authority to own, lease and operate its properties and assets and to carry on its business as now being conducted and is duly qualified to do business and is in good standing as a foreign corporation or entity (to the extent such concepts are applicable) in each jurisdiction where the character of its properties owned, operated or leased or the nature of its activities makes such qualification necessary, except in each case for such failures that, individually or in the aggregate, are not reasonably likely to have a Company Material Adverse Effect. All of the outstanding shares of capital stock and other equity securities or interests of each Subsidiary of the Company are duly authorized, validly issued, fully paid, nonassessable and free of preemptive rights, and, except for the Stockholders’ Agreement, dated as of July 13, 2005 (the “ MidCo Stockholders’ Agreement ”), by and among Click MidCo Corp. and the stockholders party thereto, all such shares (other than directors’ qualifying shares in the case of non-U.S. Subsidiaries, all of which the Company has the power to cause to be transferred for no or nominal consideration to the Company or the Company’s designee) are owned, of record and beneficially, by the Company or another of its Subsidiaries free and clear of all security interests, liens, claims, pledges, agreements, limitations in the Company’s voting rights, charges or other encumbrances. There are no outstanding or authorized options, warrants, rights, agreements or commitments to which the Company or any of its Subsidiaries is a party or which are binding on any of them providing for the issuance, disposition or acquisition of any capital stock of any Subsidiary of the Company. There are no outstanding stock appreciation, phantom stock or similar rights with respect to any Subsidiary of the Company. Except for the MidCo Stockholders’ Agreement, there are no voting trusts, proxies or other agreements or understandings with respect to the voting of any capital stock of any Subsidiary of the Company.

(c) The Company has made available to the Buyer complete and accurate copies of the charter, by-laws or other organizational documents of each Subsidiary of the Company (the “ Subsidiary Charter Documents ”), and each such instrument is in full force and effect, and no other organizational documents are applicable to or binding upon such Subsidiaries. None of the Subsidiaries is in violation in any material respect of any of the provisions of its Subsidiary Charter Documents.

(d) The Company does not control, directly or indirectly, or have any direct or indirect equity participation or similar interest in any corporation, partnership, limited liability company, joint venture, trust or other business association or entity which is not a Subsidiary of the Company, other than securities in a publicly traded company held for investment by the Company or any of its Subsidiaries and consisting of less than 5% of the outstanding capital stock of such company.

 

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3.4. Authority; No Conflict; Required Filings and Consents; Required Company Stockholder Vote .

(a) The Company has all requisite corporate power and authority to enter into this Agreement and, subject to the adoption of this Agreement (the “ Company Voting Proposal ”) by the Company’s stockholders under the DGCL (the “ Company Stockholder Approval ”) (which adoption will be effected pursuant to the Stockholder Written Consent immediately following the execution and delivery of this Agreement) to perform its obligations and consummate the transactions contemplated by this Agreement. Without limiting the generality of the foregoing, the Board of Directors of the Company (the “ Company Board ”), at a meeting duly called and held, with all directors present voting in favor, (i) determined that the Merger is fair to and in the best interests of the Company and its stockholders, (ii) approved and adopted this Agreement and declared its advisability in accordance with the provisions of the DGCL and (iii) directed that this Agreement be submitted to the stockholders of the Company for their adoption and resolved to recommend that the stockholders of the Company vote in favor of the adoption of this Agreement. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated by this Agreement by the Company have been duly authorized by all necessary corporate action on the part of the Company, subject only to the required receipt of the Company Stockholder Approval (which will be received immediately following execution and delivery of this Agreement). This Agreement has been duly executed and delivered by the Company and constitutes the valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles (the “ Bankruptcy and Equity Exception ”).

(b) The execution and delivery of this Agreement by the Company do not, and the consummation by the Company of the transactions contemplated by this Agreement shall not, (i) conflict with, or result in any violation or breach of, any provision of the Company Charter Documents or the Subsidiary Charter Documents, (ii) conflict with, or result in any violation or breach of, or constitute (with or without notice or lapse of time, or both) a default (or give rise to a right of termination, cancellation, modification or acceleration of any obligation or loss of any material benefit) under, require a consent or waiver under, constitute a change in control under, require the payment of a penalty or increased fees under or result in the imposition of any mortgage, right of first refusal, claim, license, limitation in voting rights, security interest, pledge, lien, charge or encumbrance (“ Liens ”) on the Company’s or any of its Subsidiaries’ assets under, any of the terms, conditions or provisions of any lease, license, contract, subcontract, indenture, note, option or other agreement, instrument or obligation, written or oral (each, a “ Contract ”), to which the Company or any of its Subsidiaries is a party or by which any of them or any of their properties or assets are bound, or (iii) subject to (A) obtaining the Company Stockholder Approval (which will be obtained immediately following execution and delivery of this Agreement) and (B) compliance with the requirements specified in clauses (i) through (iv) of Section 3.4(c), conflict with or violate any permit, concession, franchise, license, judgment, injunction, order, writ, decree, statute, law, ordinance, rule, or regulation applicable to the Company or any of its Subsidiaries or any of its or their respective properties or assets, except in the case of clauses (ii) and (iii) of this Section 3.4(b) for any such conflicts, violations,

 

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breaches, defaults, terminations, cancellations, modifications, accelerations, losses, penalties, increased fees or Liens, and for any consents or waivers not obtained, that, individually or in the aggregate, are not reasonably likely to have a Company Material Adverse Effect.

(c) No consent, approval, action, license, permit, order, certification, concession, franchise or authorization of, or registration, declaration, notice or filing with, any federal, state or local U.S. or foreign court, administrative agency or commission or other governmental or regulatory authority, agency or instrumentality (a “ Governmental Entity ”) is required by or with respect to the Company or any of its Subsidiaries in connection with the execution, delivery and performance of this Agreement by the Company or the consummation by the Company of the transactions contemplated by this Agreement, except for (i) the pre-merger notification requirements (and the expiration of any waiting periods or the receipt of any clearances) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “ HSR Act ”) and applicable foreign Antitrust Laws, (ii) the filing of the Certificate of Merger with the Secretary of State of the State of Delaware and appropriate corresponding documents with the appropriate authorities of other states in which the Company is qualified as a foreign corporation to transact business in order to continue such qualification, (iii) such consents, approvals, licenses, permits, orders, registrations, declarations, notices and filings as may be required under applicable state securities laws and (iv) such other consents, approvals, licenses, permits, orders, authorizations, registrations, declarations, notices and filings which, if not obtained or made, individually or in the aggregate, are not reasonably likely to have a Company Material Adverse Effect.

(d) The affirmative vote or written consent of the holders of a majority of the outstanding shares of Company Common Stock (the “ Required Company Stockholder Vote ”) is the only vote of the holders of any class or series of the Company’s capital stock or other securities necessary for the approval and adoption of this Agreement and for the consummation by the Company of the transactions contemplated by this Agreement. There are no bonds, Contracts, debentures, warrants, options, series of capital stock, notes or other Indebtedness of the Company or its Subsidiaries having the right to vote on any matters on which stockholders of the Company may vote.

3.5. Financial Statements .

(a) Section 3.5 of the Company Disclosure Schedule sets forth the DoubleClick Inc. audited (i) Consolidated Balance Sheets as of December 31, 2006 and December 31, 2005, (ii) Consolidated Statements of Operations for the year ended December 31, 2006 and for the period July 14, 2005 through December 31, 2005 (Successor) and for the period January 1, 2005 through July 13, 2005 (Predecessor), (iii) Consolidated Statement of Cash Flows for the year ended December 31, 2006 and for the period July 14, 2005 through December 31, 2005 (Successor) and for the period January 1, 2005 through July 13, 2005 (Predecessor) and (iv) Consolidated Statements of Changes in Stockholders Equity and Comprehensive Income for the year ended December 31, 2006 and for the period July 14, 2005 through December 31, 2005 (Successor) and for the period January 1, 2005 through July 13, 2005 (Predecessor) (the financial statements described in the preceding clauses (i), (ii), (iii) and (iv) collectively, the “ Financials ”). The “ Balance Sheet Date ,” as used herein, means December 31, 2006. The

 

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Financials have been prepared in accordance with United States generally accepted accounting principles (“ GAAP ”) consistently applied throughout the periods indicated (except (A) as may be indicated in the notes to such Financials and (B) for the absence of footnotes and other presentation items that may be required by GAAP). The Financials present fairly in all material respects the Company’s consolidated financial condition, operating results and cash flows as of the dates and during the periods indicated therein. DoubleClick Inc.’s audited consolidated balance sheet as of the Balance Sheet Date is referred to hereinafter as the “ Company Balance Sheet .”

(b) DoubleClick Inc.’s auditors did not identify any “significant deficiencies” or “material weaknesses” (as such terms are defined under GAAP) in connection with the audit of the DoubleClick Inc.’s financial statements for the fiscal year ended December 31, 2005.

3.6. No Undisclosed Liabilities . Except as disclosed in the Company Balance Sheet, the Company and its Subsidiaries do not have any liabilities (whether accrued, absolute, contingent or otherwise), other than liabilities (a) incurred in connection with the transactions contemplated hereby, (b) incurred in the ordinary course of business consistent with past practice or (c) that, individually or in the aggregate, are not reasonably likely to have a Company Material Adverse Effect.

3.7. Absence of Certain Changes or Events . Between the date of the Company Balance Sheet and the date of this Agreement, (i) the Company and its Subsidiaries have conducted their respective businesses only in the ordinary course of business consistent with past practice, (ii) neither the Company nor any of its Subsidiaries has taken any action which, if taken after the date hereof, would require the consent of the Buyer under Section 5.1 of this Agreement and (iii) there has not been any change, event, circumstance or development that, individually or in the aggregate, has had or is reasonably likely to have a Company Material Adverse Effect.

3.8. Taxes . Except as would not, individually or in the aggregate, be reasonably likely to have a Company Material Adverse Effect:

(a) The Company and each of its Subsidiaries have timely filed all Tax Returns that they were required to file, and all such Tax Returns were correct and complete. The Company and each of its Subsidiaries have paid on a timely basis all Taxes due and payable (whether or not shown on any such Tax Returns). The unpaid Taxes of the Company and its Subsidiaries for Tax periods through the date of the Company Balance Sheet do not exceed the accruals and reserves for Taxes set forth on the Company Balance Sheet exclusive of any accruals and reserves for “deferred taxes” or similar items that reflect timing differences between Tax and financial accounting principles. All Taxes that the Company or any of its Subsidiaries is or was required by law to withhold or collect have been duly withheld or collected and, to the extent required, have been paid to the proper Governmental Entity. There are no liens or encumbrances with respect to Taxes upon any of the assets or property of the Company or its Subsidiaries, other than liens for Taxes not yet due and payable. For purposes of this Agreement, (i) “ Taxes ” means all taxes, charges, fees, levies or other similar assessments or liabilities, including income, gross receipts, ad valorem, premium, value-added, excise, real

 

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property, personal property, sales, use, services, license alternative or add-on minimum, transfer, withholding, employment, payroll and franchise taxes imposed by the United States of America or any state, local or foreign government, or any agency thereof, or other political subdivision of the United States or any such government, and any interest, fines, penalties, assessments or additions to tax resulting from, attributable to or incurred in connection with any tax or any contest or dispute thereof, and (ii) “ Tax Returns ” means all reports, returns, declarations, statements or other information required to be supplied to a taxing authority in connection with Taxes, including, without limitation, any information return, claim for refund, amended return or declaration of estimated Tax.

(b) There are no deficiencies for any amount of Taxes claimed, proposed or assessed by any taxing or other Governmental Entity in writing that have not been fully paid, settled or accrued for. The federal income Tax Returns of the Company and each of its Subsidiaries have been audited by the Internal Revenue Service (the “ IRS ”) or are closed by the applicable statute of limitations for all taxable years through the taxable year specified in Section 3.8 of the Company Disclosure Schedule. No examination or audit of any Tax Return of the Company or any of its Subsidiaries by any Governmental Entity is currently in progress or, to the Knowledge of the Company, threatened or contemplated. Neither the Company nor any of its Subsidiaries has been informed by any Governmental Entity that the Governmental Entity believes that the Company or any of its Subsidiaries was required to file any Tax Return that was not filed. Neither the Company nor any of its Subsidiaries has waived any statute of limitations with respect to Taxes or agreed to an extension of time with respect to a Tax assessment or deficiency.

(c) Neither the Company nor any of its Subsidiaries has any actual or potential liability for any Taxes of any person (other than the Company and its Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any similar provision of law in any jurisdiction), or as a transferee or successor, by contract or otherwise.

(d) Each Company Stock Option and Company SAR was originally granted with an exercise price that the Board of Directors of the Company, based on a reasonable valuation method, determined to be equal to or greater than the fair market value of a share of the underlying capital stock on the date of grant.

(e) Neither the Company nor any of its Subsidiaries has been either a “distributing corporation” or a “controlled corporation” in a distribution occurring during the last five years in which the parties to such distribution treated the distribution as one to which Section 355 of the Code is applicable.

(f) Neither the Company nor any of its Subsidiaries has agreed or is required to make any adjustments for any taxable period, or portion thereof, ending after the Closing Date pursuant to Section 481(a) of the Code or any similar provision of state, local or foreign law by reason of a change in accounting method initiated by it or any other relevant party and neither the Company nor any of its Subsidiaries has any knowledge that the IRS has proposed any such adjustment or change in accounting method, nor has any application pending with any

 

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Governmental Entity requesting permission for any changes in accounting methods that relate to the business or assets of the Company or any of its Subsidiaries.

(g) The Company will not 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) “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or foreign income Tax law) executed on or prior to the Closing Date, (ii) intercompany transaction or excess loss account described in the Treasury Regulations under Section 1502 of the Code (or any corresponding or similar provision of state, local or foreign income Tax law), (iii) installment sale or open transaction disposition made on or prior to the Closing Date, (iv) prepaid amount received on or prior to the Closing Date or (v) other action taken prior to the Closing Date.

(h) None of the Company or any of its Subsidiaries has engaged in a listed transaction under Treas. Reg. § 1.6011-4(b)(2), including any transaction that is the same as or substantially similar to one of the types of transactions that the Internal Revenue Service has determined to be a tax avoidance transaction and identified by notice, regulation, or other form of published guidance as a listed transaction, as set forth in Treas. Reg. § 1.6011-4(b)(2).

3.9. Owned and Leased Real Properties .

(a) Section 3.9(a) of the Company Disclosure Schedule sets forth a complete and accurate list as of the date of this Agreement of (i) the addresses of all real property owned by the Company or any Subsidiary (the “ Owned Real Property ”), (ii) the record owner of such Owned Real Property, and (iii) all loans secured by mortgages encumbering the Owned Real Property. Legal descriptions of such Owned Real Property and the most recent title reports or policies (if any) with respect to each of the Owned Real Properties have previously been made available to Buyer. The Company or its Subsidiaries are the sole owners of good, valid, fee simple and marketable title to the Owned Real Properties, including without limitation, all buildings, structures, fixtures and improvements located thereon, in each case free and clear of any Liens other than those that are not, individually or in the aggregate, reasonably likely to have a Company Material Adverse Effect.

(b) Section 3.9(b) of the Company Disclosure Schedule sets forth a complete and accurate list as of the date of this Agreement of all real property leased, subleased or licensed by the Company or any of its Subsidiaries (collectively, the “ Company Leases ,” and such real property, the “ Leased Real Property ” and together with the Owned Real Property, the “ Real Property ”) (other than (i) property subject to a Lease that is terminable by the Company or any of its Subsidiaries on no more than thirty (30) days notice without liability or financial obligation to the Company or (ii) property subject to a Lease for which the payment by the Company is less than $50,000 per month) and the location of the premises. Neither the Company nor any of its Subsidiaries nor, to the Knowledge of the Company, any other party to any Company Lease, is in default under any of the Company Leases, except where the existence of such defaults, individually or in the aggregate, is not reasonably likely to have a Company Material Adverse Effect, and each Company Lease is valid and binding and is enforceable by the Company and its

 

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Subsidiaries in accordance with its respective terms (subject to the Bankruptcy and Equity Exception), except for such failures to be valid, binding or enforceable, individually or in the aggregate, that are not reasonably likely to have a Company Material Adverse Effect. Neither the Company nor any of its Subsidiaries leases, subleases or licenses any Real Property to any person other than to the Company and its Subsidiaries. The Company has made available to the Buyer complete and accurate copies of all Company Leases.

3.10. Title to Tangible Personal Property . The Company and its Subsidiaries have legal and valid title to, or a valid and enforceable right to use, all of the tangible personal properties and assets used or held for use by the Company and its Subsidiaries in connection with the conduct of the business of the Company and its Subsidiaries, except for such defects or failures that, individually or in the aggregate, are not reasonably likely to have a Company Material Adverse Effect. All such tangible personal properties and assets, other than properties and assets in which the Company or any of its Subsidiaries has a leasehold interest, are free and clear of all Liens, except for such Liens that, individually or in the aggregate, are not reasonably likely to have a Company Material Adverse Effect.

3.11. Intellectual Property .

(a) Except for such failures that are not, individually or in the aggregate, reasonably likely to have a Company Material Adverse Effect, the Company and its Subsidiaries own, license, sublicense or otherwise possess legally enforceable rights to use all Intellectual Property necessary to conduct the business of the Company and its Subsidiaries as currently conducted. For purposes of this Agreement, the term “ Intellectual P