Exhibit 2.1
Execution Copy
AGREEMENT AND PLAN OF MERGER
among
C-COR Incorporated,
ARRIS Group, Inc.
and
Air
Merger Subsidiary, Inc.
TABLE OF CONTENTS
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ARTICLE I THE
MERGER
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SECTION 1.1
— The Merger
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SECTION 1.2
— Effective Time
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SECTION 1.3
— Effect of the Merger
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SECTION 1.4
— Subsequent Actions
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SECTION 1.5
— Certificate of Incorporation; Bylaws; Directors and
Officers of Surviving Corporation
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ARTICLE II
EFFECT ON STOCK OF THE SURVIVING CORPORATION AND THE MERGED
CORPORATION
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SECTION 2.1
— Conversion of Securities
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SECTION 2.2
— Conversion of Shares
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SECTION 2.3
— Allocation of Merger Consideration
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SECTION 2.4
— Cancellation of Treasury Shares
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SECTION 2.5
— Election of Merger Consideration and Exchange of
Shares
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SECTION 2.6
— Transfer Books
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SECTION 2.7
— No Fractional Share Certificates
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SECTION 2.8
— Options to Purchase C-COR Common Stock
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SECTION 2.9
— Restricted Stock
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SECTION 2.10
— Certain Adjustments
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SECTION 2.11
— Employee Stock Purchase Plans
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ARTICLE III
CERTAIN CORPORATE MATTERS
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SECTION 3.1
— Directors of ARRIS
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF C-COR
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SECTION 4.1
— Organization and Qualification; Subsidiaries
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SECTION 4.2
— Articles of Incorporation and Bylaws
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SECTION 4.3
— Capitalization
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SECTION 4.4
— Authority Relative to this Agreement
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SECTION 4.5
— No Conflict; Required Filings and Consents
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SECTION 4.6
— Compliance, Permits
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SECTION 4.7
— SEC Filings; Financial Statements
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SECTION 4.8
— Absence of Certain Changes or Events
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SECTION 4.9
— No Undisclosed Liabilities
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SECTION 4.10
— Absence of Litigation
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SECTION 4.11
— Joint Proxy Statement
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SECTION 4.12
— Employee Benefit Plans, Employment Agreements
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SECTION 4.13
— Labor Matters
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SECTION 4.14
— Restrictions on Business Activities
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SECTION 4.15
— Title to Property
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SECTION 4.16
— Customers
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SECTION 4.17
— Supplier Relations
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SECTION 4.18
— Inventory
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SECTION 4.19
— Taxes
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SECTION 4.20
— Environmental Matters
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SECTION 4.21
— Intellectual Property
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SECTION 4.22
— Product Warranty and Product Liability
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SECTION 4.23
— Insurance
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SECTION 4.24
— Import and Export Control Laws
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SECTION 4.25
— Foreign Corrupt Practices Act
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SECTION 4.26
— Board Recommendation; Required Vote
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SECTION 4.27
— Opinion of Financial Advisor
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SECTION 4.28
— Brokers
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SECTION 4.29
— Certain of Pennsylvania Law Not Applicable
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SECTION 4.30
— C-COR Rights Plan
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF ARRIS AND THE MERGER
SUBSIDIARY
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SECTION 5.1
— Organization and Qualification; Subsidiaries
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SECTION 5.2
— Certificate of Incorporation and By-laws
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SECTION 5.3
— Capitalization
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SECTION 5.4
— Authority Relative to this Agreement
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SECTION 5.5
— No Conflict, Required Filings and Consents
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SECTION 5.6
— Compliance, Permits
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SECTION 5.7
— SEC Filings; Financial Statements
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SECTION 5.8
— Absence of Certain Changes or Events
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SECTION 5.9
— No Undisclosed Liabilities
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SECTION 5.10
— Absence of Litigation
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SECTION 5.11
— Joint Proxy Statement
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SECTION 5.12
— Employee Benefit Plans, Employment Agreements
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SECTION 5.13
— Taxes
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SECTION 5.14
— Environmental Matters
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SECTION 5.15
— ARRIS Customers
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SECTION 5.16
— ARRIS Intellectual Property
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SECTION 5.17
— Foreign Corrupt Practices Act
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SECTION 5.18
— Opinion of Financial Advisor
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SECTION 5.19
— Brokers
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SECTION 5.20
— Financial Capability
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SECTION 5.21
— Board Recommendation; Required Vote
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SECTION 5.22
— ARRIS Rights Plan
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ARTICLE VI
CONDUCT OF BUSINESS PENDING THE MERGER
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SECTION 6.1
— Conduct of Business by C-COR Pending the
Merger
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SECTION 6.2
— No Solicitation by C-COR
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SECTION 6.3
— Conduct of Business by ARRIS Pending the
Merger
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SECTION 6.4
— Recommendation of the Board of Directors of
ARRIS
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ii
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ARTICLE VII
ADDITIONAL AGREEMENTS
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SECTION 7.1
— Joint Proxy Statement and the Registration
Statement
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SECTION 7.2
— C-COR and ARRIS Stockholders’ Meetings and
Consummation of the Merger
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SECTION 7.3
— Additional Agreements
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SECTION 7.4
— Notification of Certain Matters
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SECTION 7.5
— Access to Information
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SECTION 7.6
— Public Announcements
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SECTION 7.7
— Cooperation
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SECTION 7.8
— Indemnification, Directors, and Officers’
Insurance
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SECTION 7.9
— Employee Benefit Plans
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SECTION 7.10
— Stock Exchange Listing
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SECTION 7.11
— No Shelf Registration
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SECTION 7.12
— Affiliates
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SECTION 7.13
— Change in Control, Severance and Employment
Agreements
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SECTION 7.14
— Tax-Free Reorganization
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SECTION 7.15
— Section 16 Matters
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SECTION 7.16
— C-COR Notes
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SECTION 7.17
— C-COR Incentive Plan
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SECTION 7.18
— C-COR Intellectual Property
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SECTION 7.19
— Change of Control Notifications
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ARTICLE VIII
CONDITIONS TO THE MERGER
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SECTION 8.1
— Conditions to Obligations of Each Party to Effect the
Merger
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SECTION 8.2
— Additional Conditions to Obligations of C-COR
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SECTION 8.3
— Additional Conditions to Obligations of ARRIS
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ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
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SECTION 9.1
— Termination by Mutual Consent
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SECTION 9.2
— Termination by Either ARRIS or C-COR
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SECTION 9.3
— Termination by C-COR
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SECTION 9.4
— Termination by ARRIS
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SECTION 9.5
— Effect of Termination and Abandonment
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ARTICLE X
GENERAL PROVISIONS
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SECTION 10.1
— Non-Survival of Representations, Warranties and
Agreements
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SECTION 10.2
— Notices
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SECTION 10.3
— Expenses
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SECTION 10.4
— Certain Definitions
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SECTION 10.5
— Specific Performance
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SECTION 10.6
— Headings
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SECTION 10.7
— Severability
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SECTION 10.8
— Entire Agreement; No Third-Party Beneficiaries
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SECTION 10.9
— Assignment
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SECTION 10.10
— Governing Law; Jurisdiction and Venue
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SECTION 10.11
— Counterparts
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iii
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated
as of September 23, 2007 (this “ Agreement
”), among C-COR INCORPORATED, a Pennsylvania corporation
(“ C-COR ” or the “ Company
”), ARRIS GROUP, INC., a Delaware corporation (“
ARRIS ”), and AIR MERGER SUBSIDIARY, INC., a Delaware
corporation and wholly owned subsidiary of ARRIS (the “
Merger Subsidiary ”). C-COR, ARRIS, and the Merger
Subsidiary are herein referred to collectively as the “
Parties ” and each individually as a “
Party .”
W
I T N E S S E T H
WHEREAS, the Boards of Directors of
C-COR, ARRIS and the Merger Subsidiary have determined that it is
in the best interests of their respective stockholders that C-COR,
ARRIS and the Merger Subsidiary enter into a business combination
under which C-COR will merge with and into the Merger Subsidiary
(the “ Merger ”) and, in connection therewith,
to make certain representations, warranties and agreements in
connection with the Merger;
WHEREAS, the Boards of Directors of
C-COR, ARRIS and the Merger Subsidiary have determined that the
Merger and the other transactions contemplated hereby are
consistent with, and in furtherance of, their respective business
strategies and goals and have each adopted and approved this
Agreement and the Merger upon the terms and conditions set forth
herein; and
WHEREAS, for federal income tax
purposes, it is intended that the Merger shall constitute a
tax-free reorganization under Section 368 of the Internal
Revenue Code of 1986, as amended and the Treasury regulations
promulgated thereunder (the “ Code ”);
NOW, THEREFORE, in consideration of
the foregoing and the mutual covenants and agreements herein
contained, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, the parties
hereto hereby agree as follows:
ARTICLE I
THE
MERGER
SECTION 1.1 — The Merger
. At the Effective Time and subject to and upon the terms and
conditions of this Agreement, the Pennsylvania Business Corporation
Law (“ Pennsylvania Law ”) and the Delaware
General Corporation Law (“ Delaware Law ”), the
Merger shall be consummated, whereby C-COR shall be merged with and
into the Merger Subsidiary, the separate corporate existence of
C-COR shall cease, and the Merger Subsidiary shall continue as the
surviving corporation, which shall be a wholly owned subsidiary of
ARRIS. The Merger Subsidiary as the surviving corporation after the
Merger is herein sometimes referred to as the “ Surviving
Corporation ,” and C-COR as the non-surviving corporation
after the Merger is herein sometimes referred to as the “
Merged Corporation .”
SECTION 1.2 — Effective
Time . As promptly as practicable after the satisfaction or
waiver of the conditions set forth in Article VIII hereof and
the consummation of the Closing
referred
to in Section 7.2(b) hereof, the Parties shall cause the
Merger to be consummated by filing (i) Articles of Merger (the
“ Articles of Merger ”) with the Department of
State of the Commonwealth of Pennsylvania with respect to the
Merger and (ii) a Certificate of Merger (the “
Certificate of Merger ”) with the Secretary of State
of the State of Delaware with respect to the Merger, in such form
as required by, and executed in accordance with, the relevant
provisions of Pennsylvania Law and Delaware Law, as applicable (the
time of such filing being the “ Effective Time
”).
SECTION 1.3 — Effect of the
Merger . At the Effective Time, the effect of the Merger shall
be as provided in the applicable provisions of Pennsylvania Law and
Delaware Law. Without limiting the generality of the foregoing, and
subject thereto, at the Effective Time, all the property, rights,
privileges, powers and franchises of C-COR and the Merger
Subsidiary shall continue with, or vest in, as the case may be, the
Merger Subsidiary as the Surviving Corporation, and all debts,
liabilities and duties of C-COR and the Merger Subsidiary shall
continue to be, or become, as the case may be, the debts,
liabilities and duties of the Merger Subsidiary as the Surviving
Corporation. As of the Effective Time, the Surviving Corporation
shall be a direct wholly owned subsidiary of ARRIS.
SECTION 1.4 — Subsequent
Actions . If, at any time after the Effective Time, the
Surviving Corporation shall consider or be advised that any deeds,
bills of sale, assignments, assurances or any other actions or
things are necessary or desirable to continue in, vest, perfect or
confirm of record or otherwise in the Surviving Corporation its
right, title or interest in, to or under any of the rights,
properties, privileges, franchises or assets of either of its
constituent corporations acquired or to be acquired by the
Surviving Corporation as a result of, or in connection with, the
Merger or otherwise to carry out this Agreement, the directors and
officers of the Surviving Corporation shall be directed and
authorized to execute and deliver, in the name and on behalf of
either of such constituent corporations, all such deeds, bills of
sale, assignments and assurances and to take and do, in the name
and on behalf of each of such corporations or otherwise, all such
other actions and things as may be necessary or desirable to vest,
perfect or confirm any and all right, title and interest in, to and
under such rights, properties, privileges, franchises or assets in
the Surviving Corporation or otherwise to carry out this
Agreement.
SECTION 1.5 — Certificate of
Incorporation; Bylaws; Directors and Officers of Surviving
Corporation . Unless otherwise agreed by C-COR and ARRIS before
the Effective Time, at the Effective Time:
(a) the Certificate of
Incorporation of the Merger Subsidiary immediately prior to the
Effective Time shall be the Certificate of Incorporation of the
Merger Subsidiary as the Surviving Corporation from and after the
Effective Time, until thereafter amended as provided by Delaware
Law and such Certificate of Incorporation, except that the name of
the Merger Subsidiary as the Surviving Corporation shall be changed
to “ C-COR Incorporated ;”
(b) the Bylaws of the Merger
Subsidiary immediately prior to the Effective Time shall be the
Bylaws of the Merger Subsidiary as the Surviving Corporation from
and after the Effective Time, until thereafter amended as provided
by Delaware Law, the Certificate of Incorporation and such Bylaws;
and
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(c) the directors of the Merger
Subsidiary immediately prior to the Effective Time shall continue
to serve as directors of the Surviving Corporation, and the
officers of C-COR immediately prior to the Effective Time shall
continue to serve in their respective offices as officers of the
Surviving Corporation from and after the Effective Time, in each
case until their successors are elected or appointed or until their
resignation or removal. If, at the Effective Time, a vacancy shall
exist in any office of the Surviving Corporation, such vacancy may
thereafter be filled in the manner provided by Delaware Law and the
Bylaws of the Merger Subsidiary as the Surviving Corporation.
ARTICLE II
EFFECT ON STOCK OF THE SURVIVING
CORPORATION AND THE MERGED CORPORATION
SECTION 2.1 — Conversion of
Securities . The manner and basis of converting the shares of
common stock of the Merged Corporation at the Effective Time, by
virtue of the Merger and without any action on the part of any of
the Parties or the holder of any of such securities, shall be as
hereinafter set forth in this Article II.
SECTION 2.2 — Conversion of
Shares .
(a) Subject to Section 2.3,
each share of C-COR Common Stock (as defined herein) issued and
outstanding immediately before the Effective Time (excluding those
held in the treasury of C-COR and those owned by ARRIS, referred to
herein as the “ Excluded C-COR Shares ”) and all
rights in respect thereof, shall at the Effective Time, without any
action on the part of any holder thereof, forthwith cease to exist
and be converted into and become exchangeable, at the election of
the holder thereof: (i) for each share of C-COR Common Stock
with respect to which an election to receive cash has been
effectively made and not revoked or lost pursuant to
Section 2.5 (a “ Cash Election ”), the
right to receive in cash from ARRIS, without interest, an amount
equal to $13.75 (the “ Cash Consideration ”),
(collectively, “ Cash Election Shares ”);
(ii) for each share of C-COR Common Stock with respect to
which an election to receive ARRIS Common Stock (as defined herein)
has been effectively made and not revoked or lost pursuant to
Section 2.5 (a “ Stock Election ”), the
right to receive from ARRIS a portion of a share of ARRIS Common
Stock equal to 0.9642 of a share, subject to adjustment as set
forth in Section 2.2(b) below, (the “ Exchange
Ratio ”) of ARRIS Common Stock (the “ Stock
Consideration ”), subject to adjustment as provided in
Section 2.2(b) (collectively, the “ Stock Election
Shares ”); and (iii) for each share of C-COR Common
Stock other than shares as to which a Cash Election or a Stock
Election has been effectively made and not revoked or lost pursuant
to Section 2.5 (“ Non-Election Shares ”),
the right to receive from ARRIS such Stock Consideration and/or
Cash Consideration as is determined in accordance with
Section 2.3(b). For purposes of this Agreement, the term
“ Merger Consideration ” with respect to a given
share of C-COR Common Stock shall mean either the Cash
Consideration (with respect to a share of C-COR Common Stock
representing the right to receive the Cash Consideration) or the
Stock Consideration (with respect to a share of C-COR Common Stock
representing the right to receive the Stock Consideration).
3
(b) In the event that the
average closing price of the ARRIS Common Stock on the Nasdaq
Global Select Market (as reported in The Wall Street Journal
) for the ten trading-day period ending the third trading day prior
to the anticipated Closing Date (the “ Average Trading
Price ”) is less than $12.83 (a “ Decrease
Event ”) then ARRIS shall increase the amount of the
Stock Consideration, which increase in the Stock Consideration, at
ARRIS’ election by notice to the Exchange Agent and C-COR,
may be paid as cash or additional shares of ARRIS Common Stock,
such that the value of the aggregate Merger Consideration paid per
share of C-COR Common Stock for all outstanding shares of C-COR
Common Stock (other than Excluded C-COR Shares), calculated using
the Average Trading Price (solely for purposes of determining the
value of the shares of ARRIS Common Stock to be issued as Stock
Consideration), equals $13.08. If the Average Trading Price is more
than $15.69 (an “ Increase Event ”), then ARRIS
shall decrease the amount of the Stock Consideration such that the
value of the aggregate Merger Consideration paid per share of C-COR
Common Stock for all outstanding shares of C-COR Common Stock
(other than Excluded C-COR Shares), calculated using the Average
Trading Price (solely for purposes of determining the value of the
shares of ARRIS Common Stock to be issued as Stock Consideration),
equals $14.43. Notwithstanding the foregoing, in making the
adjustments to the Merger Consideration set forth in this Section
2.2(b), (i) ARRIS shall not be required to use an Average
Trading Price of less than $11.41 or more than $17.11, and
(ii) in the event of a Decrease Event, ARRIS shall not elect
to pay such increase in cash to the extent that such increase in
cash would result in counsel to C-COR or counsel to ARRIS being
unable to deliver its opinion contemplated by Sections 8.2(d)
or 8.3(d), respectively.
(c) Commencing immediately after
the Effective Time, each certificate that, immediately prior to the
Effective Time, represented issued and outstanding shares of C-COR
Common Stock (“ C-COR Shares ”) shall evidence
the right to receive the Merger Consideration on the basis
hereinbefore set forth, but subject to the limitations set forth in
this Article II.
(d) For all purposes of this
Agreement, unless otherwise specified, all C-COR Shares held by
retirement plans of C-COR subject to the requirements under Section
401(a) of the Code and all C-COR Shares held in non-qualified plans
of C-COR (the “ C-COR Retirement Plan Shares ”)
(i) shall be deemed to be issued and outstanding, (ii) shall
not be deemed to be held in the treasury of C-COR and
(iii) shall be converted into the right to receive the Merger
Consideration in accordance with Section 2.2(a);
provided , however , that all such C-COR Retirement
Plan Shares shall be deemed Non-Election Shares for purposes of
this Article II.
SECTION 2.3 — Allocation of
Merger Consideration .
(a) Notwithstanding any other
provision contained in this Agreement and subject to ARRIS’s
rights under Section 2.3(b) to increase the Stock
Consideration by adding cash instead of ARRIS Common Stock,
(i) the number of shares of C-COR Common Stock to be converted
into Stock Consideration pursuant to Section 2.2(a) (the
“ Stock Conversion Number ”) shall be equal to
the product obtained by multiplying (A) the number of shares
of C-COR Common Stock outstanding immediately prior to the
Effective Time by (B) 0.4909 and (ii) all of the other
shares of C-COR Common Stock outstanding immediately prior to the
Effective Time shall be converted into Cash Consideration (in case
of each of clauses (i) and (ii), excluding the Excluded C-COR
Shares).
4
(b) As soon as practicable after
the Election Deadline (as defined herein) and in any event no more
than five business days after the Closing Date (or such other date
as C-COR and ARRIS shall agree), ARRIS shall cause the Exchange
Agent to effect the allocation among holders of C-COR Common Stock
(other than Excluded C-COR Shares) of rights to receive the Cash
Consideration and the Stock Consideration as follows:
(i) If the aggregate number of C-COR
Shares with respect to which Stock Elections shall have been made
(the “ Stock Election Number ”) exceeds the
Stock Conversion Number, then all Cash Election Shares and all
Non-Election Shares of each holder thereof shall be converted into
the right to receive the Cash Consideration and Stock Election
Shares of each holder thereof will be converted into the right to
receive the Stock Consideration in respect of that number of Stock
Election Shares of such holder equal to the product obtained by
multiplying (A) the number of Stock Election Shares held by
such holder by (B) a fraction, the numerator of which is the
Stock Conversion Number and the denominator of which is the Stock
Election Number, with the remaining number of such holder’s
Stock Election Shares being converted into the right to receive the
Cash Consideration; and
(ii) If the Stock Election Number is
less than the Stock Conversion Number (the amount by which the
Stock Conversion Number exceeds the Stock Election Number being
referred to herein as the “ Shortfall Number ”),
then all Stock Election Shares shall be converted into the right to
receive the Stock Consideration and the Non-Election Shares and
Cash Election Shares shall be treated in the following manner:
(A) if the Shortfall Number is less than or equal to the
number of Non-Election Shares, then all Cash Election Shares shall
be converted into the right to receive the Cash Consideration and
the Non-Election Shares of each holder thereof shall be converted
into the right to receive the Stock Consideration in respect of
that number of Non-Election Shares equal to the product obtained by
multiplying (x) the number of Non-Election Shares held by such
holder by (y) a fraction, the numerator of which is the
Shortfall Number and the denominator of which is the total number
of Non-Election Shares, with the remaining number of such
holder’s Non-Election Shares being converted into the right
to receive the Cash Consideration; or (B) if the Shortfall
Number exceeds the number of Non-Election Shares, then all
Non-Election Shares shall be converted into the right to receive
the Stock Consideration and Cash Election Shares of each holder
thereof shall be converted into the right to receive the Stock
Consideration in respect of that number of Cash Election Shares
equal to the product obtained by multiplying (x) the number of
Cash Election Shares held by such holder by (y) a fraction,
the numerator of which is the amount by which the Shortfall Number
exceeds the total number of Non-Election Shares and the denominator
of which is the total number of Cash Election Shares, with the
remaining number of such holder’s Cash Election Shares being
converted into the right to receive the Cash Consideration.
SECTION 2.4 — Cancellation
of Treasury Shares . Except as provided in Section 2.2(d),
at the Effective Time, each share of C-COR Common Stock held in the
treasury of C-COR or owned by ARRIS immediately prior to the
Effective Time shall be canceled and retired and no shares of stock
or other securities of ARRIS or the Surviving Corporation shall be
issuable, and no payment or other consideration shall be made, with
respect thereto.
5
SECTION 2.5 — Election of
Merger Consideration and Exchange of Shares . Each holder of
record of C-COR Common Stock (other than (i) Excluded C-COR
Shares and (ii) C-COR Retirement Plan Shares) shall have the
right, subject to the limitations set forth in this Article II
to submit an election in accordance with the following
procedures:
(a) Each holder may specify in a
request made in accordance with the provisions of this
Section 2.5 (herein called an “ Election ”)
(i) the number of C-COR Shares owned by such holder with
respect to which such holder desires to make a Stock Election and
(ii) the number of C-COR Shares owned by such holder with
respect to which such holder desires to make a Cash Election.
(b) Subject to the terms and
conditions hereof, at or prior to the Effective Time, ARRIS and
C-COR shall jointly appoint an exchange agent to effect the
exchange of C-COR Shares for the Merger Consideration in accordance
with the provisions of this Article II (the “
Exchange Agent ”). Prior to the Effective Time, ARRIS
shall deposit, or cause to be deposited, with the Exchange Agent
cash and certificates representing ARRIS Common Stock sufficient to
pay all amounts for conversion of C-COR Shares in accordance with
the provisions of Section 2.2 hereof, it being understood that
any and all interest earned on funds deposited with the Exchange
Agent shall be turned over to ARRIS. Commencing immediately after
the Effective Time and until the appointment of the Exchange Agent
shall be terminated, each holder of a certificate or certificates
theretofore representing C-COR Shares may surrender the same to the
Exchange Agent, and, after the appointment of the Exchange Agent
shall be terminated, any such holder may surrender any such
certificate to ARRIS. Each holder shall be entitled upon such
surrender to receive in exchange therefor the Cash Consideration
and a certificate or certificates representing the number of full
shares of the Stock Consideration into which the C-COR Shares
theretofore represented by the certificate or certificates so
surrendered shall have been converted in accordance with the
provisions of Section 2.2 hereof, together with a cash payment in
lieu of fractional shares, if any, in accordance with
Section 2.7 hereof. All such shares of ARRIS Common Stock
issued as Stock Consideration shall be issued at the Effective
Time. Until so surrendered and exchanged, each outstanding
certificate that, prior to the Effective Time, represented issued
and outstanding C-COR Shares shall be for all corporate purposes of
ARRIS, other than the payment of dividends and other distributions,
if any, to evidence the right to receive the Merger Consideration.
Unless and until any such certificate theretofore representing
C-COR Shares is so surrendered, no dividend or other distribution,
if any, payable to the holders of record of ARRIS Common Stock as
of any date subsequent to the Effective Time shall be paid to the
holder of such certificate in respect thereof. Except as otherwise
provided in Section 2.6 hereof, upon the surrender of any such
certificate theretofore representing C-COR Shares, however, the
record holder of the certificate or certificates representing
shares of ARRIS Common Stock issued in exchange therefor shall
receive from the Exchange Agent or from ARRIS, as the case may be,
payment of the amount of dividends and other distributions, if any,
that as of any date subsequent to the Effective Time and until such
surrender shall have become payable with respect to such number of
shares of ARRIS Common Stock (“ Pre-Surrender
Dividends ”). No interest shall be payable with respect
to the payment of Pre-Surrender Dividends upon the surrender of
certificates theretofore representing C-COR Shares. After the
appointment of the Exchange Agent shall have been terminated, any
holders of certificates representing C-COR Shares which have not
received payment of Pre-Surrender Dividends shall look only to
ARRIS for payment thereof. Notwithstanding the foregoing provisions
of this
6
Section 2.5(b), neither the Exchange Agent nor any Party shall
be liable to a holder of C-COR Shares for any Cash Consideration,
Stock Consideration, any dividends or distributions thereon or any
cash payment for fractional shares as contemplated by
Section 2.7, delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law or to a
transferee.
(c) ARRIS shall cause the
Exchange Agent to mail to the shareholders of C-COR entitled to
vote at the C-COR Stockholders’ Meeting (as defined herein),
at the time that the Joint Proxy Statement (as defined herein) is
provided to the stockholders of C-COR, a form reasonably acceptable
to C-COR (the “ Form of Election ”) pursuant to
which C-COR’s stockholders shall be entitled to exercise
their right to make an Election prior to the Election Deadline (as
defined herein), and shall cause the Exchange Agent to use all
reasonable efforts to make available as promptly as possible a Form
of Election to any stockholder of C-COR who requests such Form of
Election following the initial mailing of the Form of Election and
prior to the Election Deadline. In no event shall the initial
mailing of the Form of Election to C-COR’s stockholders be
made less than 20 days prior to the Election Deadline.
(d) Any Election shall have been
made properly only if the person authorized to receive Elections
and to act as Exchange Agent under this Agreement, shall have
received, by 5:00 p.m. New York City time on the date of the
Election Deadline, a Form of Election properly completed and
signed. As used herein, “ Election Deadline ”
means 5:00 p.m. New York City time on the date that is the business
day prior to the date of the C-COR Stockholders Meeting (or at such
other date and time as C-COR and ARRIS shall agree). ARRIS and
C-COR shall cooperate to issue a press release announcing the date
of the Election Deadline not more than fifteen business days
before, and at least five business days prior to, the Election
Deadline (and, if C-COR and ARRIS shall agree to any extension
thereof, C-COR and ARRIS shall make a public announcement of any
such extension as far as reasonably practicable prior to such new
Election Deadline).
(e) If ARRIS shall determine in
its reasonable discretion that any Election is not properly made
with respect to any C-COR Shares, such Election shall be deemed to
be not in effect, thereafter timely filed. Any stockholder of C-COR
may, at any time prior to the Election Deadline, change his, her or
its Election by written notice received by the Exchange Agent prior
to the Election Deadline accompanied by a properly completed and
signed, revised Form of Election. Any stockholder of C-COR may, at
any time prior to the Election Deadline, revoke his, her or its
Election by written notice received by the Exchange Agent prior to
the Election Deadline.
(f) Each of the Exchange Agent,
ARRIS and the Surviving Corporation will be entitled to deduct and
withhold from the Merger Consideration otherwise payable pursuant
to this Agreement to any holder of shares of C-COR Common Stock
such amounts as it is required to deduct and withhold with respect
to the making of such payment under the Code, or any other
applicable state, local or foreign law related to Taxes. To the
extent that amounts are so withheld by the Surviving Corporation or
ARRIS, as the case may be, such withheld amounts (i) will be
remitted by ARRIS or the Surviving Corporation, as the case may be,
to the applicable governmental entity, and (ii) will be
treated for all purposes of this Agreement as having been paid to
the holder of the share of C-COR Common Stock in respect of which
such deduction and withholding was made by the Surviving
Corporation or ARRIS, as the case may be.
7
(g) If any certificate formerly
representing C-COR Shares shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the
person claiming such certificate to be lost, stolen or destroyed
and, if required by ARRIS, the posting by such person of a bond, in
such reasonable amount as ARRIS may direct, as indemnity against
any claim that may be made against it with respect to such
certificate, the Exchange Agent shall pay, in exchange for such
lost, stolen or destroyed certificate, the Merger Consideration to
be paid in respect of C-COR Shares represented by such certificate,
as contemplated by this Section 2.5.
SECTION 2.6 — Transfer
Books . The stock transfer books of C-COR shall be closed at
the Effective Time and no transfer of any C-COR Shares will
thereafter be recorded on any of such stock transfer books. In the
event of a transfer of ownership of C-COR Shares that is not
registered in the stock transfer records of C-COR at the Effective
Time, cash and a certificate or certificates representing the
number of full shares of ARRIS Common Stock into which such C-COR
Shares shall have been converted shall be issued to the transferee
together with a cash payment in lieu of fractional shares, if any,
in accordance with Section 2.7 hereof, and a cash payment in
the amount of Pre-Surrender Dividends, if any, in accordance with
Section 2.5(b) hereof, if the certificate or certificates
representing such C-COR Shares is or are surrendered as provided in
Section 2.5 hereof, accompanied by all documents required to
evidence and effect such transfer and by evidence of payment of any
applicable stock transfer tax.
SECTION 2.7 — No Fractional
Share Certificates . Notwithstanding any other provision of
this Agreement, each holder of shares of C-COR Common Stock
exchanged pursuant to the Merger who otherwise would have been
entitled to receive a fraction of a share of ARRIS Common Stock
(after taking into account all certificates delivered by such
holder) shall receive, in lieu thereof, cash (without interest) in
an amount equal to such fractional part of a share of ARRIS Common
Stock multiplied by the Average Trading Price. No such holder will
be entitled to dividends, voting rights, or any other rights as a
stockholder in respect of any fractional shares.
SECTION 2.8 — Options to
Purchase C-COR Common Stock .
(a) At the Effective Time, each
option granted by C-COR to purchase shares of C-COR Common Stock
that is outstanding and unexercised immediately prior to the
Effective Time (the “ Assumed Equity Awards ”),
whether vested or unvested, shall be assumed by ARRIS and converted
into an option or warrant to purchase shares of ARRIS Common Stock
in such amount and at such exercise price as provided below and
otherwise having the same terms, conditions and restrictions as are
in effect immediately prior to the Effective Time (except to the
extent that such terms, conditions and restrictions may be altered
in accordance with their terms as a result of the transactions
contemplated hereby):
(i) the number of shares of ARRIS
Common Stock to be subject to the new option or warrant shall be
equal to the product of (x) the number of shares of C-COR
Common Stock subject to the original option or warrant multiplied
by (y) 0.9642 (the “ Option Exchange Ratio
”), rounded down to the nearest whole share; provided
, however , that (A) in the event of a Decrease Event
under Section 2.2(b), the Option Exchange Ratio shall be the
quotient obtained by dividing $13.08 by the Average Trading Price,
and (B) in the event of an Increase Event under
Section 2.2(b), the Option Exchange
8
Ratio shall be
the quotient obtained by dividing $14.43 by the Average Trading
Price, in the case of either (A) or (B), rounded down to the
nearest whole share; provided , further , that ARRIS
shall not be required to use an Average Trading Price of less than
$11.41 or more than $17.11; and
(ii) the exercise price per share of
ARRIS Common Stock under the new option or warrant shall be equal
to the result of (x) the exercise price per share of the C-COR
Common Stock under the original option or warrant divided by
(y) the applicable Option Exchange Ratio, rounded up to the
nearest cent.
(b) For purposes of Section 4(b)
of the C-COR Amended and Restated Incentive Plan (the “
Incentive Plan ”), the provisions of
Section 2.8(a) constitute an adjustment in the number and
option price of shares subject to, and the consideration to be
issued upon the exercise of, outstanding Options (as defined in the
Incentive Plan), as determined appropriate by the Board of
Directors of C-COR, as of the Effective Time, and no further action
or amendment of the Incentive Plan shall be necessary to implement
such adjustment.
(c) The adjustments provided
herein shall, to the extent applicable, be effected in a manner
consistent with Section 409A of the Code so as not to be
treated as new grants or awards or as a change in the form of
payment, and with respect to any options that are “incentive
stock options” (as defined in Section 422 of the Code)
shall be effected in a manner consistent with Section 424(a) of the
Code.
(d) ARRIS shall take all
corporate actions necessary to reserve for issuance a sufficient
number of shares of ARRIS Common Stock for delivery upon exercise
of the Assumed Equity Awards assumed in accordance with this
Section 2.8. Within ten (10) business days following the
Effective Time, ARRIS shall file a registration statement on Form
S-8 (or any successor form) with respect to ARRIS Common Stock
subject to such Assumed Equity Awards and shall use its reasonable
best efforts to maintain the effectiveness of such registration
statement or registration statements (and maintain the current
status of the prospectus or prospectuses contained therein) for so
long as such Assumed Equity Awards remain outstanding.
(e) As of the Effective Time,
ARRIS shall assume the obligations and succeed to the rights of
C-COR under the Incentive Plan with respect to the Assumed Equity
Awards.
(f) At the Effective Time, each
warrant granted by C-COR to purchase shares of C-COR Common Stock
that is outstanding and unexercised immediately prior to the
Effective Time, whether vested or unvested, shall be canceled and
no shares of stock or other securities of ARRIS or the Surviving
Corporation shall be issuable, and no payment or other
consideration shall be made with respect thereto. C-COR will take
all steps reasonably necessary to notify the holders of such
warrants of the anticipated Effective Time as required by the
applicable warrant agreements.
SECTION 2.9 — Restricted
Stock . At the Effective Time, each share of C-COR Common Stock
awarded pursuant to any plan, arrangement or transaction, and
outstanding immediately prior to the Effective Time shall be
treated as fully vested and shall be exchanged in accordance with
Section 2.2 hereof with respect to such percentage of such award
equal to the
9
percentage of the applicable restriction period for such award that
has elapsed as of the Effective Time.
SECTION 2.10 — Certain
Adjustments . If between the date hereof and the Effective
Time, the outstanding shares of C-COR Common Stock or of ARRIS
Common Stock shall be changed into a different number of shares by
reason of any reclassification, recapitalization, split-up,
combination or exchange of shares, or any dividend payable in stock
or other securities shall be declared thereon with a record date
within such period, the Exchange Ratio and Option Exchange Ratio
shall be adjusted accordingly to provide to the holders of C-COR
Common Stock and ARRIS Common Stock the same economic effect as
contemplated by this Agreement prior to such reclassification,
recapitalization, split-up, combination, exchange or
dividend.
SECTION 2.11 — Employee
Stock Purchase Plans . C-COR shall take all actions with
respect to the 1992 Stock Purchase Plan (the “ 1992
SPP ”) as are necessary to assure that (i) the 1992
SPP shall be suspended as soon as permitted by the terms of the
1992 SPP and (ii) there shall not be any additional Offering
Period (as defined in the 1992 SPP) following the date of this
Agreement.
ARTICLE III
CERTAIN CORPORATE MATTERS
SECTION 3.1 — Directors of
ARRIS . As soon as practicable after the Effective Time, ARRIS
shall take such steps as are reasonably necessary to ensure that a
nominee to the Board of Directors of ARRIS as selected by C-COR
(and reasonably acceptable to ARRIS) is appointed to the Board of
Directors of ARRIS.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF C-COR
C-COR hereby represents and warrants
to ARRIS and the Merger Subsidiary that, except as set forth in the
written disclosure schedule delivered on or prior to the date
hereof by C-COR to ARRIS and the Merger Subsidiary that is arranged
in paragraphs corresponding to the numbered and lettered paragraphs
contained in this Article IV (the “ C-COR Disclosure
Schedule ”) that the statements contained in this
Article IV are true and correct. The C-COR Disclosure Schedule
shall be arranged in paragraphs corresponding to the numbered and
lettered paragraphs contained in this Article IV. Unless
otherwise stated therein, if the disclosure of any paragraph lists
an item or information in such a way as to make its relevance to
the disclosure required in another paragraph reasonably apparent on
its face, such disclosure shall qualify and apply to the other
paragraph.
SECTION 4.1 — Organization
and Qualification; Subsidiaries . Each of C-COR and each of its
Subsidiaries (as defined herein) is an entity duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its organization, and has the requisite corporate
power and authority and is in possession of all franchises, grants,
authorizations, licenses, permits, easements, consents,
certificates, approvals and orders (“ Approvals
”) necessary to own, lease and operate the properties it
purports to own, operate or lease and to
10
carry on
its business as it is now being conducted, except where the failure
to be in good standing or to have such Approvals would not have a
Material Adverse Effect. Each of C-COR and each of its Subsidiaries
is duly qualified or licensed as a foreign entity to do business,
and is in good standing, in each jurisdiction where the character
of its properties owned, leased or operated by it or the nature of
its activities makes such qualification or licensing necessary,
except for such failures to be so duly qualified or licensed and in
good standing that would not have a Material Adverse Effect. A true
and complete list of all of C-COR’s Subsidiaries, together
with the jurisdiction of organization of each Subsidiary and the
percentage of each Subsidiary’s outstanding capital stock or
ownership interests owned by C-COR or another Subsidiary, is set
forth in Section 4.1 of the C-COR Disclosure Schedule. Except
as set forth in Section 4.1 of the C-COR Disclosure Schedule,
C-COR does not directly or indirectly own any equity or similar
interest in, or any interest convertible into or exchangeable or
exercisable for, any equity or similar interest in, any
corporation, partnership, joint venture or other business
association or entity, with respect to which interest C-COR or any
of its Subsidiaries has invested or is required to invest $50,000
or more, excluding securities in any publicly traded company held
for investment and comprising less than five percent of the
outstanding stock of such company.
SECTION 4.2 — Articles of
Incorporation and Bylaws . C-COR has heretofore furnished to
ARRIS a complete and correct copy of its Articles of Incorporation
and Bylaws as most recently restated and subsequently amended to
date, and has furnished or made available to ARRIS and the Merger
Subsidiary the Articles of Incorporation and Bylaws (or equivalent
organizational documents) of each of its Subsidiaries (the “
Subsidiary Documents ”). Such Articles of
Incorporation, Bylaws and Subsidiary Documents are in full force
and effect. Neither C-COR nor any of its Subsidiaries is in
violation of any of the provisions of its Articles of Incorporation
or Bylaws or Subsidiary Documents, except for immaterial violations
of the Subsidiary Documents that may exist.
SECTION 4.3 —
Capitalization . The authorized capital stock of C-COR
consists of (i) 100,000,000 shares of C-COR Common Stock and
(ii) 2,000,000 shares of preferred stock, no par value per
share, none of which is issued and outstanding and none of which is
reserved for issuance. As of September 20, 2007,
(i) 50,288,695 shares of C-COR Common Stock were issued and
outstanding, all of which are validly issued, fully paid and
nonassessable, and 3,644,980 shares were held in treasury,
(ii) no shares of C-COR Common Stock were held by Subsidiaries
of C-COR, (iii) 4,216,184 shares of C-COR Common Stock were
reserved for future issuance pursuant to warrants or pursuant to
outstanding stock options or other similar rights granted under
C-COR incentive plans and agreements listed in Section 4.3 of
the C-COR Disclosure Schedule (“ C-COR’s Stock
Option Plans ”), (iv) 2,838,168 shares reserved for
future issuance upon the conversion of the 3.5% Convertible Senior
Unsecured Notes due 2009 (the “ C-COR Notes ”)
and (v) 563,853 shares of C-COR Common Stock were reserved for
future issuance under C-COR’s 1992 Stock Purchase Plan.
Except as set forth in Section 4.3 or Section 4.12 of the
C-COR Disclosure Schedule, and other than the C-COR Notes, there
are no options, warrants, convertible securities or other similar
rights, agreements, arrangements or commitments of any character
relating to the issued or unissued capital stock of C-COR or any of
its Subsidiaries or obligating C-COR or any of its Subsidiaries to
issue or sell any shares of capital stock of, or other equity
interests in, C-COR or any of its Subsidiaries. All shares of C-COR
Common Stock subject to issuance as aforesaid, upon issuance on the
terms and conditions
11
specified in the instruments pursuant to which they are issuable,
shall be duly authorized, validly issued, fully paid and
nonassessable. Except as disclosed in Section 4.3 of the C-COR
Disclosure Schedule, there are no obligations, contingent or
otherwise, of C-COR or any of its Subsidiaries to repurchase,
redeem or otherwise acquire any shares of C-COR Common Stock or the
capital stock of any Subsidiary or to provide funds to or make any
investment (in the form of a loan, capital contribution or
otherwise) in any such Subsidiary or any other entity. There are no
preemptive rights with respect to the C-COR Common Stock. Except as
set forth in Sections 4.1 and 4.3 of the C-COR Disclosure
Schedule, all of the outstanding shares of capital stock of each of
C-COR’s Subsidiaries are duly authorized, validly issued,
fully paid and nonassessable, and all such shares are owned by
C-COR or another Subsidiary of C-COR free and clear of all security
interests, liens, claims, pledges, agreements, limitations in
C-COR’s voting rights, charges or other encumbrances of any
nature whatsoever.
SECTION 4.4 — Authority
Relative to this Agreement . C-COR has all necessary corporate
power and authority to execute and deliver this Agreement and to
perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery of
this Agreement by C-COR and the consummation by C-COR of the
transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action, and no other
corporate proceedings on the part of C-COR are necessary to
authorize this Agreement or to consummate the transactions so
contemplated (other than the adoption of this Agreement by the
holders of at least a majority of the votes cast at the C-COR
Stockholders’ Meeting by the holders of all outstanding
shares of C-COR Common Stock entitled to vote in accordance with
Pennsylvania Law and C-COR’s Articles of Incorporation and
Bylaws). The Board of Directors of C-COR has determined that the
Merger upon the terms and subject to the conditions of this
Agreement is advisable and in the best interests of C-COR’s
stockholders. This Agreement has been duly and validly executed and
delivered by C-COR and, assuming the due authorization, execution
and delivery by ARRIS and the Merger Subsidiary, as applicable,
constitutes a legal, valid and binding obligation of C-COR
enforceable against C-COR in accordance with its terms.
SECTION 4.5 — No Conflict;
Required Filings and Consents .
(a) Section 4.5(a) of the
C-COR Disclosure Schedule includes a list of all agreements to
which C-COR or any of its Subsidiaries is a party or by which any
of them is bound that, as of the date hereof: (i) are required
to be filed as “material contracts” with the SEC
pursuant to the requirements of the Exchange Act (as defined
herein); (ii) under which the consequences of a default,
nonrenewal, termination or reduction of purchases or sales
thereunder could have a Material Adverse Effect on C-COR; or
(iii) pursuant to which payments might be required or
acceleration of benefits may be required upon a “change of
control” of C-COR (collectively, the “ Material
Contracts ”).
(b) Except as set forth in
Section 4.5(b) of the C-COR Disclosure Schedule, the execution
and delivery of this Agreement by C-COR does not, and the
performance of this Agreement by C-COR will not, (i) conflict
with or violate the Articles of Incorporation, Bylaws or Subsidiary
Documents of C-COR or any of its Subsidiaries, (ii) conflict
with or violate any law, rule, regulation, order, judgment or
decree applicable to C-COR or any of its Subsidiaries or by which
its or any of their respective properties is bound or affected, or
(iii) result in any breach
12
of or
constitute a default (or an event that with notice or lapse of time
or both would become a default) under, or impair C-COR’s or
any of its Subsidiaries’ rights or alter the rights or
obligations of any third party under, or give to others any rights
of termination, amendment, acceleration or cancellation of any
Material Contract, or result in the creation of a lien or
encumbrance on any of the properties or assets of C-COR or any of
its Subsidiaries pursuant to any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which C-COR or any of its Subsidiaries
is a party or by which C-COR or any of its Subsidiaries or its or
any of their respective properties is bound or affected, except in
such cases for any such conflicts, violations, breaches, defaults,
liens or other occurrences with respect to (ii) and
(iii) above that would not have a Material Adverse
Effect.
(c) Except as set forth in
Section 4.5(c) of the C-COR Disclosure Schedule, the execution
and delivery of this Agreement by C-COR does not, and the
performance of this Agreement by C-COR will not, require any
consent, approval, authorization or permit of, or filing with or
notification to, any governmental or regulatory authority, domestic
or foreign, except (i) for applicable requirements, if any, of
the 1933 Act, the Exchange Act, the pre-merger notification
requirements of the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (“ HSR Act ”), and the filing
of the Articles of Merger and the Certificate of Merger, and
(ii) where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or
notifications, would not prevent or delay consummation of the
Merger, or otherwise prevent or delay C-COR from performing its
obligations under this Agreement, or would not otherwise have a
Material Adverse Effect.
SECTION 4.6 — Compliance,
Permits .
(a) Except as disclosed in
Section 4.6(a) of the C-COR Disclosure Schedule, neither C-COR
nor any of its Subsidiaries is in conflict with, or in default or
violation of, (i) any law, rule, regulation, order, judgment
or decree applicable to C-COR or any of its Subsidiaries or by
which its or any of their respective properties is bound or
affected or (ii) any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which C-COR or any of its Subsidiaries
is a party or by which C-COR or any of its Subsidiaries or its or
any of their respective properties is bound or affected, except for
any such conflicts, defaults or violations that would not have a
Material Adverse Effect.
(b) Except as disclosed in
Section 4.6(b) of the C-COR Disclosure Schedule, C-COR and its
Subsidiaries hold all permits, licenses, easements, variances,
exemptions, consents, certificates, orders and approvals from
governmental authorities that are material to the operation of the
business of C-COR and its Subsidiaries taken as a whole as it is
now being conducted (collectively, the “ C-COR Permits
”), except where the failure to have such C-COR Permits would
not have a Material Adverse Effect. C-COR and its Subsidiaries are
in compliance with the terms of the C-COR Permits, except where the
failure to so comply would not have a Material Adverse
Effect.
SECTION 4.7 — SEC Filings;
Financial Statements .
(a) C-COR has filed all forms,
reports and documents required to be filed with the SEC and has
made available to ARRIS (i) its Annual Reports on Form 10-K
for the fiscal years
13
ended
June 24, 2005, June 30, 2006 and June 29, 2007,
(ii) all proxy statements relating to C-COR’s meetings
of stockholders (whether annual or special) held since
June 25, 2004, (iii) all other reports or registration
statements filed by C-COR with the Securities and Exchange
Commission (the “ SEC ”) since June 25,
2004, and (iv) all amendments and supplements to all such
reports and registration statements filed by C-COR with the SEC
since June 25, 2004 (collectively, the “ C-COR SEC
Reports ”). Except as disclosed in Section 4.7(a) of
the C-COR Disclosure Schedule, the C-COR SEC Reports (i) were
prepared in all material respects in accordance with the
requirements of the 1933 Act (as defined herein) or the Exchange
Act, as the case may be, and (ii) did not at the time they were
filed (or if amended or superseded by a filing prior to the date of
this Agreement, then on the date of such filing) contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading. None of C-COR’s Subsidiaries
is required to file any forms, reports or other documents with the
SEC.
(b) Except as disclosed in
Section 4.7(b) of the C-COR Disclosure Schedule, each of the
consolidated financial statements (including, in each case, any
related notes thereto) contained in the C-COR SEC Reports was
prepared in accordance with GAAP applied on a consistent basis
throughout the periods involved (except as may be indicated in the
notes thereto), and each fairly presents in all material respects
the consolidated financial position of C-COR and its Subsidiaries
as at the respective dates thereof and the consolidated results of
its operations and cash flows for the periods indicated, except
that the unaudited interim financial statements were subject to
normal and recurring year-end adjustments which were not, or are
not expected to be, material in amount.
(c) C-COR has established and
maintains “disclosure controls and procedures” (as
defined in Rule 13a-15(e) promulgated under the Exchange Act)
that are reasonably designed to ensure that material information
(both financial and non-financial) relating to C-COR and its
Subsidiaries required to be disclosed by C-COR in the reports that
it files or submits under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the
rules and forms of the SEC, and that such information is
accumulated and communicated to C-COR’s principal executive
officer and principal financial officer, or persons performing
similar functions, as appropriate to allow timely decisions
regarding disclosure and to make the certifications of the
principal executive officer and the principal financial officer of
C-COR required by Section 302 of the Sarbanes-Oxley Act of
2002 (“ Sarbanes-Oxley ”) with respect to such
reports. For purposes of this Agreement, “principal executive
officer” and “principal financial officer” shall
have the meanings given to such terms in Sarbanes-Oxley.
(d) C-COR has established and
maintains a “system of internal control over financial
reporting” (as defined in Rule 13a-15(f) promulgated
under the Exchange Act) (“ internal controls ”).
Such internal controls are sufficient to provide reasonable
assurance regarding the reliability of C-COR’s financial
reporting and the preparation of C-COR’s financial statements
for external purposes in accordance with GAAP (as defined herein).
C-COR has disclosed, based on its most recent evaluation of
internal controls prior to the date hereof, to C-COR’s
auditors and audit committee (i) any significant deficiencies
and material weaknesses known to C-COR in the design or operation
of internal controls which are reasonably likely to adversely
affect in a material respect C-COR’s ability to record,
process, summarize and report financial information
14
and
(ii) any material fraud known to C-COR that involves
management or other employees who have a significant role in
internal controls. C-COR has made available to ARRIS a summary of
any such disclosure regarding material weaknesses and fraud made by
management to C-COR’s auditors and audit committee since
July 1, 2005. For purposes of this Agreement, a
“significant deficiency” in controls means an internal
control deficiency that adversely affects an entity’s ability
to initiate, authorize, record, process, or report external
financial data reliably in accordance with GAAP. A
“significant deficiency” may be a single deficiency or
a combination of deficiencies that results in more than a remote
likelihood that a misstatement of the annual or interim financial
statements that is more than inconsequential will not be prevented
or detected. For purposes of this Agreement, a “material
weakness” in internal controls means a significant
deficiency, or a combination of significant deficiencies, that
results in more than a remote likelihood that a material
misstatement of the annual or interim financial statements will not
be prevented or detected.
SECTION 4.8 — Absence of
Certain Changes or Events . Except as set forth in
Section 4.8 of the C-COR Disclosure Schedule or the C-COR SEC
Reports, since June 29, 2007, C-COR has conducted its business
in the ordinary course and there has not occurred: (i) any
Material Adverse Effect; (ii) any amendments or changes in the
Articles of Incorporation or Bylaws of C-COR; (iii) any damage
to, destruction or loss of any asset of C-COR (whether or not
covered by insurance) that would have a Material Adverse Effect;
(iv) any material change by C-COR in its accounting methods,
principles or practices, except as disclosed in Section 4.8 of
the C-COR Disclosure Schedule; (v) any material revaluation by
C-COR of any of its assets, including, without limitation, writing
down the value of inventory or writing off notes or accounts
receivable other than in the ordinary course of business;
(vi) any other action or event that would have required the
consent of ARRIS pursuant to Section 6.1 had such action or
event occurred after the date of this Agreement; or (vii) any
sale of a material amount of property of C-COR or any of its
Subsidiaries, except in the ordinary course of business.
SECTION 4.9 — No Undisclosed
Liabilities . Except as is disclosed in Section 4.9 of the
C-COR Disclosure Schedule, neither C-COR nor any of its
Subsidiaries has any liabilities (absolute, accrued, contingent or
otherwise), except liabilities (a) in the aggregate adequately
provided for in C-COR’s audited balance sheet (including any
related notes thereto) as of June 29, 2007 (the “
2007 C-COR Balance Sheet ”), (b) incurred in the
ordinary course of business and not required under GAAP to be
reflected on the 2007 C-COR Balance Sheet, (c) incurred since
June 29, 2007, in the ordinary course of business consistent
with past practice, or (d) incurred in connection with this
Agreement.
SECTION 4.10 — Absence of
Litigation . Except as set forth in Section 4.10 of the
C-COR Disclosure Schedule, there are no claims, actions, suits or
proceedings pending or, to the knowledge of C-COR, overtly
threatened and to the knowledge of C-COR, there are no
investigations pending or threatened against C-COR or any of its
Subsidiaries, or any properties or rights of C-COR or any of its
Subsidiaries, before any court, arbitrator or administrative,
governmental or regulatory authority or body, domestic or foreign,
could reasonably be expected to result in a liability in excess of
$500,000.
SECTION 4.11 — Joint Proxy
Statement . None of the information supplied or to be supplied
by or on behalf of C-COR for inclusion or incorporation by
reference in the registration
15
statement to be filed with the SEC by ARRIS in connection with the
issuance of shares of ARRIS Common Stock in the Merger (the “
Registration Statement ”) will, at the time the
Registration Statement becomes effective under the 1933 Act,
contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under
which they were made, not misleading. None of the information
supplied or to be supplied by or on behalf of C-COR for inclusion
or incorporation by reference in the joint proxy statement, in
definitive form, relating to the meetings of C-COR and ARRIS
stockholders to be held in connection with the Merger, or in the
related proxy and notice of meeting, or soliciting material used in
connection therewith (referred to herein collectively as the
“ Joint Proxy Statement ”) will, at the dates
mailed to stockholders and at the times of the C-COR
Stockholders’ Meeting and the ARRIS Stockholders’
Meeting (as defined herein), contain any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made,
not misleading. The information provided by C-COR for inclusion in
the Joint Proxy Statement (except for information relating solely
to ARRIS) will comply as to form in all material respects with the
provisions of the Exchange Act and the rules and regulations
promulgated thereunder.
SECTION 4.12 — Employee
Benefit Plans, Employment Agreements .
(a) Section 4.12(a) of the
C-COR Disclosure Schedule lists all employee pension plans (as
defined in Section 3(2) of the Employee Retirement Income
Security Act of 1974 (“ ERISA ”)), all material
employee welfare plans (as defined in Section 3(1) of ERISA)
and all other material bonus, stock option, stock purchase,
incentive, deferred compensation, supplemental retirement,
severance and other similar fringe or employee benefit plans,
programs or arrangements, and any material current or former
employment, executive compensation, consulting or severance
agreements, written or otherwise, for the benefit of, or relating
to, any employee of or consultant to C-COR, any trade or business
(whether or not incorporated) which is a member of a controlled
group including C-COR or which is under common control with C-COR
(an “ ERISA Affiliate ”) within the meaning of
Section 414 of the Code, or any Subsidiary of C-COR, as well
as each plan with respect to which C-COR or an ERISA Affiliate
could incur liability under Section 4069 (if such plan has
been or were terminated) or Section 4212(c) of ERISA (collectively
the “ C-COR Employee Plans ”). C-COR has made
available to ARRIS copies of (i) each such written C-COR
Employee Plan (other than those referred to in Section 4(b)(4)
of ERISA), (ii) the most recent annual report on
Form 5500 series, with accompanying schedules and attachments,
filed with respect to each C-COR Employee Plan required to make
such a filing, (iii) the most recent actuarial valuation for
each C-COR Employee Plan subject to Title IV of ERISA, and
(iv) such other documents or information that ARRIS reasonably
requests. For purposes of this Section 4.12(a), the term
“material,” used with respect to any C-COR Employee
Plan, shall mean that C-COR or an ERISA Affiliate has incurred or
may incur obligations in an annual amount exceeding $500,000 with
respect to such C-COR Employee Plan.
(b) (i) Except as set forth
in Section 4.12(b) of the C-COR Disclosure Schedule, none of
the C-COR Employee Plans promises or provides retiree medical or
other retiree welfare benefits to any person, (ii) none of the
C-COR Employee Plans is a “multiemployer plan” as such
term is defined in Section 3(37) of ERISA; (iii) there
has been no “prohibited transaction,”
16
as such
term is defined in Section 406 of ERISA and Section 4975
of the Code, with respect to any C-COR Employee Plan that could
result in any material liability of C-COR or any of its
subsidiaries; (iv) all C-COR Employee Plans are in compliance
in all material respects with the requirements prescribed by any
and all statutes (including ERISA and the Code), orders, or
governmental rules and regulations currently in effect with respect
thereto (including all applicable requirements for notification to
participants or the Department of Labor, the Pension Benefit
Guaranty Corporation (the “ PBGC ”), Internal
Revenue Service (the “ IRS ”) or Secretary of
the Treasury), and C-COR and each of its Subsidiaries have
performed all material obligations required to be performed by them
under, are not in any material respect in default under or
violation of, and have no knowledge of any default or violation by
any other party to, any of the C-COR Employee Plans; (v) each
C-COR Employee Plan that is subject to Section 409A of the
Code has been operated prior to 2008 in material good faith
compliance with temporary and transition guidance issued by the IRS
with respect to Section 409A of the Code, and will be amended
within the time prescribed by law so that payments thereunder will
not result in the imposition of any additional tax as a result of
Section 409A of the Code; (vi) each C-COR Employee Plan
intended to qualify under Section 401(a) of the Code and each trust
intended to qualify under Section 501(a) of the Code is the subject
of a favorable determination letter from the IRS, and nothing has
occurred which may reasonably be expected to impairs such
determination; (vii) all contributions required to be made to
any C-COR Employee Plan pursuant to Section 412 of the Code,
or the terms of C-COR Employee Plan or any collective bargaining
agreement, have been made on or before their due dates;
(viii) with respect to each C-COR Employee Plan, no
“reportable event” within the meaning of
Section 4043 of ERISA (excluding any such event for which the
30 day notice requirement has been waived under the
regulations to Section 4043 of ERISA) nor any event described
in Section 4062, 4063 or 4041 of ERISA has occurred; and
(ix) neither C-COR nor any ERISA Affiliate has incurred, nor
reasonably expects to incur, any liability under Title IV of ERISA
(other than liability for premium payments to the PBGC arising in
the ordinary course).
(c) Section 4.12(c) of the
C-COR Disclosure Schedule sets forth a true and complete list of
each current or former employee, officer or director of C-COR or
any of its subsidiaries who holds (i) any option to purchase
C-COR Common Stock as of the date hereof, together with the number
of shares of C-COR Common Stock subject to such option, the option
price of such option (to the extent determined as of the date
hereof), whether such option is intended to qualify as an incentive
stock option within the meaning of Section 422(b) of the Code (an
“ ISO ”), and the expiration date of such
option; (ii) any other right, directly or indirectly, to
acquire C-COR Common Stock, together with the number of shares of
C-COR Common Stock subject to such right. Section 4.12(c) of
the C-COR Disclosure Schedule also sets forth the total number of
such ISOs, such nonqualified options and such other rights. The per
share exercise price for each option to purchase C-COR Common Stock
issued by C-COR equaled the fair market value of one share of C-COR
Common Stock.
(d) Section 4.12(d) of the
C-COR Disclosure Schedule sets forth a true and complete list of
(i) all employment agreements with officers of C-COR or any of
its Subsidiaries; (ii) all agreements with consultants who are
individuals obligating C-COR or any of its Subsidiaries to make
annual cash payments in an amount exceeding $200,000;
(iii) all employees of, or consultants to, C-COR or any of its
Subsidiaries who have executed a non-competition agreement with
C-COR or any of its Subsidiaries; (iv) all severance
agreements, programs and
17
policies
of C-COR or any of its Subsidiaries with or relating to its
employees, in each case with outstanding commitments exceeding
$100,000, excluding programs and policies required to be maintained
by law; and (v) all plans, programs, agreements and other
arrangements of C-COR or any of its Subsidiaries with or relating
to its employees that contain change in control provisions.
SECTION 4.13 — Labor
Matters . Except as set forth in Section 4.13 of the C-COR
Disclosure Schedule, (i) there are no material controversies
pending or, to the knowledge of C-COR, threatened between C-COR or
any of its Subsidiaries and any of their respective employees;
(ii) neither C-COR nor any of its Subsidiaries is a party to
any collective bargaining agreement or other labor union contract
applicable to persons employed by C-COR or its Subsidiaries, nor to
the knowledge of C-COR, are there any activities or proceedings by
any labor union to organize any employees; and (iii) to the
knowledge of C-COR, there are not any material strikes, slowdowns,
work stoppages, lockouts, or threats thereof, by or with respect to
any employees of C-COR or any of its Subsidiaries.
SECTION 4.14 — Restrictions
on Business Activities . Except for this Agreement or as set
forth in Section 4.14 of the C-COR Disclosure Schedule, to the
knowledge of C-COR, there is no material agreement, judgment,
injunction, order or decree binding upon C-COR or any of its
Subsidiaries that has or could reasonably be expected to have the
effect of prohibiting or impairing any material business practice
of C-COR or any of its Subsidiaries, any acquisition of property by
C-COR or any of its Subsidiaries or the conduct of business by
C-COR or any of its Subsidiaries as currently conducted or as
proposed to be conducted by C-COR.
SECTION 4.15 — Title to
Property . Except as set forth in Section 4.15 of the
C-COR Disclosure Schedule, C-COR and each of its Subsidiaries have
good and defensible title to all of their properties and assets,
free and clear of all liens, charges and encumbrances, except
(i) liens for Taxes (as defined herein) not yet due and
payable, (ii) mechanics’, materialmen’s or similar
statutory liens for amounts not yet due or being contested and
(iii) such liens or other imperfections of title, if any, as
do not materially detract from the value of or interfere with the
present use of the property affected thereby; and, to the knowledge
of C-COR, all leases pursuant to which C-COR or any of its
Subsidiaries lease from others material amounts of real or personal
property are valid and effective in accordance with their
respective terms, and there is not, to the knowledge of C-COR,
under any of such leases, any existing material default or event of
default (or event which with notice or lapse of time, or both,
would constitute a material default).
SECTION 4.16 — Customers
. Except as set forth in Section 4.16 of the C-COR Disclosure
Schedule, C-COR has not received any notice and has no knowledge to
the effect that any of C-COR’s ten largest customers for
fiscal year 2007 may terminate or materially alter its business
relations with C-COR, either as a result of the transactions
contemplated by this Agreement or otherwise, except for such
alterations that have not had or are not reasonably expected to
have a Material Adverse Effect.
SECTION 4.17 — Supplier
Relations . Except as set forth on Section 4.17 of the
C-COR Disclosure Schedule, C-COR has not received any notice and
has no knowledge to the effect that any of C-COR’s ten
largest suppliers for fiscal year 2007 may terminate or materially
alter its business relations with C-COR, either as a result of the
transactions contemplated by this Agreement or otherwise.
18
SECTION 4.18 — Inventory
. The inventory (a) is sufficient for the operations of C-COR
(as conducted on the date hereof) in the ordinary course consistent
with past practice, (b) consists of items which are good and
merchantable within normal trade tolerances and (c) is of a
quality and quantity presently usable or saleable in the ordinary
course of the business of C-COR (subject to applicable
reserves).
SECTION 4.19 — Taxes .
For purposes of this Agreement, “ Tax ” or
“ Taxes ” shall mean taxes, fees, levies,
duties, tariffs, imposts, and governmental impositions or charges
of any kind in the nature of (or similar to) taxes, payable to any
federal, state, local or foreign taxing authority, including
(without limitation) income, franchise, profits, gross receipts, ad
valorem, net worth, value added, sales, use, service, real or
personal property, special assessments, capital stock, license,
payroll, withholding, employment, social security, workers’
compensation, unemployment compensation, utility, severance,
production, excise, stamp, occupation, premiums, windfall profits,
transfer and gains taxes, together with any interest, penalties,
additional taxes and additions to tax imposed with respect thereto,
whether disputed or not and including any obligation to indemnify
or otherwise assume or succeed to the tax liability of any other
person; and “ Tax Returns ” shall mean returns,
reports, and information statements with respect to Taxes required
to be filed with the IRS or any other taxing authority, domestic or
foreign, including, without limitation, consolidated, combined and
unitary tax returns.
(a) Except as set forth in
Section 4.19(a) of the C-COR Disclosure Schedule, each of
C-COR and its Subsidiaries (together the “ C-COR
Entities ”), including for this purpose, their branches,
has timely filed (taking into account any extension of time within
which to file) with the appropriate Taxing authorities all material
income and other Tax Returns in all jurisdictions in which Tax
Returns are required to be filed, and such Tax Returns are correct
and complete in all material respects. All Taxes of the C-COR
Entities (whether or not shown on any Tax Return) that have become
due or payable have been fully and timely paid, or proper accruals
pursuant to GAAP have been established in the 2007 C-COR Balance
Sheet with respect thereto (except for Taxes relating to events
subsequent to the date thereof), except to the extent any failure
to accrue or reserve would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. There are
no material liens for any Taxes (other than a lien for current real
property or ad valorem Taxes not yet due and payable) on any of the
assets of any of the C-COR Entities.
(b) Except as set forth in
Section 4.19(b) of the C-COR Disclosure Schedule, none of the
C-COR Entities has received in writing from any foreign, federal,
state, or local taxing authority (including jurisdictions where the
C-COR Entities have not filed Tax Returns) any notice of deficiency
or proposed adjustment for any amount of Tax proposed, asserted, or
assessed by any taxing authority against C-COR or any of its
Subsidiaries exceeding the amount reserved on the face of, rather
than in any notes thereto, the 2007 C-COR Balance Sheet.
Section 4.19(b) of the C-COR Disclosure Schedule lists all
federal, state, local, and foreign income Tax Returns that
currently are the subject of audit. C-COR has delivered to ARRIS
correct and complete copies of all federal income Tax Returns filed
since October 15, 2002, and all examination reports, and
statements of deficiencies assessed against or agreed to by the
C-COR Entities. Except as set forth in Section 4.19(b) of the C-COR
Disclosure Schedule, none of the C-COR Entities has waived any
statute of limitations in respect of any Taxes or agreed to a Tax
assessment or deficiency.
19
(c) Each C-COR Entity has
complied in all material respects with all applicable laws, rules
and regulations relating to the withholding of Taxes and the
payment thereof to appropriate authorities, including Taxes
required to have been withheld and paid in connection with amounts
paid or owing to any employee or independent contractor, and Taxes
required to be withheld and paid pursuant to Sections 1441 and
1442 of the Code or similar provisions under foreign law.
(d) Except as set forth in
Section 4.19(d) of the C-COR Disclosure Schedule, none of the
C-COR Entities is a party to any Tax allocation or sharing
agreement, and none of the C-COR Entities has been a member of an
affiliated group filing a consolidated federal income Tax Return
(other than a group the common parent of which was C-COR) or has
any Tax liability of any person (other than another C-COR Entity
that is a member of the consolidated federal income Tax group of
which C-COR is the common parent) under Treasury
Regulation Section 1.1502-6 or any similar provision of
state, local or foreign law, or as a transferee or successor, by
contract or otherwise.
(e) During the five-year period
ending on the date hereof, none of the C-COR Entities was a
distributing corporation or a controlled corporation in a
transaction intended to be governed by Section 355 of the
Code.
(f) Except as set forth in
Section 4.19(f) of the C-COR Disclosure Schedule, none of the
C-COR Entities has made any payments, is obligated to make any
payments, or is a party to any contract that could obligate it to
make any payments that could be disallowed as a deduction under
Section 280G or 162(m) of the Code.
(g) None of the C-COR Entities
has been a United States real property holding corporation within
the meaning of Section 897(c)(2) of the Code during the
applicable period specified in Section 897(c)(1)(A)(ii) of the
Code.
(h) None of the C-COR Entities
has been or will be required to include any adjustment in taxable
income for any Tax period (or portion thereof) ending after the
Closing Date pursuant to Section 481 of the Code or any
comparable provision under state or foreign Tax laws as a result of
transactions or events occurring prior to the Closing.
(i) None of the C-COR Entities
is or has been a Passive Foreign Investment Company within the
meaning of the Code or the Treasury Regulations promulgated
thereunder. Schedule 4.19(i) of the C-COR Disclosure Schedule
lists each C-COR Entity that is a Controlled Foreign Corporation
within the meaning of the Code and the Treasury Regulations
promulgated thereunder.
(j) To the knowledge of C-COR,
except as set forth in Section 4.19(j) of the C-COR Disclosure
Schedule, the net operating losses of the C-COR Entities are not
subject to any limitation on their use under the provisions of
Sections 382, 384, or 269 of the Code or any of the provisions
of the Treasury Regulations dealing with the utilization of net
operating losses other than any such limitations as may arise as a
result of the consummation of the transactions contemplated
hereby.
SECTION 4.20 — Environmental
Matters . Except as set forth in Section 4.20 of the C-COR
Disclosure Schedule, and except in those cases, either individually
or in the aggregate, that
20
are not
reasonably expected to have a Material Adverse Effect, C-COR and
each of its Subsidiaries (i) are in compliance with all
Environmental Laws (as defined below); (ii) have obtained all
applicable permits, licenses and other authorizations that are
required to be obtained under all applicable federal, foreign,
state or local laws or any regulation, code, plan, order, decree,
judgment, notice or demand letter issued, entered, promulgated or
approved thereunder relating to pollution or protection of the
environment, including laws relating to emissions, discharges,
releases or threatened releases of pollutants, contaminants, or
Hazardous Materials into ambient air, surface water, ground water,
or land or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or
handling of pollutants, contaminants or hazardous or toxic
materials or wastes (“ Environmental Laws ”) by
C-COR or its Subsidiaries; (iii) are in compliance with all
terms and conditions of such required permits, licenses and
authorizations, and have made all appropriate filings for issuance
or renewal of such permits, licenses and authorizations;
(iv) as of the date hereof, are not aware of nor have received
any notice, claim, demand, report or other information alleging any
past or present violations of Environmental Laws, or any
liabilities arising under Environmental Laws, against C-COR or any
of its Subsidiaries; (v) have not used any waste disposal site
or otherwise disposed of, transported, or arranged for the
transportation of, any Hazardous Materials to any place or
location, or in violation of any Environmental Laws; and
(vi) have taken all actions necessary under applicable
Environmental Laws to register any products or materials required
to be registered by C-COR or its Subsidiaries (or any of their
respective agents) thereunder.
SECTION 4.21 — Intellectual
Property .
(a) Section 4.21(a)-1 of
the C-COR Disclosure Schedule sets forth, for the Owned
Intellectual Property (as defined below), a correct and complete
list of all (i) issued Patents (as defined below) and filed
and pending applications for Patents, (ii) registered
Trademarks (as defined below) and Trademarks for which
registrations have been applied for, (iii) domain name
registrations, (iv) mask work registrations and
(v) registered Copyrights (as defined below) and Copyrights
for which registrations have been applied for, indicating for each
of the foregoing (i)-(v), the applicable jurisdiction, registration
number (or application number) and date issued (or date filed).
C-COR and its Subsidiaries exclusively own, free and clear of all
liens, all right, title and interest in the Owned Intellectual
Property except as set forth in Section 4.21(a)-2 of the C-COR
Disclosure Schedule.
(b) All Trademarks, Patents and
Copyrights listed in Section 4.21(a) of the C-COR Disclosure
Schedule (i) are currently in compliance in all material
respects with all applicable legal requirements (including, as
applicable, application, registration and maintenance requirements,
such as the timely post-registration filing of affidavits of use
and incontestability and renewal applications with respect to
Trademarks, and the payment of filing, examination and annuity and
maintenance fees in the United States, (ii) are, to the
knowledge of C-COR, valid and enforceable, and (iii) except as
set forth in Section 4.21(b)-1 of the C-COR Disclosure
Schedule, are not subject to any maintenance fees or actions
falling due on or before March 31, 2008. No Trademark listed
in Section 4.21(a) of the C-COR Disclosure Schedule currently
is involved in any opposition or cancellation proceeding and, to
the knowledge of C-COR, no such action has been threatened with
respect to any of those Trademarks. As of the date hereof, except
as set forth in Section 4.21(b)-2 of the C-COR Disclosure
Schedule, no Patent owned by C-COR or any of its Subsidiaries
currently is involved in any interference, reissue, re-
21
examination or opposition proceeding and, to the knowledge of
C-COR, no such action has been threatened with respect to any such
Patent.
(c) Section 4.21(c)-1 of
the C-COR Disclosure Schedule sets forth a complete and accurate
list of any and all contracts or other written agreements
(excluding license agreements for off-the-shelf software
applications programs having a price of less than $10,000 per copy,
seat, CPU or named user) pursuant to which C-COR or any of its
Subsidiaries has been granted or otherwise receives from a third
party any right to use or distribute any software (as defined
below) (other than the Third Party Embedded Software (as defined
below) and any Software licensed pursuant to a Limited License (as
defined below)). Section 4.21(c)-2 of the C-COR Disclosure
Schedule sets forth a complete and accurate list of all third party
Software that is contained or embedded in, and necessary for the
operation and use of, any commercially available products of C-COR
(“ Third Party Embedded Software ” and, together
with the contracts and agreements listed in Section 4.21(c)-1 of
the C-COR Disclosure Schedule, the “ Third Party Software
Licenses ”). C-COR has all of the Third Party Embedded
Software rights materially necessary to manufacture, distribute,
and sell all Software embedded in C-COR products, provided ,
that the foregoing shall not be deemed to be a representation that
such Third Party Embedded Software rights do not infringe the
patent rights of any other person, other than the Third Party
Embedded Software developer or provider.
(d) Except for the Third Party
Software Licenses, Section 4.21(d) of the C-COR Disclosure
Schedule sets forth a complete and accurate list of any and all
contracts or other written arrangements pursuant to which C-COR or
any of its Subsidiaries has been granted or otherwise receives any
right to use, exercise or practice any right under any Intellectual
Property (as defined below) of a third party (the “ Third
Party IP Licenses ” and, together with the Third Party
Software Licenses, the “ Third Party Licenses
”). To the knowledge of C-COR, C-COR and its Subsidiaries
have valid and enforceable rights to use all of the Intellectual
Property covered by the Third Party Licenses. No royalties,
honoraria or other fees are past due and owing by C-COR or any of
its Subsidiaries under the Third Party Licenses. C-COR has all of
the Third Party IP Licenses necessary to manufacture, distribute,
and sell all C-COR products, provided, that the foregoing
shall not be deemed to be a representation that such rights do not
infringe the patent rights of any other person, other than the
Third Party IP Licenses developer or provider.
(e) Except as set forth on
Section 4.21(e)-1 of the C-COR Disclosure Schedule, the Owned
Intellectual Property and the Intellectual Property covered by the
Third Party Licenses constitute all of the Intellectual Property
used in and, to the knowledge of C-COR, necessary for the operation
of C-COR’s business as currently conducted. C-COR and its
Subsidiaries have taken all reasonable steps to protect the Owned
Intellectual Property, including reasonable steps to prevent and
abate any infringement or misappropriation of the Owned
Intellectual Property. To the knowledge of C-COR, except as set
forth on Section 4.21(e)-2 of the C-COR Disclosure Schedule,
no third party has challenged in writing, to C-COR, C-COR’s
ownership, use, validity or enforceability of any of the Owned
Intellectual Property since C-COR’s acquisition of such
Intellectual Property. Neither C-COR nor any of its Subsidiaries
has licensed or otherwise authorized any third party to make, have
made, sell, copy, distribute, modify, reverse engineer, or prepare
derivatives of any Owned Intellectual Property (other than
Copyrights in C-COR Software, which is addressed in the last
sentence of Section 4.21(h) below), except pursuant to a
written agreement (including via electronic means).
22
(f) Except as set forth on
Section 4.21(f)-1 of the C-COR Disclosure Schedule, the
conduct of C-COR’s business as currently conducted with
respect to the development of the products, services and platforms
set forth on Section 4.21(f)-2 of the C-COR Disclosure
Schedule, to the knowledge of C-COR, does not infringe upon any
Intellectual Property rights of any third party. Except as set
forth on Section 4.21(f)-3 of the C-COR Disclosure Schedule,
to the knowledge of C-COR, no third party has notified C-COR or any
of C-COR’s Subsidiaries in writing that (i) any of such
third party’s Intellectual Property rights are infringed by
C-COR or any of its Subsidiaries, or (ii) C-COR or any of its
Subsidiaries requires a license to any of such third party’s
Intellectual Property rights in order for C-COR or its
Subsidiaries, as applicable, to be non-infringing, and neither
C-COR nor any of its Subsidiaries has received any written offer to
license (or any other form of written notice of) any of such third
party’s Intellectual Property rights.
(g) To the knowledge of C-COR,
except as set forth in Section 4.21(g)-1 of the C-COR
Disclosure Schedule, no third party is misappropriating,
infringing, diluting or violating any Owned Intellectual Property.
Except as set forth on Section 4.21(g)-2 of the C-COR
Disclosure Schedule, no such claims have been brought or threatened
against any third party by or on behalf of C-COR or any of its
Subsidiaries.
(h) Section 4.21(h)-1 of
the C-COR Disclosure Schedule contains a complete and accurate list
of all Software that is owned by C-COR or any of its Subsidiaries
and sold, licensed, leased or otherwise distributed by C-COR or any
of its Subsidiaries or authorized resellers to end user customers
of C-COR’s or its Subsidiaries’ products or services
(the “C-COR Software”). C-COR Software was developed
either by (i) employees of C-COR or its Subsidiaries within
the scope of their employment who have executed enforceable
confidentiality and assignment of inventions agreements, which are
with or have been assigned to C-COR or any of its Subsidiaries, or
(ii) independent contractors who have assigned their rights to
C-COR or one of its Subsidiaries pursuant to enforceable written
agreements or (iii) acquired pursuant to an enforceable
written agreement or assignment. Neither C-COR nor any of its
Subsidiaries have licensed or otherwise authorized any third party
to copy, distribute, modify, decompile, or prepare derivatives of
any C-COR Software except pursuant to a written license agreement
or other written arrangement.
(i) Except as set forth on
Section 4.21(i)-1 of the C-COR Disclosure Schedule, all
material Trademarks of C-COR and its Subsidiaries within the Owned
Intellectual Property and currently used in the operation of the
business of C-COR or any of its Subsidiaries have been in
continuous use by C-COR or a Subsidiary of C-COR, as applicable,
since the date of their initial use in commerce. Except as set
forth on Section 4.21(i)-2 of the C-COR Disclosure Schedule,
to the knowledge of C-COR, there has been no prior use of any
registered Trademarks owned by C-COR or any of its Subsidiaries or
other action taken by any third party that would confer upon such
third party superior rights in such Trademarks. C-COR has taken
reasonable steps to prevent infringement of the Trademarks
referenced in the first sentence of this subsection (i).
(j) The Copyrights within the
Owned Intellectual Property have been solely (i) created by
(A) employees of C-COR and its Subsidiaries within the scope of
their employment who have executed the confidentiality and
assignment of inventions agreement set forth in
Section 4.21(h)-2 of the C-COR Disclosure Schedule, or
(B) independent contractors who have
23
assigned
their rights in such works to C-COR, either as a “work made
for hire” as defined under Section 101 of the United
States Copyright Act, or pursuant to enforceable written
agreements, or (ii) acquired pursuant to an enforceable
written assignment from the original author(s) or subsequent
assignees. To the knowledge of C-COR, the works covered by such
Copyrights were not copies of, nor derived from, any work for which
C-COR or any of its Subsidiaries does not own the Copyrights. To
the knowledge of C-COR, no other person has any claim to authorship
or ownership of any part of any of the Copyrights within the Owned
Intellectual Property.
(k) The Patents within the Owned
Intellectual Property relate solely to inventions (i) created
by (A) employees of C-COR and its Subsidiaries within the
scope of their employment who have executed the confidentiality and
assignment of inventions agreement set forth in
Section 4.21(h)-2 of the C-COR Disclosure Schedule, or
(B) independent contractors who have assigned their rights to
C-COR pursuant to enforceable written agreements, or
(ii) acquired pursuant to an enforceable written assignment
from the original inventor(s) or subsequent assignees or pursuant
to written agreements setting forth an obligation of the original
investor to assign their inventions to C-COR. The inventions
covered by such Patents were not copies of any invention for which
C-COR or any of its Subsidiaries does not own the Patent, and no
other person has any claim to inventorship or ownership of any part
thereof.
(l) C-COR and its Subsidiaries
have taken reasonable steps to protect their respective rights in
material confidential information and trade secrets owned by them
or disclosed to them by a third party and used in connection with
the conduct of C-COR’s business. Without limiting the
foregoing, C-COR and its Subsidiaries have enforced a policy of
requiring each employee, consultant and contractor to execute
proprietary information, invention assignment and confidentiality
agreements, as appropriate, substantially consistent with
C-COR’s standard forms (complete and current copies of which
have been delivered or made available to ARRIS). Except under valid
and binding confidentiality obligations, there has been no material
disclosure by C-COR or any of its Subsidiaries to a third party of
any confidential information or trade secrets used in connection
with the conduct of C-COR’s business.
(m) C-COR and its Subsidiaries
have valid registrations for each of the domain names set forth in
Section 4.21(a) of the C-COR Disclosure Schedule. The
registration of each such domain name is free and clear of all
liens and is in full force and effect. C-COR has paid all fees
required to maintain each such registration. Neither C-COR nor any
of its Subsidiaries has received written notice of any claim
asserted against C-COR or any of its Subsidiaries adverse to its
rights to such domain names, and, to the knowledge of C-COR, none
of C-COR’s registrations or uses of the domain names has been
disturbed or placed “on hold.”
(n) To the knowledge of C-COR,
all C-COR Software is free from any defect or programming or
documentation error, including bugs, logic errors or failures of
such software to operate in all material respects as described in
the related documentation, and substantially conforms to the
specifications of such software, other than those defects, errors,
bugs or failures that would not have a Material Adverse Effect on
C-COR. To the knowledge of C-COR, all Software licensed from any
third party is free from any material defect or programming or
documentation error, including major bugs, logic errors or failures
of such Software to operate in all material respects as described
in the related documentation, and substantially conforms to the
specifications of such Software. With respect to C-COR Software,
the applications can be
24
compiled
from the associated source code in accordance with the means
currently employed by C-COR. Except for any components of the
source code licensed in from third parties, C-COR has actual and
sole possession of the complete source code of C-COR Software.
Except as set forth on Section 4.21(n) of the C-COR Disclosure
Schedule, other than C-COR’s or any of its
Subsidiaries’ delivery of C-COR source code to third party
escrow agents or their disclosure of such source code to third
parties as part of a software development kit made available by
C-COR or any of its Subsidiaries in the ordinary course of
business, no event has occurred, and to the knowledge of C-COR no
circumstance or condition exists, that (with or without notice or
lapse of time) will, or could reasonably be expected to, result in
the disclosure or delivery to any third party of the source code
for C-COR Software. C-COR Software (as used or distributed by C-COR
or its Subsidiaries) does not contain any “back door,”
“time bomb,” “Trojan horse,”
“worm,” “drop dead device,”
“virus” (as these terms are commonly used in the
computer software industry), or other Software routines or hardware
components intentionally designed to permit unauthorized access, to
disrupt, disable or erase software, hardware or data, or to perform
any other similar type of unauthorized activities.
(o) Except as set forth in
Section 4.21(o) of the C-COR Disclosure Schedule, none of
C-COR Software or any Owned Intellectual Property are, in whole or
in part, subject to the provision of any open source or other
similar type of license agreement or distribution model that
(i) requires the distribution or making available of the
source code for C-COR Software to the general public,
(ii) prohibits or limits C-COR or any of its Subsidiaries from
charging a fee or receiving consideration in connection with
sublicensing or distributing any C-COR Software, (iii) except
as specifically permitted by law, grants any right to any third
party (other than C-COR and its Subsidiaries) or otherwise allows
any such third party to decompile, disassemble or otherwise
reverse-engineer any C-COR Software, or (iv) requires the
licensing of any C-COR Software to the general public for the
purpose of permitting others to make derivative works of C-COR
Software (any such open source or other type of license agreement
or distribution model described in clause (i), (ii), (iii) or
(iv) above, a “ Limited License ”). By way
of clarification, but not limitation, the term “Limited
License” includes (A) GNU’s General Public License
(GPL) or Lesser/Library GPL (LGPL), (B) the Artistic
License (e.g., PERL), (C) the Mozilla Public License,
(D) the Netscape Public License, (E) the Sun Community
Source License (SCSL), and (F) the Sun Industry Standards
License (SISL). To the knowledge of C-COR, none of C-COR Software
incorporates, or is distributed with, any Software that is subject
to a Limited License, nor does any C-COR Software constitute a
derivative work of or dynamically link with any such
Software.
(p) Except as set forth on
Section 4.21(p) of the C-COR Disclosure Schedule, no
government funding, facilities of a university, college, or other
educational institution or research center was used in the creation
or development of the Owned Intellectual Property or C-COR
Software. To the knowledge of C-COR, no current or former employee,
consultant or independent contractor who was directly involved in,
or who contributed directly to, the creation or development of any
Owned Intellectual Property or C-COR Software has performed
services for any governmental entity, a university, college, or
other educational institution, or a research center, during a
period of time during which such employee
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