UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported):  September 24, 2018

 

XO Group Inc.

  (Exact name of Registrant as Specified in its Charter)

 

Delaware   001-35217   13-3895178
(State or Other Jurisdiction   (Commission   (I.R.S. Employer
of Incorporation)   File No.)   Identification No.)

 

195 Broadway, 25th Floor

New York, New York

10007
(Address of Principal Executive Offices) (Zip Code)

 

(212) 219-8555

(Registrant’s Telephone Number, Including Area Code)

 

Not Applicable

   (Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

x Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

 

Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

 

 

Item 1.01. Entry into a Material Definitive Agreement.

 

Merger Agreement

 

On September 24, 2018, XO Group Inc., a Delaware corporation (the “Company”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with WeddingWire, Inc., a Delaware corporation (“Parent”), and Wedelia Merger Sub, Corp., a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Sub”). Parent and Merger Sub are controlled by investment funds advised by the private equity firms Permira Advisers LLC (“Permira”) and Spectrum Equity (“Spectrum”).

 

Transaction Structure

 

The Merger Agreement provides, among other things and subject to the terms and conditions set forth therein, that Merger Sub will be merged with and into the Company (the “Merger”), with the Company continuing as the surviving corporation and as a wholly owned subsidiary of Parent. The Merger Agreement provides that each share of common stock, par value $0.01 per share, of the Company (“Common Stock”) outstanding immediately prior to the effective time of the Merger (the “Effective Time”) (other than shares of Common Stock owned by the Company in treasury, Parent, Merger Sub, any wholly owned subsidiary of Parent or any subsidiary of the Company, and shares of Common Stock owned by stockholders of the Company who have not voted in favor of the adoption of the Merger Agreement and have properly exercised appraisal rights in accordance with Section 262 of the General Corporation Law of the State of Delaware) will at the Effective Time automatically be cancelled and converted into the right to receive $35.00 in cash, without interest (the “Merger Consideration”), subject to applicable withholding taxes.

 

Pursuant to the Merger Agreement, as of the Effective Time, each option to acquire shares of Common Stock (“Company Stock Option”) that is outstanding, unexercised and vested immediately prior to the Effective Time will be converted into the right to receive an amount in cash equal to the Merger Consideration in respect of each share of Common Stock underlying such award, less the applicable exercise price. Each unvested Company Stock Option and each compensatory award in respect of a share subject to vesting, repurchase or other lapse restriction (“Company RSA Award”) that is outstanding immediately prior to the Effective Time will be substituted and automatically converted into an award (a “Converted Award”) to receive an amount in cash equal to the product of (a) the total number of shares subject to such Company Stock Option or Company RSA Award, as applicable, immediately prior to the Effective Time and (b) the Merger Consideration (less, in the case of Company Stock Options, the applicable exercise price), which will, subject to certain exceptions, remain subject to the same terms and conditions applicable to the Company Stock Option or Company RSA Award (including vesting terms), except that any payments will be made no later than 30 days following the last day of the quarter in which the Converted Award vests.

 

The Company’s board of directors (the “Company Board”) has unanimously determined that the Merger is fair to, and in the best interests of, the Company and its stockholders, approved and declared advisable the Merger Agreement and the transactions contemplated thereby, including the Merger, directed that the adoption of the Merger Agreement be submitted for consideration by the Company’s stockholders at a meeting thereof and, subject to certain exceptions set forth in the Merger Agreement, resolved to recommend that the Company’s stockholders adopt the Merger Agreement.

 

Conditions to the Merger and Closing

 

The obligation of the parties to complete the Merger is subject to customary closing conditions, including, among others:

 

· the adoption of the Merger Agreement by the holders of a majority of the outstanding shares of Common Stock (the “Company Stockholder Approval”);

 

· the expiration or earlier termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”);

 

 

 

 

· the absence of any law, order or injunction of a court of competent jurisdiction or governmental entity prohibiting the consummation of the Merger;

 

· the accuracy of the representations and warranties contained in the Merger Agreement (generally subject to certain materiality qualifiers); and

 

· the performance in all material respects by the parties of their respective obligations required by the Merger Agreement to be performed prior to the Effective Time.

 

In addition, the Merger Agreement provides that the closing of the Merger (the “Closing”) may not occur earlier than November 23, 2018.

 

Solicitation

 

During the period from September 24, 2018 and continuing until 11:59 p.m. (New York time) on November 8, 2018 (the “Go-Shop Period”), the Company has the right to, among other things, (i) initiate, solicit and encourage any inquiries with respect to or the making of any proposal or offer that constitutes or would reasonably be expected to lead to an alternative acquisition proposal, (ii) engage in and otherwise participate in any discussions or negotiations regarding an alternative acquisition proposal or that would reasonably be expected to lead to an alternative acquisition proposal, (iii) cooperate with, assist, participate in or facilitate any such inquiries, proposals, offers, discussions or negotiations or any effort or attempt to make any alternative acquisition proposal, and (iv) provide nonpublic information to any person relating to the Company or any of its subsidiaries with respect to an alternative acquisition proposal, subject to certain limitations.

 

From and after November 8, 2018, the Company must comply with customary non-solicitation restrictions, except that the Company may (i) until November 18, 2018, continue to engage in discussions, negotiations and other otherwise prohibited activities with any party from which the Company received a written competing acquisition proposal during the Go-Shop Period that the Company Board has determined constitutes a Superior Proposal (as defined in the Merger Agreement) and (ii) engage in discussions, negotiations and other otherwise prohibited activities with any party from which the Company receives an unsolicited written competing acquisition proposal that the Company Board determines constitutes, or could reasonably be expected to lead to, a Superior Proposal.

 

Subject to certain exceptions, the Company Board is required to recommend that the Company’s stockholders adopt the Merger Agreement and may not withhold, withdraw, qualify or modify in a manner adverse to Parent such recommendation or take certain similar actions that are referred to in the Merger Agreement as a “Change of Recommendation.” However, the Company may, before the Company Stockholder Approval is obtained, make a Change of Recommendation in connection with a Superior Proposal or Intervening Event (as defined in the Merger Agreement) if the Company complies with certain notice and other requirements set forth in the Merger Agreement, including the payment of the Company Termination Fee (as defined in the Merger Agreement).

 

Other Terms of the Merger Agreement

 

The Company has made customary representations, warranties and covenants in the Merger Agreement, including, among others, covenants:

 

· to conduct its business in all material respects in the ordinary course consistent with past practice during the period between the date of the Merger Agreement and the Closing, and not to engage in specified types of transactions during this period, subject to certain exceptions;

 

· to convene a meeting of its stockholders for the purpose of obtaining the Company Stockholder Approval; and

 

 

 

 

· to use reasonable best efforts to take all actions to complete the Merger, including cooperating to obtain antitrust clearance under the HSR Act and defending against any lawsuits challenging the Merger.

 

The Merger Agreement contains certain termination rights, including, the right of either party to terminate the Merger Agreement if the Merger is not consummated on or before June 24, 2019 (the “Termination Date”), subject to certain limitations and the right of either Parent or the Company to extend the Termination Date for a period of 90 days if, as of such date, any of the closing conditions relating to clearance under the HSR Act, or a legal restraint relating to U.S. antitrust law, are not satisfied. If the Merger Agreement is terminated because the Merger is not consummated on or before the Termination Date (as may be extended) and, at the time of the termination, approval under the HSR Act has not been obtained or there is an injunction or legal prohibition against the Merger under the HSR Act, or if the Merger Agreement is terminated because an injunction or legal prohibition against the Merger under the HSR Act becomes final and non-appealable, Parent must pay the Company a termination fee of $30 million.

 

The Company is also entitled to terminate the Merger Agreement, and receive a termination fee of $50 million from Parent, if:

 

· there has been a breach of any representation, warranty, covenant or agreement of Parent or Merger Sub, which breach (i) would give rise to the failure of a closing condition to the Company’s obligation to consummate the Closing (other than breaches relating to Parent’s representation regarding its ownership interests in certain entities or obligations with respect to obtaining regulatory approvals) and (ii) is not capable of being cured by Parent or Merger Sub prior to the Termination Date or, if capable of being cured, has not been cured before the earlier of (A) 30 business days following receipt of written notice from the Company of such breach or (B) the Termination Date, subject to certain exceptions; or

 

· (i) all of the conditions to Parent’s and Merger Sub’s obligations to consummate the Closing have been satisfied or waived (other than those conditions that by their nature are to be satisfied at the Closing), (ii) Parent and Merger Sub fail to consummate the Merger within three business days of the first date on which Parent and Merger Sub are required to consummate the Closing pursuant to the Merger Agreement, and (iii) the Company has provided irrevocable written notice to Parent at least one business day prior to the date of such termination confirming that it stands ready, willing and able to consummate the Merger and the other transactions contemplated thereby.

 

The Merger Agreement may also be terminated by Parent if the Company Board makes a Change of Recommendation, or by the Company, to enter into a definitive agreement with respect to a Superior Proposal, subject to certain limitations.  In the event the Merger Agreement is terminated under these circumstances, the Company must pay Parent a termination fee (the “Company Termination Fee”) of $24.3 million; except that such fee will be lowered to $8.1 million upon a termination of the Merger Agreement by the Company to enter into an alternative acquisition agreement providing for a Superior Proposal made by a party that initially submitted an acquisition proposal during the Go-Shop Period.

 

The foregoing description of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement, which is attached hereto as Exhibit 2.1 and is incorporated by reference herein.

 

The Merger Agreement has been included to provide investors with information regarding its terms. It is not intended to provide any other factual information about the Company, Parent, Merger Sub or their respective subsidiaries or affiliates. The representations, warranties and covenants contained in the Merger Agreement were made only for purposes of the Merger Agreement as of the specific dates therein, were solely for the benefit of the parties to the Merger Agreement, may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk among the parties to the Merger Agreement instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the parties thereto or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of representations and warranties may change after the date of the Merger Agreement, which subsequent information may or may not be reflected in the Company’s public disclosures. The Merger Agreement should not be read alone, but should instead be read in conjunction with the other information regarding the Company, Parent and Merger Sub and the transactions contemplated by the Merger Agreement that will be contained in or attached as an annex to the proxy statement that the Company will file in connection with the transactions contemplated by the Merger Agreement, as well as in the other filings that the Company will make with the U.S. Securities and Exchange Commission (the “SEC”). The Company acknowledges that, notwithstanding the inclusion of the foregoing cautionary statements, it is responsible for considering whether additional specific disclosures of material information regarding material contractual provisions are required to make the statements in this Form 8-K not misleading.

 

 

 

 

If the Merger is consummated, the Company’s Common Stock will be delisted from the New York Stock Exchange and deregistered under the Securities Exchange Act of 1934 (the “Exchange Act”).

 

Financing

 

Certain investment funds advised by Permira and Spectrum have agreed to pay on a several and pro rata basis any termination fees payable by Parent and up to $3 million in respect of certain reimbursable expenses and indemnities in connection with the financing as well as certain other fees.

 

Parent has obtained equity financing and debt financing commitments for the purpose of financing the transactions contemplated by the Merger Agreement and paying related fees and expenses. Investment funds advised by Permira and Spectrum have committed to capitalize Parent, immediately prior to the Effective Time, with an aggregate equity contribution of up to $338 million on the terms and subject to the conditions set forth in equity commitment letters.

 

JPMorgan Chase Bank, N.A., UBS Securities LLC, UBS AG, Stamford Branch, Jefferies Finance LLC and Royal Bank of Canada (together with certain of their affiliates, the “Lenders”) have agreed to provide debt financing for the transaction consisting of a $450 million senior secured first lien term loan facility, a $175 million senior secured second lien term loan facility and a $25 million senior secured first lien revolving loan facility, each on the terms and subject to the conditions set forth in a debt commitment letter dated as of September 24, 2018. The obligations of the Lenders to provide debt financing under the debt commitment letter are subject to a number of customary conditions.

 

Indemnification Agreements

 

On September 24, 2018, the Company Board approved a new form of indemnification agreement (the “Indemnification Agreement”) between the Company and individuals who may serve from time to time as directors or officers of the Company. The Company subsequently entered into a new indemnification agreement, in the form of the Indemnification Agreement, with each of its directors. These agreements supersede previously existing indemnification agreements between the Company and its directors. The Indemnification Agreement supplements indemnification provisions contained in the Company’s organizational documents. Under the Indemnification Agreement, the Company agrees to indemnify directors and officers against liability arising out of the performance of their duties to the Company and to other entities where they provide services at the request of the Company. The Indemnification Agreement requires indemnification to the fullest extent permitted by law for expenses, judgments, fines and amounts paid in settlement incurred by directors and officers in connection with a range of legal proceedings, including reasonable attorneys’ fees, on the terms and conditions set forth in the Indemnification Agreement. The Indemnification Agreement also requires the advancement of expenses in connection with proceedings and includes customary procedures with respect to indemnification and advancement of expenses, in each case on the terms and conditions set forth therein.

 

The foregoing description of the Indemnification Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the form of Indemnification Agreement, which is attached hereto as Exhibit 10.1 and is incorporated by reference herein.

 

 

 

 

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

In connection with the execution of the Merger Agreement, each of Michael Steib, the Company's Chief Executive Officer, Paul Bascobert, the Company's President, and Gillian Munson, the Company's Chief Financial Officer (collectively, the "Executive Officers"), signed a term sheet with the Company and Parent under which each party agrees, among other things, that (1) the Executive waives the right to resign for "good reason" (as defined under the Executive Officers' applicable employment agreement and equity grants) due to certain changes to duties, responsibilities, authorities and reporting relationships that are related to the Merger; (2) the Executive will continue to be entitled to his or her 2019 base salary, target annual bonus and annual retention equity grant (the "2019 Grant"), the amounts of which are specified in the term sheets; (3) after the Merger, Mr. Steib will serve as Co-Chief Executive Officer of Parent and will serve on the board of directors of the parent entity of Parent, and each of Ms. Munson and Mr. Bascobert will hold "C-suite" positions and report to the Co-Chief Executive Officers; (4) on the earlier of a termination without cause (as defined under the Executive Officers' applicable employment agreement and equity grants), certain resignations for good reason or continued employment through a specified period of months after the Merger (12 months for Mr. Steib and six months for Ms. Munson and Mr. Bascobert) (each, a "Safe Harbor Period"), any then unvested Converted Awards relating to awards granted prior to September 24, 2018 will fully vest and be paid out; (5) on a resignation for any reason that occurs no more than 60 days prior to, and no less than 30 days prior to, the end of the applicable Safe Harbor Period, or an earlier termination without cause or certain resignations for good reason (after taking into account the waiver described above) prior to the end of the applicable Safe Harbor Period, the Executive Officer will receive (x) the severance payments and benefits to which the Executive Officer would be entitled to receive upon a resignation for good reason under his or her existing employment agreement and a pro rata target bonus for the year of termination and (y) with respect to those Converted Awards that are in respect of 2019 Grants, the greater of (i) if the termination occurs more than 90 days following the grant date, 50% of such Converted Award and (ii) a pro rata portion of the award; provided that if the termination occurs less than 90 days following the grant date, the 2019 Grant will vest pro rata and (6) upon a termination without cause or certain resignations for good reason after the Safe Harbor Period, severance benefits equal to 12 months of base salary and benefits continuation and a pro rata target bonus for the year of termination, and the same treatment of the Executive Officer's 2019 Grant as described above. The Company will enter into amendments to the Executive Officers' existing employment agreements detailing these terms with each of the Executive Officers. The summary of the term sheets is qualified in its entirety by reference to the text of the retention term sheets, which are attached hereto as Exhibit 10.1, 10.2 and 10.3 for Mr. Steib, Ms. Munson and Mr. Bascobert, respectively, and such term sheets are incorporated by reference herein.

 

Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

 

On September 24, 2018, the Company Board approved amended and restated bylaws (as amended, the “Bylaws”) of the Company, effective September 24, 2018, to provide for indemnification of and expense advancement to directors and executive officers of the Company and any person who had formerly served in such capacity. The indemnification and expense advancement provisions of the Bylaws provide many of the same protections to directors and executive officers as do the Indemnification Agreement, although they are generally less detailed than the Indemnification Agreement.

 

Item 8.01. Other Events.

 

On September 25, 2018, the Company issued a press release announcing the execution of the Merger Agreement. A copy of the press release is attached as Exhibit 99.1 hereto and incorporated herein by reference.

 

Additional Information and Where to Find It

 

This communication relates to the proposed merger transaction involving the Company. In connection with the proposed merger, the Company will file relevant materials with the SEC, including the Company’s proxy statement on Schedule 14A and accompanying proxy card (the “Proxy Statement”). This communication is not a substitute for the Proxy Statement or any other document that the Company may file with the SEC or send to its stockholders in connection with the proposed merger. BEFORE MAKING ANY VOTING DECISION, STOCKHOLDERS OF THE COMPANY ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE PROXY STATEMENT, WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders will be able to obtain the documents (when available) free of charge at the SEC’s website, http://www.sec.gov, and the Company’s website, www.xogroupinc.com.

 

 

 

 

Participants in the Solicitation

 

The Company and its directors and executive officers may be deemed to be participants in the solicitation of proxies from the holders of Company Common Stock in respect of the proposed merger. Information about the directors and executive officers of the Company is set forth in the proxy statement for the Company’s 2018 annual meeting of stockholders, which was filed with the SEC on April 9, 2018, and in other documents filed by the Company with the SEC, including the Current Report on Form 8-K filed with the SEC on June 1, 2018. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the Proxy Statement and other relevant materials to be filed with the SEC in respect of the proposed merger when they become available.

 

Forward-Looking Statements

 

This Form 8-K may contain projections or other forward-looking statements regarding future events or our future financial performance or estimates regarding third parties. These statements are only estimates or predictions and reflect our current beliefs and expectations. Actual events or results may differ materially from those contained in the estimates, projections or forward-looking statements. It is routine for internal projections and expectations to change as the quarter progresses, and therefore it should be clearly understood that the internal projections and beliefs upon which we base our expectations may change prior to the end of the quarter. Although these expectations may change, we will not necessarily inform you if they do. Our policy is to provide expectations not more than once per quarter, and not to update that information until the next quarter. Some of the factors that could cause actual results to differ materially from the forward-looking statements contained herein include, without limitation, (i) our operating results may fluctuate, are difficult to predict and could fall below expectations, (ii) our ability to accurately measure and monetize the level of offline store level traffic attributable to an online digital campaign conducted on our sites, (iii) our business depends on strong brands, and failing to maintain and enhance our brands would hurt our business, (iv) our ongoing investment in new businesses and new products, services, and technologies is inherently risky, and could disrupt our ongoing business and/or fail to generate the results we are expecting, (v) if we are unable to continue to develop solutions that generate revenue from advertising and other services delivered to mobile devices, our business could be harmed, (vi) our businesses could be negatively affected by changes in Internet search engine and app store search algorithms and email marketing policies, (vii) we face intense competition in our markets. If we do not continue to innovate and provide products and services that are useful to users, we may not remain competitive, and our revenue and results of operations could be adversely affected, (viii) our transactions business is dependent on third-party participants, whose lack of performance could adversely affect our results of operations, (ix) fraudulent or unlawful activities on our marketplace could harm our business and consumer confidence in our marketplace, (x) we may be subject to legal liability associated with providing online services or content, (xi) we may be unable to continue to use the domain names that we use in our business, or prevent third parties from acquiring and using domain names that infringe on, are similar to, or otherwise decrease the value of our brand or our trademarks or service marks, (xii) risks related to the occurrence of any event, change or other circumstance that could give rise to the termination of the definitive agreement, (xiii) the failure to obtain Company stockholder approval of the proposed transaction or required regulatory approvals or the failure to satisfy any of the other conditions to the completion of the proposed transaction, (xiv) the effect of the announcement of the proposed transaction on the ability of the Company to retain and hire key personnel and maintain relationships with its customers, suppliers, vendors, advertisers, distributors, partners and others with whom it does business, or on its operating results and businesses generally, (xv) risks associated with the disruption of management’s attention from ongoing business operations due to the proposed transaction, (xvi) the ability to meet expectations regarding the timing and completion of the proposed transaction, (xvii) the potential impact of the consummation of the proposed transaction on the Company’s relationships, including with employees, customers, suppliers, vendors, advertisers, distributors, partners and competitors, and (xviii) other factors detailed in documents we file from time to time with the SEC. Forward-looking statements in this Form 8-K are made pursuant to the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995.

 

 

 

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit No.   Description of Exhibit
2.1   Agreement and Plan of Merger, dated as of September 24, 2018, by and among WeddingWire, Inc., Wedelia Merger Sub, Corp. and XO Group Inc. *
     
3.1   Second Amended and Restated By-laws of XO Group Inc., dated September 24, 2018
     
10.1   Form of Indemnification Agreement
     
10.2   Retention and Waiver Summary of Material Terms, by and between Michael Steib, XO Group Inc. and Wedding Wire, Inc., dated as of September 24, 2018
     
10.3   Retention and Waiver Summary of Material Terms, by and between Gillian Munson, XO Group Inc. and Wedding Wire, Inc., dated as of September 24, 2018
     
10.4   Retention and Waiver Summary of Material Terms, by and between Paul Bascobert, XO Group Inc. and Wedding Wire, Inc., dated as of September 24, 2018
     
99.1   Press Release, dated September 25, 2018

 

* Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K.  A copy of any omitted schedule will be furnished supplementally to the SEC upon request; provided, however, that the parties may request confidential treatment pursuant to Rule 24b-2 of the Exchange Act for any document so furnished.

 

 

 

 

  INDEX TO EXHIBITS

 

Exhibit No.   Description of Exhibit
2.1   Agreement and Plan of Merger, dated as of September 24, 2018, by and among WeddingWire, Inc., Wedelia Merger Sub, Corp. and XO Group Inc. *
     
3.1   Second Amended and Restated By-laws of XO Group Inc., dated September 24, 2018
     
10.1   Form of Indemnification Agreement
     
10.2   Retention and Waiver Summary of Material Terms, by and between Michael Steib, XO Group Inc. and Wedding Wire, Inc., dated as of September 24, 2018
     
10.3   Retention and Waiver Summary of Material Terms, by and between Gillian Munson, XO Group Inc. and Wedding Wire, Inc., dated as of September 24, 2018
     
10.4   Retention and Waiver Summary of Material Terms, by and between Paul Bascobert, XO Group Inc. and Wedding Wire, Inc., dated as of September 24, 2018
     
99.1   Press Release, dated September 25, 2018

 

* Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K.  A copy of any omitted schedule will be furnished supplementally to the SEC upon request; provided, however, that the parties may request confidential treatment pursuant to Rule 24b-2 of the Exchange Act for any document so furnished.

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

  XO GROUP INC.
   
   
  By: /s/ Gillian Munson
    Gillian Munson
    Chief Financial Officer

 Date: September 25, 2018

 

 

 

Exhibit 2.1

 

EXECUTION VERSION

 

 

 

AGREEMENT AND PLAN OF MERGER

 

by and among

 

WeddingWire, Inc.,

 

Wedelia Merger Sub, Corp.

 

and

 

XO Group Inc.

 

Dated as of September 24, 2018

 

 

 

 

 

 

Table of Contents

 

    Page
     
ARTICLE I
 
The Merger
     
Section 1.1. The Merger 2
Section 1.2. Closing 2
Section 1.3. Effective Time 2
     
ARTICLE II
 
Effects of the Merger
     
Section 2.1. Effects of the Merger 2
Section 2.2. Certificate of Incorporation 2
Section 2.3. Bylaws 3
Section 2.4. Directors 3
Section 2.5. Officers 3
Section 2.6. Effect on Capital Stock 3
Section 2.7. Payment 4
Section 2.8. Company Equity Awards 7
Section 2.9. Adjustments to Prevent Dilution 8
     
ARTICLE III
 
Representations and Warranties of the Company
     
Section 3.1. Organization and Power 9
Section 3.2. Subsidiaries 9
Section 3.3. Capitalization 9
Section 3.4. Authority 10
Section 3.5. Consents and Approvals; No Violations 11
Section 3.6. Company SEC Documents 11
Section 3.7. Absence of Certain Changes or Events 13
Section 3.8. Information Supplied 13
Section 3.9. Compliance with Laws; Permits 13
Section 3.10. Tax Matters 14
Section 3.11. Liabilities 15
Section 3.12. Litigation 15
Section 3.13. Employees and Employee Benefit Plans 16
Section 3.14. Intellectual Property and Privacy 18
Section 3.15. Material Contracts 20
Section 3.16. Real and Personal Property 22
Section 3.17. Environmental Laws 23

 

  i  

 

 

Table of Contents

(Continued)

 

    Page
     
Section 3.18. Insurance Policies 23
Section 3.19. Opinion of Financial Advisor 23
Section 3.20. Brokers 23
Section 3.21. Takeover Statutes Not Applicable; No Rights Agreement 23
Section 3.22. Related Party Transactions 24
Section 3.23. Exclusivity of Representations 24
     
ARTICLE IV
 
Representations and Warranties of Parent and Merger Sub
     
Section 4.1. Organization 25
Section 4.2. Merger Sub 25
Section 4.3. Authority 25
Section 4.4. Consents and Approvals; No Violations; No Source of Conflicting Interests. 26
Section 4.5. Information Supplied 26
Section 4.6. Litigation 27
Section 4.7. Financing 27
Section 4.8. Share Ownership 28
Section 4.9. Fee Funding Arrangement 29
Section 4.10. Brokers 29
Section 4.11. Solvency 29
Section 4.12. Exclusivity of Representations 30
Section 4.13. No Other Company Representations or Warranties 30
     
ARTICLE V
 
Covenants
     
Section 5.1. Conduct of Business by the Company Pending the Merger 31
Section 5.2. Acquisition Proposals 35
Section 5.3. Proxy Statement 39
Section 5.4. Stockholders Meeting 40
Section 5.5. Reasonable Best Efforts; Filings; Other Actions 40
Section 5.6. Access and Reports 43
Section 5.7. Publicity; Communications 44
Section 5.8. Employee Benefits 45
Section 5.9. Expenses; Transfer Taxes 46
Section 5.10. Indemnification; Directors’ and Officers’ Insurance 47
Section 5.11. Section 16 Matters 49
Section 5.12. Financing 49
Section 5.13. Financing Cooperation 50
Section 5.14. Transaction Litigation 53

 

  ii  

 

 

Table of Contents

(Continued)

 

    Page
     
Section 5.15. Resignation of Directors 54
Section 5.16. State Takeover Statutes 54
Section 5.17. Conduct of Parent and Merger Sub; Obligations of Merger Sub 54
Section 5.18. Other Investors 54
     
ARTICLE VI
 
Conditions
     
Section 6.1. Conditions to Each Party’s Obligation to Effect the Merger 54
Section 6.2. Conditions to Obligations of Parent and Merger Sub 55
Section 6.3. Conditions to Obligation of the Company 56
Section 6.4. Frustration of Closing Conditions 56
     
ARTICLE VII
 
Termination
     
Section 7.1. Termination by Mutual Consent 57
Section 7.2. Termination by Either the Company or Parent 57
Section 7.3. Termination by the Company 58
Section 7.4. Termination by Parent 58
Section 7.5. Effect of Termination and Abandonment 59
     
ARTICLE VIII
 
General Provisions
     
Section 8.1. No Survival of Representations and Warranties 61
Section 8.2. Modification or Amendment 61
Section 8.3. Waiver; Extension 62
Section 8.4. Counterparts 62
Section 8.5. Governing Law and Venue; Waiver of Jury Trial 62
Section 8.6. Notices 64
Section 8.7. Specific Performance 65
Section 8.8. Entire Agreement 66
Section 8.9. Parties in Interest 66
Section 8.10. Definitions; Construction 66
Section 8.11. Severability 75
Section 8.12. Assignment 75
Section 8.13. Headings 75
Section 8.14. Delivery by Facsimile or Electronic Transmission 75
Section 8.15. Non-Recourse 76

 

  iii  

 

 

INDEX OF DEFINED TERMS

 

Terms   Page
     
401(k) Plan   46
Acceptable Confidentiality Agreement   66
Acquisition Proposal   66
Action   67
Affiliate   67
Agreement   1
Alternative Acquisition Agreement   36
Applicable Regulatory Law   67
Book-Entry Share   4
Budgeted Amount   32
Business Day   67
Bylaws   3
Cancelled Shares   3
Capitalization Date   9
Certificate   4
Certificate of Merger   2
Change of Recommendation   37
Charter   2
Chosen Courts   61
Clean Team NDA   44
Closing   2
Closing Date   2
Code   6
Commitment Letters   27
Common Stock   9
Company   1
Company Benefit Plan   67
Company Board   1
Company Disclosure Schedule   8
Company Equity Awards   7
Company ESPP   67
Company Group   67
Company Intellectual Property   67
Company Material Adverse Effect   67
Company Preferred Stock   9
Company Recommendation   11
Company Registered IP   69
Company RSA Award   7
Company SEC Documents   11
Company Severance Policy   45
Company Stock Option   7
Company Termination Fee   69
Compliant   69

 

  iv  

 

 

INDEX OF DEFINED TERMS

(Continued)

 

Terms   Page
     
Confidentiality Agreements   44
Contingent Worker   18
Continuation Period   45
Continuing Employees   45
Contract   69
Converted Award   8
Converted Shares   3
Copyrights   70
Current ESPP Offering Period   7
D&O Insurance   49
debt   28
Debt Commitment Letter   27
Debt Financing   27
Debt Financing Source Parties   63
DGCL   1
Dissenting Shares   6
Domain Names   70
Effective Time   2
Election Notice   46
Employee   70
Enforceability Exceptions   10
Environmental Laws   69
Equity Commitment Letter   27
Equity Financing   27
ERISA   69
ERISA Affiliate   69
Exchange Act   70
Exchange Fund   4
Excluded Party   70
Excluded Shares   3
Fee Funding Arrangements   1
Financing   28
GAAP   12
Governmental Entity   70
HSR Act   70
Indemnified Parties   47
Intellectual Property   70
Intervening Event   70
Investor   27
JDA   44
Knowledge   71
Law   71
Lease   71

 

  v  

 

 

INDEX OF DEFINED TERMS

(Continued)

 

Terms   Page
     
Leased Real Property   22
Lenders   27
Lien   72
Material Contract   20
Material Customer Agreement   21
Materials of Environmental Concern   23
Merger   1
Merger Amounts   28
Merger Consideration   3
Merger Sub   1
Multiemployer Plan   71
Mutual NDA   44
New Plan   45
No-Shop Period Start Date   35
Notice Period   38
NYSE   71
Order   71
Parent   1
Parent 401(k) Plan   46
Parent Board   1
Parent Disclosure Schedule   24
Parent Group   71
Parent Material Adverse Effect   25
Parent Termination Fee   60
Patents   70
Paying Agent   4
Permira Funds   71
Permits   13
Permitted Liens   72
Person   72
Personal Data   72
Privacy Law   72
Privacy Policies   72
Proxy Statement   39
Record Holder   72
Registered IP   72
Regulatory Law   73
Related Parties   76
Representatives   35
Required Information   73
Reverse Termination Fee   61
Sanctions   14
SEC   73

 

  vi  

 

 

INDEX OF DEFINED TERMS

(Continued)

 

Terms   Page
     
Securities Act   73
Share   3
Shares   3
Solvent   29
Spectrum Funds   73
Stockholder Approval   55
Stockholders Meeting   40
Subsidiary   73
Substituted Option Award   7
Substituted RSA Award   7
Superior Proposal   73
Surviving Corporation   2
Takeover Statute   54
Tax   73
Tax Return   73
Taxes   73
Termination Date   57
Trade Secrets   70
Trademarks   70
Transaction Documents   74
Transaction Litigation   44
Treasury Regulations   74
Ultimate Parent Entity   74
Unvested Option   7
Vested Option   7
Willful Breach   74

 

  vii  

 

 

AGREEMENT AND PLAN OF MERGER

 

This AGREEMENT AND PLAN OF MERGER, dated as of September 24, 2018 (this “ Agreement ”), by and among WeddingWire, Inc., a Delaware corporation (“ Parent ”), Wedelia Merger Sub, Corp., a Delaware corporation and wholly owned Subsidiary of Parent (“ Merger Sub ”) and XO Group Inc., a Delaware corporation (the “ Company ”).

 

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 provisions of the General Corporation Law of the State of Delaware (the “ DGCL ”), 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 (the “ Company Board ”) has (a) approved and declared the advisability of this Agreement and the transactions contemplated hereby, including the Merger, (b) directed that the adoption of this Agreement be submitted for consideration by the Company’s stockholders at a meeting thereof and (c) resolved to recommend that the Company’s stockholders adopt this Agreement;

 

WHEREAS, the board of directors of Merger Sub has (a) approved and declared the advisability of this Agreement and the transactions contemplated hereby, including the Merger and (b) resolved to recommend that the sole stockholder of Merger Sub adopt this Agreement;

 

WHEREAS, Parent, as the sole stockholder of Merger Sub, has approved and adopted this Agreement and the transactions contemplated by this Agreement, including the Merger;

 

WHEREAS, concurrently with the execution and delivery of this Agreement, and as a condition and inducement to the Company’s willingness to enter into this Agreement, the Permira Funds and the Spectrum Arrangement Funds are each entering into a fee funding arrangement in favor of the Company (the “ Fee Funding Arrangements ”), pursuant to which, subject to the terms and conditions contained therein, the Permira Funds and the Spectrum Arrangement Funds are each agreeing to fund certain obligations of Parent and Merger Sub in connection with this Agreement; and

 

WHEREAS, the board of directors of Parent (the “ Parent Board ”) approved and declared the advisability of this Agreement and the transactions contemplated hereby, including the Merger; and

 

WHEREAS, the Company, Parent and Merger Sub desire to make certain representations, warranties, covenants and agreements in connection with the transactions contemplated by this Agreement and also to prescribe certain conditions to the transactions contemplated by this Agreement.

 

 

 

 

NOW, THEREFORE, in consideration of the premises, and of the representations, warranties, covenants and agreements contained herein, the parties hereto agree as follows:

 

ARTICLE I

 

The Merger

 

Section 1.1.           The Merger . Upon the terms and subject to the conditions set forth in this Agreement, at the Effective Time, Merger Sub shall be merged with and into the Company, in accordance with the provisions of the DGCL, and the separate corporate existence of Merger Sub shall thereupon cease. The Company shall be the surviving corporation in the Merger (sometimes hereinafter referred to as the “ Surviving Corporation ”) and, following the Merger, shall be a wholly owned Subsidiary of Parent, and the separate corporate existence of the Company, with all its rights, privileges, immunities, powers and franchises, shall continue unaffected by the Merger, except as set forth in this Agreement.

 

Section 1.2.           Closing . The closing of the Merger (the “ Closing ”) shall take place: (a) at 9:00 a.m., New York City time, no later than the third (3rd) Business Day following the satisfaction or waiver (if permissible under applicable Law) of all of the conditions set forth in Article VI (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 at the Closing), at the offices of Wachtell, Lipton, Rosen & Katz, 51 West 52nd Street, New York, New York 10019 or (b) at such other date, time, or place as agreed to in writing by Parent and the Company; provided, that the Closing shall not occur earlier than November 23, 2018. The date on which the Closing actually occurs is referred to herein as the “ Closing Date .” For the avoidance of doubt, a condition may only be waived in writing by the party or parties entitled to such condition under this Agreement.  

 

Section 1.3.           Effective Time . Subject to the terms and conditions hereof, on the Closing Date, the Company and Parent shall cause a certificate of merger (the “ Certificate of Merger ”) to be duly executed and filed with the Secretary of State of the State of Delaware in accordance with Section 251 of the DGCL. The Merger shall become effective at the time when the Certificate of Merger has been duly filed with the Secretary of State of the State of Delaware or at such later time as the parties shall agree in writing and specify in the Certificate of Merger in accordance with the DGCL (the “ Effective Time ”).

 

ARTICLE II

 

Effects of the Merger

 

Section 2.1.           Effects of the Merger . The Merger shall have the effects specified in this Agreement and the applicable provisions of the DGCL.

 

Section 2.2.           Certificate of Incorporation . Subject to Section 5.10 , and without any further action on the part of the Company or Merger Sub, at the Effective Time, the certificate of incorporation of the Surviving Corporation (the “ Charter ”) shall be amended and restated in its entirety to be in the form of the certificate of incorporation of Merger Sub (except with respect to the name of the Surviving Corporation, which from and after the Effective Time shall be the name of the Company), until thereafter amended as provided therein or by applicable Law.

 

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Section 2.3.           Bylaws . Subject to Section 5.10 , without any further action on the part of the Company or Merger Sub, at the Effective Time, the bylaws of the Surviving Corporation (the “ Bylaws ”) shall be amended and restated in their entirety to be in the form of the bylaws of Merger Sub (except that the name of the Surviving Corporation shall be the name of the Company), until thereafter amended as provided therein or in the Charter or by applicable Law.

 

Section 2.4.           Directors . The directors of Merger Sub immediately prior to the Effective Time shall, from and after the Effective Time, be the directors of the Surviving Corporation until their successors have been duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the Charter and the Bylaws.

 

Section 2.5.           Officers . The officers of the Company immediately prior to the Effective Time shall, from and after the Effective Time, be the officers of the Surviving Corporation until their successors have been duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the Charter and the Bylaws.

 

Section 2.6.           Effect on Capital Stock . At the Effective Time, as a result of the Merger and without any action on the part of the holder of any capital stock of the Company, any party hereto or any other Person:

 

(a)           Merger Consideration . Each share of Common Stock (each “ Share ” or, collectively, the “ Shares ”) issued and outstanding immediately prior to the Effective Time (other than Cancelled Shares, Converted Shares and Dissenting Shares (collectively, “ Excluded Shares ”)) shall at the Effective Time automatically be cancelled and converted into the right to receive $35.00 in cash (the “ Merger Consideration ”), without interest, whereupon such Shares shall cease to exist and no longer be outstanding, and each holder thereof shall cease to have any rights with respect thereto, except the right to receive the Merger Consideration, without interest, upon surrender of Certificates or Book-Entry Shares in accordance with Section 2.7 .

 

(b)           Cancellation of Cancelled Shares; Conversion of Converted Shares . Shares that immediately prior to the Effective Time are held by the Company in treasury or by Parent or Merger Sub (collectively, “ Cancelled Shares ”) shall at the Effective Time automatically be cancelled and shall cease to exist, and no consideration shall be delivered or deliverable in exchange therefor. Shares that immediately prior to the Effective Time are held by any wholly owned Subsidiary of the Company or any wholly owned Subsidiary of Parent (other than Merger Sub) (collectively, “ Converted Shares ”) shall at the Effective Time automatically be converted into such number of fully paid and nonassessable shares of common stock, par value $0.01 per share, of the Surviving Corporation such that the ownership percentage of any such Subsidiary in the Surviving Corporation immediately following the Effective Time shall equal the ownership percentage of such Subsidiary in the Company immediately prior to the Effective Time.

 

(c)           Conversion of Merger Sub Common Stock . At the Effective Time, each share of common stock, par value $0.01 per share, of Merger Sub issued and outstanding immediately prior to the Effective Time shall be converted into one fully paid and nonassessable share of common stock, par value $0.01 per share, of the Surviving Corporation.

 

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Section 2.7.           Payment .

 

(a)           Paying Agent; Exchange Fund . Prior to the Effective Time, Parent shall designate a bank or trust company reasonably acceptable to the Company to act as agent (the “ Paying Agent ”) for the payment of the Merger Consideration in accordance with this Article II , and in connection therewith, shall enter into an agreement reasonably acceptable to the Company relating to the Paying Agent’s responsibilities with respect to this Agreement. At or prior to the Effective Time, Parent shall deposit, or shall cause to be deposited, with the Paying Agent in trust for the benefit of the holders of Shares a cash amount sufficient to pay the aggregate Merger Consideration (not including, for the avoidance of doubt, any Merger Consideration payable with respect to Excluded Shares) (such cash being hereinafter referred to as the “ Exchange Fund ”). The Exchange Fund shall not be used for any purpose except as set forth herein. The Paying Agent shall invest the Exchange Fund as reasonably directed by Parent; provided , that such investments shall be in short-term obligations of, or guaranteed in full by, the United States of America with maturities no more than thirty (30) days or in commercial paper obligations rated A-1 or P-1 or better by Moody’s Investor Service, Inc. or Standard & Poor’s Corporation. Any interest and other income resulting from such investments shall be payable to Parent or the Surviving Corporation and any amounts in excess of the amounts payable under this Article II shall be promptly returned to the Surviving Corporation. To the extent that there are any losses with respect to any such investments, Parent shall, or shall cause the Surviving Corporation to, promptly replace or restore the cash in the Exchange Fund so as to ensure that the Exchange Fund is at all times maintained at a level sufficient for the Paying Agent to pay the aggregate Merger Consideration under this Article II . No investment losses resulting from investment of the funds deposited with the Paying Agent shall diminish the rights of any holder of Shares to receive the Merger Consideration as provided herein.

 

(b)           Exchange Procedures .

 

(i)           Letter of Transmittal . As soon as reasonably practicable after the Effective Time (but in any event no later than three (3) Business Days after the date on which the Effective Time occurs), Parent shall, or shall cause the Surviving Corporation to, cause the Paying Agent to mail to each Record Holder of a certificate (a “ Certificate ”) or book-entry share (a “ Book-Entry Share ”) that immediately prior to the Effective Time represented Shares, which Shares were converted into the right to receive the Merger Consideration pursuant to Section 2.6(a) , (A) a letter of transmittal (which shall be in customary form and with such other provisions as Parent and the Company shall reasonably agree, and which shall specify that delivery shall be effected, and risk of loss and title shall pass, only upon delivery of such Certificates (or affidavits of loss in lieu thereof as provided in Section 2.7(e) ) or transfer such Book-Entry Shares to the Paying Agent (including customary provisions with respect to delivery of an “agent’s message” with respect to Book-Entry Shares)) and (B) instructions for effecting the surrender of Certificates (or affidavits of loss in lieu thereof as provided in Section 2.7(e) ) or Book-Entry Shares to the Paying Agent in exchange for payment of the Merger Consideration therefor.

 

  4  

 

 

(ii)          Payment for Shares . Upon surrender to the Paying Agent of Certificates (or affidavits of loss in lieu thereof as provided in Section 2.7(e) ) or Book-Entry Shares, together with, in the case of Certificates, such letter of transmittal, duly completed and validly executed in accordance with the instructions thereto, or in the case of Book-Entry Shares, receipt of an “agent’s message” by the Paying Agent, and such other customary documents as may reasonably be required by the Paying Agent, the holder of such Certificates or Book-Entry Shares shall be entitled to receive in exchange therefor, and the Paying Agent shall be required to deliver to each such holder, the amount in cash (after giving effect to any required withholding taxes as provided in Section 2.7(g) that such holder has the right to receive pursuant to Section 2.6(a) ). No interest will be paid or accrued on any amount payable in respect of Certificates or Book-Entry Shares. If payment of the Merger Consideration is to be made to a Person other than the Person in whose name a surrendered Certificate or, in the case of a Book-Entry Share, a surrendered Share is registered, it will be a condition of payment that the Certificate or, in the case of a Book-Entry Share, the Share so surrendered be endorsed properly or otherwise be in proper form for transfer and that the Person requesting such payment has paid all transfer and other similar Taxes required by reason of the payment of the Merger Consideration to a Person other than the registered holder of the Certificate or, in the case of a Book-Entry Share, the Share surrendered and has established to the reasonable satisfaction of the Paying Agent that such Taxes have been paid or are not required to be paid.

 

(c)           Closing of Transfer Books . From and after the Effective Time, the stock transfer books of the Surviving Corporation 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 immediately prior to the Effective Time. Until surrendered as contemplated by Section 2.7(b) , each Certificate and Book-Entry Share (other than Excluded Shares) shall, from and after the Effective Time, represent only the right to receive the Merger Consideration, without interest thereon, as contemplated by Section 2.6(a) . If, after the Effective Time, Certificates or, in the case of Book-Entry Shares, such Shares are presented to the Surviving Corporation, Parent or the Paying Agent for transfer or any other reason, they shall be cancelled and exchanged for the Merger Consideration as provided in this Article II .

 

(d)           Termination of Exchange Fund . Any portion of the Exchange Fund (including the proceeds of any investments thereof) that remains unclaimed by the Record Holders of Shares one (1) year after the Effective Time shall be delivered to the Surviving Corporation. Any Record Holder of Shares (other than Excluded Shares) who has not theretofore complied with this Article II shall thereafter look only to the Surviving Corporation and Parent, which shall remain responsible for payment of the Merger Consideration for such Shares as provided in this Article II , without any interest thereon. Notwithstanding anything to the contrary herein, none of the Surviving Corporation, Parent, Merger Sub, the Paying Agent or any other Person shall be liable to any Record Holder of Shares for any amount properly delivered to a public official pursuant to applicable abandoned property, escheat or similar Laws.

 

  5  

 

 

(e)           Lost, Stolen or Destroyed Certificates . In the event that any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the holder thereof, and if required by Parent, the posting by such holder of a bond in customary amount and upon such terms as may be required by Parent as indemnity against any claim that may be made against it, the Surviving Corporation or the Paying Agent with respect to such Certificate, Parent will cause the Surviving Corporation or the Paying Agent to pay in exchange for such lost, stolen or destroyed Certificate the Merger Consideration payable in respect of the Shares previously evidenced by such lost, stolen or destroyed Certificate, without any interest thereon.

 

(f)           Dissenting Shares . Notwithstanding anything in this Agreement to the contrary, if required by the DGCL (but only to the extent required thereby), Shares that are issued and outstanding immediately prior to the Effective Time (other than Cancelled Shares and Converted Shares) and that are held by holders of such Shares who have not voted in favor of the adoption of this Agreement or consented thereto in writing and who are entitled to and have properly exercised appraisal rights with respect thereto in accordance with, and who have complied in all respects with, Section 262 of the DGCL (the “ Dissenting Shares ”) will not be converted into the right to receive the Merger Consideration, and holders of such Dissenting Shares will be entitled to receive payment of the fair value of such Dissenting Shares in accordance with the provisions of such Section 262 unless and until any such holder fails to perfect or effectively withdraws or loses its rights to appraisal and payment under the DGCL. If, after the Effective Time, any such holder fails to perfect or effectively withdraws or loses such right, such Dissenting Shares will thereupon be treated as if they had been converted into and had become exchangeable for, at the Effective Time, the right to receive the Merger Consideration, without any interest thereon. At the Effective Time, any holder of Dissenting Shares shall cease to have any rights with respect thereto, except the rights provided in Section 262 of the DGCL and as provided in the previous sentence. The Company will give Parent (i) prompt notice of any demands received by the Company for appraisals of Shares, including any holder’s notice of its intent to demand payment pursuant to Section 262 of the DGCL that the Company receives, withdrawals of such demands and any other instruments served pursuant to Section 262 of the DGCL and received by the Company, and (ii) the opportunity to participate in and direct all negotiations and proceedings with respect to such notices and demands. The Company shall not, except with the prior written consent of Parent, make any payment with respect to any demands for appraisal, offer to settle or settle any such demands or approve any withdrawal of any such demands.

 

(g)           Withholding . Each of Parent, the Surviving Corporation and the Paying Agent shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement (including pursuant to Section 2.6(a) and Section 2.8 ) such Taxes as it is required to deduct and withhold with respect to the making of such payment under the Internal Revenue Code of 1986, as amended (the “ Code ”) or under any other applicable provision of Law. To the extent that amounts are so deducted and withheld and timely paid over to the appropriate Governmental Entity, such deducted and withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Person in respect of which such deduction and withholding was made.

 

  6  

 

 

Section 2.8.           Company Equity Awards .

 

(a)          Each outstanding option to acquire Shares (each, a “ Company Stock Option ”), that is outstanding, unexercised and vested immediately prior to the Effective Time in accordance with its terms (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 (i) the excess, if any, of the Merger Consideration over the exercise price per Share of such Vested Option in effect immediately prior to the Effective Time, multiplied by (ii) the total number of Shares subject to such Vested Option immediately prior to the Effective Time, subject to any applicable Tax withholding. The Surviving Corporation shall pay the holders of Vested Options the cash payments described in this Section 2.8(a) on or as soon as reasonably practicable after the Closing Date, but in any event no later than the second regular payroll date following the Closing Date.

 

(b)          Each Company Stock Option that is outstanding and unvested immediately prior to the Effective Time (each, an “ Unvested Option ”) shall, as of the Effective Time, be substituted and automatically convert into an award to receive an amount in cash (a “ Substituted Option Award ”) equal to the product of (i) the excess, if any, of the Merger Consideration over the exercise price per Share of such Unvested Option in effect immediately prior to the Effective Time, multiplied by (ii) the total number of Shares subject to such Unvested Option immediately prior to the Effective Time. Such Substituted Option Award shall be subject to the terms set forth on Section 5.1(b)(xiv) of the Company Disclosure Schedule and shall otherwise 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 any applicable Tax withholding, within thirty days of the end of the calendar quarter in which the applicable vesting date occurs.

 

(c)          Each compensatory award in respect of a Share subject to vesting, repurchase or other lapse restriction (each, a “ Company RSA Award ” and, together with the Company Stock Options, the “ Company Equity Awards ”) that is outstanding immediately prior to the Effective Time shall, as of the Effective Time, be substituted and automatically convert into an award to receive an amount in cash (each, a “Substituted RSA Award”) equal to the product of (i) the total number of Shares underlying such Company RSA Award and (ii) the Merger Consideration. Such Substituted RSA Award shall be subject to the terms set forth on Section 5.1(b)(xiv) of the Company Disclosure Schedule and otherwise 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 any applicable Tax withholding, within thirty days of the end of the calendar quarter in which the applicable vesting date occurs.

 

(d)          As soon as practicable following the date hereof, the Company shall take all actions with respect to the Company ESPP to provide that (i) with respect to any offering periods in effect as of the date hereof (the “ Current ESPP Offering Period ”), no employee who is not a participant in the Company ESPP as of the date hereof may become a participant in the Company ESPP and there will be no increase in the amount of payroll deductions permitted to be made by the participants under the Company ESPP during the Current ESPP Offering Period; (ii) subject to the consummation of the transactions contemplated by this Agreement, the Company ESPP shall terminate immediately prior to the Effective Time, (iii) if the Current ESPP Offering Period terminates prior to the Effective Time, then the Company ESPP shall be suspended and no new offering period shall be commenced under the Company ESPP prior to the termination of this Agreement, and (iv) if the Current ESPP Offering Period is still in effect at the Effective Time, then the last day of such Current ESPP Offering Period shall be accelerated to a date before the Closing Date as specified by the Company Board or its designated committee in accordance with the terms of the Company ESPP.

 

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(e)          For the avoidance of doubt, if a holder of a Substituted Option Award or Substituted RSA award (each, a “ Converted Award ”) vests in such Converted Award in accordance with Sections 2.8(b) and 2.8(c) of this Agreement and such holder subsequently terminates employment with the Company and its Affiliates for any reason prior to the date on which such Converted Award is paid, the holder will be nevertheless be entitled to receive payment for such vested portion of such Converted Award at the time such payment would have been made had such holder remained employed with the Company or any of its Affiliates (including, after the Effective Time, the Surviving Corporation). Prior to the Effective Time, the Company Board or any authorized committee thereof shall adopt such resolutions as may reasonably be appropriate or required in its discretion to effectuate the actions contemplated by this Section 2.8 .

 

Section 2.9.           Adjustments to Prevent Dilution . In the event that, between the date of this Agreement and the Effective Time, the Company changes the number of Shares issued and outstanding as a result of a reclassification, stock split or reverse stock split, stock dividend or stock distribution, recapitalization, combination, merger, issuer tender or exchange offer, or other similar transaction, the Merger Consideration shall be correspondingly adjusted to reflect such change and to provide the holders of Shares the same economic effect as contemplated by this Agreement prior to such action, and as so adjusted shall, from and after the date of such event, be the Merger Consideration.

 

ARTICLE III

 

Representations and Warranties of the Company

 

Except as set forth in (a) any form, document or report publicly filed with or publicly furnished to the SEC by the Company or any of its Subsidiaries (including any documents incorporated by reference therein) prior to the date of this Agreement but after December 31, 2015 (other than with respect to Section 3.1, Section 3.2, Section 3.3, Sections 3.4, Section 3.5, Section 3.19 and Section 3.20); excluding any risk factor disclosure under the heading “Risk Factors” or disclosure set forth in any “forward looking statements” disclaimer or other similar section, in each case to the extent cautionary, predictive or forward looking in nature or (b) the disclosure letter delivered by the Company to Parent or its Representatives prior to entering into this Agreement (the “ Company Disclosure Schedule ”) (it being acknowledged and agreed that disclosure of any item in any section or subsection of the Company Disclosure Schedule, whether or not an explicit cross reference appears, shall be deemed disclosure with respect to any other section or subsection to which the relevance of such item is reasonably apparent on the face of such disclosure), the Company hereby represents and warrants to Parent and Merger Sub as follows:

 

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Section 3.1.           Organization and Power . The Company and each of its Subsidiaries is duly organized, validly existing and in good standing (with respect to jurisdictions that recognize that concept) under the Laws of its respective jurisdiction of organization and each 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 currently conducted, except where the failure to be in good standing or to have such corporate or similar power and authority would not constitute a Company Material Adverse Effect. The Company and each of its Subsidiaries is duly qualified or licensed to do business and is in good standing (with respect to jurisdictions that recognize that concept) as a foreign corporation (or other applicable entity) in each jurisdiction where the ownership, leasing or operation of its properties or assets or conduct of its business requires such qualification or licensing, except in such jurisdictions where the failure to be so qualified or licensed or to be in good standing would not constitute a Company Material Adverse Effect. The Company has made available to Parent true, complete and correct copies of its certificate of incorporation and bylaws, in each case as amended and in effect as of the date of this Agreement.

 

Section 3.2.           Subsidiaries .

 

(a)          Section 3.2(a) of the Company Disclosure Schedule sets forth as of the date hereof a true and complete list of the Subsidiaries of the Company and indicates the jurisdiction of organization or formation of each such Subsidiary. All of the outstanding shares of capital stock of each Subsidiary of the Company that is a corporation have been duly authorized and validly issued and are fully paid and nonassessable and free of preemptive rights. All of the outstanding shares of capital stock or equity interests of each Subsidiary of the Company are owned by the Company, directly or indirectly, free and clear of all Liens, other than Permitted Liens.

 

(b)          As of the date hereof, neither the Company nor any of its Subsidiaries required to be listed in Section 3.2(a) of the Company Disclosure Schedule owns, directly or indirectly, any capital stock of, or any joint venture, membership, partnership, voting or equity interest of any nature in, any other Person, other than the Subsidiaries identified in Section 3.2(a) of the Company Disclosure Schedule.

 

Section 3.3.           Capitalization .

 

(a)          The authorized capital stock of the Company consists of 100,000,000 shares of common stock, par value $0.01 per share (the “ Common Stock ”), and 5,000,000 shares of preferred stock, par value $0.001 per share (the “ Company Preferred Stock ”). At the close of business on September 19, 2018 (the “ Capitalization Date ”), (i) 25,911,987 Shares were issued and outstanding (including 666,594 Shares subject to Company RSA Awards), (ii) zero Shares were held by the Company in its treasury, (iii) 1,495,914 Shares were reserved for issuance pursuant to outstanding Company Stock Options, and (iv) no shares of Company Preferred Stock were issued and outstanding. All outstanding Shares, and all Shares reserved for issuance referred to in clauses (iii) and (iv) of the foregoing sentence, when issued in accordance with the terms thereof, are or will be duly authorized, validly issued, fully paid and nonassessable and are or will be free of, and were not or will not be issued in violation of any preemptive or similar right, purchase option, call or right of first refusal or similar rights. Section 3.3(a) of the Company Disclosure Schedule contains a correct and complete list, as of the date set forth therein, of the Company Stock Options and Company RSA Awards including the holder (identified with his or her employee ID number), 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 Benefit Plans.

 

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(b)          Except as set forth in this Section 3.3 and for changes since the Capitalization Date resulting from the exercise, vesting or settlement of Company Stock Options or the vesting of Company RSA Awards outstanding on the Capitalization Date, as of the date hereof, there are no outstanding (i) shares of capital stock or voting securities of the Company, (ii) bonds, debentures, notes or other indebtedness of the Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matter on which the Company’s stockholders may vote or (iii) securities, options, warrants, calls, rights, commitments, profits interests, stock appreciation rights, phantom stock agreements, arrangements or undertakings of any kind to which the Company or any of its Subsidiaries is a party or by which any of them is bound obligating the Company or any of its Subsidiaries to issue or sell, or cause to be issued or sold, additional shares of capital stock or other voting or equity securities or interests of the Company or of any of its Subsidiaries (or any security convertible or exercisable therefor) or obligating the Company or any of its Subsidiaries to issue, grant or enter into any such security, option, warrant, call, right, commitment, profits interest, agreement, arrangement or undertaking.

 

(c)          As of the date hereof, there are no voting agreements, voting trusts, stockholders agreements, or other agreements to which the Company or any of its Subsidiaries is a party with respect to the voting of, or providing for registration rights with respect to, the capital stock or other equity interests of the Company or any of its Subsidiaries (other than any such capital stock or other equity interests that are owned by the Company or a Subsidiary of the Company).

 

Section 3.4.           Authority .

 

(a)          The Company has the requisite corporate power and authority to execute and deliver this Agreement and, subject to obtaining the Stockholder Approval, to perform its obligations hereunder and to consummate the Merger and the other transactions contemplated hereby. The execution and delivery of this Agreement by the Company and the consummation by the Company of the Merger and the other transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of the Company, subject to obtaining the Stockholder Approval and filing the Certificate of Merger with the Secretary of State of the State of Delaware, and no other actions on the part of the Company are necessary to authorize the consummation of the Merger and the other transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by the Company and, assuming the due and valid authorization, execution and delivery of this Agreement by Parent and Merger Sub, constitutes a valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as limited by (i) bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar Laws of general applicability affecting or relating to creditors’ rights generally and (ii) general principles of equity, whether such enforceability is considered in a proceeding in equity or at Law ( clauses (i) and (ii) collectively, the “ Enforceability Exceptions ”).

 

(b)          The Company Board has (i) determined that the Merger is fair to, and in the best interests of, the Company and its stockholders, (ii) approved and declared advisable this Agreement and the transactions contemplated hereby, including the Merger, (iii) directed that the adoption of this Agreement be submitted for consideration by the Company’s stockholders at a meeting thereof and, (iv) subject to Section 5.2 , resolved to recommend that the Company’s stockholders adopt this Agreement (such recommendation, the “ Company Recommendation ”), which resolutions, as of the date hereof, remain in full force and effect.

 

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(c)          The Stockholder Approval is the only vote of the holders of any class or series of capital stock of the Company required to adopt this Agreement and approve the Merger and the other transactions contemplated hereby.

 

Section 3.5.           Consents and Approvals; No Violations .

 

(a)          Except as set forth in Section 3.5(a) of the Company Disclosure Schedule or as may be required under, and other applicable requirements of, the Exchange Act, the HSR Act, the DGCL, the rules and regulations of NYSE, state securities laws and any other applicable Regulatory Laws, and subject to the accuracy of Parent’s and Merger Sub’s representations and warranties set forth in Section 4.4(a) , neither the execution, delivery or performance of this Agreement by the Company nor the consummation by the Company of the transactions contemplated hereby will require the Company to make any notice to, or filing with, or obtain any permit, authorization, consent or approval of, any Governmental Entity of competent jurisdiction, with such exceptions as would not constitute a Company Material Adverse Effect.

 

(b)          Subject to obtaining the Stockholder Approval, neither the execution, delivery or performance of this Agreement by the Company nor the consummation by the Company of the transactions contemplated hereby will (i) contravene, conflict with, or result in any violation or breach of any provision of the certificate of incorporation or bylaws of the Company or of the similar organizational documents of any of the Company’s Subsidiaries, or (ii) assuming compliance with the matters referred to in Section 3.5(a) , contravene, conflict with or result in a violation or breach of any provision of any applicable Law, require any consent or other action by any Person under, constitute a default or an event that, with or without notice, lapse of time or both, would constitute a default under, or cause or permit the termination, cancellation or acceleration of any right or obligation under, any provision of any Material Contract, in the case of this clause (ii) with such exceptions as would not constitute a Company Material Adverse Effect.

 

Section 3.6.           Company SEC Documents .

 

(a)          Since December 31, 2015, the Company has filed with or furnished to the SEC, on a timely basis, all forms, reports and documents required to be filed with or furnished to the SEC under the Securities Act or the Exchange Act (collectively with any amendments thereto, the “ Company SEC Documents ”). As of their respective filing dates (or if amended, as of the date of the last such amendment), the Company SEC Documents complied as to form in all material respects with the applicable requirements of the Securities Act, the Exchange Act and the Sarbanes-Oxley Act of 2002, as the case may be, each as in effect on the date so filed (or amended). None of the Subsidiaries of the Company is required to file periodic reports with the SEC pursuant to the Exchange Act.

 

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(b)          The consolidated financial statements of the Company included in the Company SEC Documents (including the related notes and schedules thereto) complied as of their respective dates in all material respects with the then-applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, have been prepared in all material respects in accordance with United States generally accepted accounting principles (“ GAAP ”) (except, in the case of the unaudited statements or any foreign Subsidiaries, 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) and, on that basis, fairly present in all material respects the consolidated financial position, results of operations, changes in stockholder’s equity and cash flows of the Company and its Subsidiaries as of the indicated dates and for the indicated periods (subject, in the case of unaudited statements, to normal year-end audit adjustments and to any other adjustments described therein, including the notes thereto).

 

(c)          The Company has established and maintains disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as required by Rule 13a-15(a) under the Exchange Act, and the Company has established and maintains internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) as required by Rule 13a-15(a) under the Exchange Act. Such disclosure controls and procedures are designed to provide reasonable assurances that (i) material information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management as appropriate to allow timely decisions regarding disclosure and (ii) information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s applicable rules and forms, the Exchange Act and the Securities Act.

 

(d)          The Company has disclosed, based on its most recent evaluation of internal control over financial reporting prior to the date hereof, to the Company’s outside auditor and the audit committee of the Company Board (i) any significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting that are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information and (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

 

(e)          Since December 31, 2015, (i) neither the Company nor any of its Subsidiaries, has received any material, written unresolved complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of the Company or any of its Subsidiaries or their respective internal accounting controls, and (ii) no attorney representing the Company or any of its Subsidiaries, whether or not employed by the Company or any of its Subsidiaries, has, to the Knowledge of the Company, reported in writing credible evidence of a material violation of securities Laws, breach of fiduciary duty or similar violation by the Company or any of its Subsidiaries or their respective officers, directors, employees or agents to the Company Board or any committee thereof or to the General Counsel, Chief Executive Officer or Chief Financial Officer of the Company.

 

(f)          Since December 31, 2015, the Company has complied in all material respects with the applicable listing and corporate governance rules and regulations of the NYSE.

 

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Section 3.7.           Absence of Certain Changes or Events .

 

(a)          From December 31, 2017 through the date hereof, except in connection with the transactions contemplated by this Agreement, the Company and its Subsidiaries have conducted their respective businesses in all material respects in the ordinary course consistent with past practice and have not taken any action that, if taken after the date hereof, would require Parent’s consent pursuant to Section 5.1(b)(i) , (ii) , (iv) (excluding with respect to the Company’s wholly-owned Subsidiaries), (viii) , (ix) , (xi) , (xii) , (xvi) or (xxi) (solely to the extent related to Section 5.1(b)(i) , (ii) , (iv) , (viii) , (ix) , (xi) , (xii) or (xvi) ).

 

(b)          Since December 31, 2017 through the date hereof, there has not been a Company Material Adverse Effect.

 

Section 3.8.           Information Supplied . None of the information supplied or to be supplied by or on behalf of the Company for inclusion or incorporation by reference in the Proxy Statement will, at the time the Proxy Statement is first mailed to the Company’s stockholders or at the time of the Stockholders Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. The Proxy Statement will comply in all material respects with the requirements of the Exchange Act. Notwithstanding the foregoing, the Company makes no representation or warranty with respect to statements made or incorporated by reference in the Proxy Statement based on information supplied by or on behalf of Parent and Merger Sub or affiliates thereof.

 

Section 3.9.           Compliance with Laws; Permits .

 

(a)          Except as would not constitute a Company Material Adverse Effect, the Company and its Subsidiaries (i) are, and since December 31, 2015 have been in compliance with all Laws and Orders applicable to the Company and its Subsidiaries, and (ii) to the Knowledge of the Company, are not under investigation by any Governmental Entity with respect to, and have not been threatened to be charged with or given notice by any Governmental Entity of, any violation of any such Law or Order. Except as would not constitute a Company Material Adverse Effect, each of the Company and its Subsidiaries has in effect all licenses, certificates, authorizations, consents, permits, approvals and other similar authorizations of, from or by a Governmental Entity necessary for it to own, lease or operate its properties and assets and to carry on its business as currently conducted (collectively, “ Permits ”). No default has occurred under, and there exists no event that, with or without notice, lapse of time or both, would result in a default under, any such Permit, or would give to others any rights of revocation, non-removal, adverse modification or cancellation of any such Permit, and none of the Company or any of its Subsidiaries has received any cease and desist letters or material written inquiries from any Governmental Entity with respect to any such Permit, except, in each case, as would not constitute a Company Material Adverse Effect.

 

(b)          The Company and its Subsidiaries and their directors and officers, and, to the Knowledge of the Company, their employees and any agents acting on their behalf, are, and during the past five (5) years have been in all material respects, in compliance with U.S. and any applicable foreign economic sanctions laws and regulations, including economic sanctions administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control (collectively, “ Sanctions ”) and U.S. and applicable foreign laws and regulations pertaining to export and import controls, including those administered by the U.S. Departments of Commerce and State.

 

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(c)          None of the Company or its Subsidiaries, or their directors or officers, or, to the Knowledge of the Company, their employees, is (i) identified on any Sanctions-related list of restricted or blocked persons, (ii) organized, resident, or located in any country or territory that is itself the subject of Sanctions, or (iii) owned or controlled by any such Person or Persons.

 

Section 3.10.          Tax Matters . Except as would not constitute a Company Material Adverse Effect:

 

(a)          (i) The Company and each of its Subsidiaries have timely filed (taking into account any valid extension of time within which to file) all Tax Returns required to be filed by any of them and all such Tax Returns are complete and accurate and (ii) the Company and each of its Subsidiaries have paid all Taxes that are required to be paid by any of them (and have withheld all Taxes required to be withheld by any of them from amounts paid to any employee, independent contractor, creditor, or stockholder), except, in the case of each of clauses (i) and (ii) , with respect to matters for which adequate reserves have been established in accordance with GAAP.

 

(b)          (i) There is no deficiency for any Taxes which has been proposed, asserted or assessed in writing by any Governmental Entity against the Company or any of its Subsidiaries that has not been paid, withdrawn or settled, or for which adequate reserves have not been established in accordance with GAAP, by the Company; (ii) there are not ongoing or pending or, to the Company’s knowledge, threatened in writing, any audits, suits, proceedings, examinations, investigations or other administrative or judicial proceedings in respect of Taxes of the Company or any of its Subsidiaries, other than in respect of matters for which adequate reserves have been established in accordance with GAAP by the Company; and (iii) neither the Company nor any of its Subsidiaries has waived any statute of limitations with respect to Taxes or Tax Returns or agreed to any extension of time with respect to a Tax assessment or deficiency or the collection of Taxes, which waiver or extension is currently in effect.

 

(c)          There are no Liens for Taxes on any of the assets of the Company or any of its Subsidiaries other than Permitted Liens.

 

(d)          In the past three years, no written claim has been made by any Governmental Entity in a jurisdiction where the Company or any of its Subsidiaries has not filed a Tax Return that the Company or such Subsidiary, as applicable, is subject to income or franchise Tax in such jurisdiction.

 

(e)          The Company has not been a “controlled corporation” or a “distributing corporation” (in each case, within the meaning of Section 355(a)(1)(A) of the Code) in any distribution that was purported or intended to be governed by Section 355 of the Code occurring during the two-year period ending on the date hereof.

 

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(f)          Neither the Company nor any of its Subsidiaries (i) is a party to any Tax allocation, sharing or indemnity agreement (other than (A) any Tax indemnification provisions in commercial agreements or agreements that are not primarily related to Taxes or (B) any agreement between or among any of the Company and its Subsidiaries) or (ii) is liable for any Taxes of any other Person (other than the Company or its Subsidiaries) pursuant to Treasury Regulation Section 1.1502-6 (or any comparable provision of state, local or foreign Law) or as transferee or successor.

 

(g)          Neither the Company nor any of its Subsidiaries has participated in a “listed transaction” within the meaning of Treasury Regulation Section 1.6011-4(b)(2).

 

(h)          Neither the Company nor any of its Subsidiaries will be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) beginning after the Closing Date as a result of (i) any adjustment under Section 481 of the Code (or any similar provision of state, local or non-U.S. Law) required as a result of a change in method of accounting made prior to the Closing, (ii) any written “closing agreement” with a Governmental Entity executed prior to the Closing, (iii) any installment sale or open transaction disposition made prior to the Closing, (iv) any prepaid amount received prior to the Closing or (v) any election under Section 108(i) or Section 965 of the Code.

 

(i)          Notwithstanding anything herein to the contrary, the representations and warranties contained in this Section 3.10 and, to the extent expressly referring to Code sections, Section 3.13 are the sole and exclusive representations of the Company with respect to Taxes and Tax matters.

 

Section 3.11.          Liabilities . Neither the Company nor any of its Subsidiaries has any liabilities or obligations of any nature (whether accrued, absolute, contingent or otherwise) that would be required by GAAP to be reflected in the consolidated balance sheet of the Company, other than liabilities and obligations (a) reserved against or reflected in the Company’s consolidated balance sheet for the fiscal quarter ended December 31, 2017 included in the Company SEC Documents (or the notes thereto), (b) incurred in the ordinary course of business since December 31, 2017, (c) incurred in connection with the transactions contemplated by this Agreement, the entry into this Agreement and the performance of the transactions contemplated by this Agreement or (d) that would not constitute a Company Material Adverse Effect.

 

Section 3.12.          Litigation . As of the date of this Agreement, there is no Action pending or, to the Knowledge of the Company, threatened against the Company or any of its Subsidiaries, or any of their properties, rights or assets, for which an adverse result would constitute a Company Material Adverse Effect. As of the date of this Agreement, there is no Order imposed upon or, to the Knowledge of the Company, threatened against the Company or any of its Subsidiaries, or any of their properties, rights or assets that constitutes a Company Material Adverse Effect.

 

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Section 3.13.          Employees and Employee Benefit Plans .

 

(a)          Section 3.13(a) of the Company Disclosure Schedule contains a list of each material Company Benefit Plan. The Company has made available to Parent copies of (i) each material Company Benefit Plan document (or, if such document is not written, a written summary of the material terms) and any proposed amendments and (ii) to the extent applicable, (A) the two most recent annual reports on Form 5500 filed and all schedules thereto filed with respect to such Company Benefit Plan, (B) each current trust agreement, insurance contract or policy, group annuity contract and any other funding arrangement relating to such Company Benefit Plan, (C) the most recent summary plan description, if any, required under ERISA with respect to such Company Benefit Plan and any material modifications, (D) the most recent determination or opinion letter, if any, issued by the Internal Revenue Service and any pending request for such a letter, (E) with respect to each plan that has been merged into any tax qualified plan of the Company within the previous six years, the latest determination letter or, for a prototype plan, favorable opinion letter, and plan documents, including, for any prototype plan, the underlying prototype plan document, executed adoption agreement and any service agreements, (F) all material correspondence, and all non-routine filings made, with any Governmental Entity, and (G) the most recent audited financial statements and actuarial or other valuation reports prepared with respect thereto.

 

(b)          (i) Each Company Benefit Plan has been maintained in all material respects in compliance with its terms and in all material respects with the requirements of applicable Law, including the Code and ERISA, and (ii) each Company Benefit Plan that is intended to be qualified under Section 401(a) of the Code is and at all times has been so qualified, and has either received a favorable determination letter from the Internal Revenue Service or may rely on a favorable opinion letter issued by the Internal Revenue Service as to its qualification, and, to the Knowledge of the Company, nothing has occurred that could reasonably be expected to adversely affect such qualification.

 

(c)          Except as would not reasonably be expected to result in material liability to the Company, (i) each Company Benefit Plan intended to qualify for special tax treatment that is required to be registered or qualified under applicable Laws has been so registered or qualified and has been maintained in good standing in accordance with the applicable Governmental Entity, so as to qualify for such special tax treatment, (ii) no Company Benefit Plan is under audit or investigation by the Internal Revenue Service, the Department of Labor or any other Governmental Entity and, to the Knowledge of the Company, no such audit or investigation is threatened in writing and (iii) there are no pending or, to the Knowledge of the Company, threatened, actions, suits or claims with respect to any Company Benefit Plan or the assets or any fiduciary thereof (in that Person’s capacity as a fiduciary of such Company Benefit Plan), other than ordinary course claims for benefits brought by participants or beneficiaries.

 

(d)          No Company Benefit Plan is subject to, or reasonably expected to incur liability under, Title IV of ERISA or Section 412 of the Code, and, during the immediately preceding six (6) years, none of the Company, its Subsidiaries or any of their respective ERISA Affiliates (i) has contributed to, or been required to contribute to, a plan subject to Title IV of ERISA or Section 412 of the Code or (ii) incurred any liability under Title IV of ERISA that has not been satisfied in full including, without limitation, liability arising under Section 4062, 4063, 4069 or Subtitle E of Title IV of ERISA (relating to Multiemployer Plans).

 

(e)          All material contributions, premiums or benefits which are due from the Company or any of its Subsidiaries under any Company Benefit Plan have been paid to or in respect of each such Company Benefit Plan or have been accrued in accordance with applicable accounting standards.

 

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(f)          No Company Benefit Plan provides or has ever provided for medical, life insurance, or other welfare benefits to any former or current Employee, or any spouse or dependent of any such Employee, beyond retirement or other termination of employment (other than as required under Code Section 4980B, or similar state Law).

 

(g)          Each Company Benefit Plan that constitutes in any part a “nonqualified deferred compensation plan” (as defined in Section 409A(d)(1) of the Code) and that is subject to Section 409A of the Code has been operated and maintained in all material respects in operational and documentary compliance with Section 409A of the Code and applicable guidance thereunder during the respective time periods in which such operational or documentary compliance has been required. There is no contract or other arrangement to which the Company or any of its Subsidiaries is a party or by which it is bound to compensate any individual for additional Taxes paid pursuant to Section 409A of the Code.

 

(h)          Except as expressly provided under this Agreement, neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated by this Agreement will (alone or in combination with any other event) (i) result in any payment becoming due to any Employee, including any severance or termination pay pursuant to a Company Benefit Plan, (ii) accelerate the time of payment or vesting, result in any forgiveness of indebtedness or trigger any payment of funding (through a grantor trust or otherwise) of compensation or benefits under, or increase the amount payable pursuant to, or benefits under, any Company Benefit Plan, (iii) result in any “excess parachute payment” (within the meaning of Section 280G of the Code) becoming due to any Employee or (iv) result in the triggering or imposition of any restrictions or limitations on the right of the Company or any of its Subsidiaries to amend or terminate any Company Benefit Plan (or result in any adverse consequence in so doing). There is no contract or other arrangement to which the Company or any of its Subsidiaries is a party or by which it is bound to compensate any individual for excise Taxes paid pursuant to Section 4999 of the Code. As of the date hereof, the Company has made available to Parent true and correct copies of preliminary Section 280G calculations (based on the assumptions set forth in the applicable calculations) with respect to each “disqualified individual” (within the meaning of Section 280G of the Code).

 

(i)          There are no current union organization activities or representation questions involving Employees of the Company or any of its Subsidiaries and neither the Company nor any of its Subsidiaries (i) has agreed to recognize any labor union or labor organization, nor has any labor union or labor organization been certified as the exclusive bargaining representative of any employees of the Company or any of its Subsidiaries, (ii) is a party to or otherwise bound by, or has within the last six (6) years been party to or bound by, or currently negotiating, any collective bargaining agreement or other Contract with a labor union, labor organization or other employee representative, or (iii) as of the date hereof is the subject of any proceeding seeking to compel it to bargain with any labor union or labor organization, nor, to the Knowledge of the Company, is any such proceeding threatened in writing.

 

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(j)          No labor strike, organized work stoppage, slowdown, lockout, unfair labor practice charge or similar labor activity or dispute affecting the Company or any of its Subsidiaries has occurred during the past two years or, to the Knowledge of the Company, is threatened.

 

(k)          There are no material claims (other than ordinary claims under Company Benefit Plans), disputes, actions, grievances or disciplinary actions pending or, to the Knowledge of the Company, threatened in writing, by or between the Company or any of its Subsidiaries and any Employees.

 

(l)          The Company and its Subsidiaries are in compliance in all material respects with all applicable Laws respecting labor and employment, including but not limited to, fair employment practices, terms and conditions of employment, workers’ compensation, occupational safety and health requirements, plant closings, wages and hours, overtime, withholding of Taxes, worker classification, employment discrimination, disability rights or benefits, equal opportunity, labor relations, employee leave issues, immigration status, collective bargaining, and unemployment insurance and related matters.

 

(m)          Except as would not be reasonably be expected to result in material liability to the Company, neither the Company nor any of its Subsidiaries has any liability for the misclassification of any Person as an independent contractor, temporary employee, leased employee or any other service provider compensated other than through reportable wages (as an Employee) paid by the Company or a Subsidiary (any such Person, a “ Contingent Worker ”), and no Contingent Worker has been improperly excluded from any Company Benefit Plan. Neither the Company nor any of its Subsidiaries has any leased employees within the meaning of Section 414(n) of the Code.

 

Section 3.14.          Intellectual Property and Privacy .

 

(a)          Section 3.14(a) of the Company Disclosure Schedule sets forth a complete and accurate list as of the date hereof of all Company Registered IP. Except as would not constitute a Company Material Adverse Effect, each item of Company Registered IP is currently in compliance with all formal legal requirements (including payment of filing, examination and maintenance fees) and, to the extent issued, is, to the Knowledge of the Company, subsisting and not invalid or unenforceable. The Company, or a Subsidiary of the Company, owns the Company Intellectual Property free and clear of all Liens, except for Permitted Liens.

 

(b)          As of the date hereof, Company has not received written notice of claims that are pending or, to the Knowledge of the Company, threatened in writing, (i) challenging the ownership, enforceability or validity of any Company Intellectual Property, or (ii) alleging that the Company or any of its Subsidiaries is violating, misappropriating or infringing the rights of any Person with regard to any Intellectual Property.

 

(c)          Except as would not constitute a Company Material Adverse Effect, (i) no Person is violating, misappropriating or infringing any Company Intellectual Property, and (ii) to the Knowledge of the Company, the operation of the business of the Company and its Subsidiaries as currently conducted does not violate, misappropriate or infringe the Intellectual Property of any other Person.

 

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(d)          Except as would not constitute a Company Material Adverse Effect, the Company and its Subsidiaries have taken such steps as are reasonably necessary to protect their respective rights in material Trade Secrets. In addition to the foregoing, each Company employee, and each consultant or contractor, engaged in the development or creation of any material technology, or Intellectual Property for Company or its Subsidiaries has executed a valid and enforceable proprietary information, confidentiality and assignment agreement sufficient to irrevocably assign (except as limited by applicable Law) any Intellectual Property developed by such employee, consultant or contractor for the Company or such Subsidiary to the Company or such Subsidiary.

 

(e)          Section 3.14(e) of the Company Disclosure Schedule lists all Contracts to which the Company or any of its Subsidiaries is a party as of the date hereof that grants to Company or any of its Subsidiaries a license, ownership rights, an option to, or other rights in or to any Intellectual Property owned by a third Person and that is material to the business of the Company and its Subsidiaries take as a whole, other than (A) licenses to commercially available software on substantially standard terms and conditions that are available as of the date of this Agreement or (B) Contracts with third parties pursuant to which the Company or any Subsidiary is granted a license or other right in or to any Intellectual Property provided by such third parties on the Company’s standards terms and conditions or in connection with the provision of services by, or in exchange for any payment from, the Company, including any user-generated data or content.

 

(f)          Section 3.14(f) of the Company Disclosure Schedule lists all Contracts to which the Company or one of its Subsidiaries is a party as of the date hereof under which Company or such Subsidiary grants any third Person a license or other rights in or to any material Company Intellectual Property, other than the Material Customer Agreements or any other customer, developer and reseller licenses, and service agreements.

 

(g)          The Company and its Subsidiaries maintain commercially reasonable policies and procedures regarding data security and privacy, including procedures reasonably designed to detect and remedy data security breaches and unauthorized access or unauthorized use of the Company’s and its Subsidiaries’ information technology systems, including systems that store or process Personal Data. The Company and its Subsidiaries are, in all material respects, in compliance with Company’s Privacy Policies and all applicable Privacy Laws. To the Knowledge of the Company, as of the date of this Agreement, there have been no material losses or thefts of or material data or security breaches with respect to, Personal Data. For the past five (5) years, the Company and its Subsidiaries have not been involved in any Action related to Personal Data, Privacy Policies, or Privacy Laws.

 

(h)          Notwithstanding any other provisions of this Agreement to the contrary, the representations and warranties made in this Section 3.14 are the sole and exclusive representations and warranties of the Company with respect to the matters set forth in this Section 3.14 , including Intellectual Property matters and matters relating to Personal Data and privacy.

 

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Section 3.15.          Material Contracts .

 

(a)          Except as set forth in Section 3.15(a) of the Company Disclosure Schedule or as would not constitute a Company Material Adverse Effect, (i) neither the Company nor any of its Subsidiaries is in breach of or default under, nor to the Knowledge of the Company has it received written notice alleging it to be in breach of or default under, the terms of any Material Contract, (ii) to the Knowledge of the Company, no other party to any Material Contract is in breach of or default under the terms of any such Material Contract, (iii) each Material Contract is a valid, binding and enforceable obligation of the Company or its Subsidiary that is a party thereto and is in full force and effect, except as limited by the Enforceability Exceptions and (iv) to the Knowledge of the Company, no event has occurred which would result in a breach of or default under any Material Contract (in each case, with or without notice, lapse of time or both) by the Company or any of its Subsidiaries or any other party thereto.

 

(b)          A true and complete list of the Material Contracts as of the date hereof is set forth in Section 3.15(b) of the Company Disclosure Schedule. The Company has made available to Parent a true and complete copy of each Material Contract, each as amended to the date hereof. For purposes of this Agreement, the term “ Material Contract ” means any of the following Contracts (together with all exhibits and schedules thereto), excluding any Company Benefit Plan, to which the Company or any of its Subsidiaries is a party as of the date hereof:

 

(i)          any limited liability company, partnership, joint venture or other similar agreement or arrangement relating to the formation, creation, operation, management or control of any partnership or joint venture over which the Company or any of its Subsidiaries exercises control, other than any such limited liability company, partnership or joint venture that is a Subsidiary of the Company;

 

(ii)         any Contract (other than between or among the Company and any of its wholly owned Subsidiaries or between or among any of the wholly owned Subsidiaries of the Company) (A) relating to (w) indebtedness of the Company or its Subsidiaries for borrowed money in excess of $1 million, (x) other indebtedness of the Company or its Subsidiaries in excess of $1 million evidenced by credit agreements, notes, bonds, indentures, securities or debentures, (y) any financial guaranty by the Company or its Subsidiaries of indebtedness of any other Person described in clause (w) or (x) , and (z) swaps, options, derivatives and other hedging arrangements entered into by the Company or its Subsidiaries in connection with indebtedness described in clause (w) , (x) or (y) or (B) involving consideration in excess of $1,000,000 and containing any limitation on the ability of the Company or any of its Subsidiaries to incur indebtedness for borrowed money, give guarantees of indebtedness for borrowed money of the Company or any of its Subsidiaries or incur Liens (other than Permitted Liens);

 

(iii)        any Contract that (A) limits the right of the Company or its Subsidiaries to engage or compete in any line of business or to compete or operate in geographic area, (B) provides for “exclusivity” in favor of any third party or (C) grants any rights of first refusal, rights of first negotiation, or “most favored nation” rights to any third party, in each case that are material to the business of the Company and its Subsidiaries, taken as a whole;

 

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(iv)        any Contract that relates to the acquisition or disposition of any business or any assets or properties that constitute a business or division of any Person since January 1, 2014, whether by way of merger, consolidation or purchase of stock or assets, which involved or would reasonably be expected to involve payments in excess of $1 million;

 

(v)         any Contract with (A) each of the ten (10) largest customers of the Company (each such Contract, a “ Material Customer Agreement ”) and (B) each of the ten (10) largest commercial vendors of the Company, in each case by dollar amount for the fiscal year ending December 31, 2017;

 

(vi)        any Contract for capital expenditures or the acquisition or construction of fixed assets which requires aggregate future payments in excess of $1 million;

 

(vii)       any Contract to which the Company or any of its Subsidiaries is a party pursuant to which the Company and its Subsidiaries, collectively, received or paid in excess of $3 million during the 12-month period ended December 31, 2017, other than any Contract that is disclosed in any other subsection of this Section 3.15(b) ;

 

(viii)      any Contract under which a Governmental Entity procures or supplies services from the Company pursuant to which the Company and its Subsidiaries, collectively, received or paid in excess of $250,000 during the 12-month period ended December 31, 2017;

 

(ix)         each (A) Lease and (B) any Contract pursuant to which the Company or any of its Subsidiaries is a lessee of any machinery, equipment, office furniture or other personal property, in any such case requiring by its terms aggregate payments by the Company or any of its Subsidiaries in excess of $500,000 for the 12-month period ending December 31, 2017;

 

(x)          any Contract involving any resolution or settlement since January 1, 2016 of any actual Action involving the Company or any of its Subsidiaries involving a payment in excess of $500,000 or any material ongoing requirements or restrictions on the Company or any of its Subsidiaries;

 

(xi)         any Contract that prohibits the payment of dividends or distributions in respect of the capital stock of the Company or any of its Subsidiaries, or prohibits the pledging of the capital stock of the Company or any of its Subsidiaries (other than the Company’s existing anti-pledging policies);

 

(xii)        any Contract required to be scheduled pursuant to Section 3.14(e) and Section 3.14(f) , other than any Contract (A) that provides for annual payments during the 12-month period ended December 31, 2017 of (or concerns Intellectual Property with a value of) less than $500,000 or (B) is disclosed in any other subsection of this Section 3.15(b) ;

 

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(xiii)       any collective bargaining agreement; and

 

(xiv)      any Contract required to be filed by the Company with the SEC as a “material contract” pursuant to Item 601(b)(10) of Regulation S-K.

 

Section 3.16.          Real and Personal Property .

 

(a)          The Company does not own any real property and as of the date of this Agreement, the Company does not have any contract to acquire any fee interest in real property. Section 3.16(a) of the Company Disclosure Schedule sets forth (i) a list of the addresses of all real property leased or subleased by the Company and its Subsidiaries (the “ Leased Real Property ”) and (ii) a true and correct list of all Leases. The Leased Real Property constitutes all of the real property leased, subleased or occupied by the Company and its Subsidiaries to operate its business and there are no other lease, sublease, license, use or occupancy agreements for real property to which any of the Company or its Subsidiaries is bound.

 

(b)          The Company or one of its Subsidiaries has valid leasehold estates in or other rights to use all Leased Real Property, free and clear of all Liens, except for Permitted Liens.

 

(c)          Except as would not constitute a Company Material Adverse Effect, all Leases are in full force and effect, neither the Company nor any of its Subsidiaries that is a party to such Lease has received or given any written notice of any default thereunder which remains uncured as of the date hereof. Except as would not constitute a Company Material Adverse Effect, neither the Company nor any of its Subsidiaries party thereto (as the case may be) or, to the Knowledge of the Company, any Person other than the Company or its Subsidiary is in breach of, or default under, any provisions of any Lease nor has, to the Knowledge of the Company, any event occurred which, with notice or the passage of time, or both, would give rise to such a default or breach, result in a loss of any rights or result in the creation of any Lien (except for Permitted Liens) thereunder or pursuant thereto.

 

(d)          Except as would not constitute a Company Material Adverse Effect or as set forth on Section 3.16(d) of the Company Disclosure Schedule, neither the Company nor any of its Subsidiaries party to any Lease has assigned such Lease, sublet any part of the premises covered thereby or transferred, conveyed, mortgaged, deeded in trust, or encumbered any interest in the leasehold estate or any of its rights under such Lease. Except as set forth on Section 3.16(d) of the Company Disclosure Schedule and except for matters that would constitute Permitted Liens, none of the Leased Real Property is subject to any leases, subleases, licenses, occupancy agreements, options, rights, tenancies of any kind or other agreements or arrangements, other than the Leases, which grant to any Person (other than the Company and its Subsidiaries) the right to use or occupy all or any portion of the Leased Real Property whether as lessees, sublessees, occupants, licensees or otherwise.

 

(e)          Except as would not constitute a Company Material Adverse Effect, the Company and its Subsidiaries have valid title to, or valid and enforceable rights to use under existing franchises, easements or licenses of, or valid and enforceable leasehold interests in, all of their material tangible personal properties and assets necessary to carry on their businesses as currently conducted, free and clear of all Liens, except for Permitted Liens.

 

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Section 3.17.          Environmental Laws . Except as would not constitute a Company Material Adverse Effect, to the Knowledge of the Company, the Company and its Subsidiaries are not in violation of any Environmental Law, and as of the date hereof neither the Company nor any of its Subsidiaries has received any written notification alleging that it has any material liability or material obligation under any Environmental Law or in connection with any release or threatened release of Materials of Environmental Concern, except to the extent such matter has been fully resolved with the appropriate Governmental Entity.

 

Section 3.18.          Insurance Policies . Except as would not constitute a Company Material Adverse Effect, (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, and (b) neither the Company nor any of its Subsidiaries is in breach of or default under any such insurance policies, and neither the Company nor any of its Subsidiaries has taken any action or failed to take any action which, with or without notice, lapse of time or both, would constitute such a breach or default or permit termination or adverse modification of any such insurance policies. Except as would not constitute a Company Material Adverse Effect, as of the date hereof, the Company has not received any notice of termination, cancellation or non-renewal with respect to any such insurance policy nor, to the Knowledge of the Company, are any of the foregoing threatened in writing, and there is no claim pending under any such insurance policies as to which coverage has been denied or disputed by the underwriters of such policies.

 

Section 3.19.          Opinion of Financial Advisor . The Company Board has received the opinion of Allen & Company LLC to the effect that, as of the date of such opinion and based on and subject to the assumptions, qualifications and other matters set forth in such opinion, the Merger Consideration to be paid to holders of Shares (other than, to the extent applicable, Parent, Merger Sub, Permira Advisers LLC, Spectrum Equity and their respective affiliates) is fair, from a financial point of view, to such holders. A signed, correct and complete copy of such opinion will be made available to Parent solely for informational purposes promptly following receipt thereof by the Company.

 

Section 3.20.          Brokers; Fees . No broker, finder, investment banker, financial advisor or other similar Person, other than Allen & Company LLC, the fees and expenses of which will be paid by the Company, is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Company. The Company has furnished to Parent a true and complete copy of each of the engagement letters between the Company and Allen & Company LLC relating to the transactions contemplated by this Agreement, which agreement discloses all fees payable and other material obligations thereunder. The transaction advisory fees set forth in Section 3.20 of the Company Disclosure Schedule to be paid by the Company in connection with the Closing shall not exceed the amounts specified therein.

 

Section 3.21.          Takeover Statutes Not Applicable; No Rights Agreement . Assuming the accuracy of the representations and warranties contained in Section 4.8 , no “moratorium,” “business combination,” “control share acquisition” or similar provision of any state anti-takeover Law, including Section 203 of the DGCL, or any similar anti-takeover provision in the certificate of incorporation or bylaws of the Company, is applicable to the transactions contemplated by this Agreement, including the Merger. As of the date hereof, the Company is not party to any stockholder rights agreement, “poison pill” or similar anti-takeover agreement or plan.

 

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Section 3.22.          Related Party Transactions . As of the date hereof, neither the Company nor any of its Subsidiaries is a party to any agreement, commitment or transaction with or for the benefit of any executive officer or director of the Company that is required to be disclosed under Item 404 of Regulation S-K under the Securities Act, other than ordinary course of business employment agreements and similar employee arrangements otherwise set forth on the Company Disclosure Schedule.

 

Section 3.23.          Exclusivity of Representations . Except for the representations and warranties expressly set forth in this Article III (as qualified by the Company Disclosure Schedule and the Company SEC Documents to the extent provided herein), none of the Company, any of its Affiliates or any other Person on behalf of the Company makes any express or implied representation or warranty (and there is and has been no reliance by Parent and Merger Sub or any of their respective Affiliates or Representatives on any such representation or warranty) with respect to the Company, its Subsidiaries or its and their respective businesses or with respect to any other information provided, or made available, to Parent and Merger Sub or their respective Affiliates or Representatives in connection with the transactions contemplated hereby, including the accuracy or completeness thereof. Except for the representations and warranties expressly set forth in this Article III (as qualified by the Company Disclosure Schedule and the Company SEC Documents to the extent provided herein), 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, and for the avoidance of doubt, neither the Company nor any of its Affiliates makes any express or implied representation or warranty with respect to the Evaluation Material (as defined in the Mutual NDA) or any information, documents, projections, forecasts or other material made available to Parent, Merger Sub or their Affiliates or Representatives, including any information made available in the electronic data room maintained by the Company for purposes of the transactions contemplated by this Agreement, teasers, marketing materials, consulting reports or materials, confidential information memoranda, management presentations, functional “break-out” discussions, responses to questions submitted on behalf of Parent, Merger Sub or their respective Affiliates or Representatives or in any other form in connection with the transactions contemplated by this Agreement.

 

ARTICLE IV

 

Representations and Warranties of Parent and Merger Sub

 

Except as set forth in the disclosure letter delivered by Parent to the Company and its Representatives prior to entering into this Agreement (the “ Parent Disclosure Schedule ”) (it being acknowledged and agreed that disclosure of any item in any section or subsection of the Parent Disclosure Schedule, whether or not an explicit cross reference appears, shall be deemed disclosure with respect to any other section or subsection to which the relevance of such item is reasonably apparent on the face of such disclosure), Parent and Merger Sub jointly and severally hereby represent and warrant to the Company as follows:

 

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Section 4.1.           Organization . Parent and Merger Sub are corporations, in each case, duly organized, validly existing and in good standing (with respect to jurisdictions that recognize that concept) under the Laws of its respective jurisdiction of organization and each 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 currently conducted, except where the failure to be in good standing or to have such corporate or similar power and authority would not constitute a Parent Material Adverse Effect. Each of Parent and Merger Sub is duly qualified or licensed to do business and is in good standing (with respect to jurisdictions that recognize that concept) as a foreign corporation (or other applicable entity) in each jurisdiction where the ownership, leasing or operation of its properties or assets or conduct of its business requires such qualification or licensing, except in such jurisdictions where the failure to be so qualified or licensed or to be in good standing would not constitute a Parent Material Adverse Effect. For purposes of this Agreement, a “ Parent Material Adverse Effect ” means any fact, circumstance, change, event, occurrence or effect that, individually or in the aggregate, has, or would reasonably be expected to have, a material adverse effect of Parent’s or Merger Sub’s ability to timely consummate the transactions contemplated hereby, including the Merger. Parent has made available to the Company true, complete and correct copies of the organizational or governing documents of Parent and Merger Sub, in each case as amended and in effect as of the date of this Agreement.

 

Section 4.2.           Merger Sub .

 

(a)          The authorized capital stock of Merger Sub consists solely of 1,000 shares of common stock, par value $0.01 per share, all of which are validly issued and outstanding. All of the issued and outstanding capital stock of Merger Sub is, and at the Effective Time will be, owned by Parent or a wholly owned Subsidiary of Parent free and clear of all Liens.

 

(b)          Merger Sub has been formed solely for the purpose of the Merger and, prior to the Effective Time, will have engaged in no other business activities and will have owned no assets and incurred no liabilities or obligations other than in connection with the transactions contemplated hereby and activities incidental to its formation.

 

Section 4.3.           Authority .

 

(a)          Each of Parent and Merger Sub has the requisite power and authority to execute and deliver this Agreement and to perform its obligations hereunder and to consummate the Merger and the other transactions contemplated hereby. The execution and delivery of this Agreement by Parent and Merger Sub and the consummation by each of Parent and Merger Sub of the Merger and the other transactions contemplated hereby have been duly authorized by all necessary actions on the part of each of Parent and Merger Sub, subject to the adoption of this Agreement by Parent, as the sole stockholder of Merger Sub (which such adoption shall occur immediately following the execution of this Agreement) and the filing of the Certificate of Merger with the Secretary of State of the State of Delaware, and no other actions on the part of Parent or Merger Sub are necessary to authorize the consummation of the Merger and the other transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by each of Parent and Merger Sub and (assuming the due and valid authorization, execution and delivery of this Agreement by the Company) constitutes a valid and binding obligation of each of Parent and Merger Sub, enforceable against each of them in accordance with its terms, except as limited by the Enforceability Exceptions.

 

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(b)          The Parent Board has approved and declared the advisability of this Agreement and the transactions contemplated hereby, including the Merger, and the board of directors of Merger Sub has (i) determined that the Merger is fair to, and in the best interests of, Merger Sub and its sole stockholder, (ii) approved and declared the advisability of this Agreement and the transactions contemplated hereby, including the Merger, and (iii) resolved to recommend that the sole stockholder of Merger Sub adopt this Agreement.

 

(c)          No vote of the stockholders of Parent or the holders of any other securities of Parent (equity or otherwise) is required by Law or the organizational documents of Parent in order for Parent to consummate the transactions contemplated by this Agreement, including the Merger.

 

Section 4.4.           Consents and Approvals; No Violations; No Source of Conflicting Interests .

 

(a)          Except as may be required under, and other applicable requirements of, the Exchange Act, the HSR Act, the DGCL, the rules and regulations of NYSE, state securities laws and any other applicable Regulatory Laws, neither the execution, delivery or performance of this Agreement by Parent and Merger Sub nor the consummation by Parent and Merger Sub of the transactions contemplated hereby will require Parent or Merger Sub to make any notice to, or filing with, or obtain any permit, authorization, consent or approval of, any Governmental Entity of competent jurisdiction, with such exceptions as would not constitute a Parent Material Adverse Effect.

 

(b)          Neither the execution, delivery or performance of this Agreement by the Parent or Merger Sub nor the consummation by Parent or Merger Sub of the transactions contemplated hereby will (i) contravene, conflict with, or result in any violation or breach of any provision of the certificate of incorporation or bylaws of Parent or Merger Sub or, (ii) assuming compliance with the matters referred to in Section 4.4(a) , contravene, conflict with or result in a violation or breach of any provision of any applicable Law, require any consent or other action by any Person under, constitute a default, or an event that, with or without notice, lapse of time or both, would constitute a default under, or cause or permit the termination, cancellation or acceleration of any right or obligation under, any provision of any Contract to which Parent or Merger Sub is a party, with such exceptions as would not constitute a Parent Material Adverse Effect.

 

(c)          Neither Parent nor Merger Sub, nor any of their Affiliates, owns any five percent (5%) or greater equity interest in any Person set forth on Section 5.17(a) of the Parent Disclosure Schedule.

 

Section 4.5.           Information Supplied . None of the information supplied or to be supplied by or on behalf of Parent or Merger Sub for inclusion or incorporation by reference in the Proxy Statement will, at the time the Proxy Statement is first mailed to the Company’s stockholders or at the time of the Stockholders Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. Notwithstanding the foregoing, neither Parent nor Merger Sub makes any representation or warranty with respect to statements made or incorporated by reference in the Proxy Statement based on information supplied by or on behalf of the Company or its Subsidiaries.

 

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Section 4.6.           Litigation . As of the date of this Agreement, there is no Action pending or, to the Knowledge of Parent, threatened in writing against Parent or any of its Subsidiaries (including Merger Sub), or any of their properties, rights or assets, for which an adverse result would constitute a Parent Material Adverse Effect. As of the date of this Agreement, there is no Order imposed upon or, to the Knowledge of Parent, threatened in writing against Parent or any of its Subsidiaries (including Merger Sub), or any of their properties, rights or assets that constitutes a Parent Material Adverse Effect.

 

Section 4.7.           Financing .

 

(a)          Parent and Merger Sub are party to and have accepted an executed commitment letter, dated as of the date hereof, (as the same may be amended, modified or replaced in accordance with Section 5.12(b) hereof, and (together with all exhibits, annexes and schedules thereto, the “ Debt Commitment Letter ”)) from JPMorgan Chase Bank, N.A., UBS Securities LLC, UBS AG, Stamford Branch, Jefferies Finance LLC and Royal Bank of Canada (as such parties may be supplemented or amended in accordance with Section 5.12(b) hereof, collectively, the “ Lenders ”), relating to the commitment of the Lenders to provide, subject only to the terms and conditions thereof, the full amount of the debt financing stated therein (the “ Debt Financing ”).

 

(b)          Parent and Merger Sub are party to and have accepted executed commitment letters, dated as of the date hereof (together with all exhibits and schedules thereto, the “ Equity Commitment Letters ” and, together with the Debt Commitment Letter, the “ Commitment Letters ”), from the Permira Funds and the Spectrum Funds (the “ Investors ”), relating to the commitment of the Investors, subject only to the terms and conditions thereof, to invest in Parent the full amount of the cash equity financing stated therein (the “ Equity Financing ” and, together with the Debt Financing, the “ Financing ”). Parent and Merger Sub have delivered to the Company true, complete and correct copies of the executed Commitment Letters and any fee letters related thereto (in the case of any such fee letters only, redacted solely for provisions related to fees and other economic terms that are customarily redacted in connection with transactions of this type, none of which could adversely affect the conditionality, enforceability, availability, termination or aggregate principal amount of the Financing).

 

(c)          Except as expressly set forth in the Commitment Letters, there are no conditions precedent to the obligations of the Lenders and the Investors to provide the Financing or any contingencies that would permit the Lenders or the Investors to reduce the total amount of Financing, including any condition or contingency relating to the availability of the Financing pursuant to any “flex” provision. As of the date hereof, assuming the satisfaction in full of the conditions set forth in Sections 6.1 and 6.2 , neither Parent nor Merger Sub has any reason to believe that it will be unable to satisfy on a timely basis all of the terms and conditions to be satisfied by it in the Commitment Letters on or prior to the Closing Date, nor does Parent or Merger Sub have Knowledge that any Lender or any Investor will not perform its obligations thereunder. Other than any fee letter related to the Debt Commitment Letter that has been delivered to the Company pursuant to Section 4.7(a) , there are no side letters, understandings or other agreements, contracts or arrangements of any kind relating to the Commitment Letters that could affect the availability of the Financing.

 

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(d)          Assuming the Financing is funded in accordance with the Commitment Letters, and giving effect to any “flex” provisions in or related to the Debt Commitment Letter (including with respect to fees and original issue discount), the Financing will provide Parent with cash proceeds on the Closing Date sufficient for the satisfaction of all of Parent’s and Merger Sub’s obligations under this Agreement and under the Commitment Letters, including the payment of the Merger Consideration, any payments in respect of equity compensation obligations to be made in connection with the Merger, payment of any fees and expenses of or payable by Parent, Merger Sub or the Surviving Corporation, and any repayment or refinancing of any outstanding indebtedness of Parent, the Company and their respective Subsidiaries contemplated by, or required in connection with the transactions described in, this Agreement or the Commitment Letters (such amounts, collectively, the “ Merger Amounts ”).

 

(e)          As of the date hereof, the Commitment Letters constitute the legal, valid, binding and enforceable obligations of Parent and Merger Sub and, to the Knowledge of the Parent, all the other parties thereto, and is in full force and effect. Assuming the accuracy of the representations and warranties set forth in Article III such that the condition set forth in Section 6.2(a) would be satisfied, as of the date hereof, no event has occurred which (with or without notice, lapse of time or both) would constitute a breach or failure to satisfy a condition by Parent or Merger Sub under the terms and conditions of the Commitment Letters, and neither Parent nor Merger Sub has any reason to believe that any of the conditions to the Financing will not be satisfied by Parent or Merger Sub, as applicable, on a timely basis or that the Financing will not be available to Parent on the Closing Date. Parent has paid in full (or caused to be paid) any and all commitment fees or other fees required to be paid pursuant to the terms of the Commitment Letters on or before the date of this Agreement, and will pay (or cause to be paid) all amounts due on or before the Closing Date. As of the date hereof, the Commitment Letters have not been modified, amended or altered and the commitments under the Commitment Letters have not been withdrawn or rescinded in any respect, and, to the Knowledge of Parent, no withdrawal or rescission thereof is contemplated.

 

(f)          In no event shall the receipt or availability of any funds or financing (including, for the avoidance of doubt, the Financing) by Parent, Merger Sub or any of their respective Affiliates or any other financing or other transactions be a condition to any of Parent’s or Merger Sub’s obligations under this Agreement.

 

Section 4.8.           Share Ownership . As of the date hereof and at all times prior to the time that is immediately prior to the Effective Time, neither Parent nor any of its Affiliates (including Merger Sub) is or has been at any time during the period commencing three years prior to the date hereof through the date hereof, an “interested shareholder” of the Company, as such term is defined in Section 203 of the DGCL, and neither Parent nor any of its Subsidiaries (including Merger Sub) is or will be the beneficial owner of any Shares.

 

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Section 4.9.           Fee Funding Arrangement . Concurrently with the execution of this Agreement, the Permira Funds and the Spectrum Arrangement Funds have each delivered to the Company a true, complete and correct copy of a duly executed Fee Funding Arrangement. Each Fee Funding Arrangement is in full force and effect, has not been amended, modified, withdrawn or rescinded in any respect, and is the legal, valid, binding and enforceable obligation of the Permira Funds and the Spectrum Arrangement Funds, as applicable. No event has occurred or circumstance exists which, with or without notice, lapse of time or both, could constitute a default or breach on the part of the Permira Funds or the Spectrum Arrangement Funds under the applicable Fee Funding Arrangement.

 

Section 4.10.          Brokers . No broker, finder, investment banker, financial advisor or other similar Person, other than J.P. Morgan Securities LLC, the fees and expenses of which will be paid by Parent, is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Parent or Merger Sub or any of their respective Affiliates.

 

Section 4.11.          Solvency .

 

(a)          Neither Parent nor Merger Sub is entering into the transactions contemplated by this Agreement with the actual intent to hinder, delay or defraud either present or future creditors of the Company or any of its Subsidiaries. As of the Effective Time, assuming (i) the satisfaction or waiver of the conditions set forth in Sections 6.1 and 6.2 , and (ii) (A) the representations and warranties of the Company contained in this Agreement (other than those qualified by materiality or “Company Material Adverse Effect”) are true and correct in all material respects and (B) the representations and warranties of the Company contained in this Agreement that are qualified by materiality or “Company Material Adverse Effect” are true and correct in all respects, after giving effect to all of the transactions contemplated by this Agreement, including the Financing and the payment of the aggregate Merger Consideration (including the amounts payable pursuant to Sections 2.7 and 2.8 ) and any other repayment or refinancing of debt that may be required in connection with the consummation of the Merger and the other transactions contemplated by this Agreement, and payment of all related fees and expenses, the Surviving Corporation and its Subsidiaries, taken as a whole, will be Solvent.

 

(b)          For purposes of this Section 4.11 : (i) the term “ Solvent ” means, with respect to any Person as of a particular date, that on such date, (A) the sum of the assets, at a fair valuation, of such Person exceeds its debts, (B) such Person has not incurred debts beyond its ability to pay such debts as such debts mature and (C) such Person does not have unreasonably small capital with which to conduct its business; (ii) “debt” means any liability whether or not reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured; and (iii) the amount of any unliquidated or contingent liabilities at any time shall be the maximum amount which, in light of all the facts and circumstances existing at such time, could reasonably be expected to become an actual or matured liability.

 

(c)          Prior to the date of this Agreement, the Permira Funds’ previously announced investment of $350 million in Parent was consummated and the Permira Funds are, and will continue to be, the majority shareholder of Parent, owning a majority of the outstanding and issuable equity interests of Parent and with control and authority to direct the actions of Parent, subject to applicable law.

 

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Section 4.12.          Exclusivity of Representations . Except for the representations and warranties expressly set forth in this Article IV , neither Parent nor Merger Sub nor any other Person makes any other express or implied representation or warranty on behalf of Parent or Merger Sub or any of their respective Affiliates.

 

Section 4.13.          No Other Company Representations or Warranties . Each of Parent and Merger Sub has conducted its own independent review and analysis of the business and assets of the Company and its Subsidiaries, and each of them acknowledges that it and its Representatives have received access to such books and records, facilities, equipment, Contracts and other assets of the Company and its Subsidiaries that it and its Representatives have requested to review and that it and its Representatives have had the opportunity to meet with the management of the Company and to discuss the business and assets of the Company and its Subsidiaries. Each of Parent and Merger Sub acknowledges that neither the Company nor any Person on behalf of the Company has made, and neither Parent nor Merger Sub or any other member of the Parent Group has relied upon, any representation or warranty with respect to the Company or any of its Subsidiaries or with respect to any other information provided to Parent or Merger Sub or any of their Affiliates or other Representatives in connection with the transactions contemplated by this Agreement including the accuracy or completeness or currency thereof other than the representations and warranties contained in Article III (as qualified by the Company Disclosure Schedule and the Company SEC Documents to the extent provided herein). Without limiting the foregoing, each of Parent and Merger Sub acknowledges and agrees that, except for any remedies available under this Agreement with respect to the representations and warranties expressly set forth in Article III (as qualified by the Company Disclosure Schedule and the Company SEC Documents to the extent provided herein) neither the Company nor any other Person will have or be subject to any liability or other obligation to Parent, Merger Sub or their Representatives or Affiliates or any other Person resulting from Parent’s, Merger Sub’s or their Representatives’ or Affiliates’ use of any information, documents, projections, forecasts or other material made available to Parent, Merger Sub or their Representatives or Affiliates, including any information made available in the electronic data room maintained by or on behalf of the Company or its Representatives for purposes of the transactions contemplated by this Agreement, teasers, marketing materials, consulting reports or materials, confidential information memoranda, management presentations, functional “break-out” discussions, responses to questions submitted on behalf of Parent or Merger Sub or their respective Representatives or in any other form in connection with the transactions contemplated by this Agreement.

 

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ARTICLE V

 

Covenants

 

Section 5.1.           Conduct of Business by the Company Pending the Merger .

 

(a)          From and after the date hereof and prior to the Effective Time or the earlier termination of this Agreement, except (i) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (ii) as required by applicable Law, (iii) as expressly contemplated by this Agreement or (iv) as otherwise set forth in Section 5.1 of the Company Disclosure Schedule, the Company shall, and shall cause its Subsidiaries to, carry on its business in all material respects in the ordinary course of business consistent with past practice and use commercially reasonable efforts to preserve its business organization intact and maintain relations with key customers, suppliers and other third parties with whom the Company and its Subsidiaries have significant business relationships; provided , that no action by the Company or its Subsidiaries that is restricted by Section 5.1(b) shall be deemed a breach of this Section 5.1(a) unless such action would constitute a breach of such provision of Section 5.1(b) .

 

(b)          Without limiting the generality of the foregoing, from and after the date hereof and prior to the Effective Time or the earlier termination of this Agreement, except (i) with the prior written consent of Parent (which consent may be withheld or given in Parent’s sole discretion except in the case of subsections (v), (vi), (vii), (viii), (x), (xii), (xiii), (xiv), (xv), (xvi), (xvii), (xviii), (xix) and (xx) with respect to which Parent shall not unreasonably withhold, delay or condition its prior written consent), (ii) as required by applicable Law, (iii) as expressly contemplated by this Agreement or (iv) as otherwise set forth in Section 5.1 of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to:

 

(i)          (A) declare, set aside or pay any dividends on, or make any other distributions in respect of, any of its capital stock or equity interests, except for dividends or distributions by a Subsidiary of the Company to the Company or to another Subsidiary of the Company or (B) enter into any voting agreements, voting trusts, or stockholders agreements with respect to the voting of, or providing for registration rights with respect to, the capital stock or other equity interests of the Company or any of its Subsidiaries (other than proxies with respect to voting at meetings of the Company’s stockholders);

 

(ii)         other than in the case of Subsidiaries, split, combine, subdivide, adjust, amend the terms of or reclassify any of its capital stock or equity interests;

 

(iii)        issue, deliver, sell, pledge, grant, transfer or otherwise encumber any shares of its capital stock or other equity securities or any option, warrant or other right to acquire or receive any shares of its capital stock or other equity securities, or redeem, purchase or otherwise acquire any shares of its capital stock or other equity securities, other than (A) in connection with the exercise, vesting or settlement, as applicable, of Company Equity Awards outstanding as of the date hereof, including with respect to the satisfaction of Tax withholding and, with respect to Company Stock Options, the payment of the exercise price and (B) the grant of any Liens to secure obligations of the Company or any of its Subsidiaries in respect of any indebtedness permitted under clause (viii) below;

 

(iv)        amend or otherwise change the certificate of incorporation or bylaws of the Company or amend or otherwise change in any material respect other similar organizational documents of any of its Subsidiaries;

 

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(v)         other than in the ordinary course of business consistent with past practice or pursuant to transactions that would be permissible under clause (vii) below or in transactions among wholly owned Subsidiaries of the Company (by merger, consolidation, purchase of stock or assets or otherwise), (A) acquire any entity, business or assets that constitute a business or division of any Person or (B) make any investments in or loans or capital contributions to any other Person (other than the Company or any of its Subsidiaries), for an amount in excess of $5 million in the aggregate with respect to both (A) and (B) combined;

 

(vi)        make or commit to make any capital expenditures that exceed $1 million in the aggregate, other than capital expenditures (A) that do not exceed any budgeted capital expenditure amount set forth in Section 5.1(b)(vi)(A) of the Company Disclosure Schedule (a “ Budgeted Amount ”) (provided that in the event the Effective Time has not occurred prior to January 1, 2019, the Company may establish and/or update any such Budgeted Amount for any subsequent period, including through the fiscal year ending December 31, 2019, and make or commit to make capital expenditures in accordance with such budget so long as such amounts are no greater than 125% in the aggregate of the Budgeted Amount) or (B) in the ordinary course of business;

 

(vii)       other than in the ordinary course of business consistent with past practice or in transactions among wholly owned Subsidiaries of the Company, sell, lease, license, encumber (other than Liens securing indebtedness permitted under clause (viii) below or Permitted Liens), allow the expiration or lapse of (with respect to Registered IP) or otherwise dispose of (by merger, consolidation, sale of stock or assets or otherwise) any entity, business, property or assets for a purchase price or (if not purchase price is received) with a book or fair market value in excess of $1 million individually or $3 million in the aggregate;

 

(viii)      create, incur, assume, or otherwise be liable with respect to any material indebtedness for borrowed money, other than (A) indebtedness solely among the Company and its Subsidiaries or among its Subsidiaries, (B) pursuant to Contracts in effect on the date of this Agreement, (C) to finance acquisitions or investments permitted under clause (v) above or (D) under short-term debt or overdraft facilities in an amount not to exceed $1 million in the aggregate, in each case as refinanced, replaced, amended or renewed on substantially similar terms from time to time; provided, however, that any indebtedness incurred in accordance with this Section 5.1(b)(viii) shall be repayable at Closing without penalty;

 

(ix)         issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person (other than the Company or any of its Subsidiaries), enter into any “keep well” or other agreement to maintain any financial statement condition of another Person (other than the Company or any of its Subsidiaries) or enter into any arrangement having the economic effect of any of the foregoing;

 

(x)          other than in the ordinary course of business, enter into, renew (other than any automatic renewal) or extend, materially amend, or terminate, or materially waive any material right under, any Material Contract, or enter into or materially amend any Contract that, if existing on the date hereof, would be a Material Contract, other than entering into any Contract solely to the extent effecting a capital expenditure acquisition, disposition or other transaction permitted by this Section 5.1(b) ;

 

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(xi)         merge, combine or consolidate the Company or any of its Subsidiaries with and into any other Person, other than, in the case of any Subsidiary of the Company, to effect any acquisition permitted by clause (v) or any disposition permitted by clause (vii) and other than transactions among Subsidiaries of the Company;

 

(xii)        adopt or enter into a plan of complete or partial liquidation or dissolution, restructuring, recapitalization or reorganization (other than the merger or the dissolution of a dormant Subsidiary);

 

(xiii)       other than Transaction Litigation, which is addressed in Section 5.14 , waive, settle or compromise or agree to settle any pending or threatened Action against the Company or any of its Subsidiaries (excluding any audit, claim or other proceeding or Action in respect of Taxes, which shall be governed exclusively by clause (xvii) ) , other than waivers, settlements or agreements (A) for an amount not in excess of $2 million in the aggregate (excluding amounts to be paid under existing insurance policies or renewals thereof) and (B) that do not impose any material restrictions on the operations or businesses of the Company and its Subsidiaries, taken as a whole, or any equitable relief on, or the admission of wrongdoing by, the Company and any of its Subsidiaries;

 

(xiv)      except as required by any Company Benefit Plan, (A) increase the compensation of any director, employee or independent contractor of the Company or any of its Subsidiaries, except for increases in base salary or fees for employees and independent contractors in the ordinary course of business in accordance with past practice, with such increases to in no event exceed (x) 5% in the aggregate with respect to each functional unit or division, (y) for any individual employee or independent contractor, 15% of such individual’s (other than an Executive Officer (as defined in Section 2.8 of the Company Disclosure Schedule)) then current base salary or fees, and (z) 3% of any Executive Officer’s annual base salary, (B) adopt any new employee benefit plan or arrangement or amend, modify or terminate or alter the prior interpretation of any existing Company Benefit Plan (including, without limitation, adopting, amending or modifying any bonus, incentive or commission plans relating to performance or sales periods that begin on or after the date hereof), in each case, other than (1) as would not materially increase the cost to the Company or its Subsidiaries (except with respect to bonus, incentive or commission plans relating to performance or sales period that begin on or after the date hereof) or (2) agreements that are entered into in the ordinary course of business with newly hired employees that do not provide for severance benefits (it being understood that such newly hired employees shall be eligible to participate in the Company Severance Policy), (C) take any action to accelerate the vesting or payment, or the funding of any payment or benefit under any Company Benefit Plan, (D) grant any additional rights to or make any payments with respect to cash-based or equity-based long-term incentive, change in control, severance or termination pay to any Employee (in each case, except for payments required under existing Company Benefit Plans in the ordinary course of business or as otherwise required by law) or (E) enter into any collective bargaining agreements or any other similar agreement with any labor union;

 

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(xv)       hire any officers or Employees with total target annual cash compensation (which includes base salary, 25% of annual bonus and the value of employee benefits) in excess of $250,000, or terminate the services of any officers or Employees with total target annual cash compensation (which includes base salary, 25% of annual bonus and the value of employee benefits) in excess of $250,000 or take any action that would reasonably be expected to result in such officer or other Employee having the right to terminate for “good reason” or any term of similar meaning pursuant to any agreement or arrangement with the Company or any of its Subsidiaries;

 

(xvi)      make any change in financial accounting methods, principles, policies or practices of the Company or any of its Subsidiaries, except insofar as may be required by GAAP (or any interpretation or enforcement thereof), the Company’s outside auditors, or applicable Law;

 

(xvii)     (A) change or revoke any material election with respect to Taxes, (B) change any annual Tax accounting period or change (or, except in the ordinary course of business, adopt) any material method of Tax accounting, (C) materially amend any material Tax Return, (D) surrender any right to claim a material Tax refund, or (E) agree or settle any material claim or assessment in respect of Taxes;

 

(xviii)    enter into any new line of business outside of the Company’s and its Subsidiaries’ existing businesses on the date of this Agreement;

 

(xix)       enter into or amend in any manner any Contract with any executive officer or director of the Company covered under Item 404 of Regulation S-K under the Securities Act or (B) make any payment to any Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act (other than any payments pursuant to Contracts or Company Benefit Plans made available to Parent or as expressly permitted pursuant to Section 5.1(b)(xiv) );

 

(xx)        except as otherwise provided in Section 5.10 , unless replaced with a policy with comparable coverage, terminate or fail to exercise renewal rights with respect to any material insurance policy;

 

(xxi)       agree to take or make any commitment to take, or adopt any resolutions of the Company Board authorizing, any action prohibited by this Section 5.1.

 

(c)          Notwithstanding anything to the contrary set forth in this Agreement (including Section 8.6 ), if the Company desires to take an action that would be prohibited pursuant to Section 5.1(a) or Section 5.1(b) without the written consent of Parent, prior to taking such action the Company may request such written consent by sending an e-mail to all of the individuals listed on Section 5.1(c) of the Company Disclosure Schedule, and Parent shall, and shall cause such individual to, respond promptly (which response may, for the avoidance of doubt, be a reasonable request for clarification or additional information) by e-mail (or other writing) to such request. If Parent fails to cause such individual to respond to such request in writing indicating Parent’s consent or refusal to consent by the third (3rd) Business Day after delivery of such request (or, if later, provision of such reasonably requested clarification or additional information) pursuant to this Section 5.1(c) , then Parent shall be deemed for all purposes hereunder to have consented in writing to the taking of (and the Company shall be permitted to take) such action.

 

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(d)          Nothing contained in this Agreement shall give Parent or Merger Sub, directly or indirectly, the right to control or direct the business or operations of the Company or any of its Subsidiaries prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective operations.

 

Section 5.2.           Acquisition Proposals .

 

(a)          Notwithstanding anything to the contrary contained in this Agreement, during the period beginning on the date of this Agreement and continuing until 11:59 p.m. (New York time) on the November 8, 2018 (the “ No-Shop Period Start Date ”), the Company, its Subsidiaries and its and their respective directors, officers, employees, other Affiliates, investment bankers, attorneys, accountants and other advisors or representatives (collectively, “ Representatives ”) shall have the right to (i) initiate, solicit and encourage any inquiries with respect to or the making of any proposal or offer that constitutes or would reasonably be expected to lead to an Acquisition Proposal, (ii) engage in and otherwise participate in any discussions or negotiations regarding an Acquisition Proposal or that would reasonably be expected to lead to an Acquisition Proposal, (iii) cooperate with, assist, participate in or facilitate any such inquiries, proposals, offers, discussions or negotiations or any effort or attempt to make any Acquisition Proposal, including by granting a waiver, amendment or release under any pre-existing confidentiality, “standstill” or similar provision and (iv) provide non-public information to any Person relating to the Company or any of its Subsidiaries with respect to an Acquisition Proposal pursuant to an Acceptable Confidentiality Agreement; provided, that the Company shall promptly (and in any event within forty-eight (48) hours) make available to Parent and Merger Sub any material nonpublic information concerning the Company or its Subsidiaries that is provided to any such Person or group of Persons which was not previously made available to Parent or Merger Sub.

 

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(b)          Except as permitted by this Section 5.2 , including the last sentence of this Section 5.2(b) , the Company shall, and the Company shall use its reasonable best efforts to cause its Representatives, its Subsidiaries and each of their respective Representatives to, from and after the No-Shop Period Start Date: (i) not, directly or indirectly, (A) initiate, solicit or knowingly encourage or knowingly facilitate any inquiries, expressions of interest, proposals or offers that constitute or would reasonably be expected to lead to an Acquisition Proposal, (B) engage in or otherwise participate in any discussions or negotiations regarding an Acquisition Proposal or that would reasonably be expected to lead to an Acquisition Proposal (other than, in response to an unsolicited inquiry, to ascertain facts from the Person making such Acquisition Proposal for the sole purpose of informing itself about such Acquisition Proposal and the Person that made it and to refer the inquiring Person to this Section 5.2 ), (C) provide (including through access to any data room) any non-public information to any Person relating to the Company or any of its Subsidiaries with respect to an Acquisition Proposal or that the Company reasonably expects would be used for the purposes of formulating an Acquisition Proposal, (D) enter into any agreement, letter of intent, memorandum of understanding, agreement in principle or Contract with respect to any Acquisition Proposal (other than an Acceptable Confidentiality Agreement entered into in accordance with the terms of this Agreement) (each, an “ Alternative Acquisition Agreement ”), (E) submit any Acquisition Proposal or any matter related thereto to the vote of the stockholders of the Company, or (F) resolve or agree to do any of the foregoing; and (ii) immediately cease and cause to be terminated all discussions, negotiations, solicitation or encouragement with any Persons that may be ongoing with respect to an Acquisition Proposal as of the date hereof. Promptly (and in any event within forty-eight (48) hours) after the No-Shop Period Start Date, except as it may relate to any Excluded Party, the Company shall terminate or cause to be terminated access to any data room or other access to the data of the Company, in each case relating to or in connection with, any potential Acquisition Proposal and shall instruct each Person that has previously executed a confidentiality agreement in connection with such Person’s consideration of an Acquisition Proposal to return to the Company or destroy any non-public information previously furnished to such Person or to any Representatives of such Person by or on behalf of the Company. For the avoidance of doubt, notwithstanding the commencement of the No-Shop Period Start Date, the Company may continue to engage in the activities described in Section 5.2(a) with respect to any Excluded Party and its Representatives, including with respect to any amended or modified Acquisition Proposal submitted by any Excluded Party following the No-Shop Period Start Date; provided , that, from and after the commencement of the No-Shop Period Start Date, the Company complies with the provisions of Sections 5.2(c) , (d) and (g) with respect to such activities.

 

(c)          Notwithstanding anything to the contrary contained in Section 5.2(b) or elsewhere in this Agreement, at any time following the No-Shop Period Start Date and prior to the time the Stockholder Approval is obtained, if (i) the Company receives a bona fide written Acquisition Proposal from a third party, (ii) such Acquisition Proposal was not solicited, initiated, encouraged, facilitated or otherwise obtained in breach, in any material respect, of the provisions of this Section 5.2 and (iii) the Company Board determines in good faith after consultation with the Company’s financial advisor and outside legal counsel that such Acquisition Proposal constitutes or could reasonably be expected to lead to a Superior Proposal, then the Company and its Representatives may (A) provide information to such Person or group of Persons (including their respective Representatives and prospective equity and debt financing sources) if the Company receives from such Person or group of Persons (or has received from such Person or group of Persons) an Acceptable Confidentiality Agreement, and (B) engage or participate in any discussions or negotiations with such Person or group of Persons and its Representatives; provided , that (x) the Company shall promptly (and in any event within forty-eight (48) hours) make available to Parent and Merger Sub any material non-public information concerning the Company or its Subsidiaries that is provided to any such Person or group of Persons which was not previously made available to Parent or Merger Sub and (y) the Company shall give Parent written notice of such determination promptly (and in any event within forty-eight (48) hours) after the Company Board makes such determination. It is understood and agreed that any contacts, disclosures, discussions or negotiations permitted under this Section 5.2(c) , including any public announcement that the Company or the Company Board has made any determination required under this Section 5.2(c) to take or engage in any such actions, shall not constitute a Change of Recommendation or otherwise constitute a basis for Parent to terminate this Agreement pursuant to Section 7.4 .

 

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(d)          Except as set forth in Section 5.2(e) or in Section 5.2(f) , the Company Board shall not (i) publicly withhold, withdraw, amend, qualify or modify (or publicly propose to withhold, withdraw, amend, qualify or modify), in each case in a manner adverse to Parent, the Company Recommendation or any other approval, recommendation or declaration of advisability by the Company Board or any such committee of this Agreement, the Merger or any of the other transactions contemplated hereby, (ii) submit any Acquisition Proposal or any matter related thereto to the vote of the stockholders of the Company, (iii) fail to include the Company Recommendation in the Proxy Statement, (iv) publicly adopt, approve or recommend, or publicly propose to adopt, approve or recommend, any Acquisition Proposal, (v) following the initial public announcement of any Acquisition Proposal (other than by the commencement of a tender offer or exchange offer), fail to issue a public press release within ten (10) Business Days of such public announcement that the Company Board recommends rejection of such Acquisition Proposal and reaffirms the Company Recommendation, (vi) following the initial public announcement of any Acquisition Proposal that is structured as a tender offer or exchange offer by a third party for equity securities of the Company, fail to recommend against acceptance by the Company’s stockholders of such tender offer or exchange offer (including for these purposes, by taking any position contemplated by Rule 14e-2 under the Exchange Act other than recommending rejection of such tender offer or exchange offer) within ten (10) Business Days of commencement of such tender offer or exchange offer or (vii) publicly announce its intention, authorize or resolve to take, or that it will fail to take, as applicable, any such foregoing actions (any of the foregoing, a “ Change of Recommendation ”).

 

(e)          Notwithstanding the foregoing or anything to the contrary set forth in this Agreement, (x) if the Company Board determines that an Intervening Event has occurred and that the failure to effect a Change of Recommendation in response to such Intervening Event would be inconsistent with its fiduciary duties under applicable Law or (y) if the Company has received a bona fide written Acquisition Proposal from a third party that was not solicited, initiated, encouraged, facilitated or otherwise obtained in breach, in any material respect, of the provisions of this Agreement and that the Company Board determines in good faith, after consultation with the Company’s outside legal counsel and financial advisors, constitutes a Superior Proposal (after giving effect to all of the adjustments to the terms and conditions of this Agreement that have been proposed to the Company by Parent in writing during the Notice Period provided pursuant to this Section 5.2(e) to which Parent has irrevocably committed), then the Company Board may effect a Change of Recommendation and/or, in response to a Superior Proposal, terminate this Agreement pursuant to Section 7.3(a) in order to enter into an Alternative Acquisition Agreement providing for such Superior Proposal; provided , that, in the case of either clause (x) or (y) :

 

(i)          the Company shall have provided prior written notice to Parent, at least three (3) Business Days in advance (the “ Notice Period ”), that it intends to effect a Change of Recommendation and/or terminate this Agreement pursuant to Section 7.3(a) , which notice shall specify the basis for the Change of Recommendation and/or termination and, in the case of a Superior Proposal, the identity of the Person or group of Persons making such Superior Proposal and the material terms thereof and a copy of any proposed Alternative Acquisition Agreement and any related financing commitments (which may be redacted for provisions related to fees and other economic “flex” terms that are customarily redacted in connection with transactions of such type); and

 

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(ii)         the Company’s Representatives shall have been available to negotiate with Parent and Merger Sub in good faith (to the extent Parent and Merger Sub desire to negotiate) during the Notice Period to make such adjustments to the terms and conditions of this Agreement as would obviate the need for the Company to effect a Change of Recommendation and/or terminate this Agreement pursuant to Section 7.3(a) .

 

provided , further , that the actions of the Company or the Company Board in making any of the foregoing determinations and the Company’s authorizing and providing of any such notice pursuant to this section shall not in and of itself constitute a Change of Recommendation for any purpose hereunder or the termination of this Agreement, so long as the Company Board does not determine finally to make a Change of Recommendation or terminate the Agreement.

 

(f)          Nothing contained in this Section 5.2 or elsewhere in this Agreement shall be deemed to prohibit the Company or the Company Board or any committee thereof from (i) making any disclosure to the Company’s stockholders if, in the good faith judgment of the Company Board, after consultation with its outside legal counsel, failure to make such disclosure could reasonably be likely to be inconsistent with its fiduciary duties under applicable Law, (ii) complying with its disclosure obligations under applicable Law or NYSE, including taking and disclosing to its stockholders a position contemplated by Rule 14d-9 or Rule 14e-2(a) or Item 1012(a) of Regulation M-A under the Exchange Act (or any similar communication to stockholders), or (iii) making any “stop-look-and-listen” communication to stockholders of the Company pursuant to Rule 14d-9(f) under the Exchange Act (or any similar communications to stockholders of the Company). The Company shall in no event be deemed to violate this Section 5.2 as a result of responding to any unsolicited proposal or inquiry solely by advising the Person making such proposal or inquiry of the terms of this Section 5.2 .

 

(g)          The Company shall:

 

(i)          promptly (and, in any event, within forty-eight (48) hours), notify Parent, in writing, if, from and after the date hereof until the No-Shop Period Start Date, any offer constituting an Acquisition Proposal is received by the Company or any of its Representatives, indicating (except to the extent prohibited by applicable Law or Contract) the identity of the Person or group of Persons making such Acquisition Proposal and a description of the material terms and conditions of any such Acquisition Proposal, including copies of any proposed Alternative Acquisition Agreements constituting such an Acquisition Proposal and any related financing commitments (which may be redacted for provisions related to fees and other economic “flex” terms that are customarily redacted in connection with transactions of such type), and thereafter shall keep Parent reasonably informed of the status and terms of any such Acquisition Proposal (including any material changes, modifications or amendments thereto); and

 

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(ii)         promptly (and, in any event, within forty-eight (48) hours), notify Parent, in writing, if, from and after the No-Shop Period Start Date, any Acquisition Proposal, or any inquiry, expression of interest, proposal, offer or request for information that would reasonably be expected to result in an Acquisition Proposal, is received by the Company or any of its Representatives, indicating (except to the extent prohibited by applicable Law or Contract) the identity of the Person or group of Persons making such Acquisition Proposal and a description of the material terms and conditions of any such inquiry, expression of interest, proposal, offer or request for information or Acquisition Proposal, including copies of any proposed Alternative Acquisition Agreements and any related financing commitments (which may be redacted for provisions related to fees and other economic “flex” terms that are customarily redacted in connection with transactions of such type), and thereafter shall keep Parent reasonably informed of the status and terms of any such Acquisition Proposal (including any material changes, modifications or amendments thereto).

 

(h)          Notwithstanding anything to the contrary contained in this Agreement, from and after the No-Shop Period Start Date, the Company shall be permitted to terminate, waive, amend or release any provision of any confidentiality, “standstill” or similar obligation of any Person if the Company Board determines in good faith after consultation with its outside legal counsel that failure to take such action could reasonably be expected to be inconsistent with its fiduciary obligations under applicable Law.

 

Section 5.3.           Proxy Statement .

 

(a)          As promptly as reasonably practicable after the date hereof, the Company shall prepare and file with the SEC a preliminary proxy statement relating to the Stockholders Meeting (together with any amendments thereof or supplements thereto, the “ Proxy Statement ”), and each of the Company and Parent shall, or shall cause their respective Affiliates to, prepare and file with the SEC all other documents required by the Exchange Act in connection with the Merger and the other transactions contemplated hereby, and Parent and the Company shall cooperate with each other in connection with the preparation of the Proxy Statement and any such other filings. Subject to Section 5.2 , the Proxy Statement shall include the Company Recommendation; provided , that if the Company Board shall have effected a Change of Recommendation in accordance with Section 5.2 , then in submitting this Agreement to the Company’s stockholders, the Company Board may submit this Agreement to the Company’s stockholders without the Company Recommendation, in which event the Company Board may communicate the basis for its lack of recommendation to the Company’s stockholders in the Proxy Statement or an appropriate amendment thereof or supplement thereto. Parent agrees to provide or cause to be provided all information with respect to itself, its Affiliates and their respective Representatives as may be reasonably requested by the Company for inclusion in the Proxy Statement and any such other filings.

 

(b)          Each party shall as promptly as reasonably practicable notify the other parties of the receipt of any comments of the SEC with respect to the Proxy Statement and of any request by the SEC for any amendment or supplement thereto or for additional information and shall as promptly as reasonably practicable provide to the other party copies of all written correspondence with the SEC with respect to the Proxy Statement. The Company and Parent shall each use its reasonable best efforts to promptly provide responses to the SEC with respect to all comments received on the Proxy Statement from the SEC and to make any amendments or filings as may be necessary in connection therewith. The Company shall cause the definitive Proxy Statement to be mailed to the Company’s stockholders as promptly as reasonably practicable after the date the SEC staff advises that it has no further comments thereon or that the Company may commence mailing the Proxy Statement.

 

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(c)          Subject to applicable Law, prior to filing or mailing the Proxy Statement or filing any other required filings (or, in each case, any amendment thereof or supplement thereto) or responding to any comments of the SEC with respect thereto, the Company shall (unless and until a Change of Recommendation has occurred or in connection with the matters described in Section 5.2 ) provide Parent with an opportunity to review and comment on (which comments shall be made promptly) such document or response and shall consider in good faith including in such document or response comments reasonably proposed by Parent.

 

Section 5.4.           Stockholders Meeting . The Company shall take, in accordance with applicable Law and its certificate of incorporation and bylaws, all actions necessary to duly call, establish a record date for, give notice of and hold a meeting of the holders of Shares (the “ Stockholders Meeting ”) as promptly as reasonably practicable following the mailing of the Proxy Statement to consider and vote upon the adoption of this Agreement; provided , that the Company may postpone or adjourn to a later date the Stockholders Meeting (i) with the consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), (ii) to allow time for the filing and dissemination of any supplemental or amended disclosure document that the Company Board has determined in good faith is required to be filed and disseminated under applicable Law, (iii) if there are insufficient Shares represented (either in Person or by proxy) to constitute a quorum necessary to conduct the business of the Stockholders Meeting, (iv) if the Company has not received proxies representing a sufficient number of shares of Common Stock to adopt this Agreement, or (v) if required by applicable Law or if, in the good faith judgment of the Company Board (after consultation with legal counsel), the failure to do so would be a violation of its fiduciary obligations under applicable Law; provided , further , that in no event shall the Company be required to hold the Stockholders Meeting prior to the fifth (5th) Business Day following the later of (A) the No-Shop Period Start Date and (B) the first date as of which no Person qualifies as an Excluded Party.

 

Section 5.5.           Reasonable Best Efforts; Filings; Other Actions .

 

(a)          Subject to the terms and conditions set forth in this Agreement, the Company, Parent, and Merger Sub shall promptly take, or to cause to be taken, all actions, and to do, or to cause to be done, and to assist and cooperate with the other in doing and, in the case of Parent, to cause the Parent Entities, to cooperate as necessary or appropriate with the other parties and to do, all things necessary, proper or advisable to consummate and make effective the transactions contemplated by this Agreement as soon as practicable, but in any event before to the Termination Date, including to (i) use their respective reasonable best efforts to obtain from any Governmental Entities and any third parties any actions, non-actions, clearances, waivers, consents, approvals, expirations or terminations of waiting periods, permits or orders required to be obtained by the Company, Parent, or any of their respective Affiliates in connection with the authorization, execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, (ii) make all registrations, filings, notifications or submissions which are necessary or advisable with respect to this Agreement and the Merger under (A) any applicable federal or state securities Law, (B) the HSR Act and any other applicable Regulatory Law and (C) any other applicable Law, (iii) defend against any lawsuits or other legal proceedings, whether judicial or administrative, challenging this Agreement or the consummation of the Merger and the other transactions contemplated hereby, (iv) execute and deliver any additional instruments necessary to consummate the transactions contemplated hereby and, (v) subject to the proviso to Section 5.6(a) , provide reasonable and customary cooperation with Parent regarding planning for integration of the Company and Parent following Closing, to include post-Closing budget, restructuring and similar planning; provided , that in no event shall the Company or any of its Subsidiaries be required to pay prior to the Effective Time any fee, penalty or other consideration to any third party to obtain any consent or approval required for the consummation of the Merger under any Contract. Notwithstanding anything to the contrary contained in this Agreement, all obligations of the Company, Parent and Merger Sub to obtain the Financing or any other financing for the transactions contemplated hereby shall be governed exclusively by Sections 5.12 and 5.13 , and not this Section 5.5 .

 

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(b)          In furtherance and not in limitation of the other provisions of this Section 5.5 , Parent and the Company each agrees to make, or cause to be made (including, to the extent required, in the case of Parent, to cause the Ultimate Parent Entity of Parent to make), an appropriate filing of a Notification and Report Form pursuant to the HSR Act with respect to the transactions contemplated by this Agreement as promptly as practicable (and in any event within fifteen (15) Business Days) after the date hereof this Agreement (unless a later date is mutually agreed between the parties hereto) and each party hereto agrees (i) to respond, or cause to be responded to (including, to the extent required, in the case of Parent, to cause any of the Parent Entities to respond), as promptly as reasonably practicable any inquiries or request for additional information and material from a Governmental Entity pursuant to the HSR Act or any other Regulatory Law, and (ii) to take all other actions necessary to cause the expiration or termination of the applicable waiting periods under the HSR Act as promptly as possible after the date of this Agreement. In furtherance and not in limitation of the foregoing, the parties hereto shall (in the case of Parent, cause the Parent Entities to) request and use reasonable best efforts to obtain early termination of the waiting period under the HSR Act, and no party shall (in the case of Parent, shall cause the Parent Entities not to) agree to extend any waiting period under any Regulatory Law applicable to or commit not to consummate any of the transactions contemplated by this Agreement without the prior written consent of all other parties (such consent not to be unreasonably withheld, conditioned or delayed).

 

(c)          In furtherance and not in limitation of the other provisions of this Section 5.5 , but subject to the final sentence of this paragraph limiting Parent’s obligation to agree to the remedies specified in such sentence, Parent shall, and shall cause each of the Parent Entities to, use their respective reasonable best efforts to do all things necessary, proper, or advisable to consummate and make effective, as soon as practicable, but in any event before the Termination Date, the Merger. Notwithstanding anything herein to the contrary, nothing in this Section 5.5 shall require Parent or any of the Parent Entities or any of their respective Subsidiaries or Affiliates to, and the Company shall not, without the prior written consent of Parent, take or commit to take any action, including by consent decree, hold separate order or otherwise, that would require the sale, divestiture, disposition or license of, or limit in any respect Parent’s, the Parent Entities’ (including the Surviving Corporation) or any of their respective Subsidiaries’ or Affiliates’ freedom of action with respect to, or their ability to operate or retain, one or more businesses, product lines, rights, services, licenses or assets of Parent, the Parent Entities (including the Surviving Corporation) or any of their respective Subsidiaries or Affiliates, or the Company or any of its Subsidiaries, other than any such actions that, individually or in the aggregate, are of a de minimis nature.

 

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(d)          In furtherance and not in limitation of this Section 5.5 , each of the Company, Parent, and Merger Sub shall, and, in the case of Parent, cause the Parent Entities to (i) cooperate in all respects and consult with each other in connection with any filing or submission and in connection with any investigation or other inquiry, including any proceeding initiated by a private party, in each case with respect to this Agreement or regarding the transactions and other agreements contemplated hereby, including by allowing the other parties to have a reasonable opportunity to review in advance and comment on drafts of filings and submissions and reasonably considering in good faith the comments of the other parties; (ii) subject to any restrictions under any Regulatory Law, promptly notify each other of any material communication received by such party from, or given by such party to, any Governmental Entity with respect to this Agreement or regarding the transactions and other agreements contemplated hereby and promptly provide copies to the other party or any such written communications, and of any material communication received or given in connection with any proceeding by a private party, in each case with respect to this Agreement or regarding the transactions and other agreements contemplated by this Agreement, (iii) give the other parties a reasonable advance opportunity to review and comment upon, and consider in good faith the views of the other, any proposed material communication that it gives to any Governmental Entity or other Person in each case with respect to this Agreement or regarding the transactions and other agreements contemplated by this Agreement; (iv) unless required by applicable Law, not agree to participate in any material meeting, telephone call, or conference with any Governmental Entity in respect of any filing, investigation or other inquiry with respect to this Agreement or the transactions and other agreements contemplated hereby unless it consults with the other parties in reasonable advance and, to the extent permitted by such Governmental Entity, gives the other parties the opportunity to attend and participate thereat, (v) subject to any restrictions under any Regulatory Law, promptly furnish the other parties with copies of all material correspondence, filings and communications (and memoranda setting forth the substance thereof) between it and its Affiliates and their respective Representatives on the one hand, and any Governmental Entity or members of its staff on the other hand, with respect to this Agreement or the transactions and other agreements contemplated hereby (excluding any documents and communications which are subject to the attorney-client privilege or other privilege or trade secret protection or the work product doctrine), and (vi) promptly furnish the other parties with such necessary information and reasonable assistance as such other parties and their Affiliates may reasonably request in connection with their preparation of necessary filings, registrations or submissions of information to any Governmental Entity in connection with this Agreement or the transactions and other agreements contemplated hereby and thereby, including any filings necessary or appropriate under the provisions of any Regulatory Law; provided , that the materials required to be provided pursuant to the foregoing clauses of this paragraph may be redacted (A) to remove references concerning the valuation of the Company; (B) as necessary to comply with contractual arrangements, and (C) as necessary to address reasonable privilege or confidentiality concerns; provided , further , that outside counsel for any party may, as it deems advisable and necessary, reasonably designate materials provided under this Section 5.5(d) as “Outside Antitrust Counsel Only Material.”

 

(e)          Neither Parent nor Merger Sub shall, and Parent shall, to the extent applicable, cause each of the Parent Entities not to, consent to any voluntary extension of any statutory deadline or waiting period or to any voluntary delay of the consummation of the transactions contemplated hereby, including the Merger, or withdraw its notification and report form pursuant to the HSR Act or any registrations, applications, declarations, reports, submissions or other filings made pursuant to any other Regulatory Law unless the Company has given its prior written consent to such extension or delay or withdrawal (such consent not to be unreasonably withheld, conditioned or delayed).

 

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Section 5.6.           Access and Reports .

 

(a)          Subject to applicable Law, from and after the date of this Agreement to the Effective Time or the earlier termination of this Agreement, upon reasonable request, the Company shall, and shall cause its Subsidiaries to, afford to Parent, Merger Sub and/or their respective Representatives reasonable access, during normal business hours, to its officers, key employees, properties, offices and other facilities, books, Contracts and records; provided , that (i) the foregoing shall not require the Company or any of its Subsidiaries to permit access to (A) any inspection or any information that would violate any of its obligations with respect to confidentiality, (B) any information to the disclosure of which would result in the loss of attorney-client privilege, accountant-client privilege or other similar privilege applicable to such documents or information, trade secret protection or the protection afforded under the work product doctrine, (C) any information that in the reasonable opinion of the Company would violate any applicable Law or result in a breach of a Contract to which the Company or any of its Subsidiaries are bound or (D) any information related to the negotiation and execution of this Agreement or to transactions potentially competing with or alternative to the transactions contemplated by this Agreement or proposals from other third parties relating to any competing or alternative transactions (including Acquisition Proposals) and the actions of the Company Board (or any committee thereof) with respect to any of the foregoing, whether prior to or after execution of this Agreement; provided, that in the event the restrictions of the foregoing clauses (i)(A) and (B) apply, the Company shall provide Parent (or alternatively one or more of the Parent Entities) with a reasonable description of the general nature of the information not provided and the Company shall, at Parent’s request, reasonably cooperate in good faith to design and implement alternative disclosure arrangements to enable Parent (or alternatively one or more of the Parent Entities) to evaluate any such information, in each case without resulting in any such violation or loss, and (ii) any such investigation shall be conducted in such a manner as not to interfere unreasonably with the normal business or operations of the Company or its Subsidiaries or otherwise result in any undue burden with respect to the prompt and timely discharge by employees of the Company or its Subsidiaries of their normal duties and Parent shall use its commercially reasonable efforts to minimize to the extent reasonably practicable any disruption to the businesses of the Company that may result from any such requests for access. Each of Parent and the Company, as it deems advisable and necessary, may reasonably designate as contemplated by the Clean Team NDA or the JDA competitively sensitive material provided to the other as “Outside Counsel Only Material” or with similar restrictions (including provision of materials to one or more of the Parent Entities or Representatives thereof other than Parent or Merger Sub), and such materials and the information contained therein shall be given only to the outside counsel of the recipient, or otherwise as the restriction indicates, and be subject to any additional confidentiality or joint defense agreement between the parties.

 

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(b)          Each of Parent and Merger Sub shall, and shall cause their respective Representatives and Affiliates to, hold and treat in confidence all documents and information concerning the Company and its Subsidiaries furnished to Parent or Merger Sub or their respective Representatives, financing sources or Affiliates in connection with the transactions contemplated by this Agreement in accordance with (i) the Mutual Nondisclosure Agreement, dated August 10, 2018, among the Company, Parent, Permira Advisers LLC and Spectrum Equity (the “ Mutual NDA ”), (ii) the Clean Team Confidentiality Agreement, dated August 14, 2018 (the “ Clean Team NDA ”), among the Company, Parent, Permira Advisers LLC and Spectrum Equity, and (iii) the Joint Defense, Common Interest and Confidentiality Agreement, dated August 23, 2018 (the “ JDA ”), among Permira Advisers LLC, the Company, Fried, Frank, Harris, Shriver & Jacobson LLP, Wachtell, Lipton, Rosen & Katz, Spectrum Equity, Parent, and Wilson Sonsini Goodrich & Rosati (together with the Mutual NDA and the Clean Team NDA, the “ Confidentiality Agreements ”) as if all such documents and information were Evaluation Material (as defined in the Mutual NDA), which Confidentiality Agreements shall remain in full force and effect in accordance with its terms and shall apply to Parent and Merger Sub as if they were direct parties thereto.

 

(c)          The Company shall give prompt notice to Parent, and Parent shall give prompt notice to the Company, of (i) any Actions commenced against such party or any of its Affiliates or Representatives in connection with, arising from or relating to this Agreement or the transactions contemplated by this Agreement (“ Transaction Litigation ”), (ii) any material written notice from any Person alleging that the approval or consent of such Person is or may be required in connection with the Merger or the other transactions contemplated by this Agreement or (iii) any written notice or other communication from any Governmental Entity or securities exchange in connection with the Merger or the other transactions contemplated by this Agreement.

 

Section 5.7.           Publicity; Communications . The initial press release regarding the Merger shall be a joint press release agreed to by the Company and Parent. Thereafter (unless and until a Change of Recommendation has occurred or in connection with the matters described in Section 5.2 ) each party shall consult with the other parties, and give each other the opportunity to review and comment, prior to issuing any press releases or otherwise making public announcements or filings with respect to the Merger or any of the other transactions contemplated by this Agreement, except, in the case of either the Company or Parent, with respect to communications to employees in the ordinary course of business or as may be required by Law or by the applicable rules of any stock exchange (in which case, such party shall, to the extent practicable, use commercially reasonable efforts to consult with the other parties before issuing such press release or making such public announcement or filing).

 

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Section 5.8.           Employee Benefits .

 

(a)          For a period beginning on the Closing Date and ending on December 31 of the year during which the Closing Date occurs (the “ Continuation Period ”), Parent shall, or shall cause its applicable Subsidiary to, provide each employee of the Company and its Subsidiaries who continues in employment with Parent, the Surviving Corporation or their Subsidiaries following the Effective Time (collectively, the “ Continuing Employees ”) (while they are employed by Parent, the Surviving Corporation or their Subsidiaries) with (i) a base salary or regular hourly wage (whichever is applicable) and annual cash incentive compensation opportunity that is substantially comparable, in the aggregate, to the base salary or regular hourly wage (whichever is applicable) and annual cash incentive compensation opportunity for the applicable Continuing Employee as of immediately prior to the Effective Time and (ii) other compensation and employee benefits (excluding equity based compensation) that are no less favorable in the aggregate than the other compensation and employee benefits (excluding equity based compensation) provided or available to similarly situated employees of Parent; provided , that until such time as Parent or the Surviving Corporation shall cause Continuing Employees to participate in a benefit plan sponsored or maintained by Parent or any of its Subsidiaries (each a “ New Plan ”), a Continuing Employee’s continued participation in the applicable Company Benefit Plan shall be deemed to satisfy the foregoing provisions of this clause (ii) (it being understood that participation in the applicable New Plans may commence at different times with respect to each Company Benefit Plan). Effective as of the Effective Time, the Surviving Corporation hereby expressly assumes the Company Benefit Plans and agrees to perform the obligations of the Company thereunder in accordance with the terms and conditions thereof.

 

(b)          Without limiting the generality of the foregoing, during the twelve month period immediately following the Closing Date, the Surviving Corporation shall provide each Continuing Employee whose employment is terminated by Parent or one of its Subsidiaries with severance in amounts and on terms and conditions that are no less favorable than the severance benefits and protections provided to each such Continuing Employee as set forth in Section 5.8(b) of the Company Disclosure Schedule (the “ Company Severance Policy ”).

 

(c)          Parent shall cause any employee benefit plans of Parent and its Subsidiaries in which the Continuing Employees are entitled to participate during the Continuation Period to take into account for purposes of eligibility and vesting and, solely with respect to severance, vacation, and paid time off policies, benefit accruals (except to the extent it would result in a duplication of benefits or was not recognized by the Company or its Subsidiaries prior to the Effective Time), service prior to the Effective Time by such employees to the Company and its Subsidiaries (and any predecessors to the extent recognized by the Company and its Subsidiaries prior to the Effective Time) as if such service were with Parent or its Subsidiaries.

 

(d)          With respect to any benefit plan sponsored or maintained by Parent or any of its Subsidiaries in which Continuing Employees participate during the Continuation Period, Parent shall use commercially reasonable efforts to cause the Surviving Corporation and its Subsidiaries to, (i) waive any eligibility requirements or pre-existing condition limitations or waiting period requirements with respect to any such plan providing medical, dental, pharmaceutical or vision benefits to any Continuing Employee to the same extent waived under the analogous Company Benefit Plan prior to the Closing Date, and (ii) give effect, in determining any deductible, co-insurance and maximum out-of-pocket limitations, to any eligible expenses paid by such employees during the calendar year in which the Effective Time occurs (or such plan year in which a Continuing Employee commences participation in any new plan of the Surviving Corporation and its Subsidiaries) under analogous Company Benefit Plans.

 

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(e)          The Company shall take, or shall cause to be taken, all actions necessary or appropriate to terminate, effective no later than the day immediately preceding the Closing Date, any Company Benefit Plan sponsored or maintained by the Company or any of its Subsidiaries that contains a cash or deferred arrangement intended to qualify under Section 401(a) of the Code (each, a “ 401(k) Plan ”), unless Parent, in its sole and absolute discretion, provides the Company or such Subsidiary with written notice of its election that any such 401(k) Plan should not be terminated (an “ Election Notice ”) at least three (3) Business Days prior to the Closing Date. Unless Parent provides an Election Notice to the Company, the Company shall deliver to Parent, on or prior to the Closing Date, evidence that the Company’s board of directors has validly adopted resolutions to terminate each 401(k) Plan, effective no later than the day immediately preceding the Closing Date. In the event that the 401(k) Plan is terminated, Continuing Employees shall be eligible to participate, effective as of the first day of the first month beginning after the Effective Time, in a 401(k) plan sponsored or maintained by Parent or one of its Subsidiaries (the “ Parent 401(k) Plan ”). The parties shall take any and all actions as may be required, including amendments to the 401(k) Plan and Parent 401(k) Plan, to permit the Continuing Employees who are actively employed to make rollover contributions to the Parent 401(k) Plan of “eligible rollover distributions” (with the meaning of Section 401(a)(31) of the Code) in the form of cash, notes (in the case of loans) or a combination thereof.

 

(f)          The parties to this Agreement agree that, with respect to any matter addressed by this Section 5.8 , the Company shall not be permitted to send any written notice or any other communications or written materials to any group of employees, officers, directors or consultants of the Company or any of its Subsidiaries without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed).

 

(g)           Nothing in this Agreement shall confer upon any Continuing Employee or other service provider any right to continue in the employ or service of Parent, the Surviving Corporation or any Affiliate of Parent, or shall interfere with or restrict in any way the rights of Parent, the Surviving Corporation or any of their respective Affiliates, which rights are hereby expressly reserved, to discharge or terminate the services of any Continuing Employee at any time for any reason whatsoever, with or without cause. In no event shall the terms of this Agreement be deemed to (i) establish, amend, or modify any Company Benefit Plan or any other employee benefit plan, program, agreement or arrangement maintained or sponsored by Parent, the Surviving Corporation or their Affiliates, or (ii) alter or limit the ability of Parent, the Surviving Corporation or any of their respective Subsidiaries or Affiliates to amend, modify or terminate any Company Benefit Plan in accordance with its terms after the Closing Date. Without limiting Section 8.9 , this Section 5.8 shall be binding upon and inure solely to the benefit of each of the parties to this Agreement and nothing in this Section 5.8 shall create any third party beneficiary rights in any Continuing Employee or current or former service provider of the Company or its Affiliates (or any beneficiaries or dependents thereof).

 

Section 5.9.           Expenses; Transfer Taxes .

 

(a)          Except as otherwise provided in this Agreement or the Fee Funding Arrangements, whether or not the Merger is consummated, all costs and expenses incurred in connection with this Agreement and the Merger and the other transactions contemplated by this Agreement shall be paid by the party incurring such expense, except that all filing fees under the HSR Act in connection with the transactions contemplated by this Agreement shall be borne by Parent.

 

(b)          Except as otherwise provided in Section 2.7(b)(ii) , all transfer, documentary, sales, use, stamp, registration and other such Taxes imposed with respect to the transfer of Shares pursuant to the Merger shall be borne by the Surviving Corporation.

 

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Section 5.10.          Indemnification; Directors’ and Officers’ Insurance .

 

(a)          From and after the Effective Time, Parent shall, and shall cause the Surviving Corporation to, indemnify and hold harmless, to the fullest extent permitted under applicable Law, each present and former (or future, but prior to the Effective Time) director, officer and employee of the Company or any Subsidiary, including any employee who serves as a fiduciary of a Company Benefit Plan (collectively, together with such person’s heirs, executors or administrators, the “ Indemnified Parties ”) against any costs or expenses (including reasonable attorneys’ fees), judgments, fines, losses, claims, damages, liabilities and amounts paid in settlement incurred in connection with any actual or threatened Action or investigation, whether civil, criminal, administrative or investigative, arising out of, related to or in connection with any action or omission occurring or alleged to have occurred whether prior to or at the Effective Time (including in connection with such Indemnified Parties’ service as a director, officer, employee or other fiduciary of the Company or any of its Subsidiaries or services performed by such persons at the request of or for the benefit of the Company or its Subsidiaries), whether asserted or claimed prior to, at or after the Effective Time, including, for the avoidance of doubt, in connection with (i) the transactions contemplated by this Agreement (including as to any act or omission occurring or alleged to have occurred in connection with the process resulting in and the adoption and approval of this Agreement and the consummation of the transactions contemplated hereby) and (ii) actions to enforce this provision or any other indemnification, exculpation or advancement right of any Indemnified Party. Without limiting the foregoing, Parent, for a period of six (6) years from and after the Effective Time, shall cause the Charter and the Bylaws to contain provisions no less favorable to the Indemnified Parties with respect to indemnification, exculpation from liabilities and rights to advancement of expenses than those set forth as of the date of this Agreement in the certificate of incorporation and bylaws of the Company, which provisions shall not be amended, repealed or otherwise modified in a manner that would adversely affect the rights thereunder of any Indemnified Party. In addition, from and after the Effective Time, each of Parent and the Surviving Corporation shall advance costs and expenses (including attorneys’ fees) as incurred by any Indemnified Party promptly (and in any event within ten (10) days) after receipt by Parent of a request for such advance to the fullest extent permitted under applicable Law; provided , that the Person to whom expenses are advanced provides an undertaking to repay such advances if it is ultimately determined (after exhausting all available appeals) that such Person is not entitled to indemnification. Any Indemnified Party wishing to claim indemnification under this Section 5.10(a) , upon learning of any claim, action or proceeding in respect of which such indemnification will be sought, shall notify the Surviving Corporation thereof in writing; provided, that the failure to so notify the Surviving Corporation shall not affect the indemnification obligations of the Surviving Corporation or Parent under this Section 5.10(a) . For the avoidance of doubt, in the event of any matter in respect of which indemnification is sought pursuant to this Agreement, Parent and the Surviving Corporation shall cooperate with the Indemnified Party in the defense of any such matter.

 

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(b)          Prior to the Effective Time, the Company shall obtain and fully pre-pay the premium for (and, following the Effective Time, the Surviving Corporation shall, and Parent shall cause the Surviving Corporation to, maintain with reputable and financially sound carriers) the extension of (i) the directors’ and officers’ liability coverage of the Company’s existing directors’ and officers’ insurance policies, and (ii) the Company’s existing fiduciary liability insurance policies (collectively, “ D&O Insurance ”), in each case for a claims reporting or discovery period (whichever is greater) of six (6) years from and after the Effective Time with respect to any claim arising from facts or events that existed or occurred at or prior to the Effective Time with terms, conditions, retentions, coverage limits and limits of liability that are at least as favorable as the coverage provided under the Company’s existing policies in effect on the date hereof. If the Company and the Surviving Corporation for any reason fail to obtain such “tail” insurance policies as of the Effective Time, the Surviving Corporation shall, and Parent shall cause the Surviving Corporation to, continue to maintain in effect for a period of six (6) years from and after the Effective Time the D&O Insurance in place as of the date hereof with terms, conditions, retentions, coverage limits and limits of liability that are at least as favorable as the coverage provided in the Company’s existing policies as of the date hereof, or the Surviving Corporation shall, and Parent shall cause the Surviving Corporation to, purchase comparable insurance as the D&O Insurance for such six-year period with terms, conditions, retentions and limits of liability that are at least as favorable as the coverage provided under the Company’s existing policies as of the date hereof. Notwithstanding the foregoing, (A) in no event shall the Company or the Surviving Corporation be required to expend for any such policies pursuant to this Section 5.10(b) an annual premium amount in excess of 300% of the aggregate of the annual premiums paid by the Company as of immediately prior to the Effective Time for such insurance, and (B) if the annual premiums of such insurance coverage exceed such maximum amount, the Company or the Surviving Corporation shall obtain a policy with the greatest coverage available for such maximum amount.

 

(c)          If Parent or the Surviving Corporation or any of their successors or assigns shall (i) consolidate with or merge into any other corporation or entity and shall not be the continuing or surviving corporation or entity of such consolidation or merger or (ii) transfer all or substantially all of its properties and assets to any individual, corporation or other entity, then, in each such case, proper provisions shall be made so that such surviving or acquiring Person(s), as the case may be, shall assume all of the obligations set forth in this Section 5.10 .

 

(d)          The provisions of this Section 5.10 are intended to be for the benefit of, and shall be enforceable by, each of the Indemnified Parties.

 

(e)          The rights of the Indemnified Parties under this Section 5.10 shall be in addition to any rights such Indemnified Parties may have under the certificate of incorporation or bylaws or comparable governing documents of the Company or any of its Subsidiaries, under any applicable Contracts or Laws or otherwise. All rights to indemnification, exculpation from liabilities for acts or omissions occurring at or prior to the Effective Time and rights to advancement of expenses relating thereto now existing in favor of any Indemnified Party (whether asserted or claimed prior to, at, or after the Effective Time) as provided in the certificate of incorporation or bylaws or comparable governing documents of the Company or any of its Subsidiaries or any Contract or otherwise between such Indemnified Party and the Company or any of its Subsidiaries shall survive the Merger and continue in full force and effect (and shall be so maintained) and such rights shall not be amended, repealed or otherwise modified in any manner that would adversely affect any right thereunder of any such Indemnified Party. Nothing in this Agreement is intended to, shall be construed to or shall release, waive or impair any rights to insurance claims under any policy that is or has been in existence with respect to the Company or any of its Subsidiaries or any Indemnified Party, it being understood and agreed that the indemnification provided for in this Section 5.10 is not prior to, or in substitution for, any such claims under any such policies.

 

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(f)           Notwithstanding anything herein to the contrary, if any actual or threatened Action or investigation (whether arising before, at or after the Effective Time) is made against such any such Indemnified Parties with respect to matters subject to indemnification hereunder, the provisions of this Section 5.10 shall continue in effect until the final disposition of such Action or investigation (including continuing in effect until the final disposition of any Action arising out of any such investigation).

 

Section 5.11.          Section 16 Matters . Prior to the Effective Time, the Company shall take all steps reasonably necessary to cause any dispositions of equity securities (including derivative securities) of the Company in connection with this Agreement and the transactions contemplated hereby by each individual who is a director or officer of the Company to be exempt under Rule 16b-3 promulgated under the Exchange Act.

 

Section 5.12.          Financing .

 

(a)          Parent and Merger Sub shall use reasonable best efforts to take, or cause to be taken, all actions, and do, or cause to be done, all things necessary, proper or advisable to obtain and consummate the Financing on or prior to the date upon which the Merger is required to be consummated pursuant to the terms hereof. In furtherance and not in limitation of the foregoing, Parent shall use its reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to obtain the Financing on the terms and conditions described in the Commitment Letters as promptly as possible but in any event prior to the date upon which the Merger is required to be consummated pursuant to the terms hereof, including by (i) maintaining in effect the Commitment Letters and (ii) satisfying (or obtaining a waiver of) on a timely basis all conditions applicable to Parent and Merger Sub in the Commitment Letters (including consummating the Refinancing (as defined in the Debt Commitment Letter)) and complying with their obligations thereunder. In the event that all conditions contained in the Commitment Letters (other than (x) with respect to the Debt Financing, the availability of the Equity Financing, (y) with respect to the Equity Financing, the availability of the Debt Financing and (z) other conditions that by their nature are to be satisfied at the Closing) have been satisfied, Parent and Merger Sub shall use their reasonable best efforts to cause the Lenders and Investors to fund the Financing in an amount no less than the Merger Amounts (including by seeking to enforce their rights under the Commitment Letters, in the event of any breach by the other parties thereto). To the extent necessary to consummate the Closing, Parent will use the proceeds of the Financing otherwise earmarked for post-Closing obligations and/or cash made available by the Company to satisfy Merger Amounts required to be satisfied on the Closing Date. Each of Parent and Merger Sub shall comply with its respective obligations under the Commitment Letters in a timely and diligent manner.

 

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(b)          Parent shall not, and shall not permit Merger Sub to, without the prior written consent of the Company: (i) permit (x) any amendment or modification to, or any waiver of any provision or remedy under, the Commitment Letters or (y) the replacement of the Second Lien Facility by any Alternate Junior Financing (each as defined in the Debt Commitment Letter) as contemplated by the Debt Commitment Letter, if such amendment, modification, waiver or replacement (A) adds new (or adversely modifies any existing) conditions to the consummation of all or any portion of the Financing, (B) reduces the amount of the Financing, (C) adversely affects the ability of Parent to enforce its rights against other parties to the Commitment Letters as so amended, replaced, supplemented or otherwise modified, relative to the ability of Parent or Merger Sub, as applicable, to enforce its rights against the other parties to the Commitment Letters as in effect on the date hereof or (D) could otherwise reasonably be expected to prevent, impede or delay the consummation of the Merger and the other transactions contemplated by this Agreement; or (ii) terminate a Commitment Letter. Notwithstanding anything to the contrary in this Agreement, it is understood and agreed that the Parent may amend the Debt Commitment Letter to add lenders, arrangers, bookrunners, agents, managers or similar entities that have not executed the Debt Commitment Letter as of the date of this Agreement. Parent and Merger Sub shall promptly deliver to the Company copies of any amendment, modification, waiver or replacement of a Commitment Letter and the documentation related to any Alternate Junior Financing (as defined in the Debt Commitment Letter).

 

(c)          In the event that any portion of the Debt Financing becomes unavailable, regardless of the reason therefor, Parent and Merger Sub will (i) use reasonable best efforts to obtain alternative debt financing (in an amount no less than, when taken together with the available portion of the Financing, the Merger Amounts) from the same or other sources on terms and conditions that substantially equivalent or more favorable to Parent and its Subsidiaries than the terms and conditions contemplated in the Debt Commitment Letter and which do not include any terms or conditions to the consummation of such alternative debt financing that would reasonably be expected to make the funding of such alternative debt financing less likely to occur than the conditions set forth in the Debt Commitment Letter and (ii) promptly notify the Company of such unavailability and the reason therefor. For the purposes of this Agreement, the term “Debt Commitment Letter” and “Debt Financing” shall be deemed to include any commitment letter (or similar agreement) (and the financing contemplated thereby) with respect to any alternative or replacement financing arranged in compliance herewith including any Alternate Junior Financing (as defined in the Debt Commitment Letter) (and any Debt Commitment Letter remaining in effect at the time in question). Parent and Merger Sub shall provide the Company with reasonably prompt notice (which may be oral or in writing) of any material breach or material default by any party to the Debt Commitment Letter of which Parent or Merger Sub obtain Knowledge and the receipt of any written notice or other written communication from any Lender with respect to any breach, default, termination or repudiation by any party to the Debt Commitment Letter or any definitive agreement with respect thereto of any provision thereof. At the request of the Company, Parent and Merger Sub shall keep the Company reasonably informed on a reasonably current basis of the status of its efforts to consummate the Financing. The foregoing notwithstanding, compliance by Parent and Merger Sub with this Section 5.12 shall not relieve Parent and Merger Sub of their obligations to consummate the transactions contemplated by this Agreement whether or not the Financing is available.

 

Section 5.13.          Financing Cooperation .

 

(a)          Prior to the Closing, the Company shall provide and shall use its reasonable best efforts to cause its Representatives to provide all cooperation reasonably requested by Parent necessary and customary for the arrangement of the Debt Financing in connection with the transactions contemplated by the Merger Agreement (including the Merger), including by:

 

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(i)          participating in (and use of reasonable best efforts to cause members of senior management of the Company and its representatives and advisors to participate in) a reasonable number of meetings (including customary one-on-one meetings with the parties acting as lead arrangers or agents for, and prospective lenders of, the Debt Financing), presentations, road shows, due diligence sessions and sessions with rating agencies at reasonable times and with reasonable advance notice;

 

(ii)         use of reasonable best efforts to assist with the timely preparation of materials for rating agency presentations, bank syndication materials and bank information memoranda for any portion of the Debt Financing (and furnish customary authorization letters in connection therewith (containing customary representations with respect to the presence or absence of material non-public information about the Company and the accuracy of the information provided by, or with respect to, the Company), executed on behalf of the Company);

 

(iii)        use of reasonable best efforts to assist with the preparation of, and execution and delivery as of, and subject to the occurrence of, the Closing, any credit agreements (or amendments thereto), guarantees, pledge and security documents, that facilitate the creation, perfection or enforcement of liens securing the Debt Financing (including provision of original copies of all certificated securities with transfer powers executed in blank) (including providing copies thereof prior to Closing), other definitive financing documents (including information necessary for the completion of schedules thereto), or other similar documents, in each case, as may be reasonably requested by Parent;

 

(iv)        furnishing to Parent Compliant Required Information within the time periods contemplated by the Debt Commitment Letter (it being understood that if any such Required Information fails to be Compliant for any reason, the Company can deliver updated Compliant Required Information to Parent until ten (10) Business Days prior to the Termination Date) and using reasonable best efforts to furnish such other information as Parent may reasonably request in connection with the Debt Financing, and, upon request, identifying any such information, if any, as is suitable for distribution to “public side” lenders;

 

(v)         use of reasonable best efforts to assist Parent in the preparation of customary pro forma financial statements as required by paragraph 8 of Exhibit D to the Debt Commitment Letter; provided that Parent and Merger Sub shall be responsible for the preparation of such pro forma financial statements and pro forma adjustments giving effect to the Merger and the other transactions contemplated herein;

 

(vi)        use of reasonable best efforts to assist Parent in procuring public corporate ratings and corporate family ratings and public ratings of the facilities contemplated by the Debt Financing from Standard & Poor’s Financial Services LLC and Moody’s Investors Service, Inc.;

 

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(vii)       use of reasonable best efforts to furnish to Parent documents (including customary payoff letters) reasonably required by Parent or its financing sources relating to the repayment of any existing indebtedness (if any) of the Company and its Subsidiaries, and the release of guarantees incurred, and liens granted, by the Company and its Subsidiaries to secure any such other existing indebtedness of the Company or its Affiliates, on the Closing Date, as reasonably requested by Parent to assist Parent in the arrangement of the Debt Financing (provided that the Company and its Subsidiaries shall not be required to make any payment in connection with the foregoing);

 

(viii)      furnishing to Parent, at least three (3) Business Days prior to the Closing Date, all documentation and information as is reasonably requested in writing by the Lenders at least ten days prior to the Closing Date about the Company and its Subsidiaries that the Lead Arrangers (as defined in the Debt Commitment Letter) reasonably determine is required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including without limitation the PATRIOT Act (as defined in the Debt Commitment Letter);

 

(ix)         using reasonable best efforts to obtain consents, approvals and authorizations reasonably requested by Parent in connection with the Debt Financing; and

 

(x)          use reasonable best efforts to take all actions reasonably requested by Parent to satisfy the conditions to the consummation of the Debt Financing set forth in the Debt Commitment Letter, to the extent satisfaction thereof requires the cooperation, and is within the control, of the Company and its Subsidiaries;

 

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it being understood that the Company shall have satisfied its obligations set forth in clauses (ii) , (iii) , (v) , (vi) , (vii) , (ix), and (x) of this sentence if the Company shall have used its reasonable best efforts to comply with such obligations whether or not any applicable deliverables are actually obtained or provided. The foregoing notwithstanding, neither the Company nor any of its Subsidiaries shall be required to take or permit the taking of any action pursuant to this Section 5.13 that (A) would require the Company, its Subsidiaries or any Persons who are directors of the Company or its Subsidiaries to pass resolutions or consents to approve or authorize the execution of the Debt Financing or execute or deliver any certificate, document, instrument or agreement or agree to any change or modification of any existing certificate, document, instrument or agreement (other than (i) using reasonable best efforts to deliver the customary authorization letters referred to in clause (ii) of this Section 5.13(a) or (ii) those effective as of the Closing), (B) cause any representation or warranty in this Agreement to be breached by the Company or any of its Subsidiaries, (C) require the Company or any of its Subsidiaries to pay any commitment or other similar fee or incur any other expense, liability or obligation in connection with the Debt Financing prior to the Closing or have any obligation of the Company or any of its Subsidiaries under any agreement, certificate, document or instrument be effective until the Closing, (D) cause any director, officer or employee or stockholder of the Company or any of its Subsidiaries to incur any personal liability, (E) provide access to or disclose information that the Company or any of its Subsidiaries determines would jeopardize any attorney-client privilege of the Company or any of its Subsidiaries; provided , that in the event the restrictions of the foregoing clause (ii)(E) apply, the Company shall provide Parent with a reasonable description of the information not provided and the Company shall cooperate in good faith to design and implement alternative disclosure arrangements to enable to evaluate any such information, in each case without resulting in any such violation, (F) require the Company or any of its Subsidiaries to enter into any instrument or agreement that is effective prior to the Effective Time or that would be effective if the Closing does not occur (other than using reasonable best efforts to deliver the customary authorization letters referred to in clause (ii) of this Section 5.13(a) ) or (G) in respect of its obligations set forth in clauses (i), (ii), (iii), (v), (vi), (vii), (ix), and (x) above, would unreasonably and materially interfere with the ongoing operations of the Company and its Subsidiaries. Nothing contained in this Section 5.13 or otherwise shall require the Company or any of its Subsidiaries, prior to the Closing, to be an issuer or other obligor with respect to the Debt Financing. Parent shall, promptly upon request by the Company, reimburse the Company for all reasonable out-of-pocket costs incurred by the Company or its Subsidiaries or their respective Representatives in connection with the cooperation contemplated by this Section 5.13 and shall indemnify and hold harmless the Company and its Subsidiaries and their respective Representatives from and against any and all losses suffered or incurred by them in connection with the arrangement of the Debt Financing, any action taken by them at the request of Parent pursuant to this Section 5.13 and any information used in connection therewith (other than (x) as a result of the gross negligence or willful misconduct of such indemnitee or (y) information provided in writing by the Company or its Subsidiaries specifically in connection with its obligations pursuant to this Section 5.13 ).

 

(b)          For the avoidance of doubt, the parties hereto acknowledge and agree that the provisions contained in this Section 5.13 , represent the sole obligation of the Company, its Subsidiaries and their respective Representatives with respect to cooperation in connection with the arrangement of any financing (including the Financing) to be obtained by Parent or Merger Sub with respect to the transactions contemplated by this Agreement and no other provision of this Agreement (including the Exhibits and Schedules hereto) shall be deemed to expand or modify such obligations. In no event shall the receipt or availability of any funds or financing (including, for the avoidance of doubt, the Financing) by Parent, Merger Sub or any of their respective Affiliates or any other financing or other transactions be a condition to any of Parent’s or Merger Sub’s obligations under this Agreement.

 

(c)          All non-public or otherwise confidential information regarding the Company or its Subsidiaries obtained by Parent or its Representatives pursuant to this Section 5.13 shall be kept confidential in accordance with the Confidentiality Agreements; provided , that Parent and Merger Sub shall be permitted to disclose information as necessary and consistent with customary practices in connection with the Financing subject to customary confidentiality arrangements set forth in the Debt Commitment Letter. The Company hereby consents to the reasonable and customary use of its and its Subsidiaries’ logos in connection with the Debt Financing.

 

Section 5.14.          Transaction Litigation . The Company, on the one hand, and Parent and Merger Sub, on the other hand, shall give each other the opportunity to participate in the defense, settlement or prosecution of any Transaction Litigation; provided , that no such party or Representative of such party shall compromise, settle, come to an arrangement regarding or agree to compromise, settle or come to an arrangement regarding any Transaction Litigation or consent to the same unless the Company, in the case of any such action by Parent or Merger Sub, or Parent, in the case of any such action by the Company, shall have consented in writing (such consent not to be unreasonably withheld, delayed or conditioned). Without limiting in any way the obligations of the parties hereto under Section 5.5 , each of the Company and Parent shall, and shall cause their respective Subsidiaries to, cooperate in the defense or settlement of any Transaction Litigation.

 

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Section 5.15.          Resignation of Directors. At the Closing, except as otherwise may be agreed by Parent, the Company shall use its reasonable best efforts to deliver to Parent the resignation of all members of the Company Board who are in office immediately prior to the Effective Time, which resignations shall be effective as of (but conditioned on the occurrence of) the Effective Time.

 

Section 5.16.          State Takeover Statutes . The Company and the Company Board and the Parent and the Parent Board shall (a) take all reasonable action necessary to ensure that no Takeover Statute is or becomes applicable to the Merger and (b) if any Takeover Statute becomes applicable to the Merger, take all reasonable action necessary to ensure that the Merger may be consummated as promptly as practicable on the terms contemplated by this Agreement and otherwise to minimize the effect of such Takeover Statute on the Merger. For purposes of this Agreement, “ Takeover Statute ” shall mean a “fair price,” “moratorium,” “control share acquisition” or similar anti-takeover statute or regulation enacted under the Laws of any state in the United States that is applicable to the Company.

 

Section 5.17.          Conduct of Parent and Merger Sub; Obligations of Merger Sub .

 

(a)          During the period from the date hereof until the Effective Time (or such earlier date on which this Agreement may be terminated), except as required by applicable Law or as expressly contemplated by this Agreement, Parent shall not, and shall not permit any of the Parent Entities (including Merger Sub) to, acquire, whether by merging with or into, consolidating with, purchasing all or a portion of the assets of or all or a portion of the equity in, or entering into an exclusive business arrangement with, any Person set forth on Section 5.17(a) of the Parent Disclosure Schedule.

 

(b)          Parent shall take all actions necessary to cause Merger Sub and the Surviving Corporation to perform when due their respective obligations under this Agreement.

 

Section 5.18.          Other Investors . Prior to the Effective Time, without the prior written consent of the Company (not to be unreasonably withheld, conditioned or delayed), Parent shall not permit or agree to permit any Person who holds Shares to rollover (or reinvest the Merger Consideration with respect to (or other proceeds from the sale of) such Shares) for any equity interests (or rights to obtain any equity interests) in Parent or any Person of which Merger Sub is a direct or indirect Subsidiary.

 

ARTICLE VI

 

Conditions

 

Section 6.1.           Conditions to Each Party’s Obligation to Effect the Merger . The respective obligations of each party hereto to effect the Merger are subject to the satisfaction (or waiver in writing by Parent and the Company, if permissible under applicable Law) at or prior to the Effective Time of each of the following conditions:

 

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(a)           Stockholder Approval . This Agreement shall have been duly adopted by a majority of the outstanding Shares entitled to vote thereon in accordance with applicable Law and the certificate of incorporation and bylaws of the Company (the “ Stockholder Approval ”).

 

(b)           Regulatory Approvals . Any and all waiting periods (and any extensions thereof) under the HSR Act applicable to the transactions contemplated hereby shall have expired or been terminated.

 

(c)           Orders . No court of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any Law or Order (whether temporary, preliminary or permanent) that is in effect and that restrains, enjoins or otherwise prohibits the consummation of the Merger.

 

Section 6.2.           Conditions to Obligations of Parent and Merger Sub . The respective obligations of Parent and Merger Sub to effect the Merger are also subject to the satisfaction (or waiver in writing by Parent, if permissible under applicable Law) at or prior to the Effective Time of each of the following conditions:

 

(a)           Representations and Warranties . (i) Other than the representations and warranties set forth in Section 3.1 , Section 3.2(a) , Section 3.3(a) , Section 3.3(b) , Section 3.4 , Section 3.7(b) and Section 3.20 , the representations and warranties of the Company contained in Article III shall be true and correct both at and as of the date of this Agreement and at and as of the Closing Date as though made at and as of the Closing Date (except to the extent such representations and warranties speak as of a specified date, in which case they need only be true and correct as of such specified date) interpreted without giving effect to the words “materially” or “material” or to any qualifications based on such terms or based on the term “Company Material Adverse Effect,” except where the failure of such representations and warranties to be true and correct, in the aggregate, does not constitute a Company Material Adverse Effect, (ii) the representations and warranties set forth in Section 3.3(a) , Section 3.3(b) , and Section 3.7(b) shall be true and correct both as of the date of this Agreement and at and as of the Closing Date as though made at and as of the Closing Date (except to the extent such representations and warranties speak as of a specified date, in which case they need only be true and correct as of such specified date), except, in the case of (x) Section 3.3(a) (other than the last sentence thereof) and Section 3.3(b) , for inaccuracies that are de minimis and (y) the last sentence of Section 3.3(a) , for inaccuracies as would not result in an increase in respect of the aggregate cash amounts payable with respect to the Company Equity Awards other than any such increases that are de minimis relative to the aggregate Merger Consideration (including the amounts payable pursuant to Sections 2.7 and 2.8 ) payable pursuant to this Agreement, and (iii) the representations and warranties set forth in Section 3.1 , Section 3.2 (a), Section 3.4 and Section 3.20 shall be true and correct in all material respects both at and as of the date of this Agreement and at and as of the Closing Date as though made at and as of the Closing Date (except to the extent such representations and warranties speak as of a specified date, in which case they need only be true and correct in all material respects as of such specified date) .

 

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(b)           Performance of Obligations . The Company shall have performed or complied with in all material respects its agreements and covenants contained in this Agreement that are required to be performed or complied with by it at or prior to the Effective Time pursuant to the terms hereof.

 

(c)           Officer’s Certificate . Parent shall have received a certificate signed by an executive officer of the Company, dated the Closing Date, to the effect that the conditions set forth in Sections 6.2(a) , 6.2(b) and 6.2(d) have been satisfied.

 

(d)           No Company Material Adverse Effect . Since the date of this Agreement, no Company Material Adverse Effect shall have occurred and be continuing.

 

Section 6.3.           Conditions to Obligation of the Company . The obligation of the Company to effect the Merger is also subject to the satisfaction (or waiver in writing by the Company, if permissible under applicable Law) at or prior to the Effective Time of each of the following conditions:

 

(a)           Representations and Warranties . (i) Other than the representations and warranties set forth in Section 4.1 , Section 4.2 , Section 4.3 and Section 4.10 , the representations and warranties of Parent and Merger Sub contained in Article IV shall be true and correct in all respects both at and as of the date of this Agreement and at and as of the Closing Date as though made at and as of the Closing Date (except to the extent such representations and warranties speak as of a specified date, in which case they need only be true and correct as of such specified date) interpreted without giving effect to the words “materially” or “material” or to any qualifications based on such terms or based on the term “Parent Material Adverse Effect,” except where the failure of such representations and warranties to be true and correct, in the aggregate, does not constitute a Parent Material Adverse Effect, and (ii) the representations and warranties set forth in Section 4.1 , Section 4.2 , Section 4.3 and Section 4.10 shall be true and correct in all material respects both at and as of the date of this Agreement and at and as of the Closing Date as though made at and as of the Closing Date (except to the extent such representations and warranties speak as of a specified date, in which case they need only be true and correct in all material respects as of such specified date) .

 

(b)           Performance of Obligations . Each of Parent and Merger Sub shall have performed or complied with in all material respects its agreements and covenants contained in this Agreement that are required to be performed or complied by it at or prior to the Effective Time pursuant to the terms hereof.

 

(c)           Officer’s Certificate . The Company shall have received a certificate signed by an executive officer of Parent, dated the Closing Date, to the effect that the conditions set forth in Sections 6.3(a) and 6.3(b) have been satisfied.

 

Section 6.4.           Frustration of Closing Conditions . None of Parent, Merger Sub or the Company may rely, either as a basis for not consummating the Merger or any of the other transactions contemplated by this Agreement or terminating this Agreement and abandoning the Merger, on the failure of a condition set forth in this Article VI to be satisfied if such failure was caused by such party’s failure to act in good faith or to use the efforts to cause the Closing to occur required by this Agreement.

 

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ARTICLE VII

 

Termination

 

Section 7.1.           Termination by Mutual Consent . This Agreement may be terminated and the Merger may be abandoned at any time prior to the Effective Time, whether before or after the Stockholder Approval is obtained, by mutual written consent of the Company and Parent by action of their respective boards of directors.

 

Section 7.2.           Termination by Either the Company or Parent . This Agreement may be terminated and the Merger may be abandoned at any time prior to the Effective Time by either the Company or Parent:

 

(a)          if the Merger shall not have been consummated on or before June 24, 2019 (the “ Termination Date ”); provided , that if as of the Termination Date any of the conditions set forth in Section 6.1(b) or Section 6.1(c) (solely to the extent such condition set forth in Section 6.1(c) has not been satisfied due to the enactment, issuance, promulgation, enforcement or entry of any Regulatory Law or an Order arising under any Regulatory Law) shall not have been satisfied or waived by the Company and Parent, the Termination Date may be extended by either Parent or the Company for a period of ninety (90) days by written notice to the other party, and such date, as so extended, shall be the Termination Date; provided , further , that (i) the right to terminate this Agreement pursuant to this Section 7.2(a) shall not be available to a party if the failure of the Merger to have been consummated on or before the Termination Date was caused by a material breach by such party of any representation, warranty, covenant or other agreement of such party set forth in this Agreement and (ii) the party seeking to terminate this Agreement pursuant to this Section 7.2(a) shall have complied with its obligations under Section 5.5 , Section 5.12 and Section 5.17 .

 

(b)          if the Stockholders Meeting (including any adjournments or postponements thereof) shall have been held and completed and the Stockholder Approval shall not have been obtained at such Stockholders Meeting (or at any adjournment or postponement thereof) at which a vote on the adoption of this Agreement is taken; or

 

(c)          if any Order by a Governmental Entity of competent jurisdiction permanently restraining, enjoining or otherwise prohibiting consummation of the Merger shall become final and non-appealable; provided , that the right to terminate this Agreement pursuant to this Section 7.2(c) shall not be available to a party if the enactment, issuance, promulgation, enforcement or entry of such Order, or the Order becoming final and non-appealable, was caused by a material breach by such party of any representation, warranty, covenant or other agreement of such party set forth in this Agreement; provided , further, that the party seeking to terminate this Agreement pursuant to this Section 7.2(c) shall have used the efforts required by Section 5.5 to remove such Order.

 

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Section 7.3.           Termination by the Company . This Agreement may be terminated and the Merger may be abandoned by the Company:

 

(a)          at any time prior to the time the Stockholder Approval is obtained, in order to enter into an Alternative Acquisition Agreement providing for a Superior Proposal in accordance with Section 5.2(e) ; provided , that the right to terminate this Agreement pursuant to this Section 7.3(a) shall not be available unless (i) the Company shall have complied in all material respects with Section 5.2 (other than Section 5.2(g) ), Section 5.3 and Section 5.4 (ii) prior to or concurrently with such termination, the Company pays to Parent by wire transfer in immediately available funds the Company Termination Fee and (iii) substantially concurrently with such termination, the Company duly executes and delivers a definitive Alternative Acquisition Agreement with respect to such Superior Proposal to the counterparty thereto;

 

(b)          at any time prior to the Effective Time, if there has been a breach of any representation, warranty, covenant or agreement of Parent or Merger Sub in this Agreement, which breach (i) would give rise to the failure of a condition set forth in Section 6.3(a) or 6.3(b) and (ii) (A) is not capable of being cured by Parent or Merger Sub prior to the Termination Date or (B) if capable of being cured, shall not have been cured before the earlier of (1) thirty (30) Business Days following receipt of written notice from the Company of such breach or (2) the Termination Date; provided , that the Company is not then in material breach of any of its representations, warranties, covenants or other agreements set forth in this Agreement; or

 

(c)          if (i) all of the conditions set forth in Sections 6.1 and 6.2 have been satisfied or waived (other than those conditions that by their nature are to be satisfied at the Closing), (ii) Parent and Merger Sub fail to consummate the Merger within three (3) Business Days of the first date on which Parent and Merger Sub are required to consummate the Closing pursuant to Section 1.2 , and (iii) the Company has provided irrevocable written notice to Parent at least one (1) Business Day prior to the date of such termination confirming that it stands ready, willing and able to consummate the Merger and the other transactions contemplated hereby.

 

Section 7.4.           Termination by Parent . This Agreement may be terminated and the Merger may be abandoned by Parent:

 

(a)          if at any time prior to the time the Stockholder Approval is obtained, if the Company shall have effected a Change of Recommendation; or

 

(b)          at any time prior to the Effective Time, if there has been a breach of any representation, warranty, covenant or agreement of the Company in this Agreement, which breach (i) would give rise to the failure of a condition set forth in Section 6.2(a) or 6.2(b) and (ii) (A) is not capable of being cured by the Company by the Termination Date or (B) if capable of being cured, shall not have been cured before the earlier of (x) thirty (30) Business Days following receipt of written notice from Parent of such breach or (y) the Termination Date; provided , that neither Parent nor Merger Sub is then in material breach of any of its representations, warranties, covenants or other agreements set forth in this Agreement.

 

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Section 7.5.           Effect of Termination and Abandonment .

 

(a)          In the event that this Agreement is terminated and the Merger is abandoned pursuant to this Article VII , this Agreement shall become void and of no effect with no liability to any Person on the part of any party hereto (or of any member of the Parent Group or the Company Group) except as provided in this Section 7.5 ; provided , that (i) subject to Section 7.5(b) and Section 7.5(c) , nothing herein shall relieve any party hereto from liability for any Willful Breach of this Agreement or the Commitment Letters prior to such termination, in which case the aggrieved party shall be entitled to all rights and remedies available at law or in equity, and (ii)  Section 5.6(b) , Section 5.9 , the last sentence of Section 5.13(a) , this Section 7.5 and Article VIII shall survive the termination of this Agreement. The party desiring to terminate this Agreement pursuant to Section 7.2 , 7.3 or 7.4 shall give written notice of such termination, including a description in reasonable detail of the reasons for such termination, to the other parties in accordance with Section 8.6 , specifying the provision or provisions hereof pursuant to which such termination is effected.

 

(b)          In the event that:

 

(i)          (A) this Agreement is validly terminated pursuant to Section 7.2(b) or Section 7.4(b) , (B) any Person shall have publicly made a bona fide Acquisition Proposal after the date of this Agreement and prior to the Stockholders Meeting (and such Acquisition Proposal shall not have been withdrawn at least four (4) Business Days prior to the Stockholders Meeting or any adjournment or postponement thereof), or prior to the termination of this Agreement if there has been no Stockholders Meeting, and (C) within twelve (12) months of such termination the Company shall have (1) entered into an agreement with respect to an Acquisition Proposal and such Acquisition Proposal is ultimately consummated or (2) consummated an Acquisition Proposal, then the Company shall, no later than three (3) Business Days after the date such Acquisition Proposal is consummated, pay the Company Termination Fee to Parent by wire transfer of same day funds to one or more accounts designated by Parent; provided , that for purposes of this Section 7.5(b)(i) , the references to “20%” and “80%” in the definition of “Acquisition Proposal” shall be deemed to be references to “50%”; or

 

(ii)         this Agreement is validly terminated by the Company pursuant to Section 7.3(a) or by Parent pursuant to Section 7.4(a) , the Company shall, prior to or substantially concurrently with such termination, in the case of a termination by the Company, or within three (3) Business Days thereafter, in the case of a termination by Parent, pay the Company Termination Fee to Parent by wire transfer of same day funds to one or more accounts designated by Parent.

 

Notwithstanding anything to the contrary in this Agreement, if the Company Termination Fee shall become due and payable in accordance with this Section 7.5 , from and after such termination and payment of the Company Termination Fee in full pursuant to and in accordance with this Section 7.5(b) , the Company shall have no further liability of any kind for any reason in connection with this Agreement or the termination contemplated hereby other than as set forth in this Section 7.5 . In no event shall the Company be required to pay the Company Termination Fee on more than one occasion.

 

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(c)           Parent Termination Fee and Reverse Termination Fee :

 

(i)          (A) In the event that this Agreement is validly terminated by either the Company or Parent pursuant to (1)  Section 7.2(a) , and at the time of such termination one or more of the conditions set forth in Section 6.1(b) or Section 6.1(c) has not been satisfied by the Company and Parent (unless, in the case of Section 6.1(c) , the failure to satisfy such condition is the result of a law other than an Applicable Regulatory Law), or (2)  Section 7.2(c) (but only as a result of an Order arising out of an action brought by a Governmental Entity pursuant to an Applicable Regulatory Law), and (B) all of the other conditions set forth in Sections 6.1 and 6.2 have been satisfied or waived (or in the case of conditions that by their nature are to be satisfied at the Closing, are capable of being satisfied if the Closing were to occur on the date of such termination), then Parent shall, no later than three (3) Business Days after written demand by the Company, pay or cause to be paid to the Company an amount equal to $30 million (the “ Parent Termination Fee ”) to the Company or its designees by wire transfer of same day funds to one or more accounts designated by the Company and the Company’s right to receive the Parent Termination Fee shall be the sole and exclusive remedy (whether at law, in equity, in contract, tort or otherwise) of the Company and its Affiliates, as applicable, for (x) any damages suffered as a result of the failure of the transactions contemplated by this Agreement to be consummated and (y) any other damages suffered as a result of or under this Agreement and the transactions contemplated by this Agreement and, notwithstanding anything to the contrary in this Agreement, if the Parent Termination Fee shall become due and payable in accordance with this Section 7.5(c)(i) , from and after such termination and timely payment of the Parent Termination Fee in full pursuant to and in accordance with this Section 7.5(c)(i) , Parent shall have no further liability of any kind for any reason in connection with this Agreement or the termination contemplated hereby other than for fraud. In no event shall Parent be required to pay the Parent Termination Fee on more than one occasion or to pay both the Parent Termination Fee and the Reverse Termination Fee.

 

(ii)         In the event that this Agreement is terminated pursuant to Section 7.3(b) or Section 7.3(c) (other than a termination pursuant to Section 7.3(b) related to a breach of Section 4.4(c) , Section 5.5 or Section 5.17(a) ), then Parent shall, no later than three (3) Business Days after written demand by the Company, pay or cause to be paid an amount equal to $50 million (the “ Reverse Termination Fee ”) to the Company by wire transfer of immediately available funds to an account or accounts designated in writing by the Company at least two (2) Business Days prior to the date on which payment is due and the Company’s right to receive the Reverse Termination Fee shall be the sole and exclusive remedy (whether at law, in equity, in contract, tort or otherwise) of the Company and its Affiliates, as applicable, for (x) any damages suffered as a result of the failure of the transactions contemplated by this Agreement to be consummated and (y) any other damages suffered as a result of or under this Agreement and the transactions contemplated by this Agreement and, notwithstanding anything to the contrary in this Agreement, if the Reverse Termination Fee shall become due and payable in accordance with this Section 7.5(c)(ii) , from and after such termination and timely payment of the Reverse Termination Fee in full pursuant to and in accordance with this Section 7.5(c)(ii) , Parent shall have no further liability of any kind for any reason in connection with this Agreement or the termination contemplated hereby other than as set forth in this Section 7.5(c)(ii) and other than for fraud. In no event shall Parent be required to pay the Reverse Termination Fee on more than one occasion or to pay both the Reverse Termination Fee and the Parent Termination Fee. For the avoidance of doubt and notwithstanding anything to the contrary herein, in no event shall Parent be required to pay the Reverse Termination Fee in connection with a termination pursuant to Section 7.3(b) related to a breach of Section 4.4(c) , Section 5.5 or Section 5.17(a) .

 

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(d)          In the event that the Company shall fail to pay the Company Termination Fee, or Parent shall fail to pay the Reverse Termination Fee or the Parent Termination Fee, in each case as required pursuant to this Section 7.5 , when due, such fee shall accrue interest for the period commencing on the date such fee became due, at a rate equal to the rate of interest publicly announced by JPMorgan Chase Bank, National Association, in the City of New York from time to time during such period, as such bank’s prime lending rate. In addition, if the Company or Parent shall fail to pay such fee when due, such party shall also pay to the other party all of such other party’s costs and expenses (including attorneys’ fees) in connection with such other party’s efforts to collect such fee. The Company and Parent each acknowledge that the fees and the other provisions of this Section 7.5 are an integral part of this Agreement and are not a penalty, but rather liquidated damages in a reasonable amount that will compensate the other party in the circumstances in which such fees are payable, and that, without these provisions, the other party would not enter into this Agreement.

 

ARTICLE VIII

 

General Provisions

 

Section 8.1.           No Survival of Representations and Warranties . None of the representations and warranties in this Agreement or in any instrument delivered pursuant to this Agreement shall survive the Effective Time.

 

Section 8.2.           Modification or Amendment . Subject to applicable Law, this Agreement may be modified or amended by, and only by, written agreement executed and delivered by the duly authorized officers of Parent and the Company; provided , that no amendment shall be made to this Agreement after the Effective Time; provided , further , that after receipt of Stockholder Approval, if any such amendment shall by applicable Law require further approval of the stockholders of the Company, the effectiveness of such amendment shall be subject to the approval of the stockholders of the Company. Notwithstanding anything to the contrary contained herein, Sections 7.5 , 8.5(b) , 8.5(c) , 8.5(d) , 8.8 , 8.9 , 8.11 and this Section 8.2 (and any provision of this Agreement to the extent an amendment, modification, waiver or termination of such provision would modify the substance of Sections 8.5(b) , 8.5(c) , 8.5(d) , 8.8 , 8.9, 8.11 and the last sentence of this Section 8.2 ) may not be amended, modified, waived or terminated in a manner that is adverse in any respect to the Debt Financing Source Parties without the prior written consent of the Lead Arrangers.

 

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Section 8.3.           Waiver; Extension . The conditions to each of the parties’ obligations to consummate the Merger are for the sole benefit of such party and may be waived by such party (without the approval of the stockholders of the Company) in whole or in part to the extent permitted by applicable Law. At any time prior to the Effective Time, the Company or Parent may (i) waive or extend the time for the performance of any of the obligations or other acts of Parent or Merger Sub, in the case of the Company, or the Company, in the case of Parent, or (ii) waive any inaccuracies in the representations and warranties contained in this Agreement or in any document delivered pursuant to this Agreement on the part of Parent or Merger Sub, in the case of the Company, or the Company, in the case of Parent. Any agreement on the part of a party to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party. The failure or delay of any party to this Agreement to assert any of its rights hereunder in accordance with this Agreement shall not constitute a waiver of such rights.

 

Section 8.4.           Counterparts . This Agreement may be executed in any number of counterparts, each such counterpart being deemed to be an original instrument, and all such counterparts shall together constitute the same agreement.

 

Section 8.5.           Governing Law and Venue; Waiver of Jury Trial .

 

(a)          This Agreement, the Equity Commitment Letter and the Fee Funding Arrangements and all actions (whether at law, in contract or in tort) that may be based upon, arise out of or relate to this Agreement, the Equity Commitment Letter or the Fee Funding Arrangements or the negotiation, execution or performance hereof or thereof shall be governed by and construed in accordance with the laws of the State of Delaware without regard to principles of conflicts of law. Each party hereto agrees that it shall bring any Action between the parties or involving any member of the Company Group or Parent Group arising out of or related to this Agreement, the Equity Commitment Letters or the Fee Funding Arrangements or the transactions contained in or contemplated by this Agreement, the Equity Commitment Letter or the Fee Funding Arrangements exclusively in the Delaware Court of Chancery (or, only if the Delaware Court of Chancery lacks or declines to accept jurisdiction over a particular matter, any state or federal court within the State of Delaware) (the “ Chosen Courts ”), and with respect to any such Action (i) irrevocably submits to the exclusive jurisdiction of the Chosen Courts, (ii) waives any objection to laying venue in any such Action in the Chosen Courts, (iii) waives any objection that the Chosen Courts are an inconvenient forum or do not have jurisdiction over any party hereto or any member of the Company Group or Parent Group and (iv) agrees that service of process upon such party in any such Action shall be effective if notice is given in accordance with Section 8.6 .

 

(b)          EACH PARTY, ON BEHALF OF ITSELF AND ITS RESPECTIVE AFFILIATES, ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, INCLUDING (WITHOUT IN ANY WAY LIMITING SECTION 8.5(d) ) ANY ACTION INVOLVING A DEBT FINANCING SOURCE PARTY DIRECTLY OR INDIRECTLY ARISING OUT OF THE TRANSACTIONS CONTEMPLATED HEREBY, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER AT LAW OR EQUITY, IN CONTRACT, IN TORT OR OTHERWISE. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) EACH PARTY MAKES THIS WAIVER VOLUNTARILY AND (IV) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.5(b) .

 

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(c)          Notwithstanding anything herein to the contrary, but subject to Section 8.5(d) , each party hereto, on behalf of itself and its respective Affiliates, agrees (i) that any Action of any kind or nature, whether at law or equity, in contract, in tort or otherwise, against a Debt Financing Source Party in connection with this Agreement, the Debt Financing or the transactions contemplated hereby or thereby shall be brought exclusively in any New York state or federal court sitting in the borough of Manhattan and each party submits for itself and its property with respect to any such action to the exclusive jurisdiction of such courts, (ii) that services of process, summons, notice or document by registered mail addressed to it at its address provided in the Debt Commitment Letter shall be effective service of process against it for any Action described in clause (i) brought in any such court, (iii) to waive and hereby irrevocably waives, to the fullest extent permitted by Law, any objection which it may now or hereafter have to the laying of venue of, and the defense of an inconvenient forum to the maintenance of, any Action described in clause (i) in any such court, (iv) that a final judgment in any Action described in clause (i) shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law, (v) that, except as specifically set forth in the Debt Commitment Letter as of the date hereof, the Laws of the State of New York shall govern any Action described in clause (i) , without giving effect to principles or rules of choice or conflict of Laws to the extent such principles or rules would require or permit the application of Laws of another jurisdiction and (vi) to irrevocably waive and hereby waives any right to a trial by jury in any Action described in clause (i) to the same extent such rights are waived pursuant to Section 8.5(b) .

 

(d)          Notwithstanding anything herein to the contrary, the Company, on behalf of itself and, to the fullest extent permitted by law, each member of the Company Group (and each of their respective former, current or future direct or indirect equity holders, controlling persons, general or limited partners, shareholders, managers, members, directors, officers, employees, representatives or agents, and their respective successors and assigns (in each case, in such capacity)), hereby waives to the fullest extent permitted by Law any rights or claims against any Lenders and the parties to any joinder agreements, credit agreements or commitment letters entered into in connection with the Debt Financing, and any of their Affiliates and any of such entities’ or their Affiliates’ respective former, current or future direct or indirect equity holders, controlling persons, general or limited partners, shareholders, managers, members, directors, officers, employees, representatives or agents, and their respective successors and assigns (excluding, for purposes of this Section 8.5(d) , any members of the Parent Group) (collectively, the “ Debt Financing Source Parties ”), in connection with this Agreement or the Debt Commitment Letter, whether at law or equity, in contract, in tort or otherwise. For the avoidance of doubt, neither the Company nor any of its Affiliates shall be Debt Financing Source Parties.

 

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Section 8.6.           Notices . All notices, demands and other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given (a) if personally delivered, on the date of delivery, (b) if delivered by express courier service of national standing (with charges prepaid), on the Business Day following the date of delivery to such courier service, (c) if deposited in the United States mail, first-class postage prepaid, on the fifth (5th) Business Day following the date of such deposit, or (d) if delivered by email transmission, on the date of such transmission. All notices, demands and other communications hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice:

 

If to Parent or Merger Sub, to:

 

WeddingWire, Inc.

c/o Permira Advisers LLC

3000 Sand Hill Road, Building 1, Suite 170

Menlo Park, CA 94025

Attention: Dipan Patel

email: Dipan.Patel@permira.com

 

with a copy (which shall not constitute notice) to:

 

Fried, Frank, Harris, Shriver & Jacobson LLP

801 17th Street NW

Washington, DC 20006

Attention: Brian Mangino

email: Brian.Mangino@friedfrank.com

 

If to the Company, to:

 

XO Group Inc.

195 Broadway, 25th Floor

New York, New York 10007

Attention: Mike Steib

email: msteib@xogrp.com

 

with a copy (which shall not constitute notice) to:

 

XO Group Inc.

195 Broadway, 25th Floor

New York, New York 10007

Attention: Jeffrey Yin

email: jyin@xogrp.com

 

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Wachtell, Lipton, Rosen & Katz

51 West 52nd Street

New York, New York 10019

Attention: Sabastian V. Niles & Gordon S. Moodie

email: SVNiles@wlrk.com / GSMoodie@wlrk.com

 

or to such other persons or addresses as may be designated in writing by the party to receive such notice as provided above.

 

Section 8.7.           Specific Performance .

 

(a)          The parties agree that irreparable damage for which monetary damages, even if available, would not be an adequate remedy, would occur in the event that the parties hereto do not perform the provisions of this Agreement (including failing to take such actions as are required of them in order to consummate the Merger) in accordance with its specified terms or otherwise breach or threaten to breach such provisions. The parties acknowledge and agree that the parties hereto shall be entitled, in addition to any other remedy to which they are entitled at law or in equity, to an injunction, specific performance and other equitable relief to prevent breaches or threatened breaches of this Agreement and to enforce specifically the terms and provisions hereof.

 

(b)          Without limiting the foregoing, each of the parties agrees that it will not oppose the granting of an injunction, specific performance and other equitable relief on the basis that (i) there is adequate remedy at law or (ii) an award of specific performance is not an appropriate remedy for any reason at law or in equity. Any party seeking an order or injunction to prevent breaches or threatened breaches and to enforce specifically the terms and provisions of this Agreement shall not be required to provide any bond or other security in connection with any such order or injunction. Notwithstanding anything to the contrary in this Agreement, the parties hereto hereby acknowledge and agree that the Company shall be entitled to specific performance or any other equitable remedy to cause Parent or Merger Sub to consummate the Merger only if (A) all conditions set forth in Section 6.1 and Section 6.2 have been satisfied or waived (other than those conditions that by their nature are to be satisfied at the Closing ( provided , that those other conditions would be capable of being satisfied if the Closing were on such date)) and Parent has failed to consummate the Closing when required to hereunder, (B) the Debt Financing (or any alternative thereto in accordance with this Agreement) has been funded or would be funded following the delivery of a drawdown notice by Parent and the satisfaction of those conditions that by their nature are to be satisfied at the Closing, including the funding of the Equity Financing and (C) the Company has irrevocably confirmed in writing to Parent that if specific performance is granted and the Debt Financing is funded, then it is willing to complete the Closing in accordance with Article I .

 

(c)          While the Company may pursue either (i) a grant of specific performance in accordance with this Section 8.7 or (ii) the payment of either the Parent Termination Fee or the Reverse Termination Fee in accordance with Section 7.5 , under no circumstances will the Company be entitled to receive both (A) a grant of specific performance to cause the consummation of the transactions contemplated hereby and (B) any portion of either the Parent Termination Fee or the Reverse Termination Fee.

 

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Section 8.8.           Entire Agreement . This Agreement (including any exhibits and schedules hereto), the Company Disclosure Schedule, the Parent Disclosure Schedule, the Commitment Letters, the Fee Funding Arrangements and the Confidentiality Agreements constitute the entire agreement among the parties with respect to the subject matter hereof, and supersede all other prior agreements, understandings, representations and warranties, both written and oral, among the parties, with respect to the subject matter hereof.

 

Section 8.9.          Parties in Interest. Each of Parent, Merger Sub and the Company hereby agrees that their respective representations, warranties and covenants set forth herein are solely for the benefit of the other parties hereto, in accordance with and subject to the terms of this Agreement, and this Agreement is not intended to, and does not, confer upon any Person other than the parties hereto any rights or remedies hereunder, including the right to rely upon the representations and warranties set forth herein; provided , that (a) the Debt Financing Source Parties shall be express third party beneficiaries of, and shall be entitled to rely on Sections 8.2 , 8.5(b) , 8.5(c) , 8.5(d) , 8.8 , 8.11 and this Section 8.9 , (b) the definition of “Debt Financing Source Parties” (it being understood that the provisions and definitions identified in this clause (a) and clause (b) may not be amended in a manner adverse to any Debt Financing Source Party in any respect without the prior written consent of the Lead Arrangers), (c) if the Effective Time occurs, the holders of Shares shall be third party beneficiaries of, and shall be entitled to rely on, Article II , (d) if the Effective Time occurs, the Indemnified Parties shall be third party beneficiaries of, and shall be entitled to rely on, Section 5.10 ( Indemnification; Directors’ and Officers’ Insurance ), and (e) if the Effective Time occurs, the holders of Company Equity Awards shall be third party beneficiaries of, and shall be entitled to rely on, Article II .

 

Section 8.10.          Definitions; Construction .

 

(a)           Definitions . As used herein:

 

Acceptable Confidentiality Agreement ” means an executed confidentiality agreement containing terms that are not materially less favorable in the aggregate to the Company than those contained in the Mutual NDA, except that such confidentiality agreement need not contain any standstill or similar provision.

 

Acquisition Proposal ” means any proposal or offer from any Person (other than Parent and its Subsidiaries) relating to, in a single transaction or series of transactions, (a) a merger, consolidation, dissolution, liquidation, recapitalization, share exchange, business combination or similar transaction involving the Company as a result of which the stockholders of the Company immediately prior to such transaction would cease to own at least 80% of the total voting power of the Company or any surviving entity (or any direct or indirect parent company thereof) immediately following such transaction, (b) the acquisition by any Person or group of Persons of more than 20% of the total voting power represented by the outstanding voting securities of the Company, (c) a tender offer or exchange offer or other transaction which, if consummated, would result in a direct or indirect acquisition by any Person or group of Persons of more than 20% of the total voting power represented by the outstanding voting securities of the Company, or (d) the acquisition in any manner, directly or indirectly, of over 20% of the consolidated assets of the Company and its Subsidiaries, in each case other than the transactions contemplated by this Agreement.

 

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Action ” means any claim, charge, complaint, demand, action, litigation, arbitration, suit in equity or at law, administrative, regulatory or quasi-judicial proceeding, or other proceeding, in each case by or before a Governmental Entity.

 

Affiliate ” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with, such Person, and for purposes of this definition, the term “control” (including the correlative terms “controlling,” “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

 

Applicable Regulatory Law ” means the Sherman Act, as amended, the Clayton Act, as amended, the HSR Act and the Federal Trade Commission Act, as amended.

 

Business Day ” means any day except a Saturday, a Sunday or any other day on which commercial banks are required or authorized by Law to close in New York, New York.

 

Company Benefit Plan ” means each “employee benefit plan” (as defined in Section 3(3) of ERISA), whether or not such plan is subject to ERISA, and each other employment, change in control, retention, bonus, defined benefit or defined contribution, pension, profit sharing, deferred compensation, incentive, stock ownership, stock purchase, stock option, stock appreciation, restricted stock, restricted stock unit, phantom stock or other equity-based, retirement, vacation, paid-time off, severance, termination, consulting, disability, death benefit, medical, dental, fringe benefit, insurance, supplemental unemployment or excess benefit, or other employee benefit plan, program, agreement or arrangement that (i) the Company or any of its Subsidiaries sponsors or maintains, (ii) with respect to which contributions, premiums or other payments are made or required to be made by the Company or any of its Subsidiaries for the benefit of any Employee or (iii) pursuant to which the Company or any of its Subsidiaries could have any liability.

 

Company ESPP ” means the Company’s Amended and Restated 2009 Employee Stock Purchase Plan.

 

Company Group ” means (i) the Company and its Subsidiaries, (ii) the former, current and future holders of any equity, partnership or limited liability company interest, controlling persons, directors, officers, employees, agents, attorneys, Affiliates, members, managers, general or limited partners, stockholders or assignees of the Company or its Subsidiaries and (iii) any future holders of any equity, partnership or limited liability company interest, controlling persons, directors, officers, employees, agents, attorneys, Affiliates, members, managers, general or limited partners, stockholders or assignees of any of the foregoing

 

Company Intellectual Property ” means Intellectual Property owned by the Company and its Subsidiaries.

 

Company Material Adverse Effect ” means any fact, circumstance, change, event, occurrence or effect that has had, or would reasonably be expected to have, individually or in the aggregate, a material adverse effect on the financial condition, business or results of operations of the Company and its Subsidiaries, taken as a whole; provided , that none of the following, and no effect arising out of, relating to or resulting from the following, shall constitute or be taken into account in determining whether there has been, or would reasonably be expected to be, a “Company Material Adverse Effect”:

 

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(i)          any facts, circumstances, changes, events, occurrences or effects generally affecting (A) the industries in which the Company and its Subsidiaries operate or (B) the economy, credit, debt, securities or financial or capital markets in the United States or elsewhere in the world, including changes in interest or exchange rates or deterioration in the credit markets generally; or

 

(ii)         any facts, circumstances, changes, events, occurrences or effects to the extent arising out of, resulting from or attributable to (A) changes or prospective changes (1) in Law, (2) in GAAP or in accounting standards, or (3) any changes or prospective changes in the interpretation or enforcement of any of the foregoing, (B) entry into and consummation and performance of this Agreement and the transactions contemplated hereby and the public announcement thereof, including the impact thereof on relationships, contractual or otherwise, with customers, suppliers, vendors, advertisers, distributors, partners, employees, regulators or other third parties (except that this clause (B) shall not apply to the representations and warranties set forth in Section 3.5(b) (and to the extent related to Section 3.5(b) , the condition set forth in Section 6.2(a) )), (C) acts of war (whether or not declared) or any outbreak of hostilities, sabotage or terrorism (including cyber-attacks and computer hacking), or any escalation or worsening of any such acts of war (whether or not declared), outbreak of hostilities, sabotage or terrorism (including cyber-attacks and computer hacking), (D) weather, pandemics, earthquakes, hurricanes, tornados, natural disasters, climatic conditions or other acts of God, whether or not weather-related, (E) regulatory and political conditions or developments, (F) any change resulting or arising from the identity of, or any facts or circumstances relating to, Parent, Merger Sub or any of their respective Affiliates, (G) any legal proceedings made or brought by any of the current or former stockholders of the Company (on their own behalf or on behalf of the Company), but in any event only in their capacities as current or former stockholders, or otherwise under the DGCL or other applicable Law, or other litigation arising out of or related to this Agreement or any of the transactions contemplated hereby, (H) actions or omissions of the Company or any of its Subsidiaries requested or consented to in writing by Parent or required by this Agreement, (I) any decline in the market price, or change in trading volume, of the Common Stock (or the volatility thereof), (J) any failure to meet any internal or public projections, forecasts or estimates of revenue, earnings, cash flow, cash position or any other metrics, (K) the effect of seasonal changes and patterns on the results of operations, business or financial condition of the Company, (L) the failure to obtain any approvals or consents from any Governmental Entity in connection with the transactions contemplated by this Agreement or any delay in obtaining any such approvals or consents.

 

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provided , that (x) facts, circumstances, changes, events, occurrences or effects set forth in clauses (ii)(A)(1) , (ii)(C) and (ii)(D) above may be taken into account in determining whether there has been, or would reasonably be expected to be, a Company Material Adverse Effect to the extent such facts, circumstances, changes, events, occurrences or effects have a disproportionate adverse effect on the Company and its Subsidiaries, taken as a whole, in relation to others in the industries of the Company and its Subsidiaries ( provided , that only the incremental disproportionate adverse effects of such facts, circumstances, changes, events, occurrences or effects may be taken into account in determining whether there has been, or would reasonably be expected to be, a Company Material Adverse Effect), and (y) that the underlying cause of any decline, change or failure referred to in clause (ii)(I) or (ii)(J) may be taken into account in determining whether there has been, or would reasonably be expected to be, a Company Material Adverse Effect unless such underlying cause is otherwise excluded hereby.

 

Company Registered IP ” means Registered IP filed in the name of, or owned by, Company or any of its Subsidiaries.

 

Company Termination Fee ” means (i) if payable in connection with a termination of this Agreement by the Company pursuant to Section 7.3(a) in order for the Company to enter into an Alternative Acquisition Agreement providing for a Superior Proposal made by an Excluded Party, an amount equal to $8.1 million and (ii) if payable in any other circumstances, an amount equal to $24.3 million.

 

Compliant ” means, with respect to the Required Information used in connection with the Debt Financing, that (i) the Required Information when taken together with all public filings of the Company with the SEC, does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the Required Information not misleading in light of the circumstances in which made; (ii) the applicable auditors have not withdrawn any audit opinion with respect to any audited financial statements contained in the Required Information; and (iii) it shall not become necessary to restate any historical financial statements included in the Required Information in any material respect (it being agreed that the matters disclosed on Schedule A to the Merger Agreement or the Company Disclosure Schedule shall not be material; provided , that the foregoing shall not apply in respect of material developments after the date hereof in respect of such matters), and no such restatement shall be under explicit consideration by the Company’s management or auditors.

 

Contract ” means any note, bond, mortgage, indenture, lease, license, franchise, contract, agreement, commitment, or other legally binding obligation.

 

Employee ” means any current or former employee, officer, director or consultant of the Company or any of its Subsidiaries.

 

Environmental Laws ” means any Law regulating or relating to natural resources or the environment, including Laws relating to contamination and the use, generation, management, handling, transport, treatment, disposal, storage, release of, or exposure to, Materials of Environmental Concern.

 

ERISA ” means the Employee Retirement Income Security Act of 1974, as amended.

 

ERISA Affiliate ” means, with respect to any entity, trade or business, any other entity, trade or business that is, or was at the relevant time, 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 or included the first entity, trade or business, or that is, or was at the relevant time, a member of the same “controlled group” as the first entity, trade or business pursuant to Section 4001(a)(14) of ERISA.

 

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Exchange Act ” means the United States Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

Excluded Party ” means any Person or group from which the Company or any of its Representatives (on behalf of the Company) has received, after the execution of this Agreement and prior to the No-Shop Period Start Date, a bona fide written Acquisition Proposal that (i) the Company Board determines, prior to the No-Shop Period Start Date, in good faith, after consultation with its outside legal counsel and financial advisor, constitutes a Superior Proposal and (ii) remains pending as of, and shall not have been withdrawn or otherwise abandoned prior to, the No-Shop Period Start Date; provided, that any such Person or group shall cease to be an Excluded Party (A) immediately upon the withdrawal or termination of the Acquisition Proposal submitted by such Excluded Party (unless, prior to or substantially concurrently with such withdrawal or termination, such Person or group has made another Acquisition Proposal that has not been withdrawn or terminated) or (B) provided that a withdrawal or termination described in the preceding clause (A) has not earlier occurred, then immediately at 5:00 p.m. (New York City time) on the tenth (10th) day immediately following the No-Shop Period Start Date.

 

Governmental Entity ” means any federal, state, local or foreign government, any court, tribunal, administrative agency or commission or other governmental or other regulatory authority or agency, whether federal, state, local, foreign or supranational, and any arbitral body or NYSE.

 

HSR Act ” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.

 

Intellectual Property ” means all common law and statutory rights anywhere in the world arising under or associated with: (a) patents and patent applications, and similar or equivalent rights in inventions (“ Patents ”); (b) trademarks, trade names, service marks, trade dress and other designations of origin (“ Trademarks ”); (c) trade secret and industrial secret rights, and rights in confidential information (“ Trade Secrets ”); (d) copyrights, moral rights, rights in data and databases, and any other rights in works of authorship (including software) and any related rights of authors (“ Copyrights ”); (e) rights in domain names, uniform resource locators and other names and locators associated with Internet addresses and sites (“ Domain Names ”); (f) applications for, registrations of, and divisions, continuations, continuations-in-part, reissuances, renewals, extensions, restorations and reversions of the any of the foregoing (as applicable); (g) rights of privacy and publicity; and (h) all other similar or equivalent intellectual property or proprietary rights anywhere in the world.

 

Intervening Event ” means any fact, circumstance, change, event, occurrence or effect that is material to the Company and its Subsidiaries taken as a whole (other than any event or circumstance resulting from a breach of this Agreement by the Company or its Subsidiaries) and that (i) was not known to the Company Board as of or prior to the date of this Agreement and (ii) does not involve or relate to an Acquisition Proposal.

 

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Knowledge ” means (i) with respect to the Company, the actual knowledge of those persons set forth in Section 8.10(a) of the Company Disclosure Schedule, and (ii) with respect to Parent, the actual knowledge of those persons set forth in Section 8.10(a) of the Parent Disclosure Schedule.

 

Law ” means any Order or any federal, state, local, foreign, supranational or international law, statute, treaty, convention or ordinance, common law, or any rule, regulation, standard, directive, requirement, policy, license or permit of any Governmental Entity.

 

Lease ” means, collectively, all leases, subleases, licenses and any other agreements or arrangements under which the Company or any of its Subsidiaries leases, subleases, licenses or has the right to occupy any real property.

 

Lien ” means any mortgage, pledge, defect, adverse ownership interest, transfer restriction, security interest, encumbrance, lien or charge.

 

Materials of Environmental Concern ” means any substance or material defined, identified or regulated as toxic or hazardous or as a pollutant or contaminant or words of similar meaning or effect under any Environmental Law, including asbestos, asbestos-containing materials, polychlorinated biphenyls, petroleum and petroleum products.

 

Multiemployer Plan ” means any “multiemployer plan” within the meaning of Section 4001(a)(3) of ERISA.

 

NYSE ” means the New York Stock Exchange.

 

Order ” means any order, judgment, writ, stipulation, settlement, award, injunction, decree, arbitration award or finding of any Governmental Entity.

 

Parent Entities ” means (i) Parent, Merger Sub, the Investors and the Spectrum Arrangement Funds, (ii) the Affiliates and general partners of Parent, Merger Sub, the Investors or the Spectrum Arrangement Funds, (iii) any Person to which the rights and obligations of the foregoing under this Agreement are assigned and (iv) any Ultimate Parent Entities of any of the foregoing.

 

Parent Group ” means the Parent Entities and any controlling persons, directors, officers or employees of the Parent Entities.

 

Permira Funds ” means Permira VI L.P.1, a limited partnership registered in Guernsey, PIL Investments LLP, a limited liability partnership incorporated in England and Wales, P6 Co-Investment SCSp, a société en commandite spéciale and Permira VI I.A.S. L.P., a limited partnership registered in Guernsey.

 

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Permitted Liens ” means (i) any Lien for Taxes not yet delinquent or that are being contested in good faith by appropriate proceedings and for which adequate reserves have been established by the Company in accordance with GAAP, (ii) vendors’, mechanics’, materialmen’s, carriers’, workers’, landlords’, repairmen’s, warehousemen’s, construction and other similar Liens (A) with respect to liabilities that are not yet due and payable or, if due, are not delinquent or (B) that are being contested in good faith by appropriate proceedings and for which adequate reserves (based on good faith estimates of management) have been set aside for the payment thereof or (C) arising or incurred in the ordinary and usual course of business and which are not, individually or in the aggregate, material to the business operations of the Company and its Subsidiaries and do not materially adversely affect the market value or continued use of the asset encumbered thereby, (iii) Liens imposed or promulgated by applicable Law or any Governmental Entity with respect to real property, including zoning, building or similar restrictions, (iv) pledges or deposits in connection with workers’ compensation, unemployment insurance, and other social security legislation, (v) Liens relating to intercompany borrowings among a Person and its wholly owned subsidiaries, (vi) utility easements, minor encroachments, rights of way, imperfections in title, charges, easements, rights of way (whether recorded or unrecorded), restrictions, declarations, covenants, conditions, defects and other Liens, but not including any monetary Liens, that are imposed by any Governmental Entity having jurisdiction thereon or otherwise do not individually or in the aggregate materially interfere with the present occupancy or use of the applicable real property or in the business operations of the Company and its Subsidiaries and (vii) Liens to be released at or prior to Closing.

 

Person ” means any individual, corporation (including not-for-profit), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, Governmental Entity or other entity of any kind or nature.

 

Personal Data ” means any information about an identifiable individual, including a natural person’s name, street address, telephone number, e-mail address, photograph, social security number, social insurance number or tax identification number, driver’s license number, passport number, credit card number, bank information, or customer or account number, biometric identifiers or any other piece of information that allows the identification of or contact with a natural person.

 

Privacy Law ” means any Law relating to the collection, use, processing, retention, transfer, or disclosure of Personal Data.

 

Privacy Policies of any privacy policies setting forth the terms under which a business, collects, uses, discloses or stores any Personal Data.

 

Record Holder ” means, with respect to any Shares, a Person who was, immediately prior to the Effective Time, the holder of record of such Shares.

 

Registered IP ” means all United States, international and foreign (i) Patents; (ii) registered Trademarks and applications to register Trademarks; (ii) registered Copyrights and applications for Copyright registration; (iv) registered Domain Names; and (v) any other Intellectual Property that is subject to any filing or recording with any state, provincial, federal, government or other public or quasi-public legal authority.

 

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Regulatory Law ” means the Applicable Regulatory Laws and all other foreign or domestic Laws that are designed or intended to prohibit, restrict or regulate (i) foreign investment, (ii) foreign exchange or currency controls or (iii) actions having the purpose or effect of monopolization, restraint of trade or lessening of competition.

 

Required Information ” means the financial statements described in paragraph 7(a)(i) and (a)(ii) of Exhibit D to the Debt Commitment Letter.

 

SEC ” means the United States Securities and Exchange Commission.

 

Securities Act ” means the United States Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

Spectrum Arrangement Funds ” means Spectrum Equity Investors VI, L.P., a Delaware limited partnership, Spectrum VI Investment Managers’ Fund, L.P., a Delaware limited partnership and Spectrum VI Co-Investment Fund, L.P., a Delaware limited partnership.

 

Spectrum Funds ” means Spectrum Equity VIII-A, L.P., Spectrum Equity VIII-B, L.P., Spectrum Equity VIII-C, L.P. Spectrum VIII Investment Managers’ Fund, L.P., Spectrum VIII Co-Investment Fund, L.P. and Spectrum Discretionary Overage Program I-A, L.P.

 

Subsidiary ” means, with respect to any Person, any other Person of which at least a majority of the securities or ownership interests having by their terms ordinary voting power to elect a majority of the board of directors or other persons performing similar functions (or, in the case of a partnership, a majority of the general partnership interests) is directly or indirectly owned or controlled by such Person or by one or more of its Subsidiaries.

 

Superior Proposal ” means a bona fide written Acquisition Proposal that the Company Board has determined in its good faith judgment, after consultation with the Company’s financial advisor and outside legal counsel, and taking into consideration, among other things, all of the terms, conditions and other aspects and risks of such Acquisition Proposal and this Agreement, to be more favorable to the Company’s stockholders from a financial point of view than the transactions contemplated by this Agreement (including, if applicable, any revisions to this Agreement made or proposed in writing by Parent in accordance with Section 5.2 prior to the time of determination to which Parent has irrevocably committed); provided , that for purposes of the definition of “Superior Proposal,” the references to “20%” and “80%” in the definition of Acquisition Proposal shall be deemed to be references to “50%.”

 

Tax ” (including, with correlative meaning, the term “ Taxes ”) means (a) all federal, state, local or foreign income, profits, franchise, gross receipts, environmental, capital stock, severance, stamp, payroll, sales, employment, unemployment, disability, use, ad valorem, real or personal property, withholding, excise, production, value added, goods and services, transfer, license, occupation, premium, windfall profits, social security (or similar), registration, alternative or add-on minimum, estimated, occupancy and other assessments imposed by any Governmental Entity responsible for the administration of Taxes, and (b) any interest, penalties and additions with respect to any of the foregoing.

 

Tax Return ” means all returns, reports, forms, elections, declarations, disclosures, schedules, claims for refund, statements, estimates, information returns and other similar documents required to be filed with any Governmental Entity responsible for the administration of Taxes.

 

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Transaction Documents ” means, collectively, this Agreement (including any exhibits and schedules thereto), the Company Disclosure Schedule, the Parent Disclosure Schedule, the Commitment Letters, the Fee Funding Arrangements and the Confidentiality Agreements and any other document contemplated thereby or any document or instrument delivered in connection hereunder or thereunder.

 

Treasury Regulations ” means the regulations promulgated under the Code.

 

Ultimate Parent Entity ” means “ultimate parent entity” as defined in Section 801.1(c) of the HSR Act.

 

Willful Breach ” means a breach that is the result of a willful or intentional act or failure to act.

 

(b)           Construction . The parties have participated jointly in negotiating and drafting this Agreement. In the event that an ambiguity or a question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement. Where a reference in this Agreement is made to a Section or Exhibit, such reference shall be to a Section of or Exhibit to this Agreement unless otherwise indicated. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The word “or” shall be deemed to mean “and/or.” Terms defined in the text of this Agreement as having a particular meaning have such meaning throughout this Agreement, except as otherwise indicated in this Agreement. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such term. Any agreement, Contract, instrument or statute defined or referred to herein or in any agreement, instrument, exhibit or schedule that is referred to or defined herein means such agreement, Contract, instrument or statute as from time to time amended, modified or supplemented, including (in the case of agreements or Contracts or instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and references to all attachments thereto and instruments incorporated therein. This Agreement shall not be interpreted or construed to require any Person to take any action, or fail to take any action, if to do so would violate any applicable Law. All references to dollar amounts in this Agreement shall be references to U.S. dollars unless otherwise expressly set forth herein. The mere inclusion of an item in the Company Disclosure Schedule or the Parent Disclosure Schedule as an exception to a representation or warranty shall not be deemed an admission that such item represents a material exception or material fact, event or circumstance or that such item is material or constitutes a Company Material Adverse Effect or Parent Material Adverse Effect or that the inclusion of such item therein is required. For purposes of this Agreement, the term “made available”, with respect to any document or item required to be made available to Parent as of the date of this Agreement or otherwise, shall mean such document or item has been provided directly to Parent, Investors or any of the foregoing’s Affiliates or other Representatives or made available to Parent, Investors or any of the foregoing’s Affiliates or other Representatives in the electronic data room maintained by the Company, in either case on or before the day immediately prior to the date of this Agreement, or is included in the Company SEC Documents publicly available on or before the day that is one (1) day prior to the date of this Agreement.

 

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Section 8.11.          Severability . The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. If any provision of this Agreement, or the application thereof to any Person or any circumstance, is determined by a court of competent jurisdiction to be invalid or unenforceable, (a) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (b) the remainder of this Agreement and the application of such provision to other Persons or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction.

 

Section 8.12.          Assignment . Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto (whether by operation of Law or otherwise) without the prior written consent of the other parties. No assignment by any party hereto shall relieve such party of any of its obligations hereunder. Subject to the foregoing, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective permitted successors and assigns. Notwithstanding the foregoing, upon prior written notice to the Company but without the Company’s consent (a) Parent and Merger Sub may assign its rights hereunder for collateral security purposes to its debt financing sources (including the Debt Financing Source Parties), or any collateral agent or trustee therefor, with any such assignment effective only as of the Closing and (b) Parent and Merger Sub may assign any rights and obligations hereunder to any of their wholly owned Subsidiaries (so long as they remain Subsidiaries); provided , that no such assignment shall limit, affect or relieve the assignor of its obligations hereunder. Any purported assignment not permitted under this Section 8.12 shall be null and void.

 

Section 8.13.          Headings . The table of contents and headings herein are for convenience of reference only, do not constitute part of this Agreement and shall not be deemed to limit or otherwise affect any of the provisions hereof.

 

Section 8.14.          Delivery by Facsimile or Electronic Transmission . This Agreement and any signed agreement or instrument entered into in connection with this Agreement, and any amendments or waivers hereto or thereto, to the extent signed and delivered by means of a facsimile machine or by e-mail, including to deliver a “.pdf” format data file, shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. No party hereto or to any such agreement or instrument shall raise the use of a facsimile machine or e-mail, including to deliver a “.pdf” format data file to deliver a signature to this Agreement or any amendment or consent hereto or thereto or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a facsimile machine or e-mail, including to deliver a “.pdf” format data file as a defense to the formation of a contract and each party hereto forever waives any such defense.

 

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Section 8.15.          Non-Recourse . Each party agrees, on behalf of itself and its Affiliates and its and their directors, officers, partners and members (collectively, “ Related Parties ”), that all Actions, claims, obligations, liabilities or causes of action (whether in Contract or in tort, in Law or in equity or otherwise, or granted by statute or otherwise, whether by or through attempted piercing of the corporate, limited partnership or limited liability company veil or any other theory or doctrine, including alter ego or otherwise) that may be based upon, in respect of, arise under, out or by reason of, be connected with, or relate to: (A) this Agreement or the transactions contemplated hereunder, (B) the negotiation, execution or performance this Agreement (including any representation or warranty made in, in connection with, or as an inducement to, this Agreement), (C) any breach or violation of this Agreement, and (D) any failure of the transactions contemplated hereunder to be consummated, in each case, may be made (1) under this Agreement only against the Persons that are expressly identified as parties to this Agreement and in accordance with, and on the terms and subject to the conditions of, this Agreement or (2) under any other Transaction Document only against the Persons that are expressly identified as parties to such Transaction Document and in accordance with, and on the terms and subject to the conditions of, such Transaction Document. In furtherance and not in limitation of the foregoing, and notwithstanding anything contained in this Agreement, each party hereto covenants, agrees and acknowledges, on behalf of itself and its respective Affiliates and Related Parties, that no recourse under this Agreement shall be sought or had against any Person other than the parties hereto, and no Person other than the parties hereto shall have any liabilities or obligations under this Agreement (whether in Contract or in tort, in Law or in equity or otherwise, or granted by statute or otherwise, whether by or through attempted piercing of the corporate, limited partnership or limited liability company veil or any other theory or doctrine, including alter ego or otherwise) for any claims, causes of action, obligations or liabilities arising under, out of, in connection with or related to the items in the immediately preceding clauses (A) through (D).

 

[ Signature Page Follows ]

 

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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized officers of the parties hereto as of the date first written above.

 

  XO Group Inc.
     
  By: /s/ Michael Steib
    Name:  Michael Steib
    Title:  Chief Executive Officer
     
  WeddingWire, Inc.
     
  By: /s/ Timothy Chi
    Name:  Timothy Chi
    Title:  CEO
     
  Wedelia Merger Sub, Corp.
     
  By: /s/ Andrew Olek
    Name:  Andrew Olek
    Title:  General Counsel

 

[ Signature Page to Agreement and Plan of Merger ]

 

  

 

 

Exhibit 3.1

 

SECOND AMENDED AND RESTATED BY-LAWS OF XO GROUP INC.

 

(Adopted on September 24, 2018)

 

ARTICLE I

 

CERTIFICATE OF INCORPORATION AND BY-LAWS

 

Section 1.           These Second Amended and Restated By-Laws (the “By-Laws”) are subject to the Certificate of Incorporation of the Corporation, as amended to date. In these By-Laws, references to law, the Certificate of Incorporation and By-Laws mean the law, the provisions of the Certificate of Incorporation and the By-Laws as from time to time in effect.

 

ARTICLE II

 

OFFICES

 

Section 1.           The registered office of the Corporation in the State of Delaware shall be at 1013 Centre Road, in the city of Wilmington, County of New Castle, State of Delaware. The registered agent at such address shall be Corporation Trust Company.

 

Section 2.           The Corporation may also have offices at such other places both within and without the State of Delaware as the Board of Directors may from time to time determine or the business of the Corporation may require.

 

ARTICLE III

 

MEETINGS OF STOCKHOLDERS

 

Section 1.           All meetings of the stockholders for the election of directors shall be held at such place as may be fixed from time to time by the Board of Directors, or at such other place either within or without the State of Delaware as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting. Meetings of stockholders for any other purpose may be held at such time and place, within or without the State of Delaware, as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof.

 

Section 2.           Annual meetings of stockholders shall be held at such date and time as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting, at which they shall elect by a plurality vote the directors to be elected at such meeting, and transact such other business as may properly be brought before the meeting.

 

Section 3.           Written notice of the annual meeting stating the place, date and hour of the meeting shall be given to each stockholder entitled to vote at such meeting not fewer than ten (10) nor more than sixty (60) days before the date of the meeting.

 

 

 

 

Section 4.           The officer who has charge of the stock ledger of the Corporation shall prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.

 

Section 5.           Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute or by the Certificate of Incorporation, may only be called by the chairman of the board or the president and shall be called by the chairman of the board, the president or secretary at the request in writing of two-thirds of the Board of Directors.

 

Section 6.           Written notice of a special meeting stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called, shall be given not fewer than ten (10) nor more than sixty (60) days before the date of the meeting, to each stockholder entitled to vote at such meeting.

 

Section 7.           Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.

 

Section 8.           The holders of fifty percent (50%) of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the Certificate of Incorporation. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented any business may be transacted which might have been transacted at the meeting as originally notified. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

 

Section 9.           When a quorum is present at any meeting, the vote of the holders of a majority of the stock having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of the statutes or of the Certificate of Incorporation, a different vote is required, in which case such express provision shall govern and control the decision of such question.

 

Section 10.          Unless otherwise provided in the Certificate of Incorporation, each stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder, but no proxy shall be voted on after three years from its date, unless the proxy provides for a longer period.

 

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Section 11.          Unless otherwise provided in the Certificate of Incorporation, the Chairman of the Board may adjourn a meeting of stockholders from time to time, without notice other than announcement at the meeting. No notice of the time and place of an adjourned meeting need be given except as required by law.

 

Section 12.

 

A. Annual Meetings of Stockholders

 

1. Nominations of persons for election to the Board of Directors and the proposal of business to be considered by the stockholders may be made at an annual meeting of stockholders only (a) pursuant to the Corporation’s notice of meeting (or any supplement thereto), (b) by or at the direction of the Board of Directors or (c) by any stockholder of the Corporation who was a stockholder of record at the time of giving of notice provided for in this Section 12, who is entitled to vote at the meeting and who complies with the notice procedures set forth in this Section 12.

 

2. For nominations or other business to be properly brought before an annual meeting by a stockholder pursuant to clause (c) of paragraph (a)(1) of this Section 12, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation and such other business must otherwise be a proper matter for stockholder action. To be timely, a stockholder’s notice shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the ninetieth (90th) day nor earlier than the close of business on the one hundred twentieth (120th) day prior to the first anniversary of the date of the preceding year’s annual meeting; provided, however, that if either the date of the annual meeting is more than thirty (30) days before or more than seventy (70) days after such anniversary date, notice by the stockholder to be timely must be so delivered not earlier than the close of business on the one hundred twentieth (120th) day prior to such annual meeting and not later than the close of business on the later of the ninetieth (90th) day prior to such annual meeting or the close of business on the tenth (10th) day following the day on which public announcement of the date of such meeting is first made by the Corporation. Such stockholder’s notice shall set forth (a) as to each person whom the stockholder proposes to nominate for election or reelection as a director, all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Rule 14a-11 thereunder (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected); (b) as to any other business that the stockholder proposes to bring before the meeting, the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend the By-Laws of the Corporation, the language of the proposed amendment), the reasons for conducting such business at the meeting and any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made; and (c) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (i) the name and address of such stockholder, as they appear on the Corporation’s books, and of such beneficial owner, (ii) the class and number of shares of capital stock of the Corporation which are owned beneficially and of record by such stockholder and such beneficial owner, (iii) a representation that the stockholder is a holder of record of stock of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to propose such business or nomination, and (iv) a representation whether the stockholder or the beneficial owner, if any, intends or is part of a group which intends (a) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Corporation’s outstanding capital stock required to approve or adopt the proposal or elect the nominee and/or (b) otherwise to solicit proxies from stockholders in support of such proposal or nomination. The Corporation may require any proposed nominee to furnish such other information as it may reasonably require to determine the eligibility of such proposed nominee to serve as a director of the Corporation.

 

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3. Notwithstanding anything in the second sentence of paragraph (a)(2) of this Section 12 to the contrary, in the event that the number of directors to be elected to the Board of Directors of the Corporation is increased and there is no public announcement by the Corporation naming all of the nominees for director or specifying the size of the increased Board of Directors at least seventy (70) days prior to the first anniversary of the preceding year’s annual meeting (or, if the annual meeting is held more than thirty (30) days before or sixty (60) days after such anniversary date, at least seventy (70) days prior to such annual meeting), a stockholder’s notice required by this Section 12 shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary at the principal executive office of the Corporation not later than the close of business on the tenth (10th) day following the day on which such public announcement is first made by the Corporation.

 

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B. Special Meetings of Stockholders. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting. Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation’s notice of meeting (a) by or at the direction of the Board of Directors or (b) provided that the Board of Directors has determined that directors shall be elected at such meeting, by any stockholder of the Corporation who is a stockholder of record at the time notice provided for in this Section 12 is delivered to the Secretary of the Corporation, who is entitled to vote at the meeting and upon such election, who complies with the notice procedures set forth in this Section 12. If the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board of Directors, any such stockholder entitled to vote in such election of directors may nominate a person or persons (as the case may be), for election to such position(s) as specified in the Corporation’s notice of meeting, if the stockholder’s notice required by paragraph (A)(2) of this Section 12 shall be delivered to the Secretary at the principal executive offices of the Corporation not earlier than the close of business on the one hundred twentieth (120) day prior to such special meeting and not later than the later of (x) the close of business of the ninetieth (90th) day prior to such special meeting or (y) the close of business of the tenth (10th) day following the day on which public announcement is first made of the date of such special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. In no event shall the public announcement of an adjournment or postponement of a special meeting commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above.

 

C. General.

 

1. Only such persons who are nominated in accordance with the procedures set forth in this Section 12 shall be eligible to be elected at an annual or special meeting of stockholders of the Corporation to serve as directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section 12. Except as otherwise provided by law, the Certificate of Incorporation or these By-Laws, the chairman of the board shall have the power and duty (a) to determine whether a nomination or any business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the procedures set forth in this Section 12 (including whether the stockholder or beneficial owner, if any, on whose behalf the nomination or proposal is made solicited (or is part of a group which solicited) or did not so solicit, as the case may be, proxies in support of such stockholder’s nominee or proposal in compliance with such stockholder’s representation as required by clause (A)(2)(c)(iv) of this Section 12) and (b) if any proposed nomination or business was not made or proposed in compliance with this Section 12, to declare that such nomination shall be disregarded or that such proposed business shall not be transacted.

 

2. For purposes of this Section 12, “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 and 15(d) of the Exchange Act.

 

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3. Notwithstanding the foregoing provisions of this Section 12, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth herein. Nothing in this Section 12 shall be deemed to affect any rights (i) of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act or (ii) of the holders of any series of Preferred Stock to elect directors pursuant to any applicable provisions of the Certificate of Incorporation.

 

Notwithstanding any other provision of law, the Certificate of Incorporation or these By-Laws, and notwithstanding the fact that a lesser percentage may be specified by law, the affirmative vote of the holders of at least 66.67% of the votes which all the stockholders would be entitled to cast at any annual election of directors or class of directors shall be required to amend or repeal, or to adopt any provision inconsistent with, this Section 12.

 

ARTICLE IV

 

DIRECTORS

 

Section 1.           The number of directors which shall constitute the whole Board shall be determined by resolution of the Board of Directors or by the stockholders at the annual meeting of the stockholders, except as provided in Section 2 of this Article. The Board shall be divided into three classes as nearly equal in number as possible. The members of each class shall be elected for a term of three years and until their successors are elected and qualified. The Board of Directors shall be classified in accordance with the provisions of the Corporation’s Certificate of Incorporation. Directors need not be stockholders.

 

Section 2.           Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by 66.67% of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office until the next annual election at which such director’s class is to be elected and until their successors are duly elected and shall qualify, unless sooner displaced. If there are no directors in office, then an election of directors may be held in the manner provided by statute. If, at the time of filling any vacancy or any newly created directorship, the directors then in office shall constitute less than a majority of the whole Board (as constituted immediately prior to any such increase), the Court of Chancery may, upon application of any stockholder or stockholders holding at least ten percent (10%) of the total number of the shares at the time outstanding having the right to vote for such directors, summarily order an election to be held to fill any such vacancies or newly created directorships, or to replace the directors chosen by the directors then in office.

 

Section 3.           The business of the Corporation shall be managed by or under the direction of its Board of Directors which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these By-Laws directed or required to be exercised or done by the stockholders.

 

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Meetings of the Board of Directors

 

Section 4.           The Board of Directors of the Corporation may hold meetings, both regular and special, either within or without the State of Delaware.

 

Section 5.           Regular meetings of the Board of Directors may be held without notice at such time and at such place as shall from time to time be determined by the Board. Members of the Board of Directors may participate in regular or special meetings by means of conference telephone or similar communications equipment by which all persons participating in the meeting can hear each other. Such participation shall constitute presence in person.

 

Section 6.           Special meetings of the Board may be called by the chairman of the board, the chief executive officer or the president on two (2) days’ notice to each director by mail or twenty-four (24) hours’ notice to each director either personally or by telecopy; special meetings shall be called by the chairman of the board, the chief executive officer, president or secretary in like manner and on like notice on the written request of two directors unless the Board consists of only one director, in which case special meetings shall be called by the chairman of the board, the chief executive officer, the president or secretary in like manner and on like notice on the written request of the sole director.

 

Section 7.           At all meetings of the Board a majority of the directors fixed by Section 1 shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors, except as may be otherwise specifically provided by statute or by the Certificate of Incorporation. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

 

Section 8.           Unless otherwise restricted by the Certificate of Incorporation or these By-Laws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all members of the Board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board or committee.

 

Section 9.           Unless otherwise restricted by the Certificate of Incorporation or these By-Laws, members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting of the Board of Directors, or any committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.

 

Committees of Directors

 

Section 10.          The Board of Directors may, by resolution passed by a majority of the whole Board, designate one or more committees, each committee to consist of one or more of the directors of the Corporation. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee.

 

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In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member.

 

Any such committee, to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to amending the Certificate of Incorporation, adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all of the Corporation’s property and assets, recommending to the stockholders a dissolution of the Corporation or a revocation of a dissolution, or amending the By-Laws of the Corporation; and, unless the resolution or the Certificate of Incorporation expressly so provide, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board of Directors.

 

Section 11.          Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required.

 

Compensation of Directors

 

Section 12.          Unless otherwise restricted by the Certificate of Incorporation or these By-Laws, the Board of Directors shall have the authority to fix the compensation of directors. The directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary as director. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings.

 

Removal of Directors

 

Section 13.          Any director or the entire Board of Directors may be removed only in accordance with the provisions of the Corporation’s Certificate of Incorporation.

 

ARTICLE V

 

NOTICES

 

Section 1.           Whenever, under the provisions of the statutes or of the Certificate of Incorporation or of these By-Laws, notice is required to be given to any director or stockholder, it shall not be construed to mean personal notice, but such notice may be given in writing, by mail, addressed to such director or stockholder, at his address as it appears on the records of the Corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail. Notice to directors may also be given by telecopy.

 

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Section 2.           Whenever any notice is required to be given under the provisions of the statutes or of the Certificate of Incorporation or of these By-Laws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto.

 

ARTICLE VI

 

OFFICERS

 

Section 1.           The officers of the Corporation shall be chosen by the Board of Directors and shall consist of a chief executive officer, chief financial officer, president, treasurer and a secretary. The Board of Directors may elect from among its members a Chairman of the Board and a Vice Chairman of the Board. The Board of Directors may also choose one or more vice-presidents, assistant secretaries and assistant treasurers. Any number of offices may be held by the same person, unless the Certificate of Incorporation or these By-Laws otherwise provide.

 

Section 2.           The Board of Directors at its first meeting after each annual meeting of stockholders shall choose a chief executive officer, a president, a treasurer, and a secretary and may choose vice presidents.

 

Section 3.           The Board of Directors may appoint such other officers and agents as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board.

 

Section 4.           The salaries of all officers and agents of the Corporation shall be fixed by the Board of Directors or a committee thereof.

 

Section 5.           The officers of the Corporation shall hold office until their successors are chosen and qualify. Any officer elected or appointed by the Board of Directors may be removed at any time by the affirmative vote of a majority of the Board of Directors. Any vacancy occurring in any office of the Corporation shall be filled by the Board of Directors.

 

The Chairman of the Board

 

Section 6.           The Chairman of the Board, if any, shall preside at all meetings of the Board of Directors and of the stockholders at which such individual shall be present. Such individual shall have and may exercise such powers as are, from time to time, assigned to him by the Board and as may be provided by law.

 

Section 7.           In the absence of the Chairman of the Board, the Vice Chairman of the Board, if any, shall preside at all meetings of the Board of Directors and of the stockholders at which such individual shall be present. Such individual shall have and may exercise such powers as are, from time to time, assigned to him by the Board and as may be provided by law.

 

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Chief Executive Officer

 

Section 8.           Such individual shall have general and active management of the business of the Corporation and shall see that all orders and resolutions of the Board of Directors are carrie d into effect.

 

Section 9.           Such individual shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the Corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the Corporation.

 

The President

 

Section 10.         The President shall conduct general and active management of the business of the Corporation and shall see that all orders and resolutions of the Board are carried into effect, subject, however, to the right of the directors to delegate any specific powers, except such as may be by statute exclusively conferred on the President, to any other officer or officers of the Corporation. The President shall have the general power and duties of supervision and management usually vested in the office of President of a corporation. In the absence of the Chairman and Vice Chairman of the Board, the President shall preside at all meetings of the stockholders and the Board of Directors. Such individual shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the Corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the Corporation.

 

The Vice-Presidents

 

Section 11.         In the absence of the president or in the event of his inability or refusal to act, the vice-president, if any (or in the event there be more than one vice-president, the vice-presidents in the order designated by the directors, or in the absence of any designation, then in the order of their election), shall perform the duties of the president, and when so acting, shall have all the powers of and be subject to all the restrictions upon the president. The vice-presidents shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe.

 

The Secretary and Assistant Secretary

 

Section 12.         The secretary shall attend all meetings of the Board of Directors and all meetings of the stockholders and record all the proceedings of the meetings of the Corporation and of the Board of Directors in a book to be kept for that purpose and shall perform like duties for the standing committees when required. Such individual shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors or president, under whose supervision such individual shall be. Such individual shall have custody of the corporate seal of the Corporation and he, or an assistant secretary, shall have authority to affix the same to any instrument requiring it and when so affixed, it may be attested by his signature or by the signature of such assistant secretary. The Board of Directors may give general authority to any other officer to affix the seal of the Corporation and to attest the affixing by his signature.

 

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Section 13.         The assistant secretary, or if there be more than one, the assistant secretaries in the order determined by the Board of Directors (or if there be no such determination, then in the order of their election) shall, in the absence of the secretary or in the event of his inability or refusal to act, perform the duties and exercise the powers of the secretary and shall perform such other duties and have such other powers as the Board of directors may from time to time prescribe.

 

The Treasurer and Assistant Treasurers

 

Section 14.         The treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors.

 

Section 15.         The treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the president and the Board of Directors, at its regular meetings, or when the Board of Directors so requires, an account of all his transactions as treasurer and of the financial condition of the Corporation.

 

Section 16.         If required by the Board of Directors, such individual shall give the Corporation a bond (which shall be renewed every six years) in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of his office and for the restoration to the Corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the Corporation.

 

Section 17.         The assistant treasurer, or if there shall be more than one, the assistant treasurers in the order determined by the Board of Directors (or if there be no such determination, then in the order of their election) shall, in the absence of the treasurer or in the event of his inability or refusal to act, perform the duties and exercise the powers of the treasurer and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe.

 

ARTICLE VII

 

CERTIFICATE OF STOCK

 

Section 1.           Every holder of stock in the Corporation shall be entitled to have a certificate, signed by, or in the name of the Corporation by, the chairman or vice-chairman of the Board of Directors, or the president or a vice-president and the treasurer or an assistant treasurer, or the secretary or an assistant secretary of the Corporation, certifying the number of shares owned by him in the Corporation.

 

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If the Corporation shall be authorized to issue more than one class of stock or more than one series of any class, the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualification, limitations or restrictions or such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate which the Corporation shall issue to represent such class or series of stock, provided that, except as otherwise provided in Section 202 of the General Corporation Law of Delaware, in lieu of the foregoing requirements, there may be set forth on the face or back of the certificate which the Corporation shall issue to represent such class or series of stock, a statement that the Corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.

 

Section 2.           Any of or all the signatures on the certificate may be facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if such individual were such officer, transfer agent or registrar at the date of issue.

 

Lost Certificates

 

Section 3.           The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require and/or give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen or destroyed.

 

Transfer of Stock

 

Section 4.           Upon surrender to the Corporation or the transfer agent of the Corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer, it shall be the duty of the Corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books.

 

Fixing Record Date

 

Section 5.           In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting, nor more than sixty (60) days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

 

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Registered Stockholders

 

Section 6.           The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.

 

ARTICLE VIII

 

INDEMNIFICATION

 

Indemnification

 

Section 1.           (A) Each person who was or is a party or is otherwise threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a “Proceeding”), by reason of the fact that he or she or a person of whom he or she is the legal representative is or was (whether or not such person continues to serve in such capacity at the time any indemnification or advancement of expenses pursuant hereto is sought or at the time any Proceeding relating thereto exists or is brought), a director or executive officer of the Corporation or, while serving as a director or executive officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, trustee, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans maintained or sponsored by the Corporation (hereinafter, a “Covered Person”), shall be (and shall be deemed to have a contractual right to be) indemnified and held harmless by the Corporation (and any successor of the Corporation by merger or otherwise) to the fullest extent authorized by the General Corporation Law of Delaware as the same exists or may hereafter be amended or modified from time to time (but, in the case of any such amendment or modification, only to the extent that such amendment or modification permits the Corporation to provide greater indemnification rights than said law permitted the Corporation to provide prior to such amendment or modification), against all expense, liability and loss (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) actually and reasonably incurred or suffered by such person in connection with such Proceeding if the person acted in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. The termination of any Proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that the person’s conduct was unlawful. Such indemnification shall continue as to a person who has ceased to be a director or executive officer of the Corporation or ceased serving at the request of the Corporation as a director, officer, trustee, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans maintained or sponsored by the Corporation, and shall inure to the benefit of his or her heirs, executors and administrators; provided , that except as provided in paragraph (A) of Section 3 of this Article VIII, the Corporation shall indemnify any such person seeking indemnification in connection with a Proceeding (or part thereof) initiated by such person only if such Proceeding (or part thereof) was authorized by the Board of Directors. For purposes of this Article VIII, the “executive officers” of the Corporation shall be the persons identified in resolutions of the Board of Directors as executive officers of the Corporation, whether for purposes of Section 16 of the Exchange Act or otherwise.

 

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(B) To obtain indemnification under this By-Law, a claimant shall submit to the Corporation a written request, including therein or therewith such documentation and information as is reasonably available to the claimant and is reasonably necessary to determine whether and to what extent the claimant is entitled to indemnification. Upon written request by a claimant for indemnification, a determination, if required by applicable law, with respect to the claimant’s entitlement thereto shall be made as follows: (1) by a majority of Disinterested Directors, even though less than a quorum, or (2) by a committee of Disinterested Directors designated by majority vote of the Disinterested Directors, even though less than a quorum, or (3) if there are no Disinterested Directors, or if the Disinterested Directors so direct, by Independent Counsel (as hereinafter defined), in a written opinion to the Board of Directors, a copy of which shall be delivered to the claimant, (4) if a majority of the Disinterested Directors so directs, by a majority vote of the stockholders of the Corporation, or (5) if there shall have occurred a “Reorganization Event” (as defined in the Corporation’s 2017 Stock Incentive Plan, as approved by the Board of Directors on March 31, 2017 (as it may be amended or modified from time to time)) within two years prior to the date of the commencement of the Proceeding for which indemnification is claimed, by an Independent Counsel selected by Indemnitee. If it is so determined that the claimant is entitled to indemnification, payment to the claimant shall be made within ten (10) days after such determination.

 

Mandatory Advancement of Expenses.

 

Section 2.           To the fullest extent authorized by the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended or modified from time to time (but, in the case of any such amendment or modification, only to the extent that such amendment or modification permits the Corporation to provide greater rights to advancement of expenses than said law permitted the Corporation to provide prior to such amendment or modification), each Covered Person shall have (and shall be deemed to have a contractual right to have) the right, without the need for any action by the Board of Directors, to be paid by the Corporation (and any successor of the Corporation by merger or otherwise) the expenses incurred in connection with any Proceeding in advance of its final disposition, such advances to be paid by the Corporation within ten (10) business days after the receipt by the Corporation of a statement or statements from the claimant requesting such advance or advances from time to time; provided , that if the General Corporation Law of the State of Delaware requires, the payment of such expenses incurred by a director or officer in his or her capacity as a director or officer (and not, except to the extent specifically required by applicable law, in any other capacity in which service was or is rendered by such person while a director or officer, including, without limitation, service to an employee benefit plan) shall be made only upon delivery to the Corporation of an undertaking (hereinafter, the “Undertaking”) by or on behalf of such director or officer, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right of appeal (a “final disposition”) that such director or officer is not entitled to be indemnified for such expenses under this By-Law or otherwise.

 

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Claims.

 

Section 3.           (A) (1) If a claim for indemnification under this Article VIII is not paid in full by the Corporation within thirty (30) days after a written claim pursuant to Section 1(B) of this Article VIII has been received by the Corporation, or (2) if a request for advancement of expenses under this Article VIII is not paid in full by the Corporation within twenty (20) days after a statement pursuant to Section 2 of this Article VIII and the required Undertaking, if any, have been received by the Corporation, the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim for indemnification or request for advancement of expenses and, if successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such claim. It shall be a defense to any such action that, under the General Corporation Law of the State of Delaware, the claimant has not met the standard of conduct which makes it permissible for the Corporation to indemnify the claimant for the amount claimed or that the claimant is not entitled to the requested advancement of expenses, but (except where the required Undertaking, if any, has not been tendered to the Corporation) the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Disinterested Directors, Independent Counsel or stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the General Corporation Law of the State of Delaware, nor an actual determination by the Corporation (including its Disinterested Directors, Independent Counsel or stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct.

 

(B) If a determination shall have been made pursuant to Section 1(B) of this Article VIII that the claimant is entitled to indemnification, the Corporation shall be bound by such determination in any judicial proceeding commenced pursuant to paragraph (A) of this Section 3 of this Article VIII.

 

(C) The Corporation shall be precluded from asserting in any judicial proceeding commenced pursuant to paragraph (A) of this Section 3 of this Article VIII that the procedures and presumptions of this By-Law are not valid, binding and enforceable and shall stipulate in such proceeding that the Corporation is bound by all the provisions of this By-Law.

 

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Contract Rights; Amendment and Repeal; Non-exclusivity of Rights.

 

Section 4.           (A) All of the rights conferred in this Article VIII, as to indemnification, advancement of expenses and otherwise, shall be contract rights between the Corporation and each Covered Person to whom such rights are extended that vest at the commencement of such Covered Person’s service to or at the request of the Corporation and (x) any amendment or modification of this Article VIII that in any way diminishes or adversely affects any such rights shall be prospective only and shall not in any way diminish or adversely affect any such rights with respect to such person and (y) all of such rights shall continue as to any such Covered Person who has ceased to be a director or officer of the Corporation or ceased to serve at the Corporation’s request as [a director, officer, trustee, employee or agent] of another corporation, partnership, joint venture, trust or other enterprise, as described herein, and shall inure to the benefit of such Covered Person’s heirs, executors and administrators.

 

(B) All of the rights conferred in this Article VIII, as to indemnification, advancement of expenses and otherwise, (i) shall not be exclusive of any other rights to which any person seeking indemnification or advancement of expenses may be entitled or hereafter acquire under any statute, provision of the Certificate of Incorporation, By-Laws, agreement, vote of stockholders or Disinterested Directors or otherwise both as to action in such person’s official capacity and as to action in another capacity while holding such office and (ii) cannot be terminated or impaired by the Corporation, the Board of Directors or the stockholders of the Corporation with respect to a person’s service prior to the date of such termination.

 

Insurance, Other Indemnification and Advancement of Expenses.

 

Section 5.           (A) The Corporation may maintain insurance, at its expense, to protect itself and any current or former director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the General Corporation Law of the State of Delaware.

 

(B) The Corporation may, to the extent authorized from time to time by the Board of Directors or the Chief Executive Officer, grant rights to indemnification and rights to advancement of expenses incurred in connection with any Proceeding in advance of its final disposition, to any current or former officer, employee or agent of the Corporation to the fullest extent permitted by applicable law.

 

Definitions.

 

Section 6.           For purposes of this Article VIII, (a) “Independent Counsel” means a law firm, a member of a law firm, or an independent practitioner, that is experienced in matters of corporation law and shall include any person who, under the applicable standards of professional conduct then prevailing, would not have a conflict of interest in representing either the Corporation or the claimant in an action to determine the claimant’s rights under this By-Law and (b) “Disinterested Director” shall mean a director of the Corporation who is not and was not a party to the proceeding in respect of which indemnification is sought by claimant.

 

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Notice.

 

Section 7.           Any notice, request or other communication required or permitted to be given to the Corporation under this By-Law shall be in writing and either delivered in person or sent by telecopy, telex, telegram, overnight mail or courier service, or certified or registered mail, postage prepaid, return receipt requested, to the Secretary of the Corporation and shall be effective only upon receipt by the Secretary.

 

Severability.

 

Section 8.           If any provision or provisions of this By-Law shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (1) the validity, legality and enforceability of the remaining provisions of this By-Law (including, without limitation, each portion of any paragraph of this By-Law containing any such provision held to be invalid, illegal or unenforceable, that is not itself held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (2) to the fullest extent possible, the provisions of this By-Law (including, without limitation, each such portion of any paragraph of this By-Law containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.

 

ARTICLE IX

 

GENERAL PROVISIONS

 

Dividends

 

Section 1.           Dividends upon the capital stock of the Corporation, subject to the provisions of the Certificate of Incorporation, if any, may be declared by the Board of Directors at any regular or special meeting, pursuant to law. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the Certificate of Incorporation.

 

Section 2.           Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for such other purposes as the directors shall think conducive to the interest of the Corporation, and the directors may modify or abolish any such reserve in the manner in which it was created.

 

Checks

 

Section 3.           All checks or demands for money and notes of the Corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate.

 

Fiscal Year

 

Section 4.           The fiscal year of the Corporation shall end on December 31, unless otherwise fixed by resolution of the Board of Directors.

 

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Seal

 

Section 5.           The Board of Directors may adopt a corporate seal having inscribed thereon the name of the Corporation, the year of its organization and the words “Corporate Seal, Delaware.” The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

 

Transactions with Interested Parties

 

Section 6.           No contract or transaction between the Corporation and one or more of the directors or officers, or between the Corporation and any other corporation, partnership, association, or other organization in which one or more of the directors or officers are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because such director or officer is present at or participates in the meeting of the Board of Directors or a committee of the Board of Directors which authorizes the contract or transaction or solely because his, her or their votes are counted for such purpose, if:

 

(1) The material facts as to his or her relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors or the committee, and the Board or committee in good faith authorizes the contract or transaction by the affirmative vote of a majority of the disinterested directors, even though the disinterested directors be less than a quorum;

 

(2) The material facts as to his or her relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or

 

(3) The contract or transaction is fair as to the Corporation as of the time it is authorized, approved or ratified, by the Board of Directors, a committee of the Board of Directors, or the stockholders. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract or transaction.

 

ARTICLE X

 

AMENDMENTS

 

These By-Laws may be repealed, altered, amended or rescinded by the stockholders of the Corporation by vote of not less than 66.67% of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors (considered for this purpose as one class) cast at a meeting of the stockholders called for that purpose (provided that notice of such proposed repeal, alteration, amendment or rescission is included in the notice of such meeting). In addition, in accordance with the Corporation’s Certificate of Incorporation, the Board of Directors may repeal, alter, amend or rescind these By-Laws by vote of 66.67% of the Board of Directors.

 

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Exhibit 10.1

 

FORM OF INDEMNIFICATION AGREEMENT

 

This Indemnification Agreement (“Agreement”) is made as of ______________, 20__ by and between XO Group Inc., a Delaware corporation (the “Company”), and ______________ (“Indemnitee”). Except as provided herein, this Agreement supersedes and replaces any and all previous Agreements between the Company and Indemnitee covering the subject matter of this Agreement.

 

RECITALS

 

WHEREAS, the Company desires to attract and retain highly qualified individuals, such as the Indemnitee, to serve the Company as directors or officers, including by providing such persons with adequate protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the Company;

 

WHEREAS, the Company desires to retain the Indemnitee to provide services to it and to assure such persons that there will be increased certainty of such protection;

 

WHEREAS, although the Indemnitee is entitled to indemnification pursuant to the General Corporation Law of the State of Delaware (the “DGCL”), the Certificate of Incorporation of the Company (the “Certificate of Incorporation”) and the Bylaws of the Company (the “Bylaws”),the DGCL, the Bylaws and the Certificate of Incorporation expressly provides that the indemnification provisions set forth therein are not exclusive, and contemplate that contracts may be entered into between the Company and members of the board of directors, officers and other persons with respect to indemnification;

 

WHEREAS, the Board of Directors of the Company (the “Board”) has determined that, in order to attract and retain qualified individuals, the Company will attempt to maintain on an ongoing basis, at its sole expense, liability insurance to protect persons serving the Company and its subsidiaries from certain liabilities;

 

WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified; and

 

WHEREAS, Indemnitee may not be willing to serve or continue to serve as an officer or director without the supplemental protections and indemnifications afforded to it under this Agreement.

 

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

 

 

 

 

Section 1.           Services to the Company. Indemnitee agrees to serve as a director or officer of the Company or as an agent of the Company. Indemnitee may at any time and for any reason resign from such position (subject to any other contractual obligation or any obligation imposed by operation of law), in which event the Company shall have no obligation under this Agreement to continue Indemnitee in such position. This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or any Enterprise (as defined below)) and Indemnitee, and this Agreement does not create any obligation of employment on the part of the Company in favor of the Indemnitee. The foregoing notwithstanding, this Agreement shall continue in force after Indemnitee has ceased to serve as a director, officer or agent of the Company as provided in Section 16 hereof.

 

Section 2.           Definitions. As used in this Agreement:

 

(a)          References to “agent” shall mean any person who is or was a director, officer, or employee of the Company or a subsidiary of the Company or other person authorized by the Company to act for the Company, to include such person serving in such capacity as a director, officer, employee, fiduciary or other official of another corporation, partnership, limited liability company, joint venture, trust or other enterprise at the request of, for the convenience of, or to represent the interests of the Company or a subsidiary of the Company.

 

(b)          A “Reorganization Event” shall mean “Reorganization Event” as defined in the Company’s 2017 Stock Incentive Plan, as approved by the Board of Directors on March 31, 2017.

 

(c)          “Corporate Status” describes the status of a person who is or was a director, officer, employee or agent of the Company or of any other corporation, limited liability company, partnership or joint venture, trust or other enterprise which such person is or was serving at the request of the Company.

 

(d)          “Disinterested Director” shall mean a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.

 

(e)          “Enterprise” shall mean the Company and any other corporation, limited liability company, partnership, joint venture, trust or other enterprise of which Indemnitee is or was serving at the request of the Company as a director, officer, trustee, partner, managing member, employee, agent or fiduciary.

 

(f)          “Expenses” shall include all reasonable attorneys’ fees, retainers, court costs, transcript costs, fees of experts and other professionals, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, any federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, ERISA excise taxes and penalties, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding. Expenses also shall include (i) Expenses incurred in connection with any appeal resulting from any Proceeding, including without limitation the premium, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent, and (ii) for purposes of Section 14(d) only, Expenses incurred by Indemnitee in connection with the interpretation, enforcement or defense of Indemnitee’s rights under this Agreement, by litigation or otherwise. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.

 

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(g)          “Independent Counsel” shall mean a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past three years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning the Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.

 

(h)          The term “Proceeding” shall include any threatened, pending or completed action, suit, claim, counterclaim, cross claim, arbitration, mediation, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought in the right of the Company or otherwise and whether of a civil, criminal, administrative, legislative or investigative (formal or informal) nature, including any appeal therefrom, in which Indemnitee was, is or will be involved as a party, potential party, non-party witness or otherwise by reason of the fact that Indemnitee is or was a director or officer of the Company, by reason of any action taken by Indemnitee (or a failure to take action by Indemnitee) or of any action (or failure to act) on Indemnitee’s part while acting pursuant to Indemnitee’s Corporate Status, in each case whether or not serving in such capacity at the time any liability or Expense is incurred for which indemnification, reimbursement or advancement of Expenses can be provided under this Agreement.

 

(i)          Reference to “other enterprise” shall include employee benefit plans; references to “fines” shall include any excise tax assessed with respect to any employee benefit plan; references to “serving at the request of the Company” shall include any service as a director, officer, employee or agent of the Company which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner Indemnitee reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Company” as referred to in this Agreement.

 

Section 3.           Indemnity in Third-Party Proceedings. The Company shall indemnify Indemnitee in accordance with the provisions of this Section 3 if Indemnitee is, or is threatened to be made, a party to or a participant in any Proceeding, other than a Proceeding by or in the right of the Company to procure a judgment in its favor, by reason of Indemnitee’s Corporate Status. Pursuant to this Section 3, Indemnitee shall be indemnified to the fullest extent permitted by applicable law against all Expenses, judgments, fines and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect of such Expenses, judgments, fines and amounts paid in settlement) actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company and, in the case of a criminal Proceeding had no reasonable cause to believe that Indemnitee’s conduct was unlawful. The parties hereto intend that this Agreement shall provide to the fullest extent permitted by law for indemnification in excess of that expressly permitted by statute, including, without limitation, any indemnification provided by the Certificate of Incorporation, the Bylaws, vote of its stockholders or Disinterested Directors or applicable law.

 

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Section 4.           Indemnity in Proceedings by or in the Right of the Company. The Company shall indemnify Indemnitee in accordance with the provisions of this Section 4 if Indemnitee is, or is threatened to be made, a party to or a participant in any Proceeding by or in the right of the Company to procure a judgment in its favor by reason of Indemnitee’s Corporate Status. Pursuant to this Section 4, Indemnitee shall be indemnified to the fullest extent permitted by applicable law against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company. No indemnification for Expenses shall be made under this Section 4 in respect of any claim, issue or matter as to which Indemnitee shall have been finally adjudged by a court to be liable to the Company, unless and only to the extent that the Delaware Court (as hereinafter defined) or any court in which the Proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification.

 

Section 5.           Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provisions of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is a party to (or a participant in) and is successful, on the merits or otherwise, in any Proceeding or in defense of any claim, issue or matter therein, in whole or in part, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by Indemnitee in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with or related to each successfully resolved claim, issue or matter to the fullest extent permitted by law. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

 

Section 6.           Indemnification For Expenses of a Witness. Notwithstanding any other provision of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is, by reason of Indemnitee’s Corporate Status, a witness or otherwise asked to participate in any Proceeding to which Indemnitee is not a party, Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith.

 

Section 7.           Partial Indemnification. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of Expenses, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.

 

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Section 8.           Additional Indemnification.

 

(a)          Notwithstanding any limitation in Sections 3, 4, or 5, the Company shall indemnify Indemnitee to the fullest extent permitted by applicable law if Indemnitee is a party to or threatened to be made a party to any Proceeding (including a Proceeding by or in the right of the Company to procure a judgment in its favor) by reason of Indemnitee’s Corporate Status.

 

(b)          For purposes of Section 8(a), the meaning of the phrase “to the fullest extent permitted by applicable law” shall include, but not be limited to:

 

i.            to the fullest extent permitted by the provision of the DGCL that authorizes or contemplates additional indemnification by agreement, or the corresponding provision of any amendment to or replacement of the DGCL, and

 

ii.         to the fullest extent authorized or permitted by any amendments to or replacements of the DGCL adopted after the date of this Agreement that increase the extent to which a corporation may indemnify its officers and directors.

 

Section 9.           Exclusions. Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnification payment in connection with any claim involving Indemnitee:

 

(a)          for which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision; or

 

(b)          for (i) an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act (as defined in Section 2(b) hereof) or similar provisions of state statutory law or common law, (ii) any reimbursement of the Company by the Indemnitee of any bonus or other incentive-based or equity-based compensation or of any profits realized by the Indemnitee from the sale of securities of the Company, as required in each case under the Exchange Act (including any such reimbursements that arise from an accounting restatement of the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), or Section 904 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the payment to the Company of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley Act) or (iii) any reimbursement of the Company by Indemnitee of any compensation pursuant to any compensation recoupment or clawback policy adopted by the Board or the compensation committee of the Board, including but not limited to any such policy adopted to comply with stock exchange listing requirements implementing Section 10D of the Exchange Act; or

 

(c)          except as provided in Section 14(d) of this Agreement, in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation or (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law.

 

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Section 10.          Advances of Expenses. Notwithstanding any provision of this Agreement to the contrary (other than Section 14(d)), the Company shall advance, to the extent not prohibited by law, the Expenses incurred and paid by Indemnitee in connection with any Proceeding (or any part of any Proceeding) not initiated by Indemnitee or any Proceeding initiated by Indemnitee with the prior approval of the Board as provided in Section 9(c), and such advancement shall be made within ten (10) business days after the receipt by the Company of a statement or statements requesting such advances from time to time, whether prior to or after final disposition of any Proceeding. Advances shall be unsecured and interest free. Advances shall be made without regard to Indemnitee’s ability to repay the Expenses and without regard to Indemnitee’s ultimate entitlement to indemnification under the other provisions of this Agreement. In accordance with Section 14(d), advances shall include any and all reasonable Expenses incurred pursuing an action to enforce this right of advancement, including Expenses incurred preparing and forwarding statements to the Company to support the advances claimed. The Indemnitee shall qualify for advances upon the execution and delivery to the Company of this Agreement, which shall constitute an undertaking providing that the Indemnitee undertakes to repay the amounts advanced (without interest) to the extent that it is ultimately determined that Indemnitee is not entitled to be indemnified by the Company. No other form of undertaking shall be required other than the execution of this Agreement, except as may be expressly required by the DGCL. This Section 10 shall not apply to any claim made by Indemnitee for which indemnity is excluded pursuant to Section 9.

 

Section 11.          Procedure for Notification and Defense of Claim.

 

(a)          Indemnitee shall notify the Company in writing of any matter with respect to which Indemnitee intends to seek indemnification or advancement of Expenses hereunder as soon as reasonably practicable following the receipt by Indemnitee of written notice thereof. The written notification to the Company shall include a description of the nature of the Proceeding and the facts underlying the Proceeding. To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification following the final disposition of such Proceeding. The omission by Indemnitee to notify the Company hereunder will not relieve the Company from any liability which it may have to Indemnitee hereunder or otherwise than under this Agreement, and any delay in so notifying the Company shall not constitute a waiver by Indemnitee of any rights under this Agreement. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification.

 

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(b)          The Company will be entitled to participate in the Proceeding at its own expense and, except as otherwise provided below, to the extent the Company so wishes, it may assume the defense thereof with counsel reasonably satisfactory to Indemnitee. After notice from the Company to Indemnitee of its election to assume the defense of any such Claim, the Company shall not be liable to Indemnitee under this Agreement or otherwise for any Expenses subsequently directly incurred by Indemnitee in connection with Indemnitee’s defense of such Claim other than reasonable costs of investigation or as otherwise provided below; provided , that the Company shall not settle any Claim in any manner which would impose any penalty, limitation or unindemnified Expense on the Indemnitee for which indemnification would not be provided hereunder without Indemnitee’s consent (which consent shall not be unreasonably withheld or delayed). Indemnitee shall have the right to employ its own legal counsel in such Claim, but all Expenses related to such counsel incurred after notice from the Company of its assumption of the defense shall be at Indemnitee’s own expense; provided , that if (i) Indemnitee’s employment of its own legal counsel has been authorized by the Company, (ii) Indemnitee has reasonably determined that there may be a conflict of interest between Indemnitee and the Company in the defense of such Claim, (iii) after a Reorganization Event, Indemnitee’s employment of its own counsel has been approved by the Independent Counsel, or (iv) the Company shall not in fact have employed counsel to assume the defense of such Claim, then Indemnitee shall be entitled to retain its own separate counsel (but not more than one law firm plus, if applicable, local counsel in respect of any such Claim) and all Expenses related to such separate counsel shall be borne by the Company.

 

Section 12.          Procedure Upon Application for Indemnification.

 

(a)          To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. Upon written request by Indemnitee for indemnification, a determination, if required by applicable law, with respect to the Indemnitee’s entitlement thereto shall be made as follows: (1) by a majority of Disinterested Directors, even though less than a quorum, or (2) by a committee of Disinterested Directors designated by majority vote of the Disinterested Directors, even though less than a quorum, or (3) if there are no Disinterested Directors, or if the Disinterested Directors so direct, by Independent Counsel, in a written opinion to the Board, a copy of which shall be delivered to Indemnitee, (4) if a majority of the Disinterested Directors so directs, by a majority vote of the stockholders of the Company, or (5) if there shall have occurred a Reorganization Event within two years prior to the date of the commencement of the Proceeding for which indemnification is claimed, by an Independent Counsel selected by Indemnitee. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any costs or Expenses (including attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom. The Company promptly will advise Indemnitee in writing with respect to any determination that Indemnitee is or is not entitled to indemnification, including a description of any reason or basis for which indemnification has been denied.

 

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(b)          In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a) hereof, the Independent Counsel shall be selected as provided in this Section 12(b). If a Reorganization Event shall not have occurred, the Independent Counsel shall be selected by the Board, and the Company shall give written notice to Indemnitee advising Indemnitee of the identity of the Independent Counsel so selected. If a Reorganization Event shall have occurred, the Independent Counsel shall be selected by Indemnitee (unless Indemnitee shall request that such selection be made by the Board, in which event the preceding sentence shall apply), and Indemnitee shall give written notice to the Company advising it of the identity of the Independent Counsel so selected. In either event, Indemnitee or the Company, as the case may be, may, within ten (10) days after such written notice of selection shall have been given, deliver to the Company or to Indemnitee, as the case may be, a written objection to such selection; provided , however , that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 2 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as Independent Counsel. If such written objection is so made and substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or the Delaware Court has determined that such objection is without merit. If, within twenty (20) days after the later of submission by Indemnitee of a written request for indemnification pursuant to Section 11(a) hereof and the final disposition of the Proceeding, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition the Delaware Court for resolution of any objection which shall have been made by the Company or Indemnitee to the other’s selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by such court or by such other person as such court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 12(a) hereof. Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 14(a) of this Agreement, Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing).

 

Section 13.          Presumptions and Effect of Certain Proceedings.

 

(a)          In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall, to the fullest extent not prohibited by law, presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 11(a) of this Agreement, and the Company shall, to the fullest extent not prohibited by law, have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption. Neither the failure of the Company (including by its directors or Independent Counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by its directors or Independent Counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.

 

(b)          The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which Indemnitee reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that Indemnitee’s conduct was unlawful.

 

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(c)          For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by the directors or officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser, financial advisor or other expert selected with reasonable care by or on behalf of the Enterprise as to matters Indemnitee reasonably believes are within such Person’s professional or expert competence. The provisions of this Section 13(c) shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement.

 

(d)          The knowledge and/or actions, or failure to act, of any director, officer, trustee, partner, managing member, fiduciary, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.

 

Section 14.          Remedies of Indemnitee. Without limitation to the rights available to an Indemnitee under Section 3 of Article VIII of the Bylaws:

 

(a)          Subject to Section 14(e), in the event that (i) a determination is made pursuant to Section 12 that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 10, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 12(a) within thirty (30) days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 5, 6 or 7 or the second to last sentence of Section 12(a) within ten (10) days after receipt by the Company of a written request therefor, (v) payment of indemnification pursuant to Section 3, 4 or 8 is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification or (vi) in the event that the Company or any other person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any litigation or other action or Proceeding designed to deny, or to recover from, the Indemnitee the benefits provided or intended to be provided to the Indemnitee hereunder, Indemnitee shall be entitled to an adjudication by the Delaware Court of Indemnitee’s entitlement to such indemnification or advancement of Expenses. Alternatively, Indemnitee, at Indemnitee’s option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association. The Company shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration.

 

(b)          In the event that a determination shall have been made pursuant to Section 12(a) that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 14 shall be conducted in all respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination. In any judicial proceeding or arbitration commenced pursuant to this Section 14 the Company shall have the burden of proving Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be.

 

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(c)          If a determination shall have been made pursuant to Section 12(a) that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 14, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.

 

(d)          The Company shall, to the fullest extent not prohibited by law, be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 14 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement. It is the intent of the Company that, to the fullest extent permitted by law, the Indemnitee not be required to incur legal fees or other Expenses associated with the interpretation, enforcement or defense of Indemnitee’s rights under this Agreement by litigation or otherwise because the cost and expense thereof would substantially detract from the benefits intended to be extended to the Indemnitee hereunder. The Company shall, to the fullest extent permitted by law, indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefor) advance, to the extent not prohibited by law, such Expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advancement of Expenses from the Company under this Agreement or under any directors’ and officers’ liability insurance policies maintained by the Company if, in the case of indemnification, Indemnitee is wholly successful on the underlying claims; if Indemnitee is not wholly successful on the underlying claims, then such indemnification shall be only to the extent Indemnitee is successful on such underlying claims or otherwise as permitted by law, whichever is greater.

 

(e)          Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement of Indemnitee to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding.

 

   Section 15.           Non-exclusivity; Survival of Rights; Insurance; Subrogation.

 

(a)          The rights of indemnification and to receive advancement of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Certificate of Incorporation, the Bylaws, any agreement, a vote of stockholders or a resolution of directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by Indemnitee in Indemnitee’s Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in Delaware law, whether by statute or judicial decision, permits greater indemnification or advancement of Expenses than would be afforded currently under the Certificate of Incorporation, the Bylaws and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.

 

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(b)          To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, or agents of the Enterprise, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, officer, employee or agent under such policy or policies. If, at the time of the receipt of a notice of a claim pursuant to the terms hereof, the Company has director and officer liability insurance in effect, the Company shall give prompt notice of such claim or of the commencement of a Proceeding, as the case may be, to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies.

 

(c)          In the event of any payment made by the Company under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

 

(d)          The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable (or for which advancement is provided hereunder) hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.         

 

(e)          The Company’s obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of the Company as a director, officer, trustee, partner, managing member, fiduciary, employee or agent of any other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of Expenses from such other corporation, limited liability company, partnership, joint venture, trust or other enterprise.

 

   Section 16.          Duration of Agreement; Successors and Assigns. All obligations of the Company contained herein shall continue during the period during which Indemnitee is a director, officer, employee or agent of the Company or of any other Enterprise and shall continue thereafter so long as Indemnitee may be subject to any Proceeding by reason of Indemnitee’s Corporate Status, whether or not Indemnitee is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Agreement. The indemnification and advancement of expenses rights provided by or granted pursuant to this Agreement shall be binding upon and be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), and shall inure to the benefit of Indemnitee and Indemnitee’s spouse, assigns, heirs, devisees, executors and administrators and other legal representatives.

 

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Section 17.          Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.

 

Section 18.          Enforcement.

 

(a)          The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving or continuing to serve as a director or officer of the Company.

 

(b)          This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof; provided, however, that this Agreement is a supplement to and in furtherance of the Certificate of Incorporation, the Bylaws and applicable law, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder.

 

Section 19.          Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement nor shall any waiver constitute a continuing waiver.

 

Section 20.          Notices. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, (b) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed, (c) mailed by reputable overnight courier and receipted for by the party to whom said notice or other communication shall have been directed or (d) sent by facsimile transmission, with receipt of oral confirmation that such transmission has been received:

 

(a)          If to Indemnitee, at the address indicated on the signature page of this Agreement, or such other address as Indemnitee shall provide to the Company.

 

(b)          If to the Company to

 

XO Group Inc.
  195 Broadway, 25th Floor
  New York, New York 10007
  Attn:  General Counsel

 

or to any other address as may have been furnished to Indemnitee by the Company.

 

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Section 21.          Contribution. To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).

 

Section 22.          Applicable Law and Consent to Jurisdiction. This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. Except with respect to any arbitration commenced by Indemnitee pursuant to Section 14(a) of this Agreement, the Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Court of Chancery of the State of Delaware (the “Delaware Court”), and not in any other state or federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) appoint, to the extent such party is not otherwise subject to service of process in the State of Delaware, irrevocably The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801 as its agent in the State of Delaware as such party’s agent for acceptance of legal process in connection with any such action or proceeding against such party with the same legal force and validity as if served upon such party personally within the State of Delaware, (iv) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court and (v) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.

 

Section 23.          Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.

 

Section 24.          Miscellaneous. Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate. The headings of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof. This Agreement is a supplement to and in furtherance of the Certificate of Incorporation and the Bylaws and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder.

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year first above written.

 

XO GROUP INC.     INDEMNITEE
         
By:      
Name:     Name:  
Office:     Address:  
         
         

 

[ Signature Page to Indemnification Agreement

 

 

Exhibit 10.2

 

Retention and Waiver Summary of Material Terms

 

The following term sheet sets forth the material terms for Michael Steib (the “ Executive ”), the Chief Executive Officer of XO Group Inc. (the “ Company ”), with respect to continued employment following the closing of the acquisition of the Company by Wedding Wire, Inc. (the “ Transaction ”, and the date thereof, the “ Closing Date ”) contemplated under that certain Agreement and Plan of Merger to be entered into between the Company and Wedding Wire, Inc. (the “ Merger Agreement ”). Reference is made to that certain employment agreement between Executive and the Company dated June 28, 2013, as amended April 17, 2014, as the same may be amended by the parties thereto (including as permitted under the Merger Agreement) (the “ Employment Agreement ”) and those options to purchase shares of common stock of the Company and restricted common stock of the Company granted to the Executive under the applicable Company Stock Incentive Plan in accordance with the resolutions of the compensation committee of the Board of Directors of the Company and outstanding as of the date hereof (collectively, the “ Company Equity Awards ”). All references to the terms “ Cause ” and “ Good Reason ” contained in this term sheet shall be as defined in the Employment Agreement and Company Equity Awards, as applicable. This term sheet contains legally binding obligations on all parties hereto relating to the foregoing matters. Notwithstanding the foregoing, if the Transaction does not close, this term sheet shall be rendered void and without effect and none of the parties hereto shall have any obligation to the others hereunder. The terms set forth in this term sheet will be incorporated into an agreement amending or amending and restating the Executive’s Employment Agreement prior to the Closing Date.

 

Post-Closing
Base Salary
   $566,500 per annum (“ Base Salary ”).
     
Post-Closing
Annual Bonus
 

Executive will be eligible for an annual target bonus opportunity which will continue to be 100% of Base Salary (“ Target Bonus ”). The actual bonus earned for the year in which the Transaction occurs will be earned based on the performance targets established by the Company in the ordinary course of business consistent with past practice as set forth in the schedules to the Merger Agreement, with the achievement of such targets at the end of such year to be determined by the Board of Directors of the parent entity of Wedding Wire, Inc. (the “ Parent ”). In any year following the year in which the Transaction occurs, Executive will remain eligible to earn an annual Target Bonus, in accordance with the bonus program to be administered by the combined Wedding Wire, Inc./Company (on and after the Transaction, the “ Company ”) for its combined senior executives, with the actual bonus for each such year to be determined based on attainment of the annual combined Company and individual performance criteria and objectives established by the compensation committee of Parent that are consistent with those established for the other senior executives of the combined Company.

 

In the event that the Executive’s employment is terminated by the Company without Cause or by the Executive with Good Reason (after taking into account the waiver contemplated herein), the Executive will be entitled to receive a prorated portion of Executive’s target annual bonus opportunity for the year in which such termination occurs (the “ Prorated Bonus ”).

 

  1  

 

  

Safe Harbor
Severance Right
 

Executive will be eligible to receive payment of Executive’s base salary severance payments equal to $1,133,000, plus the applicable COBRA subsidy amounts payable over the 24 month post-separation from service period (the “ Safe Harbor Severance ”) and the Prorated Bonus, if (a) the Executive remains employed through the first anniversary of the Closing Date (the “ Safe Harbor Period ”) and (b) Executive elects to resign the Executive’s employment with the Company for any reason or no reason, so long as the Executive gives notice of such resignation to the Company no more than 60 days prior to the end of the Safe Harbor Period and no less than 30 days prior to the end of the Safe Harbor Period, with the effective date of such resignation to be the last day of the Safe Harbor Period (such resignation right, the “ Resignation Right ”).

 

In the event that the Executive’s employment is terminated by the Company without Cause or by the Executive with Good Reason (after taking into account the waiver contemplated herein) prior to the end of the Safe Harbor Period, the Executive will be entitled to the Safe Harbor Severance and the Prorated Bonus.

 

For the avoidance of doubt, the Safe Harbor Severance and Prorated Bonus is in lieu of and not in addition to any potential severance payments or benefits that may otherwise be due to the Executive under any other agreement, plan, program or policy, including, without limitation, the Employment Agreement (prior to any amendment to reflect the terms set forth herein).

 

The payment of the Safe Harbor Severance will be subject to the Executive’s execution, delivery and non-revocation of a general release of claims in a form reasonably agreed between the parties, which release (i) shall contain customary exceptions including, without limitation, for existing rights to indemnification and to enforce the Executive’s rights under this term sheet (including under any agreement or amendment that memorializes the terms set forth in this term sheet, and any Employment Agreement) and with respect to the treatment of the Company Equity Awards and the 2019 Grant as provided under the Merger Agreement and this term sheet and (ii) shall contain customary cooperation covenants, but shall not expand the restrictive covenants described below (a “ Release ”).

     
Existing Company
Equity Awards as
of date of signing
 

Each unvested stock option to acquire shares in the Company held by the Executive that is a Company Equity Award will, upon the closing of the Transaction in accordance with the terms of the Merger Agreement, be assumed and converted into a cash award with a value based on the excess of the per share purchase price paid to a shareholder in the Transaction over the exercise price of the applicable unvested stock option multiplied by the number of shares underlying the unvested stock option, with such cash award to vest and be paid out on the earlier of the vesting dates set forth under the existing vesting schedules of the applicable awards and, as to 100% of the unvested portion of such awards, at the end of the Safe Harbor Period (subject to the Executive’s continued employment through each applicable vesting date).

 

Each vested stock option to acquire shares in the Company held by the Executive will be converted into a right to receive cash in accordance with the terms of the Merger Agreement upon the closing of the Transaction.

 

Each unvested restricted stock award of the Company that is a Company Equity Award held by the Executive will, upon the closing of the Transaction in accordance with the terms of the Merger Agreement, be assumed and converted into a cash award with a value based on the per share purchase price paid to a shareholder in the Transaction multiplied by the number of shares of restricted stock underlying the applicable restricted stock award, with such cash award to continue to vest and be paid out on the earlier of the vesting dates set forth under the existing vesting schedules of the applicable awards and, as to 100% of the unvested portion of such awards, the end of the Safe Harbor Period (subject to the Executive’s continued employment through each applicable vesting date).

 

In the event that the Executive’s employment is terminated without Cause or the Executive resigns with Good Reason (after taking into account the waiver of Good Reason contemplated herein) prior to the vesting and payout of such converted Company Equity Awards, the Executive will be paid 100% of the unvested portion of the cash awards as soon as practicable after such termination of employment. 

 

  2  

 

 

    For the avoidance of doubt, if the Executive exercises the Executive’s Resignation Right, all of the foregoing converted Company Equity Awards shall become 100% vested and paid out at the end of the Safe Harbor Period.
     
2019 Annual
Retention Equity
Grant
 

Executive will be entitled to receive a target annual retention equity grant (the “ 2019 Grant ”), with a total grant date fair value equal to $2,310,000, to be made to Executive in March of 2019 in the ordinary course, except (a) that portion of the 2019 Grant which would in the ordinary course have been granted in the form of Company stock options will instead be granted in the form of Company restricted stock (or, if such grant occurs on or after the Closing Date, in cash), and (b) such 2019 Grant (to the extent made prior to the Closing Date), as of the Transaction, will, upon the closing of the Transaction in accordance with the terms of the Merger Agreement, be assumed and converted into a cash award with a value based on the per share purchase price paid to a shareholder in the Transaction multiplied by the number of shares of restricted stock underlying the applicable restricted stock award, and (c) such 2019 Grant, whether made before or after the Closing Date, will continue to vest and be paid out on the vesting dates set forth under the vesting schedules of the applicable award agreements for such 2019 Grants (which schedules shall be consistent with the prior annual retention equity grants made to senior executives of the Company), subject to the Executive’s continued employment through each applicable vesting date. For the avoidance of doubt, if the 2019 Grant is made following the Closing Date, such grant shall be made in cash equal to the total grant date fair value set forth above and all other terms and conditions shall be the same as if the 2019 Grant had been made in Company restricted stock prior to the Closing Date and been converted into cash as described above.

 

In the event that the Executive’s employment is terminated without Cause or the Executive resigns with Good Reason (after taking into account the waiver of Good Reason contemplated herein) prior to the vesting and payout of the converted 2019 Grant as described above, the Executive will vest and be paid the portion of the unvested cash award in an amount equal to the greater of (x) so long as any such termination occurs more than 90 calendar days following the date of grant, 50% of the 2019 Grant and (y) a prorated amount of the 2019 Grant, with such prorated amount determined with each partial month being rounded up to the nearest whole month (i.e., as determined in accordance with the terms set forth in the schedules to the Merger Agreement). For the avoidance of doubt, if the termination without Cause or with Good Reason occurs less than 90 calendar days following the date of grant, the 2019 Grant shall vest pro rata based on the number of months (with each partial month being rounded up to the nearest whole month) that occurred after the date of grant and prior to such termination of employment.

 

For the avoidance of doubt, if the Executive exercises the Executive’s Resignation Right, the converted 2019 Grant shall still be treated in the same manner as if the Executive had resigned with Good Reason as set forth above, and therefore shall vest and be paid out in the same manner as set forth in the immediately preceding sentence.

 

  3  

 

  

Waiver of Good
Reason
 

Executive agrees that the consummation of the Transaction (or the related changes solely to the Executive’s title, duties, authority, responsibilities or reporting relationships) shall not by itself constitute or be deemed to constitute “Good Reason” or a “constructive termination” (or any substantially similar terms) under the Employment Agreement with the Company or any of its subsidiaries or any other plan or agreement entered into with or sponsored by the Company or any of its subsidiaries (including with respect to any equity awards held by the Executive).

 

The parties agree that, as of the Effective Time (as defined in the Merger Agreement), the Executive shall be the Co-CEO of Wedding Wire, Inc., shall be a member of the board of directors of Parent and shall have equal duties, authorities and responsibilities as the other Co-CEO of Wedding Wire, Inc., reporting to the board of directors of Parent in the same manner as the other Co-CEO.

 

For the avoidance of doubt, the foregoing waiver shall not impede or adversely impact any other rights to resign for Good Reason that Executive may have under any such definition applicable to the Executive under any Employment Agreement or other plan or agreement entered into with or sponsored by the Company or any of its subsidiaries (including with respect to any equity awards held by the Executive). 

     
Termination of
Employment
 

In the event that the Executive’s employment is terminated by the Company without Cause or the Executive resigns with Good Reason after the end of the Safe Harbor Period following the Closing Date, the Executive will be entitled to continued Base Salary and benefits continuation for a period of 12 months, subject to the Executive’s execution, delivery and non-revocation of the Release, in addition to payment of the Prorated Bonus and any other compensation or benefits the Executive may have under any other plan or agreement entered into with or sponsored by the Company or any of its subsidiaries (including with respect to any equity awards held by the Executive). 

     
Restrictive
Covenants
 

·      Executive will agree that the provisions of the Company Employee Non-Disclosure, Non-Competition and Invention and Assignment Agreement that Executive signed upon commencement of employment with the Company (the form of which is attached as Exhibit A to this term sheet) shall be expanded to cover Wedding Wire, Inc. and its subsidiaries, which agreement, in summary, includes the following:

o       Noncompete restriction during employment and for twelve months following termination of employment.

o       Nonsolicitation of employees, suppliers and customers during employment and for twelve months following termination of employment.

o       Confidentiality of information restriction of indefinite duration.

·      Executive will also agree to a perpetual nondisparagement of Parent, Wedding Wire, Inc., the Company and the majority owners of Parent (with a reciprocal non-disparagement covenant from Parent, Wedding Wire, Inc., XO Group Inc. and the majority owners of the Company, with such covenant to be limited in a customary manner to official statements and board members).

     
Miscellaneous  

·      This term sheet may be executed by .pdf or facsimile signatures in any number of counterparts, each of which shall be deemed an original, but all such counterparts shall together constitute one and the same instrument.

·      This term sheet shall be construed and enforced in accordance with, and the rights and obligations of the parties hereto shall be governed by, the laws of the State of New York without giving effect to the conflicts of law principles thereof.

 

[ SIGNATURE PAGE FOLLOWS ]

 

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IN WITNESS WHEREOF, the parties hereto have executed this term sheet on the day and year written below.

 

Executed this 24 th day of September, 2018  
       
    /s/ Michael Steib  
    EXECUTIVE  
       
Executed this 24 th day of September, 2018  
       
    Wedding Wire, Inc.  
     
By: /s/ Timothy Chi  
    Name: Timothy Chi  
    Title: CEO  
       
Executed this 24 th day of September, 2018  
       
    XO Group Inc.  
       
By: /s/ Gillian Munson  
    Name: Gillian Munson  
    Title: Chief Financial Officer  

 

 

 

 

Exhibit 10.3

 

EXECUTION COPY

 

Retention and Waiver Summary of Material Terms

 

The following term sheet sets forth the material terms for Gillian Munson (the “ Executive ”), the Chief Financial Officer of XO Group Inc. (the “ Company ”), with respect to continued employment following the closing of the acquisition of the Company by Wedding Wire, Inc. (the “ Transaction ”, and the date thereof, the “ Closing Date ”) contemplated under that certain Agreement and Plan of Merger to be entered into between the Company and Wedding Wire, Inc. (the “ Merger Agreement ”). Reference is made to that certain employment agreement between Executive and the Company dated November 12, 2013, as amended April 17, 2014, as the same may be amended by the parties thereto (including as permitted under the Merger Agreement) (the “ Employment Agreement ”) and those options to purchase shares of common stock of the Company and restricted common stock of the Company granted to the Executive under the applicable Company Stock Incentive Plan in accordance with the resolutions of the compensation committee of the Board of Directors of the Company and outstanding as of the date hereof (collectively, the “ Company Equity Awards ”). All references to the terms “ Cause ” and “ Good Reason ” contained in this term sheet shall be as defined in the Employment Agreement and Company Equity Awards, as applicable. This term sheet contains legally binding obligations on all parties hereto relating to the foregoing matters. Notwithstanding the foregoing, if the Transaction does not close, this term sheet shall be rendered void and without effect and none of the parties hereto shall have any obligation to the others hereunder. The terms set forth in this term sheet will be incorporated into an agreement amending or amending and restating the Executive’s Employment Agreement prior to the Closing Date.

 

Post-Closing
Base Salary
   $437,091 per annum (“ Base Salary ”).
     
Post-Closing
Annual Bonus
 

Executive will be eligible for an annual target bonus opportunity which will continue to be 60% of Base Salary (“ Target Bonus ”). The actual bonus earned for the year in which the Transaction occurs will be earned based on the performance targets established by the Company in the ordinary course of business consistent with past practice as set forth in the schedules to the Merger Agreement, with the achievement of such targets at the end of such year to be determined by the Board of Directors of the parent entity of Wedding Wire, Inc. (the “ Parent ”). In any year following the year in which the Transaction occurs, Executive will remain eligible to earn an annual Target Bonus, in accordance with the bonus program to be administered by the combined Wedding Wire, Inc./Company (on and after the Transaction, the “ Company ”) for its combined senior executives, with the actual bonus for each such year to be determined based on attainment of the annual combined Company and individual performance criteria and objectives established by the compensation committee of Parent that are consistent with those established for the other senior executives of the combined Company.

 

In the event that the Executive’s employment is terminated by the Company without Cause or by the Executive with Good Reason (after taking into account the waiver contemplated herein), the Executive will be entitled to receive a prorated portion of Executive’s target annual bonus opportunity for the year in which such termination occurs (the “ Prorated Bonus ”).

     
Safe Harbor Severance Right  

Executive will be eligible to receive payment of Executive’s base salary severance payments equal to $437,091, plus the applicable COBRA subsidy amounts payable over the 12-month post-separation from service period (the “ Safe Harbor Severance ”) and the Prorated Bonus, if (a) the Executive remains employed through 180 days after the Closing Date (the “ Safe Harbor Period ”) and (b) Executive elects to resign the Executive’s employment with the Company for any reason or no reason, so long as the Executive gives notice of such resignation to the Company no more than 60 days prior to the end of the Safe Harbor Period and no less than 30 days prior to the end of the Safe Harbor Period, with the effective date of such resignation to be the last day of the Safe Harbor Period (such resignation right, the “ Resignation Right ”).

 

  1  

 

 

In the event that the Executive’s employment is terminated by the Company without Cause or by the Executive with Good Reason (after taking into account the waiver contemplated herein) prior to the end of the Safe Harbor Period, the Executive will be entitled to the Safe Harbor Severance and the Prorated Bonus.

 

For the avoidance of doubt, the Safe Harbor Severance and Prorated Bonus is in lieu of and not in addition to any potential severance payments or benefits that may otherwise be due to the Executive under any other agreement, plan, program or policy, including, without limitation, the Employment Agreement (prior to any amendment to reflect the terms set forth herein).

 

The payment of the Safe Harbor Severance will be subject to the Executive’s execution, delivery and non-revocation of a general release of claims in a form reasonably agreed between the parties, which release (i) shall contain customary exceptions including, without limitation, for existing rights to indemnification and to enforce the Executive’s rights under this term sheet (including under any agreement or amendment that memorializes the terms set forth in this term sheet, and any Employment Agreement) and with respect to the treatment of the Company Equity Awards and the 2019 Grant as provided under the Merger Agreement and this term sheet and (ii) shall contain customary cooperation covenants, but shall not expand the restrictive covenants described below (a “ Release ”).

     
Existing Company Equity Awards as of date of signing  

Each unvested stock option to acquire shares in the Company held by the Executive that is a Company Equity Award will, upon the closing of the Transaction in accordance with the terms of the Merger Agreement, be assumed and converted into a cash award with a value based on the excess of the per share purchase price paid to a shareholder in the Transaction over the exercise price of the applicable unvested stock option multiplied by the number of shares underlying the unvested stock option, with such cash award to vest and be paid out on the earlier of the vesting dates set forth under the existing vesting schedules of the applicable awards and, as to 100% of the unvested portion of such awards, at the end of the Safe Harbor Period (subject to the Executive’s continued employment through each applicable vesting date).

 

Each vested stock option to acquire shares in the Company held by the Executive will be converted into a right to receive cash in accordance with the terms of the Merger Agreement upon the closing of the Transaction.

 

Each unvested restricted stock award of the Company that is a Company Equity Award held by the Executive will, upon the closing of the Transaction in accordance with the terms of the Merger Agreement, be assumed and converted into a cash award with a value based on the per share purchase price paid to a shareholder in the Transaction multiplied by the number of shares of restricted stock underlying the applicable restricted stock award, with such cash award to continue to vest and be paid out on the earlier of the vesting dates set forth under the existing vesting schedules of the applicable awards and, as to 100% of the unvested portion of such awards, the end of the Safe Harbor Period (subject to the Executive’s continued employment through each applicable vesting date).

 

  2  

 

   

In the event that the Executive’s employment is terminated without Cause or the Executive resigns with Good Reason (after taking into account the waiver of Good Reason contemplated herein) prior to the vesting and payout of such converted Company Equity Awards, the Executive will be paid 100% of the unvested portion of the cash awards as soon as practicable after such termination of employment.

 

For the avoidance of doubt, if the Executive exercises the Executive’s Resignation Right, all of the foregoing converted Company Equity Awards shall become 100% vested and paid out at the end of the Safe Harbor Period.

     
2019 Annual Retention Equity Grant  

Executive will be entitled to receive a target annual retention equity grant (the “ 2019 Grant ”), with a total grant date fair value equal to $1,375,000, to be made to Executive in March of 2019 in the ordinary course, except (a) that portion of the 2019 Grant which would in the ordinary course have been granted in the form of Company stock options will instead be granted in the form of Company restricted stock (or, if such grant occurs on or after the Closing Date, in cash), and (b) such 2019 Grant (to the extent made prior to the Closing Date), as of the Transaction, will, upon the closing of the Transaction in accordance with the terms of the Merger Agreement, be assumed and converted into a cash award with a value based on the per share purchase price paid to a shareholder in the Transaction multiplied by the number of shares of restricted stock underlying the applicable restricted stock award, and (c) such 2019 Grant, whether made before or after the Closing Date, will continue to vest and be paid out on the vesting dates set forth under the vesting schedules of the applicable award agreements for such 2019 Grants (which schedules shall be consistent with the prior annual retention equity grants made to senior executives of the Company), subject to the Executive’s continued employment through each applicable vesting date. For the avoidance of doubt, if the 2019 Grant is made following the Closing Date, such grant shall be made in cash equal to the total grant date fair value set forth above and all other terms and conditions shall be the same as if the 2019 Grant had been made in Company restricted stock prior to the Closing Date and been converted into cash as described above.

 

In the event that the Executive’s employment is terminated without Cause or the Executive resigns with Good Reason (after taking into account the waiver of Good Reason contemplated herein) prior to the vesting and payout of the converted 2019 Grant as described above, the Executive will vest and be paid the portion of the unvested cash award in an amount equal to the greater of (x) so long as any such termination occurs more than 90 calendar days following the date of grant, 50% of the 2019 Grant and (y) a prorated amount of the 2019 Grant, with such prorated amount determined with each partial month being rounded up to the nearest whole month (i.e., as determined in accordance with the terms set forth in the schedules to the Merger Agreement). For the avoidance of doubt, if the termination without Cause or with Good Reason occurs less than 90 calendar days following the date of grant, the 2019 Grant shall vest pro rata based on the number of months (with each partial month being rounded up to the nearest whole month) that occurred after the date of grant and prior to such termination of employment.

 

For the avoidance of doubt, if the Executive exercises the Executive’s Resignation Right, the converted 2019 Grant shall still be treated in the same manner as if the Executive had resigned with Good Reason as set forth above, and therefore shall vest and be paid out in the same manner as set forth in the immediately preceding sentence.

 

  3  

 

Waiver of Good Reason  

Executive agrees that the consummation of the Transaction (or the related changes solely to the Executive’s title, duties, authority, responsibilities or reporting relationships) shall not by itself constitute or be deemed to constitute “Good Reason” or a “constructive termination” (or any substantially similar terms) under the Employment Agreement with the Company or any of its subsidiaries or any other plan or agreement entered into with or sponsored by the Company or any of its subsidiaries (including with respect to any equity awards held by the Executive).

 

The parties agree that, as of the Effective Time, the Executive shall remain a C-Suite executive and shall report to the Co-CEOs of Wedding Wire, Inc.

 

For the avoidance of doubt, the foregoing waiver shall not impede or adversely impact any other rights to resign for Good Reason that Executive may have under any such definition applicable to the Executive under any Employment Agreement or other plan or agreement entered into with or sponsored by the Company or any of its subsidiaries (including with respect to any equity awards held by the Executive).

     
Termination of Employment   In the event that the Executive’s employment is terminated by the Company without Cause or the Executive resigns with Good Reason after the end of the Safe Harbor Period following the Closing Date, the Executive will be entitled to continued Base Salary and benefits continuation for a period of 12 months, subject to the Executive’s execution, delivery and non-revocation of the Release, in addition to payment of the Prorated Bonus and any other compensation or benefits the Executive may have under any other plan or agreement entered into with or sponsored by the Company or any of its subsidiaries (including with respect to any equity awards held by the Executive).  
     
Restrictive Covenants  

·     Executive will agree that the provisions of the Company Employee Non-Disclosure, Non-Competition and Invention and Assignment Agreement that Executive signed upon commencement of employment with the Company (the form of which is attached as Exhibit A to this term sheet) shall be expanded to cover Wedding Wire, Inc. and its subsidiaries, which agreement, in summary, includes the following:

o      Noncompete restriction during employment and for twelve months following termination of employment.

o      Nonsolicitation of employees, suppliers and customers during employment and for twelve months following termination of employment.

o      Confidentiality of information restriction of indefinite duration.

·     Executive will also agree to a perpetual nondisparagement of Parent, Wedding Wire, Inc., the Company and the majority owners of Parent (with a reciprocal non-disparagement covenant from Parent, Wedding Wire, Inc., XO Group Inc. and the majority owners of the Company, with such covenant to be limited in a customary manner to official statements and board members).

     
Miscellaneous  

·      This term sheet may be executed by .pdf or facsimile signatures in any number of counterparts, each of which shall be deemed an original, but all such counterparts shall together constitute one and the same instrument.

·     This term sheet shall be construed and enforced in accordance with, and the rights and obligations of the parties hereto shall be governed by, the laws of the State of New York without giving effect to the conflicts of law principles thereof.

 

[ SIGNATURE PAGE FOLLOWS ]

 

  4  

 

 

IN WITNESS WHEREOF, the parties hereto have executed this term sheet on the day and year written below.

 

Executed this 24 th day of September, 2018  
       
    /s/ Gillian Munson  
    EXECUTIVE  
       
Executed this 24 th day of September, 2018  
       
    Wedding Wire, Inc.  
       
  By: /s/ Timothy Chi  
    Name: Timothy Chi  
    Title: CEO  
       
Executed this 24 th day of September, 2018  
       
    XO Group Inc.  
       
  By: /s/ Michael Steib  
    Name: Michael Steib  
    Title: Chief Executive Officer  

 

 

 

Exhibit 10.4

 

EXECUTION COPY

 

Retention and Waiver Summary of Material Terms

 

The following term sheet sets forth the material terms for Paul Bascobert (the “ Executive ”), the President of XO Group Inc. (the “ Company ”), with respect to continued employment following the closing of the acquisition of the Company by Wedding Wire, Inc. (the “ Transaction ”, and the date thereof, the “ Closing Date ”) contemplated under that certain Agreement and Plan of Merger to be entered into between the Company and Wedding Wire, Inc. (the “ Merger Agreement ”). Reference is made to that certain employment agreement between Executive and the Company dated September 5, 2016, as the same may be amended by the parties thereto (including as permitted under the Merger Agreement) (the “ Employment Agreement ”) and those options to purchase shares of common stock of the Company and restricted common stock of the Company granted to the Executive under the applicable Company Stock Incentive Plan in accordance with the resolutions of the compensation committee of the Board of Directors of the Company and outstanding as of the date hereof (collectively, the “ Company Equity Awards ”). All references to the terms “ Cause ” and “ Good Reason ” contained in this term sheet shall be as defined in the Employment Agreement and Company Equity Awards, as applicable. This term sheet contains legally binding obligations on all parties hereto relating to the foregoing matters. Notwithstanding the foregoing, if the Transaction does not close, this term sheet shall be rendered void and without effect and none of the parties hereto shall have any obligation to the others hereunder. The terms set forth in this term sheet will be incorporated into an agreement amending or amending and restating the Executive’s Employment Agreement prior to the Closing Date.

 

Post-Closing
Base Salary
   $424,360 per annum (“ Base Salary ”).
     
Post-Closing
Annual Bonus
 

Executive will be eligible for an annual target bonus opportunity which will continue to be 60% of Base Salary (“ Target Bonus ”). The actual bonus earned for the year in which the Transaction occurs will be earned based on the performance targets established by the Company in the ordinary course of business consistent with past practice as set forth in the schedules to the Merger Agreement, with the achievement of such targets at the end of such year to be determined by the Board of Directors of the parent entity of Wedding Wire, Inc. (the “ Parent ”). In any year following the year in which the Transaction occurs, Executive will remain eligible to earn an annual Target Bonus, in accordance with the bonus program to be administered by the combined Wedding Wire, Inc./Company (on and after the Transaction, the “ Company ”) for its combined senior executives, with the actual bonus for each such year to be determined based on attainment of the annual combined Company and individual performance criteria and objectives established by the compensation committee of Parent that are consistent with those established for the other senior executives of the combined Company.

 

In the event that the Executive’s employment is terminated by the Company without Cause or by the Executive with Good Reason (after taking into account the waiver contemplated herein), the Executive will be entitled to receive a prorated portion of Executive’s target annual bonus opportunity for the year in which such termination occurs (the “ Prorated Bonus ”).

 

  1  

 

 

 

Safe Harbor Severance Right  

Executive will be eligible to receive payment of Executive’s base salary severance payments equal to $424,360, plus the applicable COBRA subsidy amounts payable over the 12-month post-separation from service period (the “ Safe Harbor Severance ”) and the Prorated Bonus, if (a) the Executive remains employed through 180 days after the Closing Date (the “ Safe Harbor Period ”) and (b) Executive elects to resign the Executive’s employment with the Company for any reason or no reason, so long as the Executive gives notice of such resignation to the Company no more than 60 days prior to the end of the Safe Harbor Period and no less than 30 days prior to the end of the Safe Harbor Period, with the effective date of such resignation to be the last day of the Safe Harbor Period (such resignation right, the “ Resignation Right ”).

 

In the event that the Executive’s employment is terminated by the Company without Cause or by the Executive with Good Reason (after taking into account the waiver contemplated herein) prior to the end of the Safe Harbor Period, the Executive will be entitled to the Safe Harbor Severance and the Prorated Bonus.

 

For the avoidance of doubt, the Safe Harbor Severance and Prorated Bonus is in lieu of and not in addition to any potential severance payments or benefits that may otherwise be due to the Executive under any other agreement, plan, program or policy, including, without limitation, the Employment Agreement (prior to any amendment to reflect the terms set forth herein).

 

The payment of the Safe Harbor Severance will be subject to the Executive’s execution, delivery and non-revocation of a general release of claims in a form reasonably agreed between the parties, which release (i) shall contain customary exceptions including, without limitation, for existing rights to indemnification and to enforce the Executive’s rights under this term sheet (including under any agreement or amendment that memorializes the terms set forth in this term sheet, and any Employment Agreement) and with respect to the treatment of the Company Equity Awards and the 2019 Grant as provided under the Merger Agreement and this term sheet and (ii) shall contain customary cooperation covenants, but shall not expand the restrictive covenants described below (a “ Release ”).

     
Existing Company Equity Awards as of date of signing  

Each unvested stock option to acquire shares in the Company held by the Executive that is a Company Equity Award will, upon the closing of the Transaction in accordance with the terms of the Merger Agreement, be assumed and converted into a cash award with a value based on the excess of the per share purchase price paid to a shareholder in the Transaction over the exercise price of the applicable unvested stock option multiplied by the number of shares underlying the unvested stock option, with such cash award to vest and be paid out on the earlier of the vesting dates set forth under the existing vesting schedules of the applicable awards and, as to 100% of the unvested portion of such awards, at the end of the Safe Harbor Period (subject to the Executive’s continued employment through each applicable vesting date).

 

Each vested stock option to acquire shares in the Company held by the Executive will be converted into a right to receive cash in accordance with the terms of the Merger Agreement upon the closing of the Transaction.

 

Each unvested restricted stock award of the Company that is a Company Equity Award held by the Executive will, upon the closing of the Transaction in accordance with the terms of the Merger Agreement, be assumed and converted into a cash award with a value based on the per share purchase price paid to a shareholder in the Transaction multiplied by the number of shares of restricted stock underlying the applicable restricted stock award, with such cash award to continue to vest and be paid out on the earlier of the vesting dates set forth under the existing vesting schedules of the applicable awards and, as to 100% of the unvested portion of such awards, the end of the Safe Harbor Period (subject to the Executive’s continued employment through each applicable vesting date).

 

  2  

 

 

 

   

In the event that the Executive’s employment is terminated without Cause or the Executive resigns with Good Reason (after taking into account the waiver of Good Reason contemplated herein) prior to the vesting and payout of such converted Company Equity Awards, the Executive will be paid 100% of the unvested portion of the cash awards as soon as practicable after such termination of employment.

 

For the avoidance of doubt, if the Executive exercises the Executive’s Resignation Right, all of the foregoing converted Company Equity Awards shall become 100% vested and paid out at the end of the Safe Harbor Period.

     
2019 Annual Retention Equity Grant  

Executive will be entitled to receive a target annual retention equity grant (the “ 2019 Grant ”), with a total grant date fair value equal to $1,100,000, to be made to Executive in March of 2019 in the ordinary course, except (a) that portion of the 2019 Grant which would in the ordinary course have been granted in the form of Company stock options will instead be granted in the form of Company restricted stock (or, if such grant occurs on or after the Closing Date, in cash), and (b) such 2019 Grant (to the extent made prior to the Closing Date), as of the Transaction, will, upon the closing of the Transaction in accordance with the terms of the Merger Agreement, be assumed and converted into a cash award with a value based on the per share purchase price paid to a shareholder in the Transaction multiplied by the number of shares of restricted stock underlying the applicable restricted stock award, and (c) such 2019 Grant, whether made before or after the Closing Date, will continue to vest and be paid out on the vesting dates set forth under the vesting schedules of the applicable award agreements for such 2019 Grants (which schedules shall be consistent with the prior annual retention equity grants made to senior executives of the Company), subject to the Executive’s continued employment through each applicable vesting date. For the avoidance of doubt, if the 2019 Grant is made following the Closing Date, such grant shall be made in cash equal to the total grant date fair value set forth above and all other terms and conditions shall be the same as if the 2019 Grant had been made in Company restricted stock prior to the Closing Date and been converted into cash as described above.

 

In the event that the Executive’s employment is terminated without Cause or the Executive resigns with Good Reason (after taking into account the waiver of Good Reason contemplated herein) prior to the vesting and payout of the converted 2019 Grant as described above, the Executive will vest and be paid the portion of the unvested cash award in an amount equal to the greater of (x) so long as any such termination occurs more than 90 calendar days following the date of grant, 50% of the 2019 Grant and (y) a prorated amount of the 2019 Grant, with such prorated amount determined with each partial month being rounded up to the nearest whole month (i.e., as determined in accordance with the terms set forth in the schedules to the Merger Agreement). For the avoidance of doubt, if the termination without Cause or with Good Reason occurs less than 90 calendar days following the date of grant, the 2019 Grant shall vest pro rata based on the number of months (with each partial month being rounded up to the nearest whole month) that occurred after the date of grant and prior to such termination of employment.

 

For the avoidance of doubt, if the Executive exercises the Executive’s Resignation Right, the converted 2019 Grant shall still be treated in the same manner as if the Executive had resigned with Good Reason as set forth above, and therefore shall vest and be paid out in the same manner as set forth in the immediately preceding sentence.

 

  3  

 

 

 

Waiver of Good Reason   Executive agrees that the consummation of the Transaction (or the related changes solely to the Executive’s title, duties, authority, responsibilities or reporting relationships) shall not by itself constitute or be deemed to constitute “Good Reason” or a “constructive termination” (or any substantially similar terms) under the Employment Agreement with the Company or any of its subsidiaries or any other plan or agreement entered into with or sponsored by the Company or any of its subsidiaries (including with respect to any equity awards held by the Executive).
     
   

The parties agree that, as of the Effective Time, the Executive shall remain a C-Suite executive and shall report to the Co-CEOs of Wedding Wire, Inc.

 

For the avoidance of doubt, the foregoing waiver shall not impede or adversely impact any other rights to resign for Good Reason that Executive may have under any such definition applicable to the Executive under any Employment Agreement or other plan or agreement entered into with or sponsored by the Company or any of its subsidiaries (including with respect to any equity awards held by the Executive).

     
Termination of Employment   In the event that the Executive’s employment is terminated by the Company without Cause or the Executive resigns with Good Reason after the end of the Safe Harbor Period following the Closing Date, the Executive will be entitled to continued Base Salary and benefits continuation for a period of 12 months, subject to the Executive’s execution, delivery and non-revocation of the Release, in addition to payment of the Prorated Bonus and any other compensation or benefits the Executive may have under any other plan or agreement entered into with or sponsored by the Company or any of its subsidiaries (including with respect to any equity awards held by the Executive).  
     
Restrictive Covenants  

·      Executive will agree that the provisions of the Company Employee Non-Disclosure, Non-Competition and Invention and Assignment Agreement that Executive signed upon commencement of employment with the Company (the form of which is attached as Exhibit A to this term sheet) shall be expanded to cover Wedding Wire, Inc. and its subsidiaries, which agreement, in summary, includes the following:

o      Noncompete restriction during employment and for twelve months following termination of employment.

o      Nonsolicitation of employees, suppliers and customers during employment and for twelve months following termination of employment.

o      Confidentiality of information restriction of indefinite duration.

·      Executive will also agree to a perpetual nondisparagement of Parent, Wedding Wire, Inc., the Company and the majority owners of Parent (with a reciprocal non-disparagement covenant from Parent, Wedding Wire, Inc., XO Group Inc. and the majority owners of the Company, with such covenant to be limited in a customary manner to official statements and board members).

     
Miscellaneous  

·      This term sheet may be executed by .pdf or facsimile signatures in any number of counterparts, each of which shall be deemed an original, but all such counterparts shall together constitute one and the same instrument.

·      This term sheet shall be construed and enforced in accordance with, and the rights and obligations of the parties hereto shall be governed by, the laws of the State of New York without giving effect to the conflicts of law principles thereof.

 

[ SIGNATURE PAGE FOLLOWS ]

 

  4  

 

 

IN WITNESS WHEREOF, the parties hereto have executed this term sheet on the day and year written below.

 

Executed this 24 th day of September, 2018  
       
    /s/ Paul Bascobert  
    EXECUTIVE  
       
Executed this 24 th day of September, 2018  
       
    Wedding Wire, Inc.  
       
  By: /s/ Timothy Chi  
    Name: Timothy Chi  
    Title: CEO  
       
Executed this 24 th day of September, 2018  
       
    XO Group Inc.  
       
  By: /s/ Michael Steib  
    Name: Michael Steib  
    Title: Chief Executive Officer  

 

 

 

Exhibit 99.1

 

XO Group Inc. to Become Privately Held Company and Merge With WeddingWire, Accelerating Growth Within Global Wedding Industry

 

XO Group Shareholders to Receive $35 Per Share in Cash

 

New York, NY - September 25, 2018 – XO Group Inc. (NYSE:XOXO), the operator of The Knot, a leading digital marketplace connecting engaged couples with wedding professionals, today announced that it has signed a definitive agreement whereby XO Group will become a privately held company and merge with WeddingWire, Inc. in a transaction valued at $933 million . Under the terms of the agreement, XO Group shareholders will receive $35.00 per share in cash, representing a 44% premium to XO Group’s 12-month average closing price and a 27 % premium to XO Group’s closing price as of Monday, September 24, 2018. XO Group's Board of Directors has unanimously approved the transaction, which is expected to close in the first half of 2019 . Upon closing, the combined company will be owned by the Permira Funds and Spectrum Equity, who are current investors in WeddingWire.

 

The combined company will maintain both brands, The Knot and WeddingWire, as separate consumer products so that couples can continue to enjoy both offerings, while delivering enhanced value to wedding professionals and partners across the globe. Following closing, XO Group CEO Mike Steib and WeddingWire CEO Tim Chi will serve as co-CEOs of the combined company.

 

“This is a proud day for XO, a tribute to the dedication of the amazing people at this company, a terrific outcome for our stockholders, and another positive step towards our mission of serving the couples and wedding pros we love,” said Mike Steib, XO Group CEO.

 

"Eleven years ago, we started WeddingWire with a deep commitment to help engaged couples plan the most important day of their lives," said Tim Chi, co-founder and CEO, WeddingWire. "This is a tremendous opportunity to further our commitment by accelerating innovation and creating the best wedding planning experience - benefitting engaged couples, wedding professionals, our employees and the global wedding industry."

 

Michael Zeisser, XO Group’s Chairman, commented, “ After a thorough assessment, the XO Board has unanimously determined that this transaction is a compelling outcome for our employees, customers, and stockholders.  For our stockholders, and in accordance with the board’s stated commitment to delivering shareholder value, it recognizes the worth of XO Group’s strong franchise and delivers compelling, all-cash consideration.”  

 

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The two companies have over 1,700 employees and serve engaged couples and wedding professionals in 15 countries across North America, Europe, Latin America, and Asia through global wedding brands The Knot, WeddingWire, Bodas.net, Matrimonio.com, WeddingWire.in and more. As a unified company, it will be better positioned to provide consumer offerings focused on the highly competitive $250 billion global wedding industry across both of its primary brands, WeddingWire and The Knot. The companies will build upon their more than four decades of combined expertise to redefine the category and continue to transform both the consumer and vendor experiences for the better. Together, engaged couples around the world will gain access to richer content, inspiration, registry services, and planning tools. Vendors, retailers, and national brands will benefit from enhanced advertising and marketing reach to the expansive global wedding audience, as well as industry-leading tools and analytics to help grow their businesses.

 

Key strategic benefits of the merger include:

Broader offerings. The expansive complementary networks and diversified features of the combined organization will strengthen the company's ability to serve engaged couples, wedding vendors, and retailers across 15 countries.
Accelerated innovation. The collaboration in research and technology will help to streamline development and better address the evolving needs of engaged couples and wedding vendors in the wedding industry.
Enhanced financial flexibility and strength. The merger will allow the combined company to pursue growth opportunities while continuing to invest in its current business.
Talent opportunities . The companies employ some of the industry’s most talented teams and the global scale of the future combined company will represent worldwide opportunities for career development and growth.

 

The combined company will also include XO Group’s leading life stage websites The Nest, The Bump, Gigmasters, How He Asked, and Lasting.

Transaction Details

 

Under the agreement, XO Group shareholders will receive $35 in cash for each share of XO Group upon consummation of the transaction. The transaction price represents a premium of 27% to XO Group’s closing price on September 24, 2018 and a premium of 44% to the 12 month average closing price, and exceeds the highest closing price in XO Group’s 19-year history as a public company. The Permira Funds and Spectrum Equity – current lead investors in WeddingWire – will finance the transaction.

 

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The transaction is expected to close in the first half of 2019 and is subject to the satisfaction of customary closing conditions, including the expiration of the required regulatory waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the approval of XO Group’s shareholders.

 

Advisors

 

Allen & Company LLC is serving as financial advisor to XO Group. Wachtell, Lipton, Rosen & Katz is serving as legal advisor to XO Group. J.P. Morgan Securities LLC, is serving as financial advisor to WeddingWire and Jefferies LLC and RBC Capital Markets are serving as financial advisors to the Permira Funds. Fried, Frank, Harris, Shriver & Jacobsen LLP and Wilson Sonsini Goodrich & Rosati are serving as legal advisors to the Permira Funds and WeddingWire. Additionally, JPMorgan Chase Bank, N.A., UBS AG, Stamford Branch, Jefferies Finance LLC and RBC Capital Markets have provided debt financing commitments as part of the transaction.

 

Additional Information and Where to Find It

 

This communication relates to the proposed merger transaction involving the Company. In connection with the proposed merger, the Company will file relevant materials with the U.S. Securities and Exchange Commission (the “SEC”), including the Company’s proxy statement on Schedule 14A and accompanying definitive proxy card (the “Proxy Statement”). This communication is not a substitute for the Proxy Statement or any other document that the Company may file with the SEC or send to its stockholders in connection with the proposed merger. BEFORE MAKING ANY VOTING DECISION, STOCKHOLDERS OF THE COMPANY ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE PROXY STATEMENT, WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders will be able to obtain the documents (when available) free of charge at the SEC’s website, http://www.sec.gov, and the Company’s website, www. xogroupinc.com .

 

Participants in the Solicitation

 

The Company and its directors and executive officers are deemed to be participants in the solicitation of proxies from the holders of XO Group common stock in respect of the proposed merger. Information about the directors and executive officers of XO Group is set forth in the proxy statement for the Company’s 2018 annual meeting of stockholders, which was filed with the SEC on April 9, 2018, and in other documents filed by XO Group with the SEC, including the Current Report on Form 8-K filed with the SEC on June 1, 2018. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the Proxy Statement and other relevant materials to be filed with the SEC in respect of the proposed merger when they become available.

 

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Forward Looking Statements

 

This release may contain projections or other forward-looking statements regarding future events or our future financial performance or estimates regarding third parties. These statements are only estimates or predictions and reflect our current beliefs and expectations. Actual events or results may differ materially from those contained in the estimates, projections or forward-looking statements. It is routine for internal projections and expectations to change as the quarter progresses, and therefore it should be clearly understood that the internal projections and beliefs upon which we base our expectations may change prior to the end of the quarter. Although these expectations may change, we will not necessarily inform you if they do. Our policy is to provide expectations not more than once per quarter, and not to update that information until the next quarter. Some of the factors that could cause actual results to differ materially from the forward-looking statements contained herein include, without limitation, (i) our operating results may fluctuate, are difficult to predict and could fall below expectations, (ii) our ability to accurately measure and monetize the level of offline store level traffic attributable to an online digital campaign conducted on our sites, (iii) our business depends on strong brands, and failing to maintain and enhance our brands would hurt our business, (iv) our ongoing investment in new businesses and new products, services, and technologies is inherently risky, and could disrupt our ongoing business and/or fail to generate the results we are expecting, (v) if we are unable to continue to develop solutions that generate revenue from advertising and other services delivered to mobile devices, our business could be harmed, (vi) our businesses could be negatively affected by changes in Internet search engine and app store search algorithms and email marketing policies, (vii) we face intense competition in our markets; if we do not continue to innovate and provide products and services that are useful to users, we may not remain competitive, and our revenue and results of operations could be adversely affected, (viii) our transactions business is dependent on third-party participants, whose lack of performance could adversely affect our results of operations, (ix) fraudulent or unlawful activities on our marketplace could harm our business and consumer confidence in our marketplace, (x) we may be subject to legal liability associated with providing online services or content, (xi) we may be unable to continue to use the domain names that we use in our business, or prevent third parties from acquiring and using domain names that infringe on, are similar to, or otherwise decrease the value of our brand or our trademarks or service marks, (xii) risks related to the occurrence of any event, change or other circumstance that could give rise to the termination of the definitive agreement, (xiii) the failure to obtain Company stockholder approval of the proposed transaction or required regulatory approvals or the failure to satisfy any of the other conditions to the completion of the proposed transaction, (xiv) the effect of the announcement of the proposed transaction on the ability of the Company to retain and hire key personnel and maintain relationships with its customers, suppliers, vendors, advertisers, distributors, partners and others with whom it does business, or on its operating results and businesses generally, (xv) risks associated with the disruption of management’s attention from ongoing business operations due to the proposed transaction, (xvi) the ability to meet expectations regarding the timing and completion of the proposed transaction, (xvii) the potential impact of the consummation of the proposed transaction on the Company’s relationships, including with employees, customers, suppliers, vendors, advertisers, distributors, partners and competitors, and (xvii) other factors detailed in documents we file from time to time with the Securities and Exchange Commission. Forward-looking statements in this release are made pursuant to the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995.

 

About XO Group Inc.
XO Group Inc.’s (NYSE:XOXO) mission is to help people navigate and truly enjoy life’s biggest moments together. Our multi-platform brands guide couples through transformative life stages: getting married with The Knot, having a healthy and supportive marriage with Lasting, having a baby with The Bump, and bringing important celebrations to life with entertainment vendors from GigMasters. The Company is publicly listed on the New York Stock Exchange and is headquartered in New York City.

About WeddingWire, Inc.
WeddingWire, Inc. is a leading global online marketplace, connecting consumers with local wedding professionals and a suite of comprehensive tools that make wedding planning easier. Operating within a $250 billion industry, WeddingWire helps 16 million users every month find the right team of wedding professionals to personalize and pull off their special day. Consumers around the world are able to read from more than 5 million vendor reviews to search, compare and book from a directory of over 500,000 vendors. Founded in 2007 and headquartered in Chevy Chase, Maryland and Barcelona, Spain, the WeddingWire portfolio serves couples and wedding professionals across 15 countries in North America, Latin America, Europe and Asia with brands such as Bodas.net, Matrimonio.com, WeddingWire.in, WeddingWire.co.uk and more.

 

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Contacts

For XO Group:

Ivan Marmolejos

Director, Investor Relations and Corporate Development

(212) 219-8555 x1004

IR@xogrp.com

 

Melissa Bach

Senior Director, Public Relations and Brand Marketing

(212) 515-3594

mbach@xogrp.com


For WeddingWire:


Elizabeth Millett, Senior Public Relations Manager
+1 301 231-9473 x2948
pr@weddingwire.com

 

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