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Agreement And Plan Of Merger By And Among

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 This Agreement and Plan of Merger involves

INTERACTIVE INTELLIGENCE GROUP, INC. | GENESYS TELECOMMUNICATIONS LABORATORIES, INC | GIANT MERGER SUB INC | Greeneden US Holdings I, LLC | Greeneden US Holdings II, LLC | Indiana Business Corporation | INTERACTIVE INTELLIGENCE GROUP, INC

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Title: AGREEMENT AND PLAN OF MERGER by and among
Governing Law: Delaware     Date: 8/31/2016
Industry: Software and Programming     Law Firm: Baker Daniels;Fried Frank     Sector: Technology

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EXHIBIT 2.1

EXECUTION VERSION

    

AGREEMENT AND PLAN OF MERGER

by and among

GENESYS TELECOMMUNICATIONS LABORATORIES, INC.,

GIANT MERGER SUB INC.,

INTERACTIVE INTELLIGENCE GROUP, INC.,

and, solely for the purpose of Section 5.16 hereof,

GREENEDEN LUX 3 S.ÀR.L.,

GREENEDEN U.S. HOLDINGS I, LLC

and

GREENEDEN U.S. HOLDINGS II, LLC

 

Dated as of August 30, 2016

    

 

 


 

Table of Contents

 

 

Page

ARTICLE 1 THE MERGER

 

Section 1.1

The Merger

2

Section 1.2

Closing

2

Section 1.3

Effective Time

2

Section 1.4

Effects of the Merger

2

Section 1.5

Organizational Documents of the Surviving Corporation

2

Section 1.6

Directors of the Surviving Corporation

3

Section 1.7

Officers of the Surviving Corporation

3

ARTICLE 2 CONVERSION OF SHARES; EXCHANGE OF CERTIFICATES

 

Section 2.1

Effect on Capital Stock

3

Section 2.2

Exchange of Certificates

4

Section 2.3

Treatment of Company Equity Awards

6

Section 2.4

Employee Stock Purchase Plan

8

ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

Section 3.1

Qualification; Organization; Subsidiaries

8

Section 3.2

Capitalization

9

Section 3.3

Corporate Authority Relative to This Agreement; No Violation

10

Section 3.4

Reports and Financial Statements

11

Section 3.5

Internal Controls and Procedures

12

Section 3.6

No Undisclosed Liabilities

13

Section 3.7

Affiliate Party Transactions

13

Section 3.8

Compliance with Law; Permits

14

Section 3.9

Employee Benefit Plans; Labor Matters

14

Section 3.10

Absence of Certain Changes or Events

18

Section 3.11

Investigations; Litigation

18

Section 3.12

Proxy Statement; Other Information

18

Section 3.13

Tax Matters

18

Section 3.14

Intellectual Property

20

Section 3.15

Real Property

21

Section 3.16

Opinion of Financial Advisors

21

Section 3.17

Required Vote of the Company Shareholders

21

Section 3.18

Material Contracts

22

Section 3.19

Insurance Policies

23

Section 3.20

Finders or Brokers

23

Section 3.21

Takeover Laws

24

ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB

 

Section 4.1

Qualification, Organization, Subsidiaries

24

Section 4.2

Corporate Authority Relative to This Agreement; No Violation

24

Section 4.3

Investigations; Litigation

25

Section 4.4

Proxy Statement; Other Information

25

Section 4.5

Financing

26

Section 4.6

Capitalization of Merger Sub

27

Section 4.7

No Vote of Parent Shareholders

27

Section 4.8

Finders or Brokers

27

 


 

Section 4.9

No Additional Representations

28

Section 4.10

Certain Arrangements

28

Section 4.11

Ownership of Common Stock

28

Section 4.12

Solvency

29

ARTICLE 5 COVENANTS AND AGREEMENTS

 

Section 5.1

Conduct of Business by the Company and Parent

29

Section 5.2

Access

33

Section 5.3

No Solicitation

33

Section 5.4

Filings; Other Actions

36

Section 5.5

Employee Matters

37

Section 5.6

Efforts

39

Section 5.7

Takeover Statutes

42

Section 5.8

Public Announcements

42

Section 5.9

Indemnification and Insurance

42

Section 5.10

Control of Operations

44

Section 5.11

Rule 16b-3

44

Section 5.12

Transaction Litigation

44

Section 5.13

FIRPTA

45

Section 5.14

Convertible Notes

45

Section 5.15

Repatriation

45

Section 5.16

Parent Financing .

45

Section 5.17

280G Matters

51

ARTICLE 6 CONDITIONS TO THE MERGER

 

Section 6.1

Conditions to Obligation of Each Party to Effect the Merger

51

Section 6.2

Conditions to Obligation of the Company to Effect the Merger

52

Section 6.3

Conditions to Obligations of Parent and Merger Sub to Effect the Merger

52

Section 6.4

Frustration of Closing Conditions

53

ARTICLE 7 TERMINATION

 

Section 7.1

Termination or Abandonment

53

Section 7.2

Effect of Termination

55

Section 7.3

Company Termination Fee

55

ARTICLE 8 MISCELLANEOUS

 

Section 8.1

No Survival of Representations and Warranties

58

Section 8.2

Expenses

58

Section 8.3

Counterparts; Effectiveness

58

Section 8.4

Governing Law; Jurisdiction

58

Section 8.5

Specific Enforcement

59

Section 8.6

WAIVER OF JURY TRIAL

60

Section 8.7

Notices

60

Section 8.8

Assignment; Binding Effect

62

Section 8.9

Severability

62

Section 8.10

Entire Agreement; No Third-Party Beneficiaries

62

Section 8.11

Amendments; Waivers

62

Section 8.12

Headings

63

Section 8.13

Interpretation

63

Section 8.14

Obligations of Merger Sub

63

 


 

Section 8.15

Non-Recourse

63

Section 8.16

No Recourse to Financing Related Parties

64

Section 8.17

Definitions

64

Annex A - Voting Agreement

 

 

 


 

 

AGREEMENT AND PLAN OF MERGER, dated as of August 30, 2016 (this “ Agreement ”), among Genesys Telecommunications Laboratories, Inc., a California corporation (“ Parent ”), Giant Merger Sub Inc., an Indiana corporation and a direct, wholly owned subsidiary of Parent (“ Merger Sub ”), Interactive Intelligence Group, Inc., an Indiana corporation (the “ Company ”), and, solely for the purposes of Section 5.16, Greeneden Lux 3 S.àR.L., a societe a responsabilite limitee under the laws of Luxembourg (“ Luxco 3 ”), Greeneden U.S. Holdings I, LLC, a Delaware limited liability company (“ LLC 1 ”), and Greeneden U.S. Holdings II, LLC, a Delaware limited liability company (“ LLC 2 ”, together with Parent, Luxco 3 and LLC 1, the “ Parent Parties ”).

RECITALS

WHEREAS, Parent desires to acquire the Company on the terms and subject to the conditions set forth in this Agreement;

WHEREAS, in furtherance of such acquisition of the Company by Parent, and on the terms and subject to the conditions set forth in this Agreement and in accordance with the Indiana Business Corporation Law, as amended (the “ IBCL ”), Merger Sub shall be merged with and into the Company (the “ Merger ”), with the Company surviving the Merger as a wholly owned subsidiary of Parent;

WHEREAS, the Board of Directors of the Company has unanimously (a) determined that it is fair to and in the best interests of the Company and its shareholders, and declared it advisable, to enter into this Agreement and to consummate the transactions contemplated hereby, including the Merger, (b) approved the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, including the Merger, and (c) resolved to recommend adoption of this Agreement by the shareholders of the Company;

WHEREAS, the Boards of Directors of Parent and Merger Sub have approved the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, including the Merger, and declared it advisable for Parent and Merger Sub, respectively, to enter into this Agreement;

WHEREAS, Parent, as the sole shareholder of Merger Sub, has adopted this Agreement;

WHEREAS, concurrently with the execution and delivery of this Agreement, Parent and Donald E. Brown, M.D., will enter into a voting and support agreement (the “ Voting Agreement ”), the form of which is attached as Annex I; and

WHEREAS, Parent, Merger Sub and the Company desire to make certain representations, warranties, covenants and agreements specified herein in connection with this Agreement.

NOW, THEREFORE, in consideration of the foregoing and the representations, warranties, covenants and agreements contained herein, and intending to be legally bound hereby, Parent, Merger Sub and the Company agree as follows:

 

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ARTICLE 1

 

THE MERGER

 

Section 1.1 The Merger.   On the terms and subject to the conditions set forth in this Agreement, and in accordance with the IBCL, at the Effective Time, Merger Sub shall merge with and into the Company, the separate corporate existence of Merger Sub shall cease and the Company shall continue its corporate existence under Indiana law as the surviving corporation in the Merger (the “ Surviving Corporation ”) and a direct, wholly owned Subsidiary of Parent.

 

Section 1.2 Closing . The closing of the Merger (the “ Closing ”) shall take place (a) at the offices of Faegre Baker Daniels LLP, 600 East 96th Street, Suite 600, Indianapolis, Indiana 46240, at 10:00 a.m., local time, on the third (3rd) Business Day after the satisfaction or waiver (to the extent permitted by applicable Law) of the conditions set forth in Article 6 (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of such conditions) or (b) at such other place, time and date as the Company and Parent may agree in writing; provided that, notwithstanding the satisfaction or waiver of the conditions set forth in Article  6, the parties shall not be required to effect the Closing until the earlier of (i) a date during the Marketing Period specified by Parent on no less than three (3) Business Days’ prior written notice to the Company and (ii) the third (3rd) Business Day following the final day of the Marketing Period (subject, in each case, to the satisfaction or waiver in writing of all of the conditions set forth in Article  6 as of the date determined pursuant to this Section 1.2 ). The date on which the Closing actually occurs is referred to as the “ Closing Date .”

 

Section 1.3 Effective Time.   Subject to the provisions of this Agreement, at the Closing and on the Closing Date, the Company shall cause articles of merger (the “ Articles of Merger ”) to be executed, acknowledged and filed with the Secretary of State of the State of Indiana in accordance with IBCL 23-1-40-5. The Merger shall become effective at such time as the Articles of Merger have been duly filed with the Secretary of State of the State of Indiana or at such later date or time as may be agreed by the Company and Merger Sub and specified in the Articles of Merger in accordance with IBCL 23-1-40-5 (the effective time of the Merger being hereinafter referred to as the “ Effective Time ”).

 

Section 1.4 Effects of the Merger . The Merger shall have the effects set forth in this Agreement and the applicable provisions of the IBCL.

 

Section 1.5 Organizational Documents of the Surviving Corporation.   Subject to Section 5.9 , at the Effective Time: (a) the articles of incorporation of the Company as in effect immediately prior to the Effective Time shall be the articles of incorporation of the Surviving Corporation until thereafter amended in accordance with the IBCL and such articles of incorporation; and (b) the bylaws of Merger Sub as in effect immediately prior to the Effective Time (but amended so that the name of the Surviving Corporation shall be “Interactive Intelligence Group, Inc.”), as so amended, shall be the bylaws of the Surviving Corporation until thereafter amended in accordance with the IBCL and such bylaws.

 

2


 

 

 

Section 1.6 Directors of the Surviving Corporation . Subject to applicable Law, the directors of Merger Sub as of immediately prior to the Effective Time shall be the initial directors of the Surviving Corporation and shall hold office until their respective successors are duly elected and qualified, or their earlier death, incapacitation, retirement, resignation or removal.

 

Section 1 .7 Officers of the Surviving Corporation . The officers of the Company as of immediately prior to the Effective Time shall be the initial officers of the Surviving Corporation and shall hold office until their respective successors are duly elected and qualified, or their earlier death, incapacitation, retirement, resignation or removal.

 

ARTICLE 2

 

CONVERSION OF SHARES; EXCHANGE OF CERTIFICATES

 

Section 2.1 Effect on Capital Stock

 

(a)At the Effective Time, by virtue of the Merger and without any action on the part of the Company, Merger Sub or the holders of any securities of the Company or Merger Sub:

 

(i) Conversion of Common Stock . Each share of common stock, par value $0.01 per share, of the Company (collectively, the “ Common Stock ,” and each, a “ Share ” and together, the “ Shares ”) that is outstanding as of immediately prior to the Effective Time, other than Cancelled Shares and Converted Shares, shall be converted automatically into and shall thereafter represent the right to receive $60.50 in cash (the “ Merger Consideration ”). All Shares that have been converted into the right to receive the Merger Consideration as provided in this Section 2.1 shall be automatically cancelled and shall cease to exist, and the holders of Book-Entry Shares or Certificates that immediately prior to the Effective Time represented such Shares shall cease to have any rights with respect to such Shares other than the right to receive the Merger Consideration and the right to receive any then declared and unpaid dividend or other distribution with respect to such Shares having a record date before the Effective Time (in each case, less any applicable withholding Taxes) in accordance with this Article 2 .

 

(ii) Company-, Parent- and Merger Sub-Owned Shares . Each Share of Common Stock that is owned directly by the Company, Parent or Merger Sub as of immediately prior to the Effective Time (the “ Cancelled Shares ”) shall be cancelled and retired and shall cease to exist, and no consideration shall be delivered in exchange for such cancellation and retirement. Each Share of Common Stock that is owned directly by any Subsidiary of the Company, any Subsidiary of Parent (other than Merger Sub) or any Subsidiary of Merger Sub (the “ Converted Shares ”) as of immediately prior to the Effective Time shall be converted into such number of shares of common stock of the Surviving Corporation so as to maintain relative ownership percentages. No Merger Consideration shall be paid in respect of Cancelled Shares or Converted Shares.

 

3


 

 

(iii) Conversion of Merger Sub Common Stock . Each share of common stock, par value $0.01 per share, of Merger Sub outstanding as of immediately prior to the Effective Time shall be converted into and become one validly issued, fully paid and nonassessable share of common stock, par value $0.01 per share, of the Surviving Corporation with the same rights, powers and privileges as the shares so converted and shall constitute the only outstanding shares of capital stock of the Surviving Corporation. From and after the Effective Time, all certificates representing the common stock of Merger Sub shall be deemed for all purposes to represent the number of shares of common stock of the Surviving Corporation into which they were converted in accordance with the immediately preceding sentence.

 

(b) Certain Adjustments . If, between the date of this Agreement and the Effective Time, the outstanding Shares of Common Stock of the Company shall have been changed into a different number of shares or a different class of shares by reason of any stock dividend, subdivision, reorganization, reclassification, recapitalization, stock split, reverse stock split, combination or exchange of shares, the Merger Consideration shall be equitably adjusted, without duplication, to proportionally reflect such change.

 

Section 2.2 Exchange of Certificates

 

(a) Paying Agent . Prior to the Effective Time, Parent shall deposit, or shall cause to be deposited, with a U.S. bank or trust company that shall be appointed to act as a paying agent hereunder and reasonably approved in advance by the Company (the “ Paying Agent ”), in trust for the benefit of holders of the Shares, cash in U.S. dollars sufficient to pay the aggregate Merger Consideration in exchange for all of the Shares outstanding as of immediately prior to the Effective Time (other than the Cancelled Shares and the Converted Shares), payable upon due surrender of the certificates that immediately prior to the Effective Time represented Shares (“ Certificates ”) (or effective affidavits of loss in lieu thereof) or non-certificated Shares represented by book-entry (“ Book-Entry Shares ”) pursuant to the provisions of this Article 2 (such cash being hereinafter referred to as the “ Exchange Fund ”).

 

(b) Payment Procedures .

 

(i)As soon as reasonably practicable after the Effective Time and in any event not later than the second Business Day following the Closing Date, Parent shall cause the Paying Agent to mail to each holder of record of Shares whose Shares were converted into the right to receive the Merger Consideration pursuant to Section 2.1 , (A) a letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to Certificates shall pass, only upon delivery of Certificates (or effective affidavits of loss in lieu thereof) or Book-Entry Shares to the Paying Agent and shall be in such form and have such other provisions as is customary), and (B) instructions for use in effecting the surrender of Certificates (or effective affidavits of loss in lieu thereof) or Book-Entry Shares in exchange for the Merger Consideration.

 

(ii)Upon surrender of Certificates (or effective affidavits of loss in lieu thereof) or Book-Entry Shares to the Paying Agent, together with such letter of transmittal, duly completed and validly executed in accordance with the instructions thereto, and such other documents as may customarily be required by the Paying Agent, the holder of such Certificates (or effective affidavits of loss in lieu thereof) or Book-Entry Shares shall be entitled to receive in exchange therefor an amount in cash equal to the product of (x) the number of Shares represented by such holder's properly surrendered Certificates (or effective affidavits of loss in lieu thereof) or Book-Entry Shares and (y) the Merger Consideration (less any applicable withholding Taxes). No interest shall be paid or accrued on any amount payable upon due surrender of Certificates (or effective affidavits of loss in lieu thereof) or Book-Entry Shares.

 

4


 

 

 

(iii)The Paying Agent, the Company, Parent and Merger Sub, as applicable, shall be entitled to deduct and withhold from any amounts otherwise payable under this Agreement such amounts as are required to be withheld or deducted under the Internal Revenue Code of 1986, as amended (the “ Code ”), or under any provision of state, local or foreign Tax Law with respect to the making of such payment. To the extent that amounts are so deducted or withheld, such deducted or withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Person in respect of which such deduction or withholding was properly made.

 

(c) Closing of Transfer Books . At the Effective Time, the stock transfer books of the Company shall be closed, and there shall be no further registration of transfers on the stock transfer books of the Surviving Corporation of the Shares that were outstanding as of immediately prior to the Effective Time.

 

(d) Termination of Exchange Fund . Any portion of the Exchange Fund (including the proceeds of any investments thereof) that remains undistributed to the former holders of Shares on the first anniversary of the Effective Time shall thereafter be delivered to the Surviving Corporation upon demand, and any former holders of Shares who have not surrendered their Shares in accordance with this Article 2 shall thereafter look only to the Surviving Corporation for payment of their claim for the Merger Consideration, without any interest thereon, upon due surrender of Certificates for their Shares (or effective affidavits of loss in lieu thereof).

 

(e) No Liability . Anything herein to the contrary notwithstanding, none of the Company, Parent, Merger Sub, the Surviving Corporation, the Paying Agent or any other Person shall be liable to any former holder of Shares for any amount properly delivered to a public official pursuant to any applicable abandoned property, escheat or similar Law.

 

(f) Investment of Exchange Fund . The Paying Agent shall invest all cash included in the Exchange Fund as reasonably directed by Parent; provided , however , that any investment of such cash shall be limited to direct short-term obligations of, or short-term obligations fully guaranteed as to principal and interest by, the U.S. government; provided , further , that no such investment or loss thereon shall affect the amounts payable to holders of Certificates (or effective affidavits of loss in lieu thereof) or Book-Entry Shares pursuant to this Article 2 , and following any losses from any such investment, Parent shall promptly provide additional funds to the Paying Agent for the benefit of the holders of Shares of Common Stock of the Company. Any interest and other income resulting from such investments shall be paid to the Surviving Corporation pursuant to Section 2.2(d) .

 

5


 

 

(g) Transferred Shares . If any portion of the Merger Consideration is to be paid to a Person other than the Person in whose name the surrendered Certificate or the transferred Book-Entry Share is registered, it shall be a condition to such payment that (i) either such Certificate shall be properly endorsed or shall otherwise be in proper form for transfer or such Book-Entry Share shall be properly transferred and (ii) the Person requesting such payment shall pay to the Paying Agent any transfer or other similar Tax required as a result of such payment to a Person other than the registered holder of such Certificate or Book-Entry Share or establish to the satisfaction of the Payment Agent that such Tax has been paid or is not payable.

 

(h) Lost Certificates . In the case of any Certificate that has 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 the Paying Agent, the posting by such Person of a bond in customary amount as indemnity against any claim that may be made against it with respect to such Certificate, the Paying Agent shall issue in exchange for such lost, stolen or destroyed Certificate a check in the amount of the number of Shares represented by such lost, stolen or destroyed Certificate multiplied by the Merger Consideration (less any applicable withholding Taxes).

 

Section 2.3 Treatment of Company Equity Awards

 

(a) Company Options .

 

(i)Each Company Option that is outstanding immediately prior to the Effective Time and that is vested as of the date hereof or becomes vested prior to the Effective Time in accordance with its terms or Section 2.3 of the Company Disclosure Letter (each, a " Vested Option ") shall as of the Effective Time, be converted into the right to receive an amount in cash equal to the product of (x) the excess, if any, of the Merger Consideration over the exercise price per Share of such Vested Option and (y) the total number of Shares subject to such Vested Option. Parent shall cause the Surviving Corporation to pay to the holders of Vested Options the cash amounts described in the immediately preceding sentence, less such amounts as are required to be withheld or deducted under the Code or any provision of state, local or foreign Tax Law with respect to the making of such payment, promptly but in any event within seven days following the Effective Time.

 

(ii)Each Company Option that is outstanding immediately prior to the Effective Time and that is unvested immediately prior to the Effective Time (and does not become vested in accordance with Section 2.3 of the Company Disclosure Letter) (each, an " Unvested Option ") shall as of the Effective Time, automatically convert into an award to receive an amount in cash equal to the product of (x) the excess, if any, of the Merger Consideration over the exercise price per Share of such Unvested Option and (y) the total number of Shares subject to such Unvested Option. Such converted award shall remain subject to the same vesting terms and conditions that applied to such award immediately prior to the Effective Time, including continued employment with Parent or the Company through the applicable vesting date, and the applicable cash amounts shall be paid out, less such amounts as are required to be withheld or deducted under the Code or any provision of state, local or foreign Tax Law with respect to the making of such payment, promptly but in any event within thirty days of the vesting date.

 

6


 

 

(iii) If the applicable exercise price per Share of any Company Option equals or exceeds the Merger Consideration, such Company Option shall be cancelled without payment of additional consideration, and all rights with respect to such Company Option shall terminate as of the Effective Time.

 

(b) Company RSUs .

 

(i)Each Company RSU that is outstanding immediately prior to the Effective Time that becomes vested at the Effective Time in accordance with its terms or Section 2.3 of the Company Disclosure Letter (each, a " Vested RSU "), shall as of the Effective Time, automatically convert into the right to receive an amount in cash equal to the product of (x) the total number of Shares subject to such Vested RSU and (y) the Merger Consideration. Parent shall cause the Surviving Corporation to pay to the holders of Vested RSUs the cash amounts described in the immediately preceding sentence, less such amounts as are required to be withheld or deducted under the Code or any provision of state, local or foreign Tax Law with respect to the making of such payment, promptly but in any event within seven days following the Effective Time.

 

(ii)Each Company RSU that is outstanding immediately prior to the Effective Time and that is unvested immediately prior to the Effective Time (and does not become vested in accordance with Section 2.3 of the Company Disclosure Letter) (each, an " Unvested RSU "), shall as of the Effective Time, automatically convert into an award to receive an amount in cash equal to the product of (x) the total number of Shares subject to such Unvested RSU and (y) the Merger Consideration. Such converted award shall remain subject to the same vesting terms and conditions that applied to such award immediately prior to the Effective Time, including continued employment with Parent or the Company through the applicable vesting date, and shall be paid, less such amounts as are required to be withheld or deducted under the Code or any provision of state, local or foreign Tax Law with respect to the making of such payment, on the same payment schedule as applied to such award immediately prior to the Effective Time.

 

(c)Notwithstanding the foregoing, for any award of Company Options or Company RSUs that is subject to performance-based vesting and for which the performance period is incomplete as of the Effective Time, the performance with respect to such awards will be determined in accordance with Section 2.3 of the Company Disclosure Letter.

 

(d)Prior to the Effective Time, the Company, through its Board of Directors or an appropriate committee thereof, will adopt such resolutions as may reasonably be required in its discretion to effectuate the actions contemplated by this Section 2.3 and to ensure that no holder of a Company Equity Award shall have any right thereunder to acquire any securities of the Company, Parent, the Surviving Corporation or any of their respective Affiliates or to receive any payment or benefit with respect to any award previously granted under a Company Stock Plan, except as provided in this Section 2.3 .

 

7


 

 

 

Section 2.4 Employee Stock Purchase Plan . The Company shall take all necessary action to ensure (i) that no new offering periods under the Company Employee Stock Purchase Plan, as amended and restated (the “ ESPP ”) will commence during the period from the date of this Agreement through the Effective Time, (ii) that there will be no increase in the amount of payroll deductions permitted to be made by the participants under the ESPP during the current offering period, except those made in accordance with payroll deduction elections that already are in effect as of the date of this Agreement, and (iii) that no individual shall commence participation in the ESPP during the period from the date of this Agreement through the Effective Time. The accumulated contributions of the participants in the current offering period shall be used to purchase Shares as of no later than ten Business Days prior to the Effective Time, and the participants' purchase rights under such offerings shall terminate immediately after such purchase. As of no later than the Business Day immediately prior to the Effective Time, the Company shall terminate the ESPP.

 

ARTICLE 3

 

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

Except (i) as disclosed in the Company SEC Documents filed prior to the date hereof (other than (x) matters required to be disclosed for purposes of Section 3.2 and Section 3.10(a) , which matters shall only be disclosed by specific disclosure in the respective corresponding section of the Company Disclosure Letter and (y) disclosures in the “Risk Factors” or “Forward-Looking Statements” sections of such reports and other disclosures that are similarly predictive or forward-looking in nature) and (A) then only to the extent that the relevance of any disclosed event, item or occurrence in such Company SEC Documents to a matter covered by a representation or warranty set forth in this Article 3 is reasonably apparent as to matters or items which are subject of such representation or warranty and (B) without giving effect to any amendment to any such documents filed on or after the date hereof) or (ii) in the disclosure letter delivered by the Company to Parent concurrently with the execution of this Agreement (the “ Company Disclosure Letter ”) (it being agreed that disclosure of any item in any section or subsection of the Company Disclosure Letter shall be deemed disclosed with respect to any other section or subsection of the Company Disclosure Letter to the extent that the relevance thereof is reasonably apparent (other than matters required to be disclosed for purposes of Section 3.2 and Section 3.10(a) , which matters shall only be disclosed by specific disclosure in the respective corresponding section of the Company Disclosure Letter)), the Company represents and warrants to Parent and Merger Sub as follows:

Section 3.1 Qualification; Organization; Subsidiaries.

 

(a)Each of the Company and its Subsidiaries (i) is a legal entity duly organized, validly existing and, where applicable, in good standing under the Laws of its respective jurisdiction of organization; (ii) has all requisite corporate or similar power and authority to own, lease and operate its properties and assets and to carry on its business as presently conducted; and (iii) is qualified to do business and is in good standing as a foreign corporation in each jurisdiction where the ownership, leasing or operation of its assets or properties or conduct of its business requires such qualification, except, in the case of clauses (ii) and (iii), as would not have, individually or in the aggregate, a Company Material Adverse Effect.

 

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(b)All of the outstanding shares of capital stock or voting securities of, or other equity interests in, each of the Company's Subsidiaries (i) have been duly authorized, validly issued and are fully paid and nonassessable and (ii) are owned by the Company, by another Subsidiary of the Company or by the Company and another Subsidiary of the Company, free and clear of all Liens other than restrictions imposed by applicable securities Laws or the organizational documents of any such Subsidiary. Except for the Company’s Subsidiaries and marketable securities held for investment or cash management purposes, the Company does not own, directly or indirectly, any capital stock of, or other equity or voting interest in, any Person.

 

Section 3.2 Capitalization.

 

(a)The authorized share capital of the Company consists of 110,000,000 shares of Common Stock and 10,000,000 shares of preferred stock, without par value (the “ Preferred Stock ”). As of August 26, 2016, there were (i) 22,268,205 shares of Common Stock issued and outstanding and no shares of Preferred Stock issued and outstanding, (ii) 5,031,910 Shares were reserved for issuances pursuant to the Company Stock Plan, of which there are (A) Company Options to purchase an aggregate of 1,248,235 shares of Common Stock issued and outstanding, and (B) 1,082,727 shares of Common Stock underlying outstanding Company RSUs. As of the date hereof, there are outstanding $150,000,000 principal amount of Convertible Notes and the conversion rate applicable to the Convertible Notes (without giving effect to any “make-whole amount”) is 16.3303 shares of Company Stock per $1,000 principal amount of Convertible Notes. All outstanding Shares are duly authorized, validly issued, fully paid and nonassessable, and are not subject to and were not issued in violation of any preemptive or similar right, purchase option, call or right of first refusal or similar right. Section 3.2 of the Company Disclosure Letter contains a correct and complete list, as of the date set forth therein, of the Company Options and Company RSUs including the holder, date of grant, term, number of Shares and, where applicable, exercise price and vesting schedule, and as of such date there were no other awards granted pursuant to the Company Benefits Plans. All Shares are “covered securities” as defined in Section 18(b)(1)(A) of the Securities Act and, assuming they remain covered securities as of the record date for the vote of holders of Shares to approve the Merger, holders of Shares shall not be entitled under the IBCL to exercise dissenters’ rights under Ind. Code Section 23-1-44-8(b).

 

(b)Except as set forth in Section 3.2(a) , and other than the exercise of options pursuant to the terms of the Company Benefit Plans and for the vesting of options and Company RSUs pursuant to the terms of the Company Benefit Plans, (i) the Company does not have any shares of its capital stock issued or outstanding other than Shares of Common Stock that have become outstanding after August 26, 2016, which were reserved for issuance as of August 26, 2016 as set forth in Section 3.2(a) , and (ii) other than the Convertible Notes and Capped Call Transactions, there are no outstanding subscriptions, options, warrants, calls, convertible securities or other similar rights, agreements or commitments relating to the issuance of capital stock to which the Company or any of the Company's Subsidiaries is a party obligating the Company or any of the Company's Subsidiaries to (A) issue, transfer or sell any shares of capital stock or other equity interests of the Company or any Subsidiary of the Company or securities convertible into, exercisable for or exchangeable for such shares or equity interests, (B) grant, extend or enter into any such subscription, option, warrant, call, convertible securities or other similar right, agreement or arrangement, (C) repurchase, redeem or otherwise acquire any such shares of capital stock or other equity interests, (D) provide a material amount of funds to, or make any material investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary, or (E) make any payments based on the price or value of any equity interests of the Company or any of the Company's Subsidiaries.

 

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(c)Except for (i) the Convertible Notes and Capped Call Transactions and (ii) awards to acquire Shares of Common Stock under any equity incentive plan of the Company and its Subsidiaries, neither the Company nor any of its Subsidiaries has outstanding bonds, debentures, notes or other obligations, the holders of which have the right to vote (or which are convertible into, exercisable for or exchangeable for securities having the right to vote) with the shareholders of the Company on any matter.

 

(d)Other than the Voting Agreement, there are no Contracts, voting trusts or other agreements or understandings to which the Company or any of its Subsidiaries is a party with respect to the voting of, restricting the transfer of, requiring registration of, or granting any preemptive rights, anti-dilutive rights (except the Company Benefit Plans and the Convertible Notes and Capped Call Transactions) or rights of first refusal or similar rights of the capital stock or other equity interest of the Company or any of its Subsidiaries.

 

Section 3.3 Corporate Authority Relative to This Agreement; No Violation.

 

(a)The Company has the requisite corporate power and authority to enter into this Agreement and, subject to receipt of the Company Shareholder Approval, to consummate the transactions contemplated hereby. The Board of Directors of the Company at a duly held meeting has (i) determined that it is in the best interests of the Company, and declared it advisable, to enter into this Agreement, (ii) approved the execution, delivery and performance of this Agreement, the Voting Agreement and the consummation of the transactions contemplated hereby and thereby, including the Merger, and (iii) adopted the plan of merger set forth in this Agreement and resolved to recommend that the shareholders of the Company approve this Agreement (the “ Recommendation ”) and directed that such matter be submitted for consideration of the shareholders of the Company at the Company Meeting. Except for the Company Shareholder Approval and the filing of the Articles of Merger with the Secretary of State of the State of Indiana, no other corporate proceedings on the part of the Company are necessary to authorize the consummation of the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by the Company and, assuming this Agreement constitutes the valid and binding agreement of Parent and Merger Sub, constitutes the valid and binding agreement of the Company, enforceable against the Company in accordance with its terms.

 

(b)The execution, delivery and performance by the Company of this Agreement and the consummation of the transactions contemplated hereby, including the Merger, by the Company do not and will not require the Company or its Subsidiaries to procure, make or provide any consent, approval, authorization or permit of, action by, filing with or notification to any United States or foreign, state or local governmental agency, commission, court, body, entity or authority (each, a “ Governmental Entity ”), other than (i) the filing of the Articles of Merger, (ii) the filing of the pre-merger notification report under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder (the “ HSR Act ”), and any foreign filings required or advisable under any applicable foreign Antitrust Law or foreign investment Law, (iii) compliance with the applicable requirements of the Exchange Act, including the filing of the Proxy Statement, (iv) compliance with the rules and regulations of Nasdaq, (v) compliance with any applicable foreign or state securities or blue sky Laws and (vi) the other consents and/or notices set forth on Section 3.3(b) of the Company Disclosure Letter (collectively, clauses (i) through (vi), the “ Specified Approvals ”), and other than any consent, approval, authorization, permit, action, filing or notification the failure of which to make or obtain would not (A) have, individually or in the aggregate, a Company Material Adverse Effect or (B) prevent or materially delay the consummation of the Merger.

 

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(c)Assuming compliance with the matters referenced in Section 3.3(b) , receipt of the Specified Approvals and the receipt of the Company Shareholder Approval, the execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the transactions contemplated hereby, including the Merger, do not and will not (i) contravene or conflict with the organizational or governing documents of the Company or any of its Subsidiaries, (ii) contravene or conflict with or constitute a violation of any provision of any Law binding upon or applicable to the Company or any of its Subsidiaries or any of their respective properties or assets or (iii) result in any violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to the loss of a benefit under any Contract, instrument, permit, concession, franchise, right or license binding upon the Company or any of its Subsidiaries or result in the creation of any Lien upon any of the properties or assets of the Company or any of its Subsidiaries, other than, in the case of clauses (ii) and (iii), any such contravention, conflict, violation, default, termination, cancellation, acceleration, right, loss or Lien that would not have, individually or in the aggregate, a Company Material Adverse Effect.

 

Section 3.4 Reports and Financial Statements.

 

(a)The Company has filed or furnished all forms, documents and reports required to be filed or furnished by it with the SEC since January 1, 2014, and after the date of this Agreement and until the Effective Time the Company will file or furnish all forms, documents and reports required to be filed or furnished by it with the SEC, each of which, in each case as of its date, or, if amended, as finally amended prior to the date of this Agreement, complied or will comply, as the case may be, as to form in all material respects with the applicable requirements of the Securities Act and the Exchange Act and the Sarbanes-Oxley Act, as the case may be, and the applicable rules and regulations promulgated thereunder, as of the date filed with the SEC (the “ Company SEC Documents ”). None of the Company SEC Documents filed or furnished since January 1, 2014 contained or will contain any untrue statement of a material fact or omitted or will 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.

 

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(b)The consolidated financial statements (including all related notes and schedules) of the Company included in the Company SEC Documents (if amended, as of the date of the last such amendment) (i) have been or will be, as the case may be, prepared in accordance with GAAP consistently applied by the Company during the periods and at the dates indicated therein (except as may be indicated in the notes thereto), (ii) complied or will comply, as the case may be, with the then applicable accounting requirements and published rules and regulations of the SEC with respect thereto, and (iii) fairly presented or will fairly present, as the case may be, in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries, as at the respective dates thereof, and the consolidated results of their operations and their consolidated cash flows for the respective periods then ended (subject, in the case of the unaudited statements, to normal year-end audit adjustments and to any other adjustments described therein, including the notes thereto) in conformity with GAAP (except, in the case of the unaudited statements, as permitted by the SEC) applied on a consistent basis during the periods involved (except as may be indicated therein or in the notes thereto).

 

(c)Since January 1, 2014, neither the Company nor any of its Subsidiaries has received from the SEC or any other Governmental Entity any written comments or questions with respect to any of the Company SEC Documents (including the financial statements included therein) or any registration statement filed by any of them with the SEC or any notice from the SEC or other Governmental Entity that such Company SEC Documents (including the financial statements included therein) or registration statements are being reviewed or investigated. To the Knowledge of the Company, there is not, as of the date of this Agreement, any investigation or review being conducted by the SEC or any other Governmental Entity of any Company SEC Documents (including the financial statements included therein), except in each case for such comments, questions, notices, investigations or reviews which have been fully resolved. None of the Company’s Subsidiaries is required to file any forms, reports, schedules, statements or other documents with the SEC.

 

(d)Since January 1, 2014, no executive officer of the Company has failed to make the certifications required of him or her under Section 302 or 906 of the Sarbanes-Oxley Act with respect to any Company SEC Documents, except as disclosed in certifications filed with the Company SEC Documents, and at the time of filing or submission of each such certification, such certification was true and accurate in all material respects and complied in all material respects with the Sarbanes-Oxley Act. Since January 1, 2014, neither the Company nor any of its executive officers has received written notice from any Governmental Entity challenging or questioning the accuracy, completeness, form or manner of filing of such certifications.

 

Section 3.5 Internal Controls and Procedures.

 

(a)The Company has established and maintains disclosure controls and procedures and internal controls over financial reporting (as such terms are defined in paragraphs (e) and (f), respectively, of Rule 13a-15 under the Exchange Act) as required by Rule 13a-15 under the Exchange Act. The Company's internal control over financial reporting is sufficient to provide reasonable assurance that (i) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP, (ii) receipts and expenditures are being made in accordance with the authorization of management and directors of the Company, and (iii) any unauthorized use, acquisition or disposition of the Company’s assets that would materially affect the Company’s financial statements would be detected or prevented in a timely manner. The Company's disclosure controls and procedures are reasonably designed to ensure that all material information required to be disclosed by the Company in the reports that it files or furnishes 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 all such material information is accumulated and communicated to the Company's management as appropriate to allow timely decisions regarding required disclosure and to make the

 

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certifications required pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act. The Company's management has completed an assessment of the effectiveness of the Company's internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act for the year ended December 31, 2015, and such assessment concluded that such controls were effective.

 

(b)Since January 1, 2014, neither the Company nor any of its Subsidiaries (including any employee thereof) nor the Company’s independent auditors has identified or been made aware of (i) any material weakness in the system of internal accounting controls utilized by the Company and its Subsidiaries, (ii) any fraud, whether or not material, that involves the Company’s management or other employees who have a role in the preparation of financial statements or the internal accounting controls utilized by the Company and its Subsidiaries or (iii) any claim or allegation regarding any of the foregoing. Since January 1, 2014, neither the Company nor any of its Subsidiaries nor, to the Knowledge of the Company, any director, officer, employee, auditor, accountant, consultant or representative of the Company or any of its Subsidiaries has received any material written substantive complaint, allegation, assertion or claim that the Company or any of its Subsidiaries has engaged in questionable accounting or auditing practices.

  

Section 3.6 No Undisclosed Liabilities . Except (a) as disclosed, reflected or reserved against in the consolidated balance sheet of the Company and its Subsidiaries as of December 31, 2015 (or the notes thereto), (b) as expressly contemplated by this Agreement, (c) for liabilities or obligations that have been discharged or paid in full, (d) for liabilities and obligations incurred in the ordinary course of business since December 31, 2015 and (e) as would not have, individually or in the aggregate, a Company Material Adverse Effect, neither the Company nor any consolidated Subsidiary of the Company has any liabilities or obligations that would be required by GAAP to be reflected on a consolidated balance sheet of the Company and its Subsidiaries (or the notes thereto).

 

Section 3.7 Affiliate Party Transactions . Since January 1, 2014, there have been no transactions, agreements, arrangements or understandings between the Company or any of its Subsidiaries on the one hand, and any Affiliate of the Company (other than the Company's Subsidiaries) or between the Company and any present or former director or executive officer of the Company or any of its Affiliates, that would be required to be disclosed under Item 404 under Regulation S-K under the Securities Act and that have not been so disclosed in the Company SEC Documents.

 

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Section 3.8 Compliance with Law; Permits.

 

(a)The Company and its Subsidiaries have since January 1, 2014, been in compliance with and not in default under or in violation of any applicable material federal, state, local or foreign law, statute, ordinance, rule, regulation, judgment, order, injunction or decree of any Governmental Entity (collectively, “Laws” and each, a “Law”), including all applicable data privacy and data protection Laws and Export and Import Control Laws. As of the date of this Agreement, neither the Company nor any of its Subsidiaries has received any written notice of any administrative, civil or criminal investigation or audit by any Governmental Entity alleging any material violation by the Company or any of its Subsidiaries of any applicable Law that remains outstanding or unresolved.

 

(b)Neither the Company nor its Subsidiaries nor any officers, directors or employees of the Company or its Subsidiaries nor, to the Knowledge of the Company, any agents, representatives, or other persons associated with or acting on behalf of the Company or its Subsidiaries have since January 1, 2013, directly or indirectly, taken any action in violation of any applicable Anti-Corruption Laws. The Company and its Subsidiaries maintain policies and procedures reasonably designed to ensure compliance with all applicable Anti-Corruption Laws.

 

(c)The Company and its Subsidiaries are in possession of and compliance with all franchises, grants, authorizations, licenses, permits, easements, variances, exceptions, consents, certificates, approvals and orders of any Governmental Entity necessary for the Company and the Company's Subsidiaries to own, lease and operate their properties and assets or to carry on their businesses as they are now being conducted (the “ Company Permits ”), except where the failure to have or comply with any of the Company Permits would not have, individually or in the aggregate, a Company Material Adverse Effect. All Company Permits are in full force and effect, except where the failure to be in full force and effect would not have, individually or in the aggregate, a Company Material Adverse Effect. The Company is not a common carrier nor does it provide common carrier services, including international telecommunications services, and is therefore not subject to applicable Laws imposing obligations on such carriers, including but not limited to regulations adopted by the United States Federal Communications Commission, except to the extent that the United States Federal Communications Commission has applied such laws to, and/or imposed such obligations on, interconnected Voice-over-Internet-Protocol service or providers thereof.

 

Section 3.9 Employee Benefit Plans; Labor Matters .

 

(a)Section 3.9(a) of the Company Disclosure Letter lists all material Company Benefit Plans other than Company Foreign Plans. “Company Benefit Plans” means all employee, independent contractor or director compensation and/or benefit plans, programs, policies, agreements or other arrangements, including any employee welfare plan within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), any employee pension benefit plan within the meaning of Section 3(2) of ERISA (whether or not such plan is subject to ERISA), and any bonus, incentive, deferred compensation, vacation, stock purchase, stock option, restricted stock, other equity-based awards, severance, salary continuation, retention, profit sharing, termination, employment, change of control, savings, life insurance, or fringe benefit plan, program or agreement (other than any “multiemployer plan” within the meaning of Section 4001(a)(3) of ERISA (a “Multiemployer Plan”)), in each case that are sponsored, maintained or contributed to by the Company or any of its Subsidiaries for the benefit of current or former employees, directors or consultants of the Company or its Subsidiaries. “Company Foreign Plan” means each Company Benefit Plan that is subject to or governed by the Laws of any jurisdiction other than the United States.

 

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(b)The Company has made available to Parent, with respect to each material Company Benefit Plan, (i) each writing constituting a part of such Company Benefit Plan, including all amendments thereto, (ii) the most recent Annual Report (Form 5500 Series) and accompanying schedules, if any, and (iii) the most recent determination letter from the Internal Revenue Service (if applicable) for such Company Benefit Plan. To the Knowledge of the Company, neither the Company nor any of its Subsidiaries has disseminated in writing any legally binding intent or commitment to create or implement any additional employee benefit plan that would be a Company Benefit Plan if in existence on the date hereof, or to amend, modify or terminate any Company Benefit Plan, in each case that would result in the incurrence of a material liability by the Company and its Subsidiaries taken as a whole.

 

(c)Except as would not be reasonably expected to result in material liability to the Company or its Subsidiaries: (i) each Company Benefit Plan has been maintained and administered in compliance with its terms and with applicable Law, including ERISA and the Code to the extent applicable thereto and neither the Company nor any of its Subsidiaries has, within the past six years, taken any corrective action or made a filing under any voluntary correction program of the Internal Revenue Service, Department of Labor or any other Governmental Entity with respect to any Company Benefit Plan and the Company has no Knowledge of any plan defect that would qualify for correction under any such program; (ii) each Company Benefit Plan intended to be “qualified” within the meaning of Section 401(a) of the Code has received a favorable determination letter from the Internal Revenue Service or is entitled to rely upon a favorable opinion issued by the Internal Revenue Service, and, to the Knowledge of the Company, there are no existing circumstances or any events that have occurred that could reasonably be expected to adversely affect the qualified status of any such plan; (iii) no Company Benefit Plan is subject to Title IV of ERISA; (iv) no Company Benefit Plan provides retiree life insurance, medical or other welfare benefits with respect to current or former employees or directors of the Company or its Subsidiaries beyond their retirement or other termination of service, other than (A) coverage mandated by applicable Law or (B) benefits not in excess of 12 months under severance arrangements; (v) no liability under Title IV of ERISA has been incurred by the Company, its Subsidiaries or any ERISA Affiliate (as defined below) of the Company that has not been satisfied in full (other than with respect to amounts not yet due), and no condition exists that presents a risk to the Company, its Subsidiaries or any ERISA Affiliate of the Company of incurring a liability thereunder; (vi) all contributions or other amounts payable by the Company or its Subsidiaries as of the date hereof with respect to each Company Benefit Plan in respect of current or prior plan years have been paid or accrued in accordance with GAAP (other than with respect to amounts not yet due); (vii) (A) no employee benefit plan of the Company or its Subsidiaries is a Multiemployer Plan, a plan that has two or more contributing sponsors, at least two of whom are not under common control, within the meaning of Section 4063 of ERISA (“ Multiple Employer Plan ”) or a voluntary employees’ beneficiary association under Section 501(c)(9) of the Code , (B) none of the Company and its Subsidiaries, nor any of their ERISA Affiliates has, at any time during the last six (6) years, contributed to or been obligated to contribute to any Multiemployer Plan or Multiple Employer Plan and (C) none of the Company and its Subsidiaries, nor any of their ERISA Affiliates has incurred any withdrawal liability that has not been satisfied in full; (viii) none of the Company, any of its Subsidiaries, or, to the Knowledge of the Company, any of their respective directors, officers, employees or agents has, with respect to any Company Benefit Plan, engaged in or been a party to any non-exempt “prohibited transaction,” as such term is defined in Section 4975 of the Code or Section 406 of ERISA, which could reasonably be expected to result in the imposition of a penalty assessed pursuant to Section 502(i) of ERISA or a tax imposed by Section 4975 of the Code   and (ix) there are no pending, threatened or, to the Knowledge of the Company, anticipated claims (other than claims for benefits in accordance with the terms of the Company Benefit Plans) by, on behalf of or against any of the Company Benefit Plans or any trusts related thereto that could reasonably be expected to result in any liability of the Company or any of its Subsidiaries. “ ERISA Affiliate ” means, with respect to any entity, trade or business, any other entity, trade or business that

 

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is a member of a group described in Section 414(b), (c), (m) or (o) of the Code or Section 4001(b)(1) of ERISA that includes the first entity, trade or business, or that is a member of the same “controlled group” as the first entity, trade or business pursuant to Section 4001(a)(14) of ERISA. Each Company Benefit Plan can be amended, terminated or otherwise discontinued after the Effective Time in accordance with its terms, without any material liability to Parent, the Surviving Corporation, the Company or any of its Subsidiaries other than ordinary administration expenses typically incurred in a termination event.

 

(d)Except as provided in this Agreement or required by applicable Law or the terms of any Company Benefit Plan set forth on Section 3.9(a) of the Company Disclosure Letter, the consummation of the transactions contemplated by this Agreement will not, either alone or in combination with another event, (i) entitle any current or former employee, director, independent contractor, or consultant of the Company or any of its Subsidiaries to severance pay, change of control payment or any other payment from the Company or its Subsidiaries, (ii) accelerate the time of payment, funding (through a grantor trust or otherwise) or vesting, or increase the amount of, compensation due to any such director, employee, independent contractor or consultant, or (iii) result in any limitation on the right of the Company or any of its Subsidiaries to amend, merge, terminate or receive a reversion of assets from any Company Benefit Plan or related trust.

 

(e)No Company Benefit Plan provides for the gross-up or reimbursement of Taxes under Section 4999 or Section 409A, or otherwise.

 

(f)No Company Benefit Plan that is subject to Section 409A of the Code and the regulations and guidance thereunder (“ Section 409A ”) has been materially modified (as defined under Section 409A) since October 3, 2004 and all such non-qualified deferred compensation plans or arrangements have been at all times since January 1, 2005 (of, if later, the date it became effective) in operational compliance with Section 409A and at all times since January 1, 2009 (of, if later, the date it became effective) in documentary compliance with Section 409A. Each Company Option (A) was granted in compliance with all applicable Laws and all of the terms and conditions of the Company Stock Plan pursuant to which it was issued, (B) has an exercise price per Share equal to or greater than the fair market value of a Share on the date of such grant, (C) has a grant date identical to or after the date on which the Company’s Board of Directors or applicable committee actually awarded such Company Option, and (D) qualifies for the Tax and accounting treatment afforded to such Company Option in the Company’s Tax returns and financial statements, respectively.  

 

(g)No material deduction for federal income tax purposes has been nor is any such material deduction expected by the Company to be disallowed for remuneration paid by the Company or any of its Subsidiaries by reason of Section 162(m) of the Code including by reason of the transactions contemplated hereby .

 

(h)Except as would not be reasonably expected to result in material liability to the Company or its Subsidiaries, all Company Foreign Plans (i) have been maintained in accordance with all applicable requirements, (ii) that are intended to qualify for special Tax treatment meet all material requirements for such treatment and (iii) that are required to be funded and/or book-reserved are funded and/or book-reserved, as appropriate, based upon reasonable actuarial assumptions and in accordance with applicable Law.

 

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(i)Neither the Company nor any of its Subsidiaries is a party to any Contract or arrangement between or applying to, one or more employees or other service providers and a union, trade union, works council, group of employees or any other employee representative body, for collective bargaining or other negotiating or consultation purposes or reflecting the outcome of such collective bargaining or negotiation or consultation with respect to their respective employees with any labor organization, union, group, association, works council or other employee representative body, or is bound by any equivalent national or sectoral agreement , Except for such matters that would be reasonably expected to result in material liability to the Company or its Subsidiaries: (i) as of the date hereof, (A) there are no strikes or lockouts with respect to any employees of the Company or any of its Subsidiaries; (B) to the Knowledge of the Company, there is no union organizing effort pending or threatened against the Company or any of its Subsidiaries; (C) there is no unfair labor practice, labor dispute (other than routine individual grievances) or labor arbitration proceeding pending or, to the Knowledge of the Company, threatened against the Company or any of its Subsidiaries; and (D) there is no slowdown, or work stoppage in effect or, to the Knowledge of the Company, threatened with respect to employees of the Company or any of its Subsidiaries; and (ii) the Company and its Subsidiaries are in compliance with all applicable Laws in respect of (A) employment and employment practices, (B) terms and conditions of employment and wages and hours, (C) unfair labor practices and (D) proper classification of individuals who currently render services or have previously rendered services to the Company or any of its Subsidiaries as employees or non-employees as applicable.

 

(j)Except as would not be reasonably expected to result in material liability to the Company or its Subsidiaries, each of the Company and its Subsidiaries is in compliance in all material respects with WARN.  In the past three years, (i) neither the Company nor any of its Subsidiaries has effectuated a “plant closing” (as defined in WARN) affecting any site of employment or one or more facilities or operating units within any site of employment or facility of its business, (ii) there has not occurred a “mass layoff” (as defined in WARN) affecting any site of employment or facility of the Company or any of its Subsidiaries, and (iii) neither the Company nor any of its Subsidiaries has been affected by any transaction or engaged in layoffs or employment terminations sufficient in number, including as aggregated, to trigger application of any similar state, local or foreign law or regulation. 

 

 

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Section 3.10 Absence of Certain Changes or Events .   Since December 31, 2015, (a) there has not been or there does not exist, as the case may be, any event, change, occurrence or development that has had or would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, (b) except for actions expressly contemplated by this Agreement, the business of the Company and its Subsidiaries has been conducted, in all material respects, in the ordinary course consistent with past practice, and (c) except for actions expressly contemplated by this Agreement, neither the Company nor any of its Subsidiaries has taken any action that, if taken after the date of this Agreement without the prior written consent of Parent would constitute a breach of clauses (i), (ii), (iv), (v), (vi), (ix), (x) or (xii) through (xvii) of Section 5.1(b) . Since June 30, 2016, except for actions expressly contemplated by this Agreement, neither the Company nor any of its Subsidiaries has taken any action that, if taken after the date of this Agreement without the prior written consent of Parent would constitute a breach of clause (iii) of Section 5.1(b) .

 

Section 3.11 Investigations; Litigation .   As of the date hereof: (a) there is no investigation or review pending (or, to the Knowledge of the Company, threatened) by any Governmental Entity with respect to the Company or any of the Company's Subsidiaries that would have, individually or in the aggregate, a Company Material Adverse Effect; and (b) there are no Actions pending (or, to the Knowledge of the Company, threatened) against or affecting the Company or any of the Company's Subsidiaries, or any of their respective properties at law or in equity before, and there are no orders, judgments or decrees of, or before, any Governmental Entity, in each case that involves an amount in controversy in excess of $500,000 or seeks specific performance or injunctive relief that would be material to the Company and its Subsidiaries, taken as a whole.

 

Section 3.12 Proxy Statement; Other Information .   The proxy statement to be filed by the Company with the SEC in connection with seeking the approval by the shareholders of the Company of the adoption of this Agreement (including the letter to shareholders, notice of meeting and form of proxy, the “ Proxy Statement ”) will not, at the time it is filed with the SEC, or at the time it is first mailed to the shareholders of the Company and at the time of the Company Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. The Company will cause the Proxy Statement to comply as to form in all material respects with the requirements of the Exchange Act applicable thereto as of the date of such filing. No representation is made by the Company with respect to statements made in the Proxy Statement based on information supplied, or required to be supplied, by or on behalf of Parent, Merger Sub or any of their Affiliates for inclusion or incorporation by reference therein.

 

Section 3.13 Tax Matters .

 

(a)Except as would not have, individually or in the aggregate, a Company Material Adverse Effect: (i) the Company and each of its Subsidiaries have prepared and timely filed (taking into account any extension of time within which to file) all Tax Returns required to be filed by any of them and all such filed Tax Returns are complete and accurate; (ii) the Company and each of its Subsidiaries have paid in full on a timely basis all Taxes required to be paid or have established adequate reserves in accordance with GAAP; (iii) there are no liens for Taxes upon any property of the Company or any of its Subsidiaries, except for Permitted Liens; (iv) the Company and each of its Subsidiaries have complied in all material respects with all applicable Laws relating to the payment, collection, withholding and remittance of Taxes (including information reporting requirements), including with respect to payments made to any employee, independent contractor, creditor, stockholder or other third party, and have timely collected, deducted or withheld and paid over to the appropriate Governmental Entity all amounts required to be so collected, deducted or withheld and paid over in accordance with applicable Laws; and (v) neither the Company nor

 

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any of its subsidiaries will be required to include any item of income in, or exclude any item of deduction from, taxable income for a taxable period (or portion thereof) ending after the Closing Date as a result of any (A) adjustment pursuant to Section 481 of the Code (or any analogous provision of state, local or non-U.S. Law) for a taxable period ending on or before the Closing Date, (B) “closing agreement” as described in Section 7121 of the Code (or any analogous provision of state, local or non-U.S. Law) executed on or prior to the Closing Date, (C) installment sale, intercompany transaction or open transaction disposition made or entered into on or prior to the Closing Date, (D) prepaid amount received on or prior to the Closing Date or (E) election by the Company or any of its Subsidiaries under Section 108(i) of the Code (or any analogous provision of state, local or non-U.S. Law).

 

(b)As of the date of this Agreement, there are not pending or, to the Knowledge of the Company, threatened in writing, any audits, examinations, investigations or other proceedings in respect of material Taxes of the Company or any of its Subsidiaries. Neither the Company nor any of its Subsidiaries has waived any statute of limitations in respect of material Taxes or agreed to any extension of time with respect to a material Tax assessment or deficiency.

 

(c)Neither the Company nor any of its Subsidiaries has been a “controlled corporation” or a “distributing corporation” in any distribution occurring during the two-year period ending on the date hereof that was purported or intended to be governed by Section 355 of the Code.

 

(d)Neither the Company nor any of its Subsidiaries has entered into any “listed transaction” within the meaning of Treasury Regulations Section 1.6011-4(b)(2).

 

(e)Neither the Company nor any of its Subsidiaries is a party to or bound by any Contract to allocate, share or indemnify another Person for Taxes (other than (i) any customary agreements with customers, vendors, lenders, lessors or the like entered into in the ordinary course of business and (ii) property Taxes payable with respect to properties leased).

 

(f)Neither the Company nor any of its Subsidiaries has a permanent establishment (within the meaning of an applicable Tax treaty) in a country other than the country in which it is organized.

 

(g)Neither the Company nor any of its Subsidiaries 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 the Company).

 

(h) “ Taxes “ means (i) any and all federal, state, local or foreign taxes of any kind (together with any and all interest, penalties, additions to tax and additional amounts imposed with respect thereto) imposed by any Governmental Entity, including income, franchise, windfall or other profits, gross receipts, property, sales, use, capital stock, payroll, employment, unemployment, social security, workers' compensation, net worth, excise, withholding, ad valorem and value added taxes and (ii) any liability for items described in clause (i) payable by reason of Contract, assumption, transferee or successor liability, operation of Law, Treasury Regulation Section 1.1502-6 (or any similar provision of Law) or otherwise. “ Tax Return “ means any return, report or similar filing (including the attached schedules) required to be filed with respect to Taxes, including any information return, claim for refund, amended return or declaration of estimated Taxes.

 

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Section 3.14 Intellectual Property .

 

(a)The Company and its Subsidiaries either own or have a right to use such patents, trademarks, trade names, service marks, domain names, copyrights and any applications and registrations for any of the foregoing (including intent-to-use applications), trade secrets, know-how, technology, computer software and other tangible and intangible proprietary information and intellectual property rights (collectively, “Intellectual Property”) as are necessary to conduct the business of the Company and its Subsidiaries as conducted by the Company and its Subsidiaries as of the date hereof in all material respects. Neither the Company nor any of its Subsidiaries has infringed, misappropriated or violated any Intellectual Property of any third party in the past three years, provided that the foregoing representation is given to Knowledge with respect to patents. To the Knowledge of the Company, no third party is currently infringing, misappropriating or violating any Intellectual Property owned by or exclusively licensed to the Company or any of its Subsidiaries.

 

(b)Except pursuant to a non-exclusive license agreement entered into with the customers in the ordinary course of business, no Person (other than the Company or any of its Subsidiaries) has an interest in or any right to use any Intellectual Property owned by the Company (“ Company Owned Intellectual Property ”).

 

(c)As of the date of this Agreement, there are no Actions pending or, to the Knowledge of the Company, threatened, that challenge or question the Company's ownership or right to use Intellectual Property of the Company or any of its Subsidiaries.

 

(d)The Company and its Subsidiaries have taken reasonable steps to maintain the confidentiality of or otherwise protect and enforce their rights in all Intellectual Property owned by them, and to protect and preserve through the use of customary non-disclosure agreements the confidentiality of all confidential information that is owned or held by the Company and its Subsidiaries and used in the conduct of the business. Neither the Company nor any of its Subsidiaries has experienced any material cybersecurity or other data breach or misappropriation.

 

(e)All personnel, including employees, agents, consultants and contractors, who have contributed to or participated in the conception or development, or both, of material Intellectual Property owned by the Company and its Subsidiaries (i) have been and are a party to “work-for-hire” arrangements with the Company or one of its Subsidiaries or (ii) have assigned to the Company or one of its Subsidiaries ownership of all tangible and intangible property arising in connection with the conception or development of such Intellectual Property.

 

The transactions contemplated by this Agreement will not impair or diminish the rights of the Company or any of its Subsidiaries in and to the Company Owned Intellectual Property in any material respect.

(f)The generality of any other representations and warranties in this Agreement notwithstanding, the representations and warranties in this Section 3.14 shall be deemed to be the Company's sole and exclusive representations and warranties in this Agreement with respect to infringement of third party Intellectual Property.

 

 

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Section 3.15 Real Property .   Except as would not have, individually or in the aggregate, a Company Material Adverse Effect: (a) the Company or a Subsidiary of the Company has good and valid title or valid leasehold interests, as applicable, in all of its owned or leased real property, free and clear of all Liens (except for Permitted Liens and all other title exceptions, changes, defects, easements, restrictions, encumbrances and other matters, whether or not of record, that do not materially affect the continued use of the applicable property for the purposes for which such property is currently being used by the Company or a Subsidiary of the Company as of the date hereof); (b) as of the date hereof, each lease, license, sublease and occupancy agreement (each, a “ Lease ”) with respect to real property leased, licensed, subleased or otherwise used by the Company or its Subsidiaries as lessee or sublessee (together with real property owned by the Company and its Subsidiaries, the “ Real Property ”), is in full force and effect and enforceable in accordance with their respective terms against the Company or its Subsidiaries that are party thereto and, to the Knowledge of the Company, to the other parties thereto; (c) as of the date hereof, neither the Company nor any of its Subsidiaries is in material breach or default under any of the Leases; and (d) to the Knowledge of the Company, there is no pending or written threat of condemnation or similar action affecting any of the Real Property. The Company does not own any Real Property. The Company and its Subsidiaries are, and since January 1, 2014 have been, in compliance in all material respects with all applicable Environmental Laws. The Company has not received written notice of any Action alleging liability under any Environmental Law.

 

Section 3.16 Opinion of Financial Advisors .   The Board of Directors of the Company has received the opinion of Union Square Advisors LLC, dated as of the date of this Agreement, to the effect that, as of such date and subject to the assumptions, limitations, qualifications and other matters stated therein, the Merger Consideration to be received by the holders of Common Stock in the Merger pursuant to this Agreement is fair, from a financial point of view, to such holders.

 

Section 3.17 Required Vote of the Company Shareholders .   The affirmative vote of the holders of a majority of the outstanding shares of Common Stock is the only vote of holders of securities of the Company that is required to approve this Agreement and consummate the transactions contemplated hereby, including the Merger (the “ Company Shareholder Approval ”).

 

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Section 3.18 Material Contracts .

 

(a)Except for this Agreement, or as set forth in Section 3.18 of the Company Disclosure Letter, as of the date of this Agreement, neither the Company nor any of its Subsidiaries is a party to or expressly bound by any Contract (excluding any Company Benefit Plan) that:

 

(i)is a “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K of the Securities Act);

 

(ii)relates to any joint venture, partnership, limited liability or other similar Contract relating to the formation, creation, operation, management or control of any joint venture or partnership that is material to the business of the Company and its Subsidiaries, taken as a whole;

 

(iii)is an indenture, credit agreement, loan agreement, security agreement, guarantee (other than any guarantee provided with respect to a wholly owned Subsidiary of the Company), note, mortgage or other Contract providing for or securing indebtedness for borrowed money or deferred payment (in each case, whether incurred, assumed, guaranteed or secured by any asset) in excess of $1 million;

 

(iv)is a settlement, conciliation or similar Contract (x) with any Governmental Entity or (y) which would require the Company or any of its Subsidiaries to pay consideration of more than $100,000 after the date of this Agreement;

 

(v)contains any covenant that materially limits the ability of the Company or any of its Subsidiaries to engage in any line of business, or to compete with any Person or operate at any geographic location;

 

(vi)contains earn-out, exclusivity obligations or similar restrictions or contingent obligations that currently are or in the future will be binding on and are material to the Company or any of its Subsidiaries or that would be binding on Parent or any of its Affiliates (other than the Company or any of its Subsidiaries) after the Closing;

 

(vii)restricts the ability of the Company or any of its Subsidiaries to incur liens to secure indebtedness for borrowed money;

 

(viii)relates to the acquisition or disposition of any business, capital stock or all or substantially all of assets of any other Person or any material real property (whether by merger, sale of stock, sale of assets or otherwise), in any such case having a purchase price of more than $10 million and entered into at any time during the last five (5) years or otherwise containing material ongoing performance obligations of the Company or any of its Subsidiaries; or

 

(ix)is a contract under which the Company or any of its Subsidiaries uses or has the right to use any Intellectual Property licensed from third parties that is material to the business of the Company and its Subsidiaries, taken as a whole.

 

Each Contract of the type described in this Section 3.18(a) is referred to herein as a “ Company Material Contract .”

 

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(b)The Company has delivered or made available to Parent true and complete copies of each such Company Material Contract. Neither the Company nor any Subsidiary of the Company is in breach of or default under the terms of any Company Material Contract where such breach or default would have, individually or in the aggregate, a Company Material Adverse Effect. To the Knowledge of the Company, no other party to any Company Material Contract is in breach of or default under the terms of any Company Material Contract where such breach or default would have, individually or in the aggregate, a Company Material Adverse Effect. Except as would not have, individually or in the aggregate, a Company Material Adverse Effect, each Company Material Contract is a valid and binding obligation of the Company or the Subsidiary of the Company that is party thereto and, to the Knowledge of the Company, of each other party thereto, and is in full force and effect, except that (i) such enforcement may be subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws, now or hereafter in effect, relating to creditors' rights generally and (ii) equitable remedies of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought. Except as would not have, individually or in the aggregate, a Company Material Adverse Effect, neither the Company nor any of its Subsidiaries has received any written notice or claim of default under any Company Material Contract or any written notice of an intention to terminate, not renew or challenge the validity or enforceability of any Company Material Contract.

 

Section 3.19 Insurance Policies .   Except as is not material to the business of the Company and its Subsidiaries, taken as a whole, (a) all insurance policies maintained by the Company and its Subsidiaries are in full force and effect and all premiums due and payable thereon have been paid in accordance with the terms of such policies, (b) neither the Company nor any of its Subsidiaries is in breach or default of any of its insurance policies, and neither the Company nor any of its Subsidiaries has taken any action or failed to take any action which, with notice or the lapse of time, would constitute such a breach or default or permit termination or modification of any of such policies and (c) other than in connection with ordinary course renewals, the Company has not received any written notice of termination, cancellation, or non-renewal with respect to any such policy.

 

Section 3.20 Finders or Brokers; Fees .   The Board of Directors of the Company has received the written opinion of its financial advisor, Union Square Advisors LLC, substantially to the effect that, as of the date of such opinion, and subject to the assumptions, limitations, qualifications and other matters stated therein, the Merger Consideration to be received by the holders of Common Stock (other than Cancelled Shares or Converted Shares) in the Merger pursuant to this Agreement is fair, from a financial point of view, to such holders (it being understood and agreed that such written opinion is for the benefit of the Company Board and may not be relied upon by Parent or Merger Sub). The Company’s estimate of expenses payable by the Company in connection with the transactions contemplated by this Agreement to Union Square Advisors LLC is set forth in Section 3.20 of the Company Disclosure Letter.

 

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Section 3.21 Takeover Laws .   Assuming the representations and warranties of Parent and Merger Sub set forth in Section 4.11 are true and correct, no “fair price,” “moratorium,” “control share acquisition” or other form of antitakeover statute or regulation (“ Takeover Laws ”) is applicable to the Agreement, the Voting Agreement, the Merger and the other transactions contemplated hereby. The actions by the Board of Directors of the Company, prior to execution and delivery of this Agreement and the Voting Agreement, in approving this Agreement and the Voting Agreement, and the transactions contemplated herein and therein, are sufficient to render inapplicable to this Agreement and the Voting Agreement, and the transactions contemplated herein and therein, the restrictions on “business combinations” as set forth in Section  23- 1-43-1 to 23-1-43-23 of the ICBL.

 

ARTICLE 4

 

REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB

 

Parent and Merger Sub jointly and severally represent and warrant to the Company as follows:

Section 4.1 Qualification, Organization, Subsidiaries .   Each of Parent and Merger Sub is a legal entity duly organized, validly existing and, where applicable, in good standing under the Laws of its respective jurisdiction of organization and has all requisite corporate or similar power and authority to own, lease and operate its properties and assets and to carry on its business as presently conducted and is qualified to do business and is in good standing as a foreign corporation in each jurisdiction where the ownership, leasing or operation of its assets or properties or conduct of its business requires such qualification, except, in each case, as would not, individually or in the aggregate, prevent or materially delay the Closing or prevent or materially delay or materially impair the ability of Parent or Merger Sub to satisfy the conditions precedent to the Merger, to obtain financing for the Merger or to consummate the Merger and the other transactions contemplated by this Agreement (a “ Parent Material Adverse Effect ”).

 

Section 4.2 Corporate Authority Relative to This Agreement; No Violation .

 

(a)Each of Parent and Merger Sub has all requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, including the Merger, have been duly and validly authorized by the Boards of Directors of Parent and Merger Sub and by Parent, as the sole shareholder of Merger Sub, and, except for the filing of the Articles of Merger with the Secretary of State of the State of Indiana, no other corporate proceedings on the part of Parent or Merger Sub are necessary to authorize the consummation of the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by Parent and Merger Sub and, assuming this Agreement constitutes the valid and binding agreement of the Company, constitutes the valid and binding agreement of Parent and Merger Sub, enforceable against each of Parent and Merger Sub in accordance with its terms.

 

(b)The execution, delivery and performance by Parent and Merger Sub of this Agreement and the consummation of the transactions contemplated hereby, including the Merger, by Parent and Merger Sub do not and will not require Parent, Merger Sub or their Subsidiaries to procure, make or provide any consent, approval, authorization or permit of, action by, filing with or notification to any Governmental Entity or other third party, other than (i) the filing of the Articles of Merger, (ii) the filing of the pre-merger notification report under the HSR Act and any foreign filings required or advisable under any applicable foreign Antitrust Law or foreign investment Law, (iii) compliance with any applicable foreign or state securities or blue sky Laws and (iv) CFIUS Clearance but solely to the extent a CFIUS Request has occurred prior to the Closing (collectively, clauses (i) through (iv), the “ Parent Approvals ”), and other than any consent, approval,

 

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authorization, permit, action, filing or notification the failure of which to make or obtain would not have, individually or in the aggregate, a Parent Material Adverse Effect. As of the date hereof, none of Parent, Merger Sub or any of their Affiliates intends to make a notification (whether draft or definitive) to the Committee on Foreign Investment in the United States in connection with the transactions contemplated hereby.

 

(c)Assuming compliance with the matters referenced in Section 4.2(b) and receipt of the Parent Approvals, the execution, delivery and performance by Parent and Merger Sub of this Agreement and the consummation by Parent and Merger Sub of the other transactions contemplated hereby, including the Merger, do not and will not (i) contravene or conflict with the organizational or governing documents of Parent, Merger Sub or any of their Subsidiaries, (ii) contravene or conflict with or constitute a violation of any provision of any Law binding upon or applicable to Parent, Merger Sub or any of their Subsidiaries or any of their respective properties or assets, or (iii) result in any violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any material obligation or to the loss of a material benefit under any Contract, instrument, permit, concession, franchise, right or license binding upon Parent, Merger Sub or any of their Subsidiaries or result in the creation of any Lien (other than Permitted Liens) upon any of the properties or assets of Parent, Merger Sub or any of their Subsidiaries, other than, in the case of clauses (ii) and (iii), any such contravention, conflict, violation, default, termination, cancellation, acceleration, right, loss or Lien that would not have, individually or in the aggregate, a Parent Material Adverse Effect.

 

Section 4.3 Investigations; Litigation .   As of the date hereof, there is no investigation or review pending (or, to the Knowledge of Parent, threatened) by any Governmental Entity with respect to Parent or any of its Subsidiaries that would have, individually or in the aggregate, a Parent Material Adverse Effect, and there are no Actions pending (or, to the Knowledge of Parent, threatened) against or affecting Parent or any of Parent's Subsidiaries, or any of their respective properties at law or in equity before, and there are no orders, judgments or decrees of, or before, any Governmental Entity, in each case that would have, individually or in the aggregate, a Parent Material Adverse Effect.

 

Section 4.4 Proxy Statement; Other Information .   None of the information supplied by or on behalf of Parent, Merger Sub or any of their Affiliates for inclusion or incorporation by reference in the Proxy Statement will, at the time it is filed with the SEC, or at the time it is first mailed to the shareholders of the Company and at the time of the Company Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

 

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Section 4.5 Financing .

 

(a)Parent has delivered to the Company a true, complete and correct copy of the executed debt commitment letter, dated as of the date hereof (together with the exhibits, schedules and annexes thereto, the “ Debt Commitment Letter ”, and as the same may be amended, supplemented or otherwise modified or replaced in accordance with the terms therein and herein and including any executed commitment letter or similar agreement for Alternative Financing, in each case, pursuant to Section 5.16, and any related executed fee letter, collectively, the “ Debt Financing Commitments ”), executed by the Parent Parties and the Lenders, pursuant to which the Lenders have committed, subject to the terms and conditions set forth therein, to provide or cause to be provided to the Parent Parties, debt financing in the aggregate amounts set forth therein (the “ Debt Financing ”).

 

(b)As of the date hereof, the Debt Financing Commitments are in full force and effect and are the legal, valid and binding obligations of the Parent Parties and, to the Knowledge of Parent, the Lenders (except as such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar laws of general applicability relating to or affecting creditors’ rights, and to general equitable principles, regardless of whether such enforceability is considered in a proceeding in equity or at law (the “ Bankruptcy and Equity Exceptions ”). As of the date hereof, the Debt Financing Commitments have not been amended, modified or replaced, and the respective commitments contained in the Debt Financing Commitments have not been withdrawn, terminated or rescinded in any respect as of the date hereof. As of the date hereof, no event has occurred which, with or without notice, lapse of time or both, would constitute a default or breach on the part of the Parent Parties, or to the Knowledge of Parent, any other Person, under the Debt Financing Commitments and, assuming the satisfaction of the conditions set forth in Section 6.1 and Section 6.3 (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 at the Closing), Parent has no reason to believe that it will be unable to satisfy on a timely basis any term or condition of closing to be satisfied by it or the other Parent Parties in the Debt Financing Commitments on or prior to the Closing Date. There are no conditions precedent related to the funding of the full amount of the Debt Financing other than as expressly set forth in or contemplated by the Debt Financing Commitments. Except for fee letters (complete copies of which have been provided to the Company, with only fee amounts, economic terms, market flex provisions, securities demand provisions and other customary threshold amounts redacted, none of which redacted terms adversely affect the conditionality, enforceability, termination or availability of the Debt Financing or reduce the Debt Financing below the Required Amount (as defined below)) and customary fee credit letters or engagement letters, none of which adversely affect the conditionality, enforceability, termination or availability of the Debt Financing or reduce the Debt Financing below the Required Amount (as defined below), as of the date hereof, there are no side letters or other agreements, contracts or arrangements related to the funding of the full amount of the Debt Financing other than as expressly set forth in or contemplated by the Debt Financing Commitments. The Parent Parties have fully paid (or caused to be paid) any and all commitment fees and other amounts that are due and payable on or prior to the date of this Agreement in connection with the Debt Financing.

 

(c)Assuming the satisfaction of the conditions set forth in Section 6.1 and Section 6.3 (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 at the Closing), and assuming the aggregate proceeds to be funded in accordance with the Debt Financing Commitments on the Closing Date have been funded, the Parent Parties will have at the Closing sufficient funds (together with the cash on hand at the Parent Parties and their subsidiaries and cash on hand at the Company and its subsidiaries) to pay and satisfy (or to provide to Merger Sub so it can pay and satisfy) in full in cash the aggregate Merger Consideration and to perform its obligations under this Agreement with respect to the transactions contemplated by this Agreement, including the treatment of

 

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Company Equity Awards, and all payments, fees and expenses payable by Parent and the Parent Parties related to or arising out of the consummation of the transactions contemplated by this Agreement (collectively, the “ Required Amount ”).

 

(d)In no event shall the receipt or availability of any funds or financing by Parent or any Affiliate thereof or any other financing or other transactions be a condition to any of Parent’s or Merger Sub’s obligations hereunder.

 

Section 4.6 Capitalization of Merger Sub .   The authorized capital stock of Merger Sub consists of one hundred (100) common shares, par value $0.01 per share, of which one hundred (100) shares are validly issued and outstanding. All of the issued and outstanding capital shares of Merger Sub are, and at the Effective Time will be, owned by Parent. Merger Sub does not have outstanding any option, warrant, right or any other agreement pursuant to which any Person other than Parent may acquire any equity security of Merger Sub. Merger Sub has not conducted any business prior to the date hereof and has, and prior to the Effective Time will have, no assets, liabilities or obligations of any nature other than those incident to its formation and pursuant to this Agreement and the Merger and the other transactions contemplated by this Agreement.

 

Section 4.7 No Vote of Parent Shareholders .   No vote of the shareholders of Parent or the holders of any other securities of Parent (equity or otherwise) is required by any applicable Law, the certificate of incorporation or bylaws or other equivalent organizational documents of Parent or the applicable rules of any exchange on which securities of Parent are traded, in order for Parent to consummate the transactions contemplated hereby.

 

Section 4.8 Finders or Brokers .   Neither Parent nor any of its Subsidiaries (including Merger Sub) has employed any investment banker, broker or finder in connection with the transactions contemplated by this Agreement who might be entitled to any fee or any commission in connection with or upon consummation of the Merger.

 

 

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Section 4.9 No Additional Representations .

 

(a)Each of Parent and Merger Sub acknowledges and agrees that it and its Representatives have received access to such books and records, facilities, equipment, contracts and other assets of the Company that it and its Representatives have desired or requested to review and that it and its Representatives have had full opportunity to meet with the management of the Company and to discuss the business and assets of the Company.

 

(b)Parent and Merger Sub agree and acknowledge that, except for the representations and warranties contained in Article 3 , neither the Company nor any other Person makes any other express or implied representation or warranty on behalf of the Company or any of its Affiliates. Parent and Merger Sub agree and acknowledge that neither the Company nor any Person has made any representation or warranty, express or implied, as to the accuracy or completeness of any information regarding the Company furnished or made available to Parent and its Representatives, except as expressly set forth in Article 3 (which includes the Company Disclosure Letter and the Company SEC Documents, as applicable), and neither the Company, its directors, officers, employees, agents or other Representatives, nor any other Person, shall be subject to any liability to Parent or any other Person resulting from the Company's making available to Parent or Parent's use of such information, or any information, documents or material made available to Parent in the due diligence materials provided to Parent, including in the data room, other management presentations (formal or informal) or in any other form in connection with the transactions contemplated by this Agreement. Without limiting the foregoing, the Company makes no representation or warranty to Parent or Merger Sub with respect to any business or financial projection, guidance or forecast relating to the Company or any of its Subsidiaries, whether or not included in the data room or any management presentation. Each of Parent and Merger Sub, on its behalf and on behalf of its Affiliates, expressly waives any such claim relating to the foregoing matters except with respect to fraud.

 

Section 4.10 Certain Arrangements .   Other than the Voting Agreement, there are no contracts, undertakings, commitments, agreements, obligations or understandings, whether written or oral, between Parent or Merger Sub or any of their Affiliates, on the one hand, and any beneficial owner of more than five percent (5%) of the outstanding Shares of Common Stock or any member of the Company's management or the Board of Directors, on the other hand, relating in any way to the Company, the transactions contemplated by this Agreement or to the operations of the Surviving Corporation after the Effective Time.  

 

Section 4.11 Ownership of Common Stock .   None of Parent, Merger Sub or any of their respective Subsidiaries beneficially owns, directly or indirectly (including pursuant to a derivatives contract), any Shares of Common Stock or other securities convertible into, exchangeable for or exercisable for shares of Common Stock or any securities of any Subsidiary of the Company, and none of Parent, Merger Sub or any of their respective Subsidiaries has any rights to acquire, directly or indirectly, any Shares of Common Stock, except pursuant to this Agreement. None of Parent, Merger Sub or any of their “affiliates” or “associates” is, or at any time during the last five years has been, an “interested shareholder” of the Company, in each case as defined in IBCL 23-1-43.

 

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Section 4.12 Solvency .   Assuming the accuracy of the representations and warranties of the Company contained in this Agreement, the satisfaction of the conditions set forth in Section 6.1 and Section 6.3 (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 at the Closing) and the performance by the Company of its obligations under this Agreement, then immediately after giving effect to the consummation of the transactions contemplated by this Agreement (including the financings being entered into in connection therewith):

 

(a)the Fair Value of the assets of Parent and its Subsidiaries, taken as a whole, shall be greater than the total amount of Parent and its Subsidiaries' liabilities (including all liabilities, whether or not reflected in a balance sheet prepared in accordance with GAAP, and whether direct or indirect, fixed or contingent, secured or unsecured, disputed or undisputed), taken as a whole;

 

(b)Parent and its Subsidiaries, taken as a whole, shall be able to pay their debts and obligations as they become due; and

 

(c)Parent and its Subsidiaries, taken as a whole, shall have adequate capital to carry on their businesses.

 

ARTICLE 5

 

COVENANTS AND AGREEMENTS

 

Section 5.1 Conduct of Business by the Company and Parent .

 

(a)From and after the date hereof and prior to earlier of the Effective Time and the date, if any, on which this Agreement is earlier terminated pursuant to Section 7.1 (the “Termination Date”), and except (i) as may be required by applicable Law, (ii) as may be agreed in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) as may be expressly contemplated or required by this Agreement or (iv) as set forth in Section 5.1 of the Company Disclosure Letter, the Company shall, and shall cause its Subsidiaries to, (x) conduct its business in all material respects in the ordinary course and (y) use its commercially reasonable efforts to preserve intact in all material respects its business organization and business relationships and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, creditors, lessors, officers and employees.

  

(b)From and after the date hereof and prior to earlier of the Effective Time and the Termination Date, and except (w) as may be required by applicable Law, (x) as may be agreed in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (y) as may be expressly required or permitted by this Agreement or (z) as set forth in Section 5.1 of the Company Disclosure Letter, the Company:

 

(i)shall not, and shall not permit any of its Subsidiaries that is not wholly-owned to, authorize or pay any dividends on or make any distribution with respect to its outstanding shares of capital stock (whether in cash, assets, stock or other securities of the Company or its Subsidiaries), except dividends and distributions paid by Subsidiaries of the Company to the Company or to any of its wholly owned Subsidiaries;

 

 

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(ii)shall not, and shall not permit any of its Subsidiaries to, split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance, sale, pledge, encumbrance or delivery of any other securities in respect of, in lieu of or in substitution for shares of its capital stock;

 

(iii)except as required by Company Benefit Plans (as in existence as of the date hereof), shall not, and shall not permit any of its Subsidiaries to (A) increase the compensation or other benefits payable or provided to the Company's directors, officers, employees, consultants or service providers, except for annual salary or wage increases for employees of the Company (other than executive officers of the Company) in the ordinary course of business consistent with past practice, including the timing thereof, not to exceed five percent per employee, (B) grant or pay (or commit to grant or pay or increase) any severance or termination pay of any current or former director, officer, employee, consultant or service provider, except for any such payments (x) to employees who are not officers of the Company or its Subsidiaries, (y) made in the ordinary course of business consistent with the terms of the Company’s and/or Subsidiary’s, as applicable, existing general severance policies and practices listed in item 16 of Section 3.9(a) of the Company Disclosure Letter and (z) made in exchange for a release of claims against the Company and its Subsidiaries; (C) enter into any employment, change of control, severance or retention agreement with any employee of the Company or any of its Subsidiaries, except (1) for severance agreements entered into with terminated employees that are consistent with clause (B) above or (2) for agreements with newly hired employees that are entered into in the ordinary course of business and are terminable on no more than 60 days' notice without penalty); (D) modify any Company Option, Company RSU or other equity-based award, (E) accelerate the payment or vesting of any payment, equity award or benefit provided or to be provided to any current or former director, officer, employee, consultant or other service provider or otherwise pay any amounts or provide any benefits not due such individual, (F) become a party to, establish, amend, commence participation in, terminate or commit itself to the adoption of any stock option plan or other stock-based compensation plan, compensation (except as permitted under clause (A) hereof), pension, retirement, profit-sharing, welfare benefit, or other employee benefit plan or agreement with or for the benefit of any current or former director, officer, employee, consultant or service provider, or any collective bargaining, works council or similar labor-related agreement; or (G) hire any new employee having a title of Vice President or above, appoint any new member to the Company’s Board of Directors, or terminate the employment of any employee having a title of Vice President or above, other than a termination for cause, or take any action that would result in such employee having the right to terminate for “Good Reason” pursuant to any agreement or arrangement with the Company;

 

(iv)shall not, and shall not permit any of its Subsidiaries to, enter into or make any loans to any of its present or former directors, employees, agents or consultants or make any change in its existing borrowing or lending arrangements for or on behalf of any of such Persons, except as required by the terms of any Company Benefit Plan;

 

(v)shall not, and shall not permit any of its Subsidiaries to, change financial accounting policies or procedures or any of its methods of reporting income, deductions or other material items for financial accounting purposes, except as required by GAAP or SEC rule or policy;

 

(vi)except as required by applicable Law or the rules or requirements of any stock exchange, shall not, and shall not permit any of its Subsidiaries to adopt any amendments to its articles of incorporation or bylaws (or comparable organizational documents);

 

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(vii)except for transactions among the Company and its Subsidiaries or among the Company's Subsidiaries, shall not, and shall not permit any of its Subsidiaries to, issue, sell, pledge, dispose of or encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of its capital stock or other ownership interests in the Company or any Subsidiaries or any securities convertible into, exercisable for or exchangeable for any such shares or ownership interests or take any action to cause to be vested any otherwise unvested Company Equity Award (except as otherwise expressly provided by Section 2.3 hereof), other than (A) issuances of Shares in respect of any exercise of or settlement of Company Equity Awards outstanding on the date hereof or as may be granted after the date hereof as permitted under this Section 5.1(b) and (B) the acquisition of Shares from a holder of a Company Equity Award in satisfaction of withholding obligations or in payment of the exercise price in accordance with the terms of the applicable Company Equity Award as of the date hereof;

 

(viii)except for transactions among the Company and its Subsidiaries or among the Company’s Subsidiaries, shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any rights, warrants or options to acquire any such shares;

 

(ix)shall not, and shall not permit any of its Subsidiaries to, (A) make any loans, advances or capital contributions to or investments in any other Person except loans and advances made in the ordinary course of business consistent with past practice or among the Company and its Subsidiaries or among the Company's Subsidiaries, (B) incur, assume, guarantee, prepay or otherwise become liable for any indebtedness for borrowed money (directly, contingently or otherwise), other than (1) any indebtedness for borrowed money among the Company and its Subsidiaries or among the Company's Subsidiaries, and (2) guarantees by the Company of indebtedness for borrowed money of Subsidiaries of the Company, which indebtedness is incurred in compliance with this Section 5.1(b) , or (3) other indebtedness for borrowed money not to exceed $1 million in aggregate principal amount outstanding at any time incurred by the Company or any of its Subsidiaries other than in accordance with clauses (1) and (2);

 

(x)except for sales of goods in the ordinary course of business, shall not permit any of its Subsidiaries to, sell, lease, license, transfer, exchange or swap, pledge, mortgage or otherwise encumber (including securitizations), or subject to any Lien (other than Permitted Liens) or otherwise dispose of any portion of its properties or assets, including the capital stock of Subsidiaries, other than sales of obsolete equipment in the ordinary course and other ordinary course transactions with an aggregate value of less than $100,000 individually or $1 million in the aggregate;

 

(xi)shall not, and shall not permit any of its Subsidiaries to enter into (other than with respect to ordinary course customer contracts entered into after the date hereof), modify, amend, terminate or waive any rights under any Company Material Contract or any Contract entered into after the date hereof that would constitute a Company Material Contract if entered into prior to the date hereof (other than the expiration or renewal of any Company Material Contract in accordance with its terms);

 

 

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(xii)except in the ordinary course of business consistent with past practice, shall not, and shall not permit any of its Subsidiaries to, (A) make, change or revoke any material Tax election, (B) file any amended Tax Return with respect to any material Tax, (C) make a material change in any method of Tax accounting, (D) settle or compromise any material Tax proceeding or consent to any extension or waiver of the limitation period applicable to any audit, assessment or claim for material Taxes, or (E) surrender any claim for a refund of material Taxes;

 

(xiii)shall not, and shall not permit any of its Subsidiaries to, settle, pay, discharge or satisfy any Action, other than any Action that involves only the payment of monetary damages not in excess of $100,000 individually or $1 million in the aggregate;

 

(xiv)shall not, and shall not permit any of its Subsidiaries to, adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the Merger);

 

(xv)shall not, and shall not permit any of its Subsidiaries to, incur or commit to incur any capital expenditures, or any obligations or liabilities in connection therewith that, individually or in the aggregate, are in excess of $1,000,000, other than any capital expenditure (or series of related capital expenditures) consistent in all material respects with the Company’s annual capital expenditure budget for periods following the date of this Agreement, as provided to Parent;

 

(xvi)shall not, and shall not permit any of its Subsidiaries to, acquire (by merger, consolidation or acquisition of stock or assets) any assets (other than those used in the ordinary course of business), any other Person or any equity interest therein, in each case, with an aggregate value of more than $100,000 individually or $1 million in the aggregate;

 

(xvii)shall not, and shall not permit any of its Subsidiaries to, take any action that would cause the Shares to no longer be a “covered security” as defined in Section 18(b)(1)(A) of the Securities Act;

 

(xviii)shall not, and shall not permit any of its Subsidiaries to, take any action to modify, amend, terminate or waive any rights under the Capped Call Transactions;

 

(xix)shall not, and shall not permit any of its Subsidiaries to, take any action that would result in an anti-dilution event under the Convertible Notes; provided , that this clause (xix) shall not affect the Company's rights in connection with a Superior Proposal); and

 

(xx)shall not, and shall not permit any of its Subsidiaries to authorize or agree, in writing or otherwise, to take any of the foregoing actions.

 

(c)Between the date hereo


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