AGREEMENT AND PLAN OF MERGER

Exhibit 2.1

 

EXECUTION COPY

 

 

AGREEMENT AND PLAN OF MERGER

 

BY AND AMONG

 

INTERMIX MEDIA , INC.,

 

FOX INTERACTIVE MEDIA, INC.

 

PROJECT IVORY ACQUISITION CORPORATION

 

AND

 

NEWS CORPORATION

(SOLELY WITH RESPECT TO SECTIONS 6.9 AND 6.15)

 

Dated as of July 18, 2005

 

Table of Contents

 

 

 

 

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INDEX OF DEFINED TERMS

 

 

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AGREEMENT AND PLAN OF MERGER

 

AGREEMENT AND PLAN OF MERGER (hereinafter called this “ Agreement ”), dated as of July 18, 2005, by and among Intermix Media, Inc., a Delaware corporation (“ Ivory ”), Fox Interactive Media, Inc., a Delaware corporation (“ Parent ”), Project Ivory Acquisition Corporation, a Delaware corporation and a wholly-owned subsidiary of Parent (“ Merger Sub “) and, solely with respect to Sections 6.9 and 6.15, News Corporation, a Delaware corporation (“ News ”).

 

W I T N E S S E T H :

 

WHEREAS, the respective Boards of Directors of Ivory, Parent and Merger Sub have unanimously approved the acquisition of Ivory by Parent on the terms and subject to the conditions set forth in this Agreement;

 

WHEREAS, the Board of Directors of Ivory has (i) determined that the Merger (as defined herein) and the other transactions contemplated hereby are fair to and advisable and in the best interests of Ivory and its stockholders, (ii) approved and adopted this Agreement and the transactions contemplated hereby, including the Merger and (iii) recommended that Ivory’s stockholders adopt this Agreement;

 

WHEREAS, the respective Boards of Directors of Merger Sub and Ivory have approved and adopted the merger of Merger Sub with and into Ivory with Ivory as the survivor, as set forth below (the “ Merger ”), in accordance with the General Corporation Law of the State of Delaware (the “ DGCL ”) and upon the terms and subject to the conditions set forth in this Agreement;

 

WHEREAS, as a condition to and an inducement to Parent’s and Merger Sub’s willingness to enter into this Agreement, simultaneously with the execution of this Agreement, certain stockholders of Ivory are entering into a stockholder voting agreement with Parent (the “ Support Agreement ”); and

 

WHEREAS, Ivory, Parent and Merger Sub desire to make certain representations, warranties, covenants and agreements in connection with the Merger and to prescribe certain conditions to the Merger.

 

NOW, THEREFORE, in consideration of the premises, and of the representations, warranties, covenants and agreements contained herein, and intending to be legally bound hereby, the parties hereto agree as follows:

 

ARTICLE I

 

THE MERGER

 

Section 1.1 The Merger . Upon the terms and subject to the conditions set forth in this Agreement, and in accordance with the DGCL, at the Effective Time (as defined below), Merger Sub shall be merged with and into Ivory, and the separate corporate existence of Merger Sub

 

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shall thereupon cease. Ivory shall be the surviving corporation in the Merger (sometimes hereinafter referred to as the “ Surviving Corporation ”), and the separate corporate existence of Ivory with all of its rights, privileges, immunities, powers and franchises shall continue unaffected by the Merger, except as set forth in Article II. The Merger shall have the effects specified in the DGCL.

 

Section 1.2 Effective Time . As promptly as practicable after the satisfaction or, if permissible, waiver of the conditions set forth in Article VII, the parties hereto shall cause the Merger to be consummated by filing a certificate of merger (the “ Certificate of Merger ”) with the Secretary of State of the State of Delaware, in such form as is required by, and executed in accordance with, the relevant provisions of the DGCL (the date and time that the Merger becomes effective in accordance with applicable Law (which shall occur upon such filing) being the “ Effective Time ”).

 

Section 1.3 Certificate of Incorporation . At the Effective Time, the certificate of incorporation of Ivory, as in effect immediately prior to the Effective Time, shall be the certificate of incorporation of the Surviving Corporation until thereafter amended as provided therein or by applicable Law (the “ Certificate of Incorporation ”).

 

Section 1.4 By-Laws . At the Effective Time, and without any further action on the part of Ivory or Merger Sub, the by-laws of Ivory, as in effect immediately prior to the Effective Time, shall be the by-laws of the Surviving Corporation (the “ By-Laws ”), until thereafter amended as provided therein, in the Certificate of Incorporation or in accordance with applicable Law.

 

Section 1.5 Directors . Subject to requirements of applicable Law, the directors of Merger Sub immediately prior to the Effective Time shall, from and after the Effective Time, be the directors of the Surviving Corporation until their successors have been duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the Certificate of Incorporation and the By-Laws.

 

Section 1.6 Officers . The officers of Merger Sub immediately prior to the Effective Time shall, from and after the Effective Time, be the officers of the Surviving Corporation until their successors have been duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the Certificate of Incorporation and the By-Laws.

 

ARTICLE II

 

EFFECT OF THE MERGER ON CAPITAL STOCK; EXCHANGE OF CERTIFICATES

 

Section 2.1 Effect on Capital Stock . At the Effective Time, as a result of the Merger and without any further action on the part of Ivory, Parent, Merger Sub or any holder of any shares of capital stock of Ivory, Parent or Merger Sub:

 

(a) Merger Sub . Each share of common stock, par value of $0.01 per share, of Merger Sub issued and outstanding immediately prior to the Effective Time shall be converted into and become one (1) fully paid share of common stock, par value $0.001 per share, of the Surviving Corporation and constitute the only outstanding shares of capital stock of the Surviving Corporation and shall not be affected by the Merger.

 

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(b) Cancellation of Treasury Stock and Parent-Owned Stock . Each Common Share and Preferred Share that is owned by Ivory directly as treasury stock or by Parent, Merger Sub, or any of Ivory’s wholly-owned Subsidiaries (other than in a representative or fiduciary capacity) shall automatically be retired and shall cease to be outstanding, and no cash or other consideration shall be delivered in exchange therefor.

 

(c) Conversion of Ivory Common Shares .

 

Subject to Section 2.3:

 

(i) each issued and outstanding share of Ivory common stock, par value $0.001 per share (the “ Common Shares ”) (other than any Common Shares to be retired in accordance with Section 2.1(b) and Dissenting Shares (as defined below)) shall be converted into the right to receive $12.00 in cash, without interest (the “ Common Merger Consideration ”).

 

(ii) each issued and outstanding share of Series A Preferred Stock (as defined below) (other than any share of Series A Preferred Stock to be retired in accordance with Section 2.1(b) and Dissenting Shares), shall be converted into the right to receive $12.00 in cash, without interest (the “ Series A Preferred Merger Consideration ”);

 

(iii) each issued and outstanding share of Series B Preferred Stock (as defined below) (other than any share of Series B Preferred Stock to be retired in accordance with Section 2.1(b) and Dissenting Shares), shall be converted into the right to receive $14.60 in cash, without interest (the “ Series B Preferred Merger Consideration ”);

 

(iv) each issued and outstanding share of Series C Preferred Stock (as defined below) (other than any share of Series C Preferred Stock to be retired in accordance with Section 2.1(b) and Dissenting Shares), shall be converted into the right to receive $13.50 in cash, without interest (the “ Series C Preferred Merger Consideration ”);

 

(v) each issued and outstanding share of Series C-1 Preferred Stock (as defined below) (other than any share of Series C-1 Preferred Stock to be retired in accordance with Section 2.1(b) and Dissenting Shares), shall be converted into the right to receive $14.00 in cash, without interest (the “ Series C-1 Preferred Merger Consideration ” and, together with the Series A Preferred Merger Consideration, the Series B Preferred Merger Consideration, and the Series C Preferred Merger Consideration, the “ Preferred Merger Consideration ”); and

 

(vi) as of the Effective Time, all such Common Shares and Preferred Shares shall no longer be outstanding and shall automatically be cancelled and retired and shall cease to exist, and each holder of a certificate representing any such Common

 

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Shares or Preferred Shares (a “ Certificate ”) shall cease to have any rights with respect thereto, except the right to receive, upon the surrender of such Certificates (for each Common Share or Preferred Share represented thereby), the Common Merger Consideration or the appropriate Preferred Merger Consideration, as applicable. No Preferred Share that validly elects to treat the Merger as a Liquidation or Liquidation Event, as applicable, under the terms of the applicable Certificate of Designation shall, be entitled to receive any Preferred Merger Consideration.

 

(d) Stock Options; ESPP; Warrants .

 

(i) As of the Effective Time, each outstanding option to purchase Common Shares under any employee stock option or compensation plan or arrangement of Ivory (an “ Ivory Option ”) that is fully vested as of the Effective Time shall by virtue of the Merger and without any action on the part of any holder of any Ivory Option be cancelled and the holder thereof will receive as soon as reasonably practicable following the Effective Time a cash payment with respect thereto equal to the product of (a) the excess, if any, of the Common Merger Consideration over the exercise price per share of such Ivory Option and (b) the number of Common Shares issuable upon exercise of such Ivory Option (the “ Option Cash Payment ”). As of the Effective Time, all Ivory Options, whether or not vested or exercisable, shall no longer be outstanding and shall automatically cease to exist, and each holder of a Ivory Option shall cease to have any rights with respect thereto, except the right to receive the Option Cash Payment. Prior to the Effective Time, Ivory shall take any and all actions necessary to effectuate this Section 2.1(d)(i), including, but not limited to, providing holders of Ivory Options with notice of their rights with respect to any such Ivory Options as provided herein.

 

(ii) Each Ivory Option that is unvested as of the Effective Time and that is outstanding immediately prior to the Effective Time (an “ Ivory Unvested Option ”) shall, at the Effective Time, cease to represent a right to acquire Common Shares, shall be cancelled and of no further force or effect and with respect to each Ivory Unvested Option held by (a) an individual set forth in Section 2.1(d)(ii) of the Ivory Disclosure Schedule (“ Specified Individual ”) who has signed before the Effective Time a waiver and non-compete agreement in the appropriate form indicated for that individual in such forms acceptable to Parent and Ivory, or (b) any other individual who has signed before the Effective Time an agreement in a form acceptable to Parent and Ivory, shall be converted into the right to receive fifty percent (50%) of the Option Cash Payment in respect of each such Ivory Unvested Option (“ Phantom Stock Payment ”) in installments as and when such Ivory Unvested Option would have vested subject to the individual’s continued employment with the Surviving Corporation and its Affiliates if it had not been cancelled. Further, with respect to each Ivory Unvested Option subject to an agreement set forth in Section 2.1(d)(ii) of the Ivory Disclosure Schedules (each of which is subject to accelerated vesting upon a qualifying termination of employment as set forth in such agreements, the employee who is party to such agreements shall be entitled to receive, upon a qualifying termination of employment within such period of time specified in such agreement, and subject to the waivers referenced in the preceding sentence, the balance of the Phantom Stock Payment to the extent that such Option Cash Payment has not previously been paid. Prior to the Effective Time, Ivory shall take any and all actions

 

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necessary to effectuate this Section 2.1(d)(ii) including but not limited to providing holders of Ivory Options with notice of their rights with respect to any such Ivory Options as provided herein and obtaining consents from the individuals set forth in Section 2.1(d)(ii) of the Ivory Disclosure Schedule.

 

(iii) As of the Effective Time, each outstanding option to purchase MySpace Shares of Common Stock (“ MySpace Shares ”) under MySpace’s 2005 Equity Incentive Plan (a “ MySpace Option ”) shall by virtue of the Merger and without any action on the part of any holder of any MySpace Option be cancelled and the holder thereof will receive as soon as practicable following the Effective Time a cash payment with respect thereto equal to the product of (a) the excess, if any, of $3.2660 over the exercise price per share of such MySpace Option and (b) the number of MySpace Shares issuable upon exercise of such MySpace Option.

 

(iv) Prior to the Effective Time, Ivory shall take any and all actions with respect to Ivory’s 2002 Employee Stock Purchase Plan (the “ ESPP ”) as are necessary to provide that effective no later than the Effective Time, the ESPP shall terminate and any and all amounts that have been withheld but not yet applied to purchase Common Shares shall be refunded to the participants in the ESPP without interest.

 

(v) As of the Effective Time, each issued and outstanding Warrant shall no longer be outstanding and shall automatically cease to exist, and each holder of a Warrant shall cease to have any rights with respect thereto. Prior to the Effective Time, Ivory shall take any and all actions necessary to effectuate this Section 2.1(d)(iv), including, but not limited to, providing holders of Warrants with notice of their rights with respect to any such Warrants.

 

Section 2.2 Exchange of Common Share Certificates .

 

(a) Paying Agent . Prior to the Effective Time, Parent shall designate a paying agent reasonably acceptable to Ivory (the “ Paying Agent ”) for the payment of the Common Merger Consideration and the appropriate Preferred Merger Consideration or any other payment to which holders of Ivory Options shall become entitled pursuant to Section 2.1. Immediately prior to the filing of the Certificate of Merger with the Secretary of State of the State of Delaware, Parent shall deposit, or cause Merger Sub to deposit, with the Paying Agent, for the benefit of the holders of Certificates and Ivory Options, cash equal to (i) the product of (A) the number of Common Shares issued and outstanding (and not to be retired pursuant to Section 2.1(b)) immediately prior to the Effective Time multiplied by (B) the Common Merger Consideration, plus (ii) the Aggregate Preferred Merger Consideration plus (iii) the amount equal to the sum of the Option Cash Payments. The deposit made by Parent or Merger Sub, as the case may be, pursuant to this Section 2.2(a) is hereinafter referred to as the “ Exchange Fund ”. In the event such funds shall be insufficient to make the payments contemplated by Section 2.1(c) and 2.1(d), Parent shall promptly deposit, or cause to be deposited, additional funds with the Paying Agent in an amount which is equal to the deficiency in the amount required to make such payment. The Paying Agent shall cause the Exchange Fund to be (i) held for the benefit of the holders of Common Shares, Preferred Shares and Ivory Options and (ii) applied promptly to

 

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making the payments provided for in Section 2.1. The Exchange Fund shall not be used for any purpose that is not expressly provided for in this Agreement. For the purposes of this Agreement, “ Aggregate Preferred Merger Consideration ” shall mean the sum of (i) the product of (A) the number of shares of Series A Preferred Stock issued and outstanding (and not to be retired pursuant to Section 2.1(b)) immediately prior to the Effective Time multiplied by (B) the Series A Preferred Merger Consideration, plus (ii) the product of (A) the number of shares of Series B Preferred Stock issued and outstanding (and not to be retired pursuant to Section 2.1(b)) immediately prior to the Effective Time multiplied by (B) the Series B Preferred Merger Consideration, plus (iii) the product of (A) the number of shares of Series C Preferred Stock issued and outstanding (and not to be retired pursuant to Section 2.1(b)) immediately prior to the Effective Time multiplied by (B) the Series C Preferred Merger Consideration, plus (iv) the product of (A) the number of shares of Series C-1 Preferred Stock issued and outstanding (and not to be retired pursuant to Section 2.1(b)) immediately prior to the Effective Time multiplied by (B) the Series C-1 Preferred Merger Consideration. Notwithstanding anything to the contrary, no amounts need to be deposited with the Paying Agent in respect of Dissenting Shares unless and until the holder thereof fails to perfect or withdraws or otherwise loses his right to appraisal.

 

(b) Exchange Procedures . As soon as reasonably practicable after the Effective Time (but in no event more than two (2) Business Days thereafter), Parent shall cause the Paying Agent to mail to each holder of record of a Certificate (i) a letter of transmittal specifying that delivery of the Certificates shall be effected, and risk of loss and title to the Certificates shall pass, only upon proper delivery of the Certificates (or affidavits of loss in lieu thereof) to the Paying Agent, such letter of transmittal to be in customary form and have such other provisions as Parent or Paying Agent may reasonably specify and (ii) instructions for use in effecting the surrender of the Certificates in exchange for the Common Merger Consideration and Preferred Merger Consideration (such instructions shall include instructions for the payment of the Common Merger Consideration or Preferred Merger Consideration to a Person other than the Person in whose name the surrendered Certificate is registered on the transfer books of Ivory, subject to the receipt of appropriate documentation for such transfer). Upon surrender to the Paying Agent of a Certificate (or evidence of loss in lieu thereof) for cancellation together with such letter of transmittal, duly completed and validly executed, and such other documents as may reasonably be requested by the Paying Agent, the holder of such Certificate shall be entitled to receive in exchange therefor the Common Merger Consideration or Preferred Merger Consideration that such holder is entitled to receive pursuant to this Article II, and the Certificate so surrendered shall forthwith be cancelled; provided that in no event will a holder of a Certificate be entitled to receive Common Merger Consideration or Preferred Merger Consideration if Common Merger Consideration or Preferred Merger Consideration was already paid with respect to the Common Shares or Preferred Shares, as the case may be, underlying such Certificate in connection with an affidavit of loss. No interest will be paid or accrued on any amount payable upon due surrender of the Certificates. In the event of a transfer of ownership of Common Shares or Preferred Shares that is not registered in the transfer records of Ivory, payment may be issued to such a transferee if the Certificate formerly representing such Common Shares or Preferred Shares is presented to the Paying Agent, accompanied by all documents required to evidence and effect such transfer, and the Person requesting such issuance pays any transfer or other Taxes required by reason of such payment to a Person other than the registered holder of such Certificate or establishes to the satisfaction of Parent and Ivory that such Tax has been paid or is not applicable. All cash paid upon the surrender of a Certificate in

 

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accordance with the terms of this Section 2.2 shall be deemed to have been paid in full satisfaction of all rights pertaining to the Common Shares or Preferred Shares formerly represented by such Certificate.

 

For the purposes of this Agreement, the term “ Person ” shall mean any individual, corporation (including not-for-profit corporations), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, Governmental Entity or other entity of any kind or nature.

 

(c) Transfers; No Further Ownership Rights . After the Effective Time, there shall be no registration of transfers on the stock transfer books of Ivory of Common Shares or Preferred Shares that were outstanding immediately prior to the Effective Time. If Certificates are presented to the Surviving Company for transfer following the Effective Time, they shall be cancelled against delivery of the Common Merger Consideration or Preferred Merger Consideration, as applicable, for each Common Share or Preferred Share formerly represented by such Certificates.

 

(d) Termination of Exchange Fund . Any portion of the Exchange Fund relating to the Common Merger Consideration and the Preferred Merger Consideration that remains unclaimed by the stockholders of Ivory or holders of Ivory Options one (1) year after the Effective Time shall be returned to Parent or the Surviving Corporation. Any stockholders of Ivory or holders of Ivory Options who have not theretofore complied with this Article II shall thereafter look only to Parent or the Surviving Corporation for payment of the Common Merger Consideration or the Preferred Merger Consideration upon due surrender of their Certificates (or affidavits of loss in lieu thereof), without interest. Notwithstanding the foregoing, none of Parent, the Surviving Corporation, the Paying Agent or any other Person shall be liable to any former holder of Common Shares, holder of Preferred Shares or holder of Ivory Options for any amount properly delivered to a public official pursuant to applicable abandoned property, escheat or similar Laws.

 

(e) Lost, Stolen or Destroyed Certificates . In the event that any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen or destroyed and, if required by Parent, the posting by such Person of a bond reasonably satisfactory to Parent as indemnity against any claim that may be made against it with respect to such Certificate, the Paying Agent will issue in exchange for such lost, stolen or destroyed Certificate the Common Merger Consideration or Preferred Merger Consideration, as applicable, upon due surrender of the Common Shares or Preferred Shares represented by such Certificate pursuant to this Agreement.

 

(f) Withholding Rights . Each of Parent, the Paying Agent and the Surviving Corporation shall be entitled to deduct and withhold from the consideration otherwise payable to any Person pursuant to this Article II such amounts as it is required to deduct and withhold with respect to the making of such payment under provision of any federal, state, local or foreign Tax Law. If Parent, the Paying Agent or the Surviving Corporation, as the case may be, so withholds amounts, such amounts shall be treated for all purposes of this Agreement as having been paid to the holder of the Common Shares or Preferred Shares, as applicable, in respect of which Parent, Paying Agent or the Surviving Corporation, as the case may be, made such deduction and withholding.

 

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Section 2.3 Dissenters’ Rights .

 

(a) Notwithstanding anything in any other Section of this Agreement to the contrary, Common Shares and Preferred Shares outstanding immediately prior to the Effective Time and held by a holder who has not voted for adoption of this Agreement, or consented thereto in writing and who has demanded appraisal for such shares in accordance with Section 262 of the DGCL (the “ Dissenting Shares ”) shall not be converted into, or represent the right to receive, the Common Merger Consideration or Preferred Merger Consideration, as applicable, unless such holder fails to perfect or withdraws or otherwise loses his right to appraisal. At the Effective Time, all Dissenting Shares shall no longer be outstanding and shall automatically be cancelled and shall cease to exist, and each holder of Dissenting Shares shall cease to have any rights with respect thereto, except the right to receive, subject to and net of any applicable withholding of Taxes, payment of the appraised value of such Dissenting Shares held by them in accordance with the provisions of Section 262 of the DGCL. Notwithstanding the foregoing, if any such holder shall fail to perfect or otherwise shall waive, withdraw or lose the right to appraisal under Section 262 of the DGCL or a court of competent jurisdiction shall determine that such holder is not entitled to the relief provided by Section 262 of the DGCL, then the right of such holder to receive, subject to and net of any applicable withholding of Taxes, payment of the appraised value of such Dissenting Shares held by them in accordance with the provisions of Section 262 of the DGCL shall cease and such Dissenting Shares shall thereupon be deemed to have been converted into, and to have become exchangeable for, as of the Effective Time, the right to receive the Common Merger Consideration or the appropriate Preferred Merger Consideration, as applicable, without interest, upon surrender, in the manner provided in Section 2.2, of the Certificate or Certificates that formerly evidenced such Dissenting Shares.

 

(b) Ivory shall give Parent prompt notice of any demands for appraisal received by Ivory, withdrawals of such demands and any other instruments served on or otherwise received by Ivory pursuant to the DGCL, and Parent shall have the right to participate in and control all negotiations and proceedings with respect to demands for appraisal under the DGCL. Ivory shall not, except with the prior written consent of Parent, make any payment with respect to any demands for appraisal or offer to settle or settle any such demands.

 

Section 2.4 Adjustments to Prevent Dilution . Without limiting the other provision of the Agreement, including Section 5.1, in the event that Ivory changes the number of Common Shares or Preferred Shares issued and outstanding prior to the Effective Time as a result of a reclassification, stock split (including a reverse stock split), stock dividend or distribution, recapitalization, merger, subdivision, issuer tender or exchange offer, or other similar transaction, the Common Merger Consideration and each Preferred Merger Consideration shall be equitably adjusted to reflect such change.

 

Section 2.5 Stockholders’ Meeting; Proxy Statement .

 

(a) In accordance with any applicable Law, the certificate of incorporation and by-laws of Ivory, Ivory shall use its commercially reasonable efforts to call and hold a

 

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meeting of its stockholders as promptly as reasonably practicable after the date hereof for the purpose of voting upon the adoption of this Agreement and the transactions contemplated hereby, including the Merger (the “ Ivory Stockholders Meeting ”), and Ivory shall use its commercially reasonable efforts to hold such stockholder meeting as promptly as reasonably practicable after the date on which the Proxy Statement (as defined below) is cleared by the SEC (as defined below). The Board of Directors of Ivory shall duly call, give notice of, convene, hold and submit the adoption of this Agreement to the stockholders of Ivory whether or not the Board of Directors of Ivory effects a Change of Recommendation (as defined below).

 

(b) Ivory shall use its commercially reasonable efforts to solicit from the stockholders of Ivory proxies in favor of the Merger and shall take all other reasonable action necessary or advisable to secure the vote or consent of the stockholders of Ivory required by the DGCL and the Certificate of Incorporation and By-Laws of Ivory to adopt this Agreement.

 

(c) As promptly as reasonably practicable after the date of this Agreement, Ivory shall prepare and file with the SEC, and shall use its commercially reasonable efforts to have cleared by the SEC, the proxy statement relating to the Ivory Stockholders Meeting (together with any amendments thereof or supplements thereto) to be distributed in connection with the Ivory Stockholders Meeting to vote upon this Agreement (the “ Proxy Statement ”). Ivory, Parent and Merger Sub each shall promptly and timely provide all information relating to its respective businesses or operations necessary for inclusion in the Proxy Statement to satisfy all requirements of applicable state and United States federal securities Laws. Ivory and Parent (with respect to Parent and Merger Sub) each shall be solely responsible for any statement, information or omission in the Proxy Statement relating to it (and Merger Sub with respect to Parent) or its Affiliates based upon written information provided by it (or Merger Sub with respect to Parent) for inclusion in the Proxy Statement.

 

(d) Ivory shall notify Parent of the receipt of any comments of the SEC with respect to the Proxy Statement and of any requests by the SEC for any amendment or supplement thereto or for additional information and shall provide a copy of such comments or requests to Parent promptly after receipt, and shall promptly provide to Parent copies of all correspondence between Ivory or any representative of Ivory and the SEC. Ivory shall give Parent and its counsel the reasonable opportunity to review and comment on any proposed responses to comments, which review shall be concluded as promptly as possible, but in no event more than three (3) Business Days after the receipt by Parent of Ivory’s proposed responses to SEC comments or other correspondence to the SEC. If at any time after the date the Proxy Statement is mailed to stockholders and prior to the Ivory Stockholders Meeting any information relating to Ivory, Parent or Merger Sub, or any of their respective Affiliates, officers or directors, is discovered by Ivory, Parent or Merger Sub which is required to be set forth in an amendment or supplement to the Proxy Statement so that the Proxy Statement will not include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, the party which discovers such information shall promptly notify the other parties hereto and an appropriate amendment or supplement describing such information shall be promptly filed with the SEC, and, to the extent required by applicable Law, disseminated to the stockholders of Ivory. As promptly as reasonably practicable after the Proxy Statement has been cleared by the SEC, Ivory shall mail the Proxy Statement to the holders of Common Shares and Preferred

 

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Shares as of the record date established for the Ivory Stockholder Meeting. Unless the Board of Directors of Ivory shall have effected a Change in Recommendation, the Proxy Statement shall include the recommendation of the Board of Directors of Ivory that the holders of Common Shares and Preferred Shares vote in favor of the adoption of this Agreement (the “ Ivory Recommendation ”).

 

(e) Nothing in this Section 2.5 shall be deemed to prevent Ivory or its Board of Directors from taking any action they are permitted or required to take under, and in compliance with, Section 6.2 or are required to take under applicable Law.

 

ARTICLE III

 

THE CLOSING

 

Section 3.1 Closing . The closing of the Merger (the “ Closing ”) shall take place (i) at the offices of Pillsbury Winthrop Shaw Pittman LLP, MGM Tower, 10250 Constellation Boulevard, Los Angeles, CA 90067 at 10:00 a.m. Pacific time on the second Business Day after the last to be satisfied or waived of the conditions set forth in Article VII (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of those conditions) shall be satisfied or waived (by the party entitled to the benefit of such condition) in accordance with this Agreement or (ii) at such other place and time and/or on such other date as Ivory and Parent may agree in writing (the “ Closing Date ”), unless this Agreement has been terminated pursuant to its terms.

 

ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES

 

Section 4.1 Representations and Warranties of Ivory . Except as set forth in the section of the disclosure letter delivered to Parent by Ivory on or prior to the date of this Agreement (the “ Ivory Disclosure Letter ”) that corresponds with the applicable subsection of this Section 4.1, Ivory hereby represents and warrants to Parent and Merger Sub that:

 

(a) Organization, Good Standing and Qualification . Each of Ivory and its Subsidiaries is a corporation or other legal entity duly organized, validly existing and in good standing under the Laws of its respective jurisdiction of organization. Each of Ivory and its Subsidiaries has all requisite corporate or similar power and authority to own and operate its properties and to carry on its business as currently conducted and is qualified to do business and is in good standing as a foreign corporation or other legal entity in each jurisdiction where the ownership or operation of its properties or conduct of its business requires such qualification, except where the failure to be so qualified or be in good standing, in the aggregate, has not had and would not reasonably be expected to have an Ivory Material Adverse Effect. Ivory has heretofore made available to Parent complete and correct copies of Ivory’s and each of its Subsidiaries’ certificate of incorporation and by-laws (or comparable governing instruments), as in effect on the date hereof. Section 4.1(a) of the Ivory Disclosure Letter sets forth a list, as of the date hereof, of all of the Subsidiaries of Ivory and the jurisdictions under which such Subsidiaries are incorporated or organized.

 

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As used in this Agreement, the term “ Subsidiary ” means, with respect to any Person, any corporation, partnership, limited liability company, trust or other legal entity of which such Person (either directly or through or together with another Subsidiary of such Person) (i) is either the sole general partner, the sole managing member or sole holder of other similar interest, or (ii) owns (x) 50% or more of the voting power of the voting capital stock or other equity interests, or (y) 50% or more of the outstanding voting capital stock or other voting equity interests, or (z) 50% or more of the economic interest of such corporation, partnership, limited liability company or other legal entity. For the avoidance of doubt, MySpace, Inc. (“ MySpace ”) shall be deemed to be a Subsidiary of Ivory for all purposes of this Agreement.

 

As used in this Agreement, the term “ Affiliate ” shall mean, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with, such Person; provided , that, for the purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

 

As used in this Agreement, the term “ Ivory Material Adverse Effect ” means any change in or effect on the condition (financial or otherwise), business, assets, liabilities or results of operations of Ivory or any of its Subsidiaries that has had or would reasonably be expected to be materially adverse to Ivory and its Subsidiaries taken as a whole; provided , however , that any event or occurrence (including litigation) arising from any of the following shall not be considered when determining if an Ivory Material Adverse Effect has occurred or is likely or expected to occur: (i) the negotiation (including activities relating to due diligence) or public announcement of this Agreement or (ii) except for purposes of Section 4.1(d), the execution, delivery or pendency of this Agreement or the transactions contemplated herein, including the impact thereof on the relationships of Ivory or any of its Subsidiaries with customers, suppliers, distributors, consultants, stockholders, employees or independent contractors or other third parties with whom Ivory or any of its Subsidiaries has any relationship, (b) any failure by Ivory to meet any projections or forecasts for any period ending (or for which revenues or earnings are released) on or after the date hereof, (c) changes generally affecting the industries in which Ivory or its Subsidiaries operates so long as such change does not disproportionately affect Ivory and its Subsidiaries, (d) changes in economic conditions in the United States, in any region thereof, or in any non-U.S. or global economy, (e) changes in generally accepted accounting principles (or any interpretation thereof), (f) any attack on, or by, outbreak or escalation of hostilities or acts of terrorism involving, the United States, or any declaration of war by the United States Congress, (g) the petition by the People of the State of New York v. Intermix Media, Inc., filed on April 28, 2005 in the Supreme Court for the State of New York, County of New York and Greenspan v. Salzman , et. al, LASC No. BC328558, filed on February 10, 2005 in the Los Angeles Superior Court (the “ Pending Matters ”), or any similar action or suit, including all court filings, appeals, judgments or settlements in connection therewith and announcements or disclosure thereof (other than as a result of New Facts adduced or any New Allegations or Developments asserted or arising with respect to the subject matter of either of the Pending

 

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Matters), (h) the trading price of Common Shares taken by itself (but excluding therefrom any underlying cause or suggested cause of such effect) or (i) Ivory’s option to purchase equity interests in MySpace pursuant to Article 7 of the Stockholders Agreement, including the exercise of such option by Ivory and announcement or disclosure thereof; provided that clause (i) shall not apply to Section 7.2(a) insofar as the accuracy of the last sentence of Section 4.1(w) is concerned.

 

“ New Fact ” means, with respect to a Pending Matter, any material factual matter in respect of an action by Ivory or any of its Subsidiaries, or any of their respective officers, directors, employees or agents, that is relevant to the resolution of such Pending Matters (or any related proceeding), and of which the Parent had not become aware prior to the date of this Agreement.

 

“ New Allegation or Development ” means, with respect to a Pending Matter, any material new allegation asserted, or material new line of investigation initiated, by any Governmental Entity in such Pending Matters (or in any related proceeding).

 

As used in this Agreement, the term “ Knowledge ” or any similar formulation of Knowledge shall mean the actual knowledge of, with respect to Ivory and its Subsidiaries, those Persons set forth in Section 4.1(a) of the Ivory Disclosure Letter and, with respect to Parent and its Subsidiaries, those Persons set forth in Section 4.2 of the Parent Disclosure Letter, in each case without any separate duty to investigate.

 

(b) Capital Structure . The authorized capital stock of Ivory consists of (i) 250,000,000 Common Shares, of which 34,905,254 shares were outstanding as of June 30, 2005 (and none of which Common Shares were held by Ivory in its treasury), and (ii) 40,000,000 shares of preferred stock, par value $0.10 per share (the “ Ivory Preferred Stock ”), of which (A) 10,000,000 shares are designated Series A 6% Convertible Preferred Stock (the “ Series A Preferred Stock ”), of which 194,000 shares were outstanding as of the date hereof, (B) 4,098,335 shares are designated Series B Convertible Preferred Stock (the “ Series B Preferred Stock ”), of which 1,750,000 shares were outstanding as of the date hereof, (C) 20,000,000 shares are designated Series C Convertible Preferred Stock (the “ Series C Preferred Stock ”), of which 3,786,595 shares were outstanding as of the date hereof and (D) 2,000,000 shares are designated Series C-1 Convertible Preferred Stock (the “ Series C-1 Preferred Stock ”), of which 1,325,000 shares were outstanding as of the date hereof (such Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series C-1 Preferred Stock referred to collectively as the “ Ivory Preferred Stock ,” each share of Ivory Preferred Stock a “ Preferred Share ”). Ivory has not made any issuance of Common Shares or Preferred Shares except as a result of (x) exercises of Ivory Options which were outstanding on June 30, 2005 for Common Shares, (y) conversions of Preferred Shares which were outstanding on June 30, 2005, into Common Shares or (z) dividends payable on Common Shares or Preferred Shares which were outstanding as of June 30, 2005. All of the issued and outstanding Common Shares and Preferred Shares have been and all Common Shares which may be issued pursuant to the Ivory Stock Plans (as defined below) will be, when issued in accordance with the terms thereof, duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation of preemptive rights. Each of the outstanding shares of capital stock or other ownership interests in each of Ivory’s Subsidiaries is duly authorized, validly issued, fully paid and nonassessable and, except for MySpace (which is

 

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at least 50% owned by Ivory) is owned by Ivory or a direct or indirect wholly owned Subsidiary of Ivory, free and clear of all Liens (as defined below) (including any restriction on the right to vote, sell or otherwise dispose of such capital stock of other ownership interests, except restrictions on transfer imposed by federal and state securities laws). Other than with respect to the Subsidiaries listed on Section 4.1(a) of the Ivory Disclosure Letter, Ivory does not directly or indirectly own any securities or other beneficial ownership interests in any other Person (including through joint ventures or partnership arrangements), or have any investment in any other Person. As of the date of this agreement, other than (i) 8,776,949 options to purchase Common Shares at an average price of $2.79 per Common Share as to which options to purchase 4,904,512 shares have not vested as of June 30, 2005, pursuant to (A) Ivory’s 2004 Stock Awards Plan, (B) Ivory’s 1999 Stock Awards Plan, and (C) Ivory’s 2002 Employee Stock Purchase Plan, each as amended ((A), (B) and (C) collectively, the “ Ivory Plans ”), (ii) options to purchase 832,920 shares of MySpace common stock pursuant to MySpace’s 2005 Equity Incentive Plan, as amended, at an average price of $1.17 per share, (iii) warrants to purchase such number of Common Shares at such prices as are set forth on Part 1 of Section 4.1(b) of the Ivory Disclosure Letter (the “ Warrants ”), and (iv) the rights to convert the Preferred Shares into Common Shares (such conversion rights, the “ Conversion Rights ”), there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments of any kind to which Ivory or any of its Subsidiaries is a party, or by which Ivory or any of its Subsidiaries are bound, obligating Ivory or any of its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, any shares of capital stock or other securities of Ivory or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of Ivory or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Except for the Support Agreement, neither Ivory nor any of its Subsidiaries is a party to any voting agreement with respect to the voting of any of its securities or the securities of any of its Subsidiaries. There are not any outstanding contractual obligations of Ivory or any of its Subsidiaries to repurchase, redeem or otherwise acquire or to file any registration statement with respect to any shares of capital stock of Ivory or any of its Subsidiaries. Following the consummation of the Merger, there will not be outstanding any rights, warrants, options or other securities entitling the holder thereof to purchase, acquire or otherwise receive any shares of the capital stock of Ivory or any of its Subsidiaries (or any other securities exercisable for or convertible into such shares). Except as described above, neither Ivory nor any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of Ivory or any Subsidiary of Ivory on any matter (“ Voting Debt ”). Part 2 of Section 4.1(b) of the Ivory Disclosure Letter sets forth the holders of all outstanding Preferred Shares, Ivory Options and Warrants, the exercise price and expiration dates, and, with respect to the Ivory Options and Warrants, the number of Common Shares into which they each convert.

 

(c) Corporate Authority .

 

(i) Ivory has all requisite corporate power and authority necessary in order to execute, deliver and perform its obligations under this Agreement and to consummate, on the terms and subject to the conditions of this Agreement, the transactions contemplated hereby. This Agreement has been duly authorized, executed

 

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and delivered by Ivory, and no other corporate proceedings on the part of Ivory are necessary to authorize or approve this Agreement, the performance by Ivory of its obligations hereunder or to consummate the transactions contemplated hereby (other than, with respect to the Merger, the adoption of this Agreement by the affirmative vote of the holders of a majority of the then outstanding Common Shares and Preferred Shares entitled to vote thereon voting together as a single class on an as converted basis with respect to each Preferred Share (collectively, the “ Ivory Requisite Vote ”). Assuming due authorization, execution and delivery by each of Parent and Merger Sub, this Agreement is a valid and legally binding agreement of Ivory enforceable against Ivory in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar Laws of general applicability relating to or affecting creditors’ rights and to general equity principles (the “ Bankruptcy and Equity Exception ”).

 

(ii) The Board of Directors of Ivory has unanimously approved and adopted this Agreement and the transactions contemplated hereby, including the Merger, has determined that the Merger and the other transactions contemplated hereby are fair to, and advisable and in the best interest of Ivory and its stockholders and, subject to Section 6.2, has recommended that the stockholders of Ivory adopt this Agreement.

 

(d) Governmental Filings; No Violations .

 

(i) Other than any reports, filings, registrations, approvals and/or notices (A) required to be made pursuant to Section 1.2, (B) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “ HSR Act ”), and the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), (C) under the antitrust Laws of foreign Governmental Entities (collectively, the “ Foreign Antitrust Filings ”) and (D) to comply with the rules and regulations of the American Stock Exchange LLC (“ AMEX ”) (items (B) through (D) (inclusive), the “ Ivory Required Statutory Approvals ”), no notices, reports, registrations or other filings are required to be made by Ivory with, nor are any consents, registrations, approvals, permits or authorizations required to be obtained by Ivory from, any United States or foreign federal, state or local governmental or regulatory authority, agency, court, commission, body or other governmental entity of competent jurisdiction (each a “ Governmental Entity ”) in connection with the execution and delivery of this Agreement and the consummation by Ivory of the transactions contemplated hereby or by the Support Agreement, except for those that the failure to make or obtain, in the aggregate, have not had and would not reasonably be expected to have an Ivory Material Adverse Effect or prevent, impair or materially delay the ability of Ivory to consummate the transactions contemplated by this Agreement or the Support Agreement.

 

(ii) Neither the execution, delivery and performance of this Agreement and the consummation by Ivory of the transactions contemplated hereby nor compliance by Ivory with any of the provisions hereof or thereof will constitute or result in (A) a breach, conflict or violation of, or a default under, either the certificate of incorporation or by-laws (or comparable governing instruments) of Ivory or any of its Subsidiaries, (B) a breach, conflict or violation of, a default under, the acceleration of any obligations, a termination or the creation of a right of termination, the loss of any right or benefit, or the creation of a Lien on any assets of Ivory or any Subsidiary of Ivory (with or without

 

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notice, lapse of time or both) pursuant to, any agreement, lease, contract, note, mortgage, indenture, arrangement or other obligation binding upon Ivory or any Subsidiary of Ivory (each, a “ Contract ”) or, assuming that all consents, approvals and authorizations described in Section 4.1(d)(i) will be obtained prior to the Effective Time and all filings, notifications and registrations described in Section 4.1(d)(i) will have been made and any waiting periods thereunder will have terminated or expired prior to the Effective Time, violate any Law or governmental or non-governmental permit or license to which Ivory or any of its Subsidiaries is subject or (C) any change in the rights or obligations of any party under any of the Contracts, except, in the case of clause (B) or (C) above, for any breaches, conflicts, violations, defaults, accelerations, terminations, rights of termination, creations and changes that, in the aggregate, have not had and would not reasonably be expected to have an Ivory Material Adverse Effect or prevent, impair or materially delay the ability of Ivory to consummate the transactions contemplated by this Agreement or the Support Agreement.

 

(e) Ivory Reports; Financial Statements .

 

(i) The filings required to be made by Ivory since April 1, 2003 under the Securities Act of 1933, as amended (the “ Securities Act ”), and the Exchange Act have been filed with the SEC, including all forms, statements, reports, agreements (oral or written) and all documents, exhibits, amendments and supplements appertaining thereto, and each such filing complied, as of their respective dates (or if amended or superseded by a filing prior to the date of this Agreement, then on the date of such subsequent filing), in all material respects with all applicable requirements of the appropriate statutes and the rules and regulations thereunder (collectively, the “ Ivory Reports ”). None of the Ivory Reports (in the case of Ivory Reports filed pursuant to the Securities Act), as of their effective dates (or if amended or superseded by a filing prior to the date of this Agreement, then on the date of such subsequent filing), contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements made therein not misleading. None of the Ivory Reports (in the case of Ivory Reports filed pursuant to the Exchange Act) as of the respective dates filed with the SEC or first mailed to stockholders (or if amended or superseded by a filing prior to the date of this Agreement, then on the date of such subsequent filing), as applicable, contained any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

(ii) The consolidated financial statements of Ivory and its Subsidiaries included in the Ivory Reports comply as to form in all material respects with the applicable rules and regulations of the SEC with respect thereto. Each of the consolidated balance sheets included in or incorporated by reference into the Ivory Reports (including the related notes and schedules) presents fairly, in all material respects, the consolidated financial position of Ivory and its Subsidiaries as of its date, and each of the consolidated statements of income and consolidated statements of cash flows included in or incorporated by reference into the Ivory Reports (including any related notes and schedules) presents fairly, in all material respects, the results of operations, retained earnings and changes in financial position, as the case may be, of

 

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Ivory and its Subsidiaries for the periods set forth therein (subject, in the case of unaudited statements, to the absence of notes and normal year-end audit adjustments which, in the aggregate, have not had and would not reasonably be expected to have an Ivory Material Adverse Effect), in each case in accordance with United States generally accepted accounting principles as in effect on the date or for the period with respect to which such principles are applied (“ U.S. GAAP ”) consistently applied during the periods indicated, except as may be noted therein.

 

(iii) Ivory has designed and maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) to ensure that material information required to be disclosed by Ivory 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 SEC’s rules and forms and is accumulated and communicated to Ivory’s management as appropriate to allow timely decisions regarding required disclosure. Ivory has complied in all material respects with the applicable provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated thereunder or under the Exchange Act.

 

(f) Information . None of the information included or incorporated by reference in the Proxy Statement will, at the date it is first mailed to Ivory’s stockholders and at the time of the Ivory Stockholders Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. The Proxy Statement will comply as to form in all material respects with the provisions of the Exchange Act and the rules and regulations thereunder. No representation is made by Ivory in this subsection (f) with respect to statements made based on information supplied by Parent or Merger Sub in writing specifically for inclusion or incorporation by reference in the Proxy Statement.

 

(g) No Undisclosed Material Liabilities . There are no liabilities or obligations, whether accrued, contingent, absolute, determined, determinable or otherwise, other than: (i) liabilities or obligations disclosed and provided for in the Ivory balance sheet as of March 31, 2005 included in the Ivory Reports, including the notes thereto (the “ Ivory Balance Sheet ”) or in the Ivory Reports filed prior to the date hereof; and (ii) liabilities or obligations incurred in the ordinary course of business consistent with past practices since March 31, 2005 except in each case for such exceptions as, in the aggregate, have not had and would not reasonably be expected to have an Ivory Material Adverse Effect.

 

(h) Absence of Certain Changes . Since March 31, 2005 (the “ Audit Date ”), except as disclosed in the Ivory Reports filed on or after the Audit Date and prior to the date of this Agreement or as set forth on Section 4.1(h) of the Ivory Disclosure Letter, Ivory and its Subsidiaries have conducted their business only in the ordinary and usual course of such business, and there has not been (i) any events, circumstances or states of fact which, in the aggregate, have had or would reasonably be expected to have an Ivory Material Adverse Effect; (ii) any declaration, setting aside or payment of any dividend or other distribution in respect of the capital stock of Ivory or any repurchase, redemption or other acquisition by Ivory or any Subsidiary of any securities of Ivory; or (iii) any change by Ivory in accounting principles,

 

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practices or methods which is not required by U.S. GAAP. Except as set forth in Section 4.1(h) of the Ivory Disclosure Letter, since the Audit Date and through the date of this Agreement, there has not been any material increase in the compensation payable or that could become payable by Ivory or any of its Subsidiaries to directors, officers or key employees or any material amendment of any of the Ivory Compensation and Benefit Plans other than increases to employees that are not officers made in the ordinary course of business consistent with past practice.

 

(i) Litigation . Except as disclosed in the Ivory Reports, there are no civil, criminal or administrative actions, suits, claims, hearings, investigations or proceedings pending or, to the Knowledge of Ivory, threatened against Ivory or any of its Subsidiaries, except for those that, in the aggregate, have not had and would not be reasonably expected to have an Ivory Material Adverse Effect or prevent or materially delay the ability of Ivory to consummate the transactions contemplated by this Agreement. Except as disclosed in the Ivory Reports filed prior to the date of this Agreement, neither Ivory nor any of its Subsidiaries is subject to any outstanding order, writ, injunction or decree of a Governmental Entity which, in the aggregate, have had or would reasonably be expected to have an Ivory Material Adverse Effect or could prevent or materially delay the consummation of the transactions contemplated hereby.

 

(j) Employee Benefits .

 

(i) The term “ Ivory Compensation and Benefit Plan ” shall mean each “employee benefit plan” within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ ERISA ”) and each other bonus, deferred compensation, profit-sharing, thrift, savings, deferred compensation, employee stock ownership, stock bonus, stock purchase, change in control, retention, restricted stock, stock option, employment, termination, severance, compensation or other material compensation or benefit plan, policy, practice, agreement or other arrangement, that is maintained by Ivory or any of its Subsidiaries or that covers employees or former employees (“ Employees ”), or directors or former directors or consultants or former consultants of Ivory or any of its Subsidiaries; and any trust agreement or insurance contract forming a part of such Ivory Compensation and Benefit Plan. Section 4.1(j) of the Ivory Disclosure Letter lists all Ivory Compensation and Benefit Plans, and any Ivory Compensation and Benefit Plans containing “change of control” or similar provisions therein are specifically identified in Section 4.1(j)(i) of the Ivory Disclosure Letter. Ivory has made available to Parent prior to the date hereof a copy of all Ivory Compensation and Benefit Plans and a copy of each agreement, policy, practice or arrangement that covers key employees or former key employees of Ivory and its Subsidiaries. In addition, with respect to each Ivory Compensation and Benefit Plan, Ivory has made available to Parent a true, correct and complete copy of: (A) the most recent Annual Report (Form 5500 Series) and accompanying schedule, if any; (B) the current summary plan description and any material modifications thereto, if any (in each case, whether or not required to be furnished under ERISA); (C) the most recent annual financial report, if any; (D) the most recent actuarial report, if any; and (E) the most recent determination letter from the IRS, if any.

 

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(ii) All Ivory Compensation and Benefit Plans are in compliance in all material respects with applicable Law including provisions of ERISA, the Internal Revenue Code of 1986, as amended (the “ Code ”) and any other applicable Law. Each Ivory Compensation and Benefits Plan has been administered in all material respects in accordance with its terms. Each Ivory Compensation and Benefit Plan that is intended to be qualified under Section 401(a) of the Code has received a favorable determination letter from the U.S. Department of the Treasury, Internal Revenue Service (the “ IRS ”), that has not been revoked and nothing has occurred, whether by action or failure to act, that would cause the loss of such qualification or that would result in costs to Ivory or any of its Subsidiaries under the Internal Revenue Service’s Employee Plans Compliance Resolution System. As of the date hereof, there is no material pending or, to the Knowledge of Ivory, threatened litigation relating to the Ivory Compensation and Benefit Plans, any fiduciaries thereof with respect to their duties to the Ivory Compensation and Benefits Plans or the assets of any of the trusts under any of the Ivory Compensation and Benefits Plans which could reasonably be expected to result in any material liability of Ivory or any of its Subsidiaries. Neither Ivory nor any of its Subsidiaries nor, to the Knowledge of Ivory, any other Person has engaged in a transaction that, assuming the Taxable period of such transaction expired as of the date hereof, would subject Ivory or any of its Subsidiaries or any Person that Ivory or its Subsidiaries has an obligation to indemnify to a material tax or penalty imposed by either Section 4975 of the Code or Section 502 of ERISA.

 

(iii) Neither Ivory, any of its Subsidiaries nor any ERISA Affiliate maintains or has ever maintained a Plan that is subject to Title IV of ERISA. Neither Ivory, any of its Subsidiaries nor any ERISA Affiliate has contributed to or ever been obligated to contribute to a “multiemployer plan”, within the meaning of Section 3(37) of ERISA, at any time. “ ERISA Affiliate ” means Ivory and any of its Subsidiaries and any trade or business (whether or not incorporated) that would be treated as a single employer with Ivory or any of its Subsidiaries under Section 4001 of ERISA or Section 414(b), (c), (m) or (o) of the Code. There does not now exist, nor do any circumstances exist that could result in, any Controlled Group Liability that could be a material liability of Ivory or its Subsidiaries following the Closing. “ Controlled Group Liability ” means any and all liabilities as a result of a failure to comply with (A) the continuation coverage requirements of Section 601 et seq. of ERISA and Section 4980B of the Code, (B) the Health Insurance Portability and Accountability Act or (C) corresponding or similar provisions of foreign Laws or regulations.

 

(iv) All contributions required to be made by Ivory or any of its Subsidiaries under the terms of any Ivory Compensation and Benefit Plan as of the date hereof have been timely made or have been reflected on the most recent consolidated balance sheet filed or incorporated by reference in Ivory Reports.

 

(v) Neither Ivory nor its Subsidiaries have any material obligations for, or liabilities with respect to, retiree health and life benefits under any Ivory Compensation and Benefit Plan, except for benefits required to be provided under Section 4980B of the Code or any other applicable Law requiring continuation of health coverage.

 

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(vi) Except as described on Section 4.1(j)(vi) of the Ivory Disclosure Letter, the consummation of the transactions contemplated by this Agreement alone or in combination with another event will not (a) entitle any of the employees of Ivory or any of its Subsidiaries to severance pay, (b) accelerate the time of payment or vesting of payment or trigger any payment of compensation or benefits under, increase the amount payable, or trigger any other material obligation pursuant to, any of the Ivory Compensation and Benefit Plans or (c) result in any breach or violation of, or a default under, or trigger any forfeiture under any Ivory Compensation and Benefit Plans. No payment under any Ivory Compensation and Benefit Plans individually or collectively and as a result of the transactions contemplated by this agreement (whether alone or upon the occurrence of any additional or subsequent events) or otherwise, would be expected to give rise to the payment of any amount that would not be deductible pursuant to Section 280G or 162(m) of the Code.

 

(vii) All Ivory Compensation and Benefit Plans subject to the Laws of any jurisdiction outside of the United States (i) have been maintained in material compliance with all applicable Laws and regulations, (ii) if they are intended to qualify for special tax treatment meet all requirements for such treatment, and (iii) if they are intended to be funded and/or book-reserved, are fully funded and/or book reserved, as appropriate, based upon reasonable actuarial assumptions.

 

(viii) Ivory has no material liability with respect to any improper classification of any individual who renders services to Ivory or any of its Subsidiaries who is classified by Ivory or such Subsidiary, as applicable, as having the status of an independent contractor or other non-employee status for any purpose (including for purposes of Taxation and Tax reporting and under Ivory Compensation and Benefit Plans).

 

(k) Compliance with Laws; Regulatory Matters .

 

(i) Except for matters that, in the aggregate, have not had and would not reasonably be expected to have an Ivory Material Adverse Effect, the business of Ivory and its Subsidiaries is and has been conducted in compliance with all applicable United States or foreign, federal, state or local laws, statutes, ordinances, rules, regulations, judgments, orders, injunctions, decrees, arbitration awards, agency requirements, licenses and permits, in each case, of any Governmental Entity (collectively, “ Laws ”). The provisions of this Section 4.1(k) shall not apply to Environmental Laws which are covered exclusively in Section 4.1(m).

 

(ii) Except for such failures that, in the aggregate, have not had and would not reasonably be expected to have an Ivory Material Adverse Effect, Ivory and each of its Subsidiaries has all permits, licenses, franchises, variances, exemptions, orders and other governmental authorizations, consents and approvals from Governmental Entities (“ Permits ”) necessary to conduct its business as currently conducted, and all such Permits are valid and in full force and effect. Each of Ivory and its Subsidiaries is, and at all times from January 1, 2003 through the date of this Agreement has been, in material compliance with the terms and requirements of such Permits, except for such failures as,

 

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in the aggregate, have not had and would not reasonably be expected to have an Ivory Material Adverse Effect. Since January 1, 2003, none of Ivory and its Subsidiaries has received any written notice from any Governmental Entity regarding (a) any actual or possible violation of or failure to comply with any term or requirement of any material Permits, or (b) any actual or possible revocation, withdrawal, suspension, cancellation, termination or modification of any material Permits, except as, in the aggregate, have not had and would not reasonably be expected to have an Ivory Material Adverse Effect. To the Knowledge of Ivory, no Governmental Entity has at any time since January 1, 2003 challenged in writing the right of any of Ivory and its Subsidiaries to develop, manufacture, market, license, distribute, promote, offer, provide or sell any products or services.

 

(l) Anti-takeover Statutes; Rights Plan . Ivory has taken all action necessary to exempt the Support Agreement, the Merger, this Agreement (and, in each case, the performance thereof) and the transactions contemplated hereby or thereby from the provisions of Section 203 of the DGCL, and such action is effective at the date of this Agreement.