Closing Conditions
Completion of the Merger is subject to certain closing conditions, including (1) the adoption of the Merger Agreement by a majority of the holders of the
outstanding shares of Common Stock, (2) (i) the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, or of any voluntary agreement with the Department of Justice
Antitrust Division or the Federal Trade Commission not to consummate the Merger and (ii) the expiration, termination or obtainment of the applicable waiting period or clearances, as applicable, under certain specified foreign antitrust laws and
foreign investment laws, (3) the absence of any law restraining, enjoining, rendering illegal or otherwise prohibiting the Merger, (4) the accuracy of the other partys representations and warranties, subject to certain materiality
standards set forth in the Merger Agreement, (5) compliance in all material respects with the other partys obligations under the Merger Agreement, and (6) no Material Adverse Effect (as defined in the Merger Agreement) being
continuing as of the closing date.
No Solicitation
The Company has also agreed to convene the Company Stockholder Meeting for the purpose of obtaining the affirmative vote of the holders of a majority of all
outstanding shares of Common Stock to adopt the Merger Agreement (the Company Stockholder Approval). The Merger Agreement also includes covenants requiring the Company not to (i) initiate, solicit, propose, knowingly
encourage or knowingly facilitate any inquiry, proposal, indication of interest or offer that constitutes, or would reasonably be expected to lead to, an acquisition proposal, (ii) engage in, continue or otherwise participate in any discussions
or negotiations relating to any acquisition proposal or any inquiry, proposal, indication of interest or offer that would reasonably be expected to lead to an acquisition proposal, (iii) provide any
non-public information to any person in connection with any acquisition proposal or any inquiry, proposal or offer that would reasonably be expected to lead to an acquisition proposal or (iv) waive,
terminate, modify or fail to enforce any standstill or confidentiality obligation of any person with respect to the company or any of its subsidiaries entered into in connection with an acquisition proposal, subject to, prior to receipt
of the Company Stockholder Approval, a customary fiduciary out provision that allows the Company, under certain specified circumstances, to provide information to, and participate in discussions and engage in negotiations with, third
parties with respect to an acquisition proposal if the Company complies with certain notice and other requirements and the Board determines in good faith (after consultation with outside legal counsel and an outside financial advisor) that such
acquisition proposal is more favorable to the Companys stockholders from a financial point of view than the Merger and that is reasonably likely to be completed, taking into account any regulatory, financing or approval requirements and any
other aspects considered relevant by the Board, subject to certain matching rights in favor of Parent.
Termination and Fees
Either the Company or Parent may terminate the Merger Agreement in certain circumstances, including if (1) the Merger is not completed by August 4,
2023 (the Outside Date), subject to certain limitations, and provided that the Outside Date will automatically be extended for up to two additional six-month periods if certain
regulatory closing conditions have not been satisfied as of the then-current Outside Date, (2) a governmental authority of competent jurisdiction has issued a final non-appealable governmental order
prohibiting the Merger, (3) the Companys stockholders fail to adopt the Merger Agreement, and (4) the other party breaches its representations, warranties or covenants in the Merger Agreement, subject in certain cases to the right of
the breaching party to cure the breach. Parent and the Company may also terminate the Merger Agreement by mutual written consent.
The Company is also
entitled to receive a termination fee of $94,000,000 from Parent if either party terminates the Merger Agreement due to (i) the occurrence of the Outside Date (as it may be automatically extended for up to two additional six-month periods) when only certain antitrust-related closing conditions remain unsatisfied or (ii) a final non-appealable governmental order relating to antitrust laws
prohibiting the Merger having been issued by a governmental authority of competent jurisdiction.
If the Merger Agreement is terminated in certain other
circumstances, including by the Company in order to enter into a superior proposal or by Parent because the Board changes its recommendation in favor of the Merger, the
may be different than those of Company stockholders generally, by reading the Proxy Statement and any other
relevant documents that are filed or will be filed with the SEC relating to the transaction. You may obtain free copies of these documents using the sources indicated above.
Cautionary Statement Regarding Forward-Looking Statements
This communication contains forward-looking statements within the meaning of the federal securities laws, including Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Exchange Act. These forward-looking statements are based on the Companys current expectations, estimates and projections about the expected date of closing of the proposed
transaction and the potential benefits thereof, its business and industry, managements beliefs and certain assumptions made by the Company and Amazon, all of which are subject to change. In this context, forward-looking statements often
address expected future business and financial performance and financial condition, and often contain words such as expect, anticipate, intend, plan, believe, could,
seek, see, will, may, would, might, potentially, estimate, continue, expect, target, similar expressions or the
negatives of these words or other comparable terminology that convey uncertainty of future events or outcomes. All forward-looking statements by their nature address matters that involve risks and uncertainties, many of which are beyond our control,
and are not guarantees of future results, such as statements about the consummation of the proposed transaction and the anticipated benefits thereof. These and other forward-looking statements, including the failure to consummate the proposed
transaction or to make or take any filing or other action required to consummate the transaction on a timely matter or at all, are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause actual
results to differ materially from those expressed in any forward-looking statements. Accordingly, there are or will be important factors that could cause actual results to differ materially from those indicated in such statements and, therefore, you
should not place undue reliance on any such statements and caution must be exercised in relying on forward-looking statements. Important risk factors that may cause such a difference include, but are not limited to: (i) the ability of the
parties to consummate the proposed transaction in a timely manner or at all; (ii) the satisfaction (or waiver) of closing conditions to the consummation of the proposed transaction, including with respect to the approval of the Companys
stockholders; (iii) potential delays in consummating the proposed transaction; (iv) the ability of the Company to timely and successfully achieve the anticipated benefits of the proposed transaction; (v) the occurrence of any event,
change or other circumstance or condition that could give rise to the termination of the merger agreement; (vi) the impact of the COVID-19 pandemic and the current conflict between the Russian Federation
and Ukraine on the Companys business and general economic conditions; (vii) the Companys ability to implement its business strategy; (viii) significant transaction costs associated with the proposed transaction;
(ix) potential litigation relating to the proposed transaction; (x) the risk that disruptions from the proposed transaction will harm the Companys business, including current plans and operations; (xi) the ability of the Company
to retain and hire key personnel; (xii) potential adverse reactions or changes to business relationships resulting from the announcement or completion of the proposed transaction; (xiii) legislative, regulatory and economic developments
affecting the Companys business; (xiv) general economic and market developments and conditions; (xv) the evolving legal, regulatory and tax regimes under which the Company operates; (xvi) potential business uncertainty,
including changes to existing business relationships, during the pendency of the merger that could affect the Companys financial performance; (xvii) restrictions during the pendency of the proposed transaction that may impact the
Companys ability to pursue certain business opportunities or strategic transactions; and (xviii) unpredictability and severity of catastrophic events, including, but not limited to, acts of terrorism or outbreak of war or hostilities, as
well as the Companys response to any of the aforementioned factors. These risks, as well as other risks associated with the proposed transaction, will be fully discussed in the Proxy Statement to be filed with the SEC in connection with the
proposed transaction. Additional risks and uncertainties that could cause actual outcomes and results to differ materially from those contemplated by the forward-looking statements are included under the caption Risk Factors in the
Companys most recent annual and quarterly reports filed with the SEC and any subsequent reports on Form 10-K, Form 10-Q or Form
8-K filed from time to time and available at www.sec.gov. While the list of factors presented here is, and the list of factors presented in the Proxy Statement will be, considered representative, no such list
should be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements. Consequences of material differences in results
as compared with those anticipated in the forward-looking statements could include, among other things, business disruption, operational problems, financial loss, legal liability and similar risks, any of which could have a material adverse effect
on the Companys financial condition, results of operations, or liquidity. The forward-looking statements included herein are made only as of the date hereof. The Company does not assume
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this Agreement), dated as of August 4, 2022, is by and among Amazon.com,
Inc., a Delaware corporation (Parent), Martin Merger Sub, Inc., a Delaware corporation and a wholly owned Subsidiary of Parent (Merger Sub), and iRobot Corporation, a Delaware corporation (the
Company, with the Company and Merger Sub sometimes being hereinafter collectively referred to as the Constituent Corporations).
RECITALS
WHEREAS, the
parties intend that, on the terms and subject to the conditions set forth in this Agreement, Merger Sub shall merge with and into the Company (the Merger), with the Company surviving the Merger, pursuant to and in
accordance with the provisions of the Delaware General Corporation Law (the DGCL);
WHEREAS, the board of
directors of Parent has unanimously approved and declared advisable this Agreement and the transactions contemplated hereby;
WHEREAS, the
board of directors of Merger Sub has unanimously approved and declared advisable this Agreement in accordance with the DGCL and unanimously recommended that this Agreement be approved and adopted by the sole stockholder of Merger Sub;
WHEREAS, the board of directors of the Company (the Company Board) has unanimously approved and declared advisable
this Agreement in accordance with the DGCL and unanimously recommended that this Agreement be approved and adopted by the holders of shares of common stock, par value $0.01 per share, of the Company (the Shares); and
WHEREAS, Parent, Merger Sub and the Company desire to make certain representations, warranties, covenants and agreements in connection with
this Agreement and to set forth certain conditions to the Merger.
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements set forth in this Agreement, the parties agree as follows:
ARTICLE I
THE MERGER; CLOSING; EFFECTIVE TIME
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. As a result of the Merger, the separate corporate existence of Merger Sub shall cease and the Company shall
continue in its existence under the laws of the State of Delaware as the surviving corporation (in such capacity, the Company is sometimes hereinafter referred to as the Surviving Corporation) and, following the Merger,
shall be a wholly owned Subsidiary of Parent. The Merger shall have the effects set forth in this Agreement and the applicable provisions of the DGCL.
Section 3.2 Officers of the Surviving
Corporation. The parties hereto shall take all actions necessary to cause the individuals specified by Parent prior to the Effective Time to be appointed as the only officers of the Surviving Corporation as of immediately following the
Effective Time until their successors have been duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the DGCL, the Charter and the Bylaws.
ARTICLE IV
EFFECT OF
THE MERGER ON CAPITAL STOCK;
EXCHANGE OF SHARE CERTIFICATES
Section 4.1 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:
(a) Merger Consideration. Each Share issued and outstanding
immediately prior to the Effective Time (other than (i) Shares owned by Parent or Merger Sub or any other direct or indirect wholly-owned Subsidiary of Parent and Shares owned by the Company or any direct or indirect wholly-owned Subsidiary of
the Company, and in each case not held on behalf of third parties (the Shares referred to in clause (i), the Cancelled Shares) and (ii) Shares that are owned by stockholders of the Company who have validly demanded and
not withdrawn appraisal rights in accordance with the applicable provisions of Section 262 of the DGCL prior to the Effective Time (the Shares referred to in clause (ii), the Dissenting Shares, and, together with the
Cancelled Shares, the Excluded Shares)) shall be converted into the right to receive $61.00 per Share in cash, without interest (the Merger Consideration). At the Effective Time, all of the Shares
converted into the right to receive the Merger Consideration pursuant to this Section 4.1(a) shall cease to be outstanding and shall cease to exist as of the Effective Time, and each certificate formerly representing any of
the Shares (other than Excluded Shares) (each, a Share Certificate) and each book-entry account formerly representing any non-certificated Shares (other than Excluded Shares) (each, a
Book-Entry Share) shall thereafter represent only the right to receive the Merger Consideration, without interest.
(b) Cancellation of Cancelled Shares. Each Cancelled Share shall, as a result of the Merger and without any action on the part
of the holder of such Cancelled Share, cease to be outstanding, be cancelled without payment of any consideration therefor and cease to exist.
(c) Merger Sub. 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 share of common stock, par value $0.01 per share, of the Surviving Corporation.
Section 4.2 Exchange of Share Certificates and Book-Entry
Shares.
(a) Appointment of Paying Agent. Prior to the Effective Time, Parent and Merger Sub shall appoint a bank or
trust company reasonably acceptable to the Company to serve as the paying agent (the Paying Agent) and shall enter into an agreement reasonably acceptable to the Company relating to the Paying Agents responsibilities
with respect to this Agreement.
(b) Deposit of Merger Consideration. At or prior to the Effective Time, Parent or Merger
Sub shall deposit, or cause to be deposited, with the Paying Agent, cash in U.S. Dollars sufficient to pay the aggregate Merger Consideration (other than in respect of Excluded Shares) under Section 4.1(a) (such cash being
hereinafter referred to as the Payment Fund). The
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(g) Dissenting Shares. Notwithstanding any provision of this Agreement to the
contrary, Dissenting Shares shall not be converted into the right to receive the Merger Consideration and holders of such Dissenting Shares shall be entitled to only such rights as are granted to a holder of Dissenting Shares pursuant to
Section 262 of the DGCL. If any such Person fails to comply with the provisions of Section 262 of the DGCL or effectively withdraws or loses such right, such Dissenting Shares shall thereupon be treated as if they had never been Dissenting
Shares and instead had been converted at the Effective Time into the right to receive the Merger Consideration. The Company shall give Parent notice of any written demands for appraisal of Shares promptly after receipt by the Company, and shall give
Parent the opportunity to devise and implement strategy for, and participate in, all negotiations and proceedings with respect to such demands. The Company shall not, except with the prior written consent of Parent, schedule any meeting or make any
payment with respect to any such demands for appraisal or offer to settle or settle any such demands.
(h) Withholding Rights. Each
of Parent, the Company, Merger Sub, the Surviving Corporation and the Paying Agent, as applicable, shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement such amounts as it is required to deduct
and withhold with respect to the making of such payment under the Internal Revenue Code of 1986, as amended (the Code), or any other applicable federal, state, local or foreign Tax Law. To the extent that amounts are so
withheld and timely remitted by Parent, the Company, Merger Sub, the Surviving Corporation or the Paying Agent, as applicable, to the applicable Governmental Authority, such 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, and none of Parent, the Company, Merger Sub, the Surviving Corporation or the Paying Agent, as the case may be, shall be required to pay any additional amounts with
respect to such deducted and withheld amounts.
Section 4.3 Treatment of Stock-Based Awards;
ESPP.
(a) Treatment of Company Options. At the Effective Time, each outstanding option to purchase
Shares (a Company Option) granted under the Stock Plans, whether vested or unvested, shall, automatically and without any action on the part of the holder thereof, fully vest and shall be cancelled and converted into the
right to receive (without interest), as soon as reasonably practicable (but not more than thirty (30) calendar days) following the Effective Time, an amount in cash equal to the product of (i) the number of Shares subject to the Company
Option immediately prior to the Effective Time multiplied by (ii) the excess, if any, of (A) the Merger Consideration over (B) the exercise price per Share of such Company Option. Any Company Option that has an exercise
price per Share that is greater than or equal to the Merger Consideration shall be cancelled at the Effective Time for no consideration or payment.
(b) Treatment of Outstanding Company Restricted Stock Unit Awards. At the Effective Time, each outstanding time-based
restricted stock unit award (a Company RSU Award) granted under the Stock Plans, shall, automatically and without any required action on the part of the holder thereof, be converted into the right to receive an amount in
cash equal to (i) the number of Shares subject to such Company RSU Award multiplied by (ii) the Merger Consideration (the product of (i) and (ii), the RSU Payment); provided that such RSU Payment
(A) shall be subject to the same vesting and forfeiture provisions as were applicable to such Company RSU Award immediately prior to the Effective Time, (B) shall vest in installments over the remainder of the vesting schedule of such
Company RSU Award based on the same percentage of the Company RSU Award that would have vested on each applicable vesting date, with each
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possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract or
otherwise, and (iii) the term Material Adverse Effect means any change, effect, event, occurrence or development that is materially adverse to the financial condition, assets, business or results of operations
of the Company and its Subsidiaries, taken as a whole; provided, that no change, effect, event, occurrence or development to the extent resulting from the following shall constitute or be taken into account in determining whether there is a
Material Adverse Effect:
(A) changes in the economy or financial, debt, credit or securities markets or capital market conditions
generally, including changes in interest or exchange rates, in the United States or any other country or region in the world in which the Company or any of its Subsidiaries conducts business;
(B) changes generally affecting the industries in which the Company and its Subsidiaries conduct business;
(C) changes or proposed changes in United States generally accepted accounting principles (U.S. GAAP) or other
accounting standards or interpretations thereof or in any Law, or enforcement or interpretations thereof;
(D) changes in any political
conditions, acts of war (whether or not declared, and including the current conflict between the Russian Federation and Ukraine), hostilities, military actions or acts of terrorism, or any escalation or worsening of the foregoing;
(E) any acts of God, including storms, earthquakes, tsunamis, tornados, hurricanes, weather conditions, natural disasters, epidemics,
pandemics, or disease outbreaks (including, for the avoidance of doubt, SARS-CoV-2 and its disease known as COVID-19 and any evolutions or additional strains, variations
or mutations thereof or any related or associated epidemics, pandemic or disease outbreaks (COVID-19) and any quarantine, shelter in place, stay at home,
workforce reduction, social distancing, shut down, closure, sequester, safety or similar Law, directive, guidelines or recommendations promulgated by any Governmental Authority, including the Centers for Disease Control and Prevention and the World
Health Organization (COVID-19 Measures), in each case, in connection with or in response to COVID-19, or the effects thereof), or any
escalation or worsening of any of the foregoing;
(F) a decline in the price or trading volume of the Shares on the NASDAQ Global Select
Market (NASDAQ) or any other securities market or in the trading price of any other securities of the Company or any of its Subsidiaries or any change in the ratings or ratings outlook for the Company or any of its
Subsidiaries; provided, that the exception in this clause (F) shall not prevent or otherwise affect a determination that any change, effect, event, occurrence or development underlying such decline, if not otherwise excluded hereby, has
resulted in a Material Adverse Effect;
(G) any failure by the Company to meet any internal or published projections, forecasts,
estimates or predictions of revenues, earnings, cash flow or cash position or other financial, accounting or operating measures or metrics (whether such projections, forecasts, estimates or predictions were made by the Company or independent third
parties) for any period; provided, that the exception in this clause (G) shall not prevent or otherwise affect a determination that any change, effect, event, occurrence or development underlying such failure, if not otherwise excluded
hereby, has resulted in a Material Adverse Effect;
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(b) Capital Structure.
(i) The authorized capital stock of the Company consists of 100,000,000 Shares and 5,000,000 shares of preferred stock, par value $0.01 per
share (the Preferred Shares). As of the close of business on August 3, 2022, 27,229,622 Shares were outstanding and no Preferred Shares were outstanding. All of the outstanding Shares have been duly authorized and are
validly issued, fully paid and nonassessable. Other than Shares reserved for issuance under the Companys 2005 Stock Option and Incentive Plan, 2015 Stock Option and Incentive Plan and 2018 Stock Option and Incentive Plan and Non-Employee Directors Deferred Compensation Program, in each case, as amended from time to time (together, the Stock Plans), and the ESPP, the Company has no Shares or
Preferred Shares reserved for issuance. As of the close of business on August 3, 2022, (i) 1,548,281 Shares were reserved and available for issuance in the aggregate pursuant to the Stock Plans, (ii) 452,345 Shares were reserved and available
for issuance pursuant to the ESPP, (iii) 86,157 Shares were underlying outstanding Company Options granted under the Stock Plans, (iv) 1,105,713 Shares were underlying outstanding Company RSU Awards granted under the Stock Plans,
(v) 395,166 Shares were underlying outstanding Company PSU Awards granted under the Stock Plans, based on target level achievement, and (vi) 6,314 Shares were underlying outstanding Company DSU Awards granted under the Stock Plans. The
Company does not have any restricted stock awards that remain subject to vesting. All of the outstanding shares of capital stock or other voting securities of each of the Companys Subsidiaries are owned by the Company or by a direct or
indirect wholly owned Subsidiary of the Company, free and clear of any Lien, other than transfer restrictions imposed by any applicable Law. Except as set forth in the fourth sentence of this Section 5.1(b)(i) and except
for securities issued after the date of this Agreement in compliance with Section 6.1(b), there are no other outstanding shares of capital stock of, or other equity or voting interests in, the Company, and there are no
preemptive or similar rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements, securities, calls, commitments or rights of any kind that obligate the Company or any of
its Subsidiaries to issue or sell to any Person any shares of capital stock or other securities of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person
(other than the Company or one or more of its wholly owned Subsidiaries) a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries. Since the close of business on August 3, 2022 through the date hereof, no
Shares have been issued, except pursuant to the exercise of Company Options or settlement of Company RSU Awards, Company PSU Awards or Company DSU Awards, in each case, outstanding on or prior to the close of business on August 3, 2022. The
Company does not have outstanding any bonds, debentures, notes or other obligations, the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any
matter. Neither the Company nor any of its Subsidiaries is a party to any stockholders agreement, voting trust agreement, registration rights agreement or other similar agreement or understanding with a third party relating to any voting or
equity interests in the Company or any of its Subsidiaries or any other agreement with a third party relating to the disposition, voting or dividends with respect to any voting or equity interests in the Company or any of its Subsidiaries. No
Subsidiary of the Company owns any Shares.
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(d) Governmental Filings; No Violations.
(i) The execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the transactions
contemplated by this Agreement require no authorization or other action by or in respect of, or filing with, any (A) federal, state, local, municipal, foreign or other government; (B) governmental, quasi-governmental, supranational or
regulatory authority (including any governmental division, department, agency, commission, instrumentality, organization, unit or body and any court or other tribunal); or (C) self-regulatory organization (including NASDAQ) (each, a
Governmental Authority) other than (1) the filing of the Certificate of Merger with the Delaware Secretary of State, (2) compliance with any applicable requirements of the HSR Act, (3) compliance with any
applicable requirements of Antitrust Laws, (4) compliance with any applicable Laws, including any state, national or multi-jurisdictional Laws, that are designed or intended to prohibit, restrict or regulate actions by foreigners to acquire
interests in domestic equities, securities, entities, assets, land or interests (Foreign Investment Laws), (5) compliance with any applicable requirements of the Securities Exchange Act of 1934, as amended (the
Exchange Act), the Securities Act and any other applicable U.S. state or federal securities, takeover or blue sky Laws, (6) compliance with any applicable rules of NASDAQ and (7) where failure to
obtain such authorization or take any such action would not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect or prevent or materially delay the ability of the Company to consummate the Merger by the Outside
Date.
(ii) The execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the
transactions contemplated by this Agreement do not and will not (A) conflict with or result in any violation or breach of any provision of the certificate of incorporation or bylaws of the Company or the similar organizational documents of any
of its Subsidiaries, (B) assuming compliance with the matters referred to in Section 5.1(d)(i), conflict with or result in a violation or breach of any applicable Law, (C) assuming compliance with the matters
referred to in Section 5.1(d)(i), require any consent by any Person under, constitute a default, or an event that, with or without notice or lapse of time or both, would constitute a default, under, or cause or permit the
termination, modification, cancellation or acceleration of any right or obligation or the loss of any benefit to which the Company and any of its Subsidiaries are entitled, under (1) any Material Contract binding upon the Company or any of its
Subsidiaries or to which any of their respective properties, rights or other assets are subject, or (2) any Company Permit governing the operation of the business of the Company or any of its Subsidiaries or (D) result in the creation or
imposition of any mortgage, lien, license, covenant not to sue, pledge, charge, security interest, deed of trust, right of first refusal, easement or similar encumbrance in respect of such property or asset, including any restriction on the voting
of any security, any restriction on the transfer of any security or other asset, any restriction on the receipt of any income derived from any asset, any restriction on the use of any asset or any restriction on the possession, exercise or transfer
of any other attribute of ownership of any asset (each a Lien) on any property or asset of the Company or any of its Subsidiaries (in each case, other than Permitted Liens), except in the case of clauses (B), (C) and
(D) above, any such violation, breach, conflict, default, right, termination, modification, acceleration, cancellation, loss or Lien that would not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect or
prevent or materially delay the ability of the Company to consummate the Merger by the Outside Date.
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(e) Company Reports; Financial Statements; Internal Controls.
(i) The Company has filed or furnished, as applicable, on a timely basis, all forms, statements, certifications, reports and documents
required to be filed or furnished by it with the Securities and Exchange Commission (the SEC) pursuant to the Exchange Act or the Securities Act of 1933, as amended (the Securities Act), since
December 28, 2019 (the Applicable Date) (the forms, statements, certifications, reports and documents filed or furnished to the SEC since the Applicable Date and those filed or furnished to the SEC subsequent to the
date of this Agreement, including any amendments thereto, the Company Reports). Each of the Company Reports, at the time of its filing or being furnished (and, if amended, as of the date of such amendment), complied or, if
not yet filed or furnished, will comply in all material respects with the applicable requirements of the Securities Act, the Exchange Act and the Sarbanes-Oxley Act of 2002 and any rules and regulations promulgated thereunder applicable to the
Company Reports. As of their respective dates (and, if amended, as of the date of such amendment, and, in the case of the Proxy Statement, at the date of mailing to stockholders of the Company and at the time of the Company Stockholders Meeting),
the Company Reports did not, and any Company Reports filed with or furnished to the SEC subsequent to the date of this Agreement will not, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements made therein, in light of the circumstances in which they were made, not misleading.
(ii) The
Company is in compliance in all material respects with the applicable listing and other requirements of NASDAQ.
(iii) The Company
maintains disclosure controls and procedures (as defined in Rule 13a-15(e) or 15d-15(e), as applicable, under the Exchange Act) as required by Rule 13a-15 or 15d-15 under the Exchange Act. Such disclosure controls and procedures are reasonably designed to ensure that information required to be disclosed by the Company in
the reports that it files or furnishes under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules of the SEC. The Company maintains a system of internal control over financial reporting (as
defined in Rule 13a-15(f) or 15d-15(f), as applicable, under the Exchange Act) reasonably designed to provide reasonable assurance regarding the reliability of the
Companys financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP. The Company has disclosed, based on the most recent evaluation of its chief executive officer and its chief financial
officer prior to the date of this Agreement, to the Companys auditors and the audit committee of the Company Board (A) any significant deficiencies or material weaknesses in the design or operation of its internal controls over financial
reporting that are reasonably likely to adversely affect in any material respect the Companys ability to record, process, summarize and report financial information and (B) any fraud, whether or not material, that involves management or
other employees who have a significant role in the Companys internal control over financial reporting, and each such deficiency, weakness or fraud so disclosed, if any, has been disclosed to Parent in writing prior to the date of this
Agreement. For purposes of this Agreement, the terms significant deficiency and material weakness have the meanings assigned to such terms in Auditing Standard No. 5 of the Public Company
Accounting Oversight Board, as in effect on the date of this Agreement.
(iv) The consolidated financial statements included in or
incorporated by reference into the Company Reports (including the related notes and schedules) fairly present, or, in the case of consolidated financial statements included in or incorporated by reference into Company Reports filed after the date of
this Agreement, will fairly present, in each case, in all
15
material respects, the consolidated financial position of the Company and its consolidated Subsidiaries as of the respective dates thereof and their consolidated statements of operations,
comprehensive income, stockholders equity and cash flows for the respective periods set forth therein (subject, in the case of unaudited statements, to notes (none of which, if presented, would materially differ from those in the audited
financial statements) and normal, recurring year-end audit adjustments), in each case in conformity with U.S. GAAP applied on a consistent basis during the periods involved, except as may be noted therein or
in the notes thereto.
(v) The books of account of the Company and its Subsidiaries have been kept accurately in all material respects in
the ordinary course of business, the transactions entered therein represent bona fide transactions, and the revenues, expenses, assets and liabilities of the Company and its Subsidiaries have been properly recorded therein in all material respects.
The corporate records and minute books of the Company and each of its Subsidiaries have been maintained in accordance with all applicable Laws in all material respects, and such corporate records and minute books are complete and accurate in all
material respects, including the fact that the minute books contain the minutes of all meetings of the boards of directors, committees of the board and the stockholders and all resolutions passed by the boards of directors, committees of the boards
and the stockholders, except that minutes of certain meetings of the Company Board or committees thereof held since May 26, 2022 have not been finalized as of the date of this Agreement.
(f) Absence of Certain Changes. From and after January 1, 2022 through the date of this Agreement, (i) the Company and its
Subsidiaries have, except in connection with this Agreement and the transactions contemplated hereby, conducted their businesses in all material respects in the ordinary course of business and there has not been any action taken by the Company or
its Subsidiaries that would have required the consent of Parent pursuant to Sections 6.1(b)(ii), 6.1(b)(iii), 6.1(b)(iv), 6.1(b)(v), 6.1(b)(vi), 6.1(b)(viii), 6.1(b)(x), 6.1(b)(xi),
6.1(b)(xii), 6.1(b)(xiii), 6.1(b)(xv), 6.1(b)(xvi) or 6.1(b)(xviii) (solely as it relates to the foregoing clauses) if such action had been taken after the date of this Agreement; and (ii) there has not
been any change, effect, event, occurrence or development that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
(g) Litigation and Liabilities.
(i) Since January 1, 2019, there have been no pending or, to the Knowledge of the Company, threatened, civil, criminal or administrative
actions, suits, claims, hearings, arbitrations, investigations or proceedings (each, an Action) before any Governmental Authority to which the Company or any of its Subsidiaries is a party or any Action by any Governmental
Authority against or involving the Company or its Subsidiaries, in each case that would reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect or prevent or materially delay the ability of the Company to
consummate the Merger by the Outside Date. None of the Company or any of its Subsidiaries is subject to any outstanding judgment, order, writ, injunction, decree or award of any Governmental Authority, except for those that would not reasonably be
expected to, individually or in the aggregate, have a Material Adverse Effect or prevent or materially delay the ability of the Company to consummate the Merger by the Outside Date.
16
(ii) There are no obligations or liabilities of the Company or any of its Subsidiaries
(whether accrued, contingent or otherwise), other than:
(A) obligations or liabilities to the extent specifically and adequately
disclosed, reflected or reserved against in the consolidated balance sheet of the Company for the quarterly period ended April 2, 2022 (or any notes thereto);
(B) obligations or liabilities arising in connection with the transactions contemplated by this Agreement;
(C) obligations or liabilities incurred in the ordinary course of business since April 2, 2022 (none of which results from, arises out
of, relates to, is in the nature of or was caused by any breach of contract, breach of warranty, tort, infringement, violation of Law, or that relates to any pending lawsuit);
(D) obligations or liabilities arising from any agreement, lease, license, contract, note, mortgage, indenture, arrangement or other
obligation (other than any purchase orders, invoices or similar instruments) (each, a Contract) entered into in the ordinary course of business and binding upon the Company or any of its Subsidiaries or to which any of
their respective properties, rights or other assets are subject (none of which results from, arises out of, relates to, is in the nature of or was caused by any breach of contract, breach of warranty, tort, infringement or violation of Law); or
(E) obligations or liabilities that have not had, and would not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
As used in this Agreement, the term Knowledge means, when used with respect to the Company, the
actual knowledge, after due inquiry, of the persons listed in Section 5.1(g)(ii) of the Company Disclosure Schedule.
(h) Employee Benefits.
(i) Section 5.1(h)(i) of the Company Disclosure Schedule sets forth an accurate and complete list, as of the date of this Agreement,
of all material Benefit Plans. For purposes of this Agreement, Benefit Plans means all benefit and compensation plans, Contracts, policies or arrangements covering current or former employees of the Company and its
Subsidiaries (the Employees) and current or former directors of the Company or pursuant to which the Company or its Subsidiaries may have any liability, including employee benefit plans within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (ERISA), the Stock Plans, and all other employment, consulting (to the extent related to a natural person), retirement, termination or
change in control agreements, supplemental retirement, profit sharing, deferred compensation, severance, stock option, stock purchase, stock appreciation rights, stock-based incentive, bonus, insurance, medical, welfare, fringe or other plans,
Contracts, policies or arrangements providing for benefits or remuneration of any kind, whether or not written and whether or not material. True and complete copies of all Benefit Plans listed in Section 5.1(h)(i) of the
Company Disclosure Schedule, all material amendments and any related trust agreement or other funding instrument thereto have been provided or made available to Parent prior to the date of this Agreement.
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(ii) Except as has not had, and would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect, all Benefit Plans, other than (A) multiemployer plans within the meaning of Section 3(37) of ERISA (each, a Multiemployer Plan) and (B) Benefit Plans
maintained outside of the United States primarily for the benefit of Employees working outside of the United States (the Non-U.S. Benefit Plans) (such remaining Benefit Plans,
collectively, U.S. Benefit Plans), are, and have been operated, in substantial compliance with ERISA, the Code and other applicable Laws. Each Benefit Plan that is subject to ERISA (an ERISA Plan)
that is an employee pension benefit plan within the meaning of Section 3(2) of ERISA intended to be qualified under Section 401(a) of the Code has received a favorable determination or opinion letter from the Internal Revenue
Service (the IRS) or has applied to the IRS for such favorable determination or opinion letter within the applicable remedial amendment period under Section 401(b) of the Code, and, to the Knowledge of the Company,
there are no circumstances likely to result in the loss of the qualification of such plan under Section 401(a) of the Code.
(iii)
Except as has not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, neither the Company nor any of its Subsidiaries has (A) engaged in a transaction with respect to any ERISA Plan
that, assuming the taxable period of such transaction expired as of the date of this Agreement, would reasonably be expected to subject the Company or any Subsidiary to a Tax or penalty imposed by either Section 4975 of the Code or
Section 502(i) of ERISA, or (B) incurred or reasonably expects to incur a Tax or penalty imposed by Section 4980F of the Code or Section 502 of ERISA or any liability under Section 4071 of ERISA.
(iv) Except as has not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect,
(A) all contributions or other amounts payable by the Company or any Subsidiary with respect to each U.S. Benefit Plan in respect of current or prior plan years have been paid or accrued in accordance with U.S. GAAP on the Company Reports, and
(B) there are no pending or, to the Knowledge of the Company, threatened claims (other than routine claims for benefits) or proceedings by a Governmental Authority by, on behalf of or against any Benefit Plan or any trust related thereto.
(v) Neither the Company nor any ERISA Affiliate has in the last six years (A) maintained, sponsored, contributed to, or had any
obligation or been required to contribute to a plan that is subject to Section 412 of the Code or Section 302 or Title IV of ERISA, or (B) maintained, established, participated in or contributed to, or been obligated to contribute to,
or has otherwise incurred any obligation or liability (including any contingent liability) under, any Multiemployer Plan. No Benefit Plan is a multiple employer welfare arrangement (as defined in Section 3(40) of ERISA). For
purposes of this Agreement, ERISA Affiliate means any entity which is considered one employer with the Company under Section 4001(b)(1) of ERISA or Section 414(b), (c), (m) or (o) of the Code.
(vi) Neither the Company nor any of its Subsidiaries has any obligations for retiree or post-employment health and life benefits under any
ERISA Plan or collective bargaining agreement, other than coverage mandated by applicable Law or continued health and life benefits coverage following a termination of employment for a period not to exceed eighteen (18) months.
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(vii) Neither the execution of this Agreement, stockholder or other approval of this
Agreement nor the consummation of the transactions contemplated hereby would, whether alone or in combination with another event, except as required by Law, (A) entitle any employee, director or officer of the Company or any of its Subsidiaries
to severance pay or any increase in severance pay upon any termination of employment after the date of this Agreement, (B) accelerate the time of payment or vesting or result in any material payment or funding (through a grantor trust or
otherwise) of compensation or benefits under, materially increase the amount payable to any employee, director or officer under or result in any other material obligation pursuant to, any of the Benefit Plans, (C) limit or restrict the right of
the Company or, after the consummation of the transactions contemplated hereby, Parent and its Subsidiaries to merge, amend or terminate any of the Benefit Plans or (D) result in payments under any of the Benefit Plans that would not be
deductible under Section 280G of the Code.
(viii) Neither the Company nor any Subsidiary has any obligation to provide, and no
Benefit Plan or other agreement provides any individual with the right to, a gross-up, indemnification, reimbursement or other payment for any excise or additional Taxes, interest or penalties incurred
pursuant to Section 409A or Section 4999 of the Code or due to the failure of any payment to be deductible under Section 280G of the Code. The Company has made available to Parent preliminary copies of any Section 280G
calculations prepared (whether or not final) with respect to any disqualified individual in connection with the transactions contemplated by this Agreement.
(ix) Except as has not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect,
(A) all Non-U.S. Benefit Plans comply in all respects with applicable Law, (B) all liabilities of the Company and its Subsidiaries with respect to any such
Non-U.S. Benefit Plans are funded to the extent required by applicable Law or the plan terms or have been accrued to the extent required by U.S. GAAP or other applicable accounting rules, and (C) there is
no pending or, to the Knowledge of the Company, threatened litigation relating to Non-U.S. Benefit Plans.
(x) The Company has provided Parent, on or prior to the date of this Agreement, with an anonymized employee census covering each employee of
the Company and its Subsidiaries, which sets forth to the extent permissible under applicable Law: each employees employee identification number, annual base salary, and target annual cash bonus, in each case as of the date of this Agreement
(the Employee Census). The Company has also provided Parent, on or prior to the date of this Agreement, the Companys long-term incentive guidelines as of the date of this Agreement.
(xi) Except as is not, and would not reasonably be expected to be, individually or in the aggregate, material to the Company and its
Subsidiaries, taken as a whole, each Company Option, Company RSU Award, Company PSU Award and Company DSU Award (A) was granted in compliance with all applicable Laws and all of the terms and conditions of the Stock Plans, (B) in the case
of Company Options, has an exercise price per Share equal to or greater than the fair market value of a Share on the date of such grant, and (C) qualifies for the Tax and accounting treatment afforded to such Company Option, Company RSU Award,
Company PSU Award or Company DSU Award, as applicable, in the Companys Tax Returns and the Company Reports, respectively.
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(i) Compliance with Laws; Company Permits.
(i) Compliance with Laws. Except as has not had, and would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect, (A) since January 1, 2019, the businesses of each of the Company and its Subsidiaries have been, and are being, conducted in compliance with all applicable federal, state, local, territorial,
provincial, municipal, regional, foreign or supranational laws, statutes, codes, treaties and ordinances, common law, and any rules, regulations, standards, judgments, orders, writs, injunctions, decrees, arbitration awards and agency requirements
of any Governmental Authority (collectively, Laws), (B) no investigation or review by any Governmental Authority with respect to the Company or any of its Subsidiaries is pending or, to the Knowledge of the Company,
threatened and (C) as of the date of this Agreement, the Company has not received any written notice or written communication or, to the Knowledge of the Company, oral notice or other communication, from any Governmental Authority of any
noncompliance with any Laws that has not been cured as of the date of this Agreement.
(ii) Permits. Except as has not had, and
would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (A) the Company and its Subsidiaries hold, and at all times since January 1, 2019 have held, all permits, certifications, approvals,
registrations, consents, authorizations, franchises, variances, exemptions and orders (including all product certifications) issued or granted by any Governmental Authority or other Person responsible for issuing such permit, certification,
approval, registration, consent, authorization, franchise, variance, exemption or order (the Company Permits) necessary for the Company and its Subsidiaries to own, lease and operate their properties or other assets and to
conduct their businesses in the manner in which they conduct them, (B) all such Company Permits are valid and in full force and effect, (C) the Company and its Subsidiaries are in compliance with such Company Permits and (D) there is
no pending or, to the Knowledge of the Company, threatened any administrative or judicial proceeding that would reasonably be expected to result in any suspension, adverse modification, revocation or cancellation of any of the Company Permits.
(j) Material Contracts.
(i) Except (i) for any Benefit Plan, (ii) as filed as exhibits to a Company Report, (iii) for this Agreement and the other
agreements entered into between the Company and Parent in connection with the transactions contemplated hereby and (iv) as set forth in Section 5.1(j)(i) of the Company Disclosure Schedule, which contains a true,
correct and complete list as of the date hereof of all Material Contracts to or by which the Company or any of its Subsidiaries is a party or is bound, as of the date of this Agreement, neither the Company nor any of its Subsidiaries is party to or
bound by any Contract (a Contract described by clauses (A) through (T) of this Section 5.1(j)(i), including Contracts and all amendments and modifications thereto filed as exhibits to the Company Reports, being
hereinafter referred to as a Material Contract):
(A) that is a material contract (as such term is
defined in Item 601(b)(10) of Regulation S-K of the Exchange Act);
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(B) that contains any non-compete or exclusivity
provision that restricts the ability of the Company or any of its Subsidiaries to compete with respect to any geographic area (or would so restrict, on its face, following the consummation of the Merger, the Surviving Corporation or any of its
Affiliates);
(C) that provides for the Company or any of its Affiliates to obtain a service, product, product line, operations or line
of business from any Person (including any of the Top Suppliers) that involved annual payments or consideration in the fiscal year ended January 1, 2022 (Fiscal Year 2021) (or which is expected to involve annual
payments or consideration in the fiscal years ending December 31, 2022 (Fiscal Year 2022) or December 30, 2023 (Fiscal Year 2023)) in excess of $10,000,000, or that contains any minimum
purchase commitments in excess of $10,000,000 annually;
(D) with a third-party manufacturer or supplier for the manufacture and/or
supply of materials or products in the supply chain for the Company Products that involves annual payments or consideration in Fiscal Year 2021 (or which is expected to involve annual payments or consideration in Fiscal Year 2022 or Fiscal Year
2023) in excess of $10,000,000;
(E) with a third-party retailer or distributor for the sale of the Company Products (including any of
the Top Distributors) that involves annual payments or consideration in Fiscal Year 2021 (or which is expected to involve annual payments or consideration in Fiscal Year 2022 or Fiscal Year 2023) in excess of $15,000,000;
(F) that contains covenants expressly limiting in any material respect the ability of the Company or any of its Subsidiaries to sell,
transfer, pledge or otherwise dispose of any material assets (including any restrictions on the transfer of any Intellectual Property Rights) or businesses of the Company or any of its Subsidiaries;
(G) that contains any standstill, most favored nation or most favored customer provision or rights of first or last offer,
negotiation or refusal, in each case, to which the Company or any of its Affiliates is subject (or that would so subject the Surviving Corporation or any of its Affiliates following the consummation of the Merger);
(H) that provides for or relates to a partnership, joint venture, collaboration or similar material arrangement (in each case, other than
with respect to wholly owned Subsidiaries of the Company);
(I) that is an indenture, credit agreement, loan agreement, security
agreement, guarantee, note, mortgage or other agreement providing for or guaranteeing indebtedness of any Person in excess of $3,000,000 (other than surety or performance bonds, letters of credit or similar agreements entered into in the ordinary
course of business consistent with past practice in each case to the extent not drawn upon), except for any Contract solely among or between the Company and any of its wholly owned Subsidiaries;
21
(P) that relates to the disposition or acquisition, directly or indirectly (by merger or
otherwise), by the Company or any of its Subsidiaries of assets or businesses with a fair market value in excess of $500,000;
(Q) that
relates to sale promotion, market research, marketing, or advertising Contracts and involves expenditures in excess of $3,000,000 per annum;
(R) that relates to interest rate, currency, or commodity derivatives or hedging transactions;
(S) that relate to Contracts, transactions, indebtedness or other arrangements between the Company or any Subsidiary, on the one hand, and
any of the directors or officers of the Company and Subsidiaries, on the other hand (other than compensation payable to officers and directors and employee expense reimbursement obligations and except to the extent not required to be disclosed
pursuant to Item 404 of Regulation S-K promulgated under the Securities Act); or
(T) that is not
covered by clauses (A) through (S) and involved in Fiscal Year 2021 or is expected to involve in Fiscal Year 2022 or Fiscal Year 2023 the payment by or to the Company or any of its Subsidiaries of more than $15,000,000 in the aggregate.
(ii) The Company has made available to Parent prior to the date of this Agreement, accurate and complete copies of all Material Contracts
required to be identified in Section 5.1(j)(i) of the Company Disclosure Schedule, including all amendments thereto, as in effect as of the date of this Agreement.
(iii) Except for expirations of Material Contracts in the ordinary course of business and except as has not had, and would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect, each Material Contract is a valid and binding agreement of the Company or any of its Subsidiaries party thereto, enforceable against the Company or any of its
Subsidiaries in accordance with its terms, except that such enforcement may be subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar Laws of general applicability relating to or affecting creditors
rights and to general equity principles, and, to the Knowledge of the Company, each other party thereto, and is in full force and effect, subject to rules of Law governing specific performance, injunctive relief and other equitable remedies, and the
Company or any of its Subsidiaries (to the extent it is a party thereto or bound thereby) and, to the Knowledge of the Company, each other party thereto has performed in all material respects all obligations required to be performed by it under each
Material Contract. Except as has not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, neither the Company nor any of its Subsidiaries, and, to the Knowledge of the Company, no other
party thereto, is (or, with or without notice or lapse of time or both would be) in default or breach in any material respect under the terms of any such Material Contract and, to the Knowledge of the Company, no event has occurred that (with or
without notice or lapse of time or both) will, or would reasonably be expected to, (A) constitute such a violation or breach, (B) give any Person the right to accelerate the maturity or performance of any Material Contract or (C) give
any Person the right to cancel, terminate or modify in a manner adverse to the Company or its Subsidiaries any Material Contract.
23
(iv) Except as has not had, and would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect, since January 2, 2021 through the date of this Agreement, neither the Company nor any of its Subsidiaries has received in writing (or, to the Knowledge of the Company, by oral communication) any
notice of any violation or breach of, default under or intention to cancel, terminate, adversely modify or not renew, any Material Contract.
(k) Distributors and Suppliers. Section 5.1(k) of the Company Disclosure Schedule sets forth accurate and
complete lists, with respect to the fiscal years ended January 1, 2022, January 2, 2021 and December 28, 2019, of each of the top twenty (20) (i) distributors or customers (the Top Distributors) who purchase
products and services directly from the Company or its Subsidiaries and (ii) suppliers (the Top Suppliers) for the Company or any of its Subsidiaries, in each of clauses (i) and (ii), during each such period,
based on amounts paid or payable to such distributor, customer or supplier, as applicable, in each such period. Except as would not, individually or in the aggregate, reasonably be expected to be material to the Company and its Subsidiaries, taken
as a whole, as of the date of this Agreement, none of the Company or any of its Subsidiaries (i) has any outstanding dispute with any Top Distributor or Top Supplier or (ii) has, since December 28, 2019, received any written notice,
or, to the Knowledge of the Company, oral notice or other communication from any Top Distributor or Top Supplier that such distributor, customer or supplier, as applicable, shall not continue, or does not expect to continue, as a distributor,
customer or supplier, as applicable, of the Company or any of its Subsidiaries, as applicable, or that such distributor, customer or supplier, as applicable, intends to materially reduce the scale of the business conducted with the Company or any of
its Subsidiaries.
(l) Real Property.
(i) Leased Real Property. Set forth in Section 5.1(l)(i) of the Company Disclosure Schedule is an accurate
and complete list of all Material Real Property Leases relating to the Leased Real Property. Each of the Material Real Property Leases relating to the Leased Real Property is valid, binding and enforceable in accordance with its terms and is in full
force and effect. Except as has not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, the Company or its applicable Subsidiary has a valid leasehold interest in such Leased Real Property
relating to the Real Property Leases, free and clear of all Liens, except Permitted Liens. Except as has not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect: (A) there exists no
default or event of default (or any event that with notice or lapse of time or both would become a default) on the part of the Company or any of its Subsidiaries (as applicable), or, to the Knowledge of the Company, any other party, under any Real
Property Lease; (B) the Company or its applicable Subsidiary has not (1) subleased, licensed or otherwise granted any Person the right to use or occupy any Leased Real Property or any portion thereof or (2) collaterally assigned or
granted any other security interests in any Real Property Lease or any interest therein; and (C) there are no Liens on the estate or interests created by any such Real Property Lease, except Permitted Liens.
(ii) Owned Real Property. Neither the Company nor any of its Subsidiaries currently owns, or has since January 1, 2019 owned, any
land, buildings or other real property.
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(iii) For purposes of this Agreement:
(A) Leased Real Property shall mean the leasehold or subleasehold interests and any other rights to use or occupy
any land, buildings, structures, improvements, fixtures or other interests in real property held by the Company or any of its Subsidiaries under the Real Property Leases.
(B) Material Real Property Leases shall mean each Real Property Lease requiring an annual payment in excess of
$300,000.
(C) Permitted Liens shall mean: (1) liens or deposits for current Taxes that are not yet due or
delinquent or are being contested in good faith by appropriate proceedings or for which adequate reserves have been established in accordance with U.S. GAAP prior to the date of this Agreement; (2) statutory liens or landlords,
carriers, warehousemens, mechanics, suppliers, workers, materialmens or repairmens liens or other like Liens arising or incurred in the ordinary course of business; (3) with respect to the Leased Real
Property, zoning restrictions, minor title defects or irregularities and other restrictions that do not, individually or in the aggregate, materially impair the use, occupancy or value of such Leased Real Property; (4) as to any Leased Real
Property, any Lien affecting solely the interest of the landlord thereunder and not the interest of the tenant thereunder, which does not materially impair the use, occupancy or value of such Leased Real Property; (5) pledges or deposits under
workers compensation Laws, unemployment insurance Laws or similar legislation, or good faith deposits in connection with bids, tenders, Contracts (other than for the payment of indebtedness) or leases to which such entity is a party, or
deposits to secure public or statutory obligations of such entity or to secure or appeal bonds to which such entity is a party, in each case incurred or made in the ordinary course of business;
(6) non-exclusive licenses of Intellectual Property Rights granted in the ordinary course of business; and (7) Liens to the extent disclosed or reflected on the consolidated balance sheet of the
Company for the quarterly period ended April 2, 2022 (or any notes thereto).
(D) Real Property Leases
shall mean the leases, subleases, ground leases, licenses or other agreements, including all amendments, extensions, renewals, guaranties or other agreements with respect thereto, under which the Company or any of its Subsidiaries uses or occupies
or has the right to use or occupy any real property.
(iv) Except as would not reasonably be expected to be, individually or in the
aggregate, material to the Company and its Subsidiaries, taken as a whole, neither the Company nor any applicable Subsidiary has received written notice, or, to the Knowledge of the Company, oral notice or other communication of or has an
expropriation or condemnation proceeding pending or, to the Knowledge of the Company, threatened or proposed against any Leased Real Property.
(v) Except as has not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, the
Company has not received any written notice, or, to the Knowledge of the Company, oral notice or other communication that its present or contemplated use of the Leased Real Property is not in conformity with all applicable Laws, rules, regulations
and ordinances, including all applicable zoning Laws, ordinances and regulations and with all registered deeds, restrictions of record or other agreements affecting such Leased Real Property. No damage or destruction has occurred with respect to any
of the Leased Real Property that has had, or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
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(v) Neither the Company nor any of its Subsidiaries (1) has any liability for Taxes of
any other Person (other than the Company or any of its Subsidiaries) under Treasury Regulation Section 1.1502-6 or any similar provision of state, local or foreign Tax Law; (2) has transferee or
successor liability for the unpaid Taxes of any other Persons (other than the Company or any of its Subsidiaries) by operation of applicable Law; or (3) is a party to any Tax sharing agreement other than any (i) agreement or arrangement
solely among the Company and its Affiliates or (ii) gross-up and indemnification provisions in credit agreements, derivatives, leases, supply agreements or other commercial agreements, each of which was
entered into in the ordinary course of business and the primary purposes of which is unrelated to Taxes. In the last two years, neither the Company nor any of its Subsidiaries has been either a distributing corporation or a
controlled corporation in a transaction intended to qualify under Section 355 of the Code. There are no closing agreements, gain recognition agreements, private letter rulings, technical advance memoranda or similar agreements or
rulings that have been entered into or issued by any Tax authority with respect to the Company or any of its Subsidiaries that will be binding on the Company or any of its Subsidiaries with respect to any taxable period beginning on or after the
Closing Date.
(vi) Within the past six (6) years, neither the Company nor any of its Subsidiaries has been a member of an
affiliated group (within the meaning of Section 1504(a) of the Code) filing a United States consolidated federal income Tax Return (other than an affiliated group the common parent of which is or was the Company or any of its Subsidiaries).
(vii) Within the past six (6) years, 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).
(viii)
Neither the Company nor any of its Subsidiaries is, or has been, a United States real property holding corporation within the meaning of Section 897(c)(2) of the Code.
As used in this Agreement, (i) the term Tax (including, with correlative meaning, the term
Taxes) includes all federal, state, local and foreign income, windfall or other profits, franchise, gross receipts, customs duty, capital stock, severances, stamp, transfer, payroll, sales, employment, unemployment,
disability, use, property, withholding, excise, production, value added, escheat, unclaimed property, occupancy and other taxes, duties or assessments of any nature whatsoever imposed by a Governmental Authority, together with all interest,
penalties and additions imposed with respect to such amounts and any interest in respect of such penalties and additions, and (ii) the term Tax Return includes all returns and reports (including elections,
declarations, disclosures, schedules, estimates and information returns) required to be supplied to a Tax authority relating to Taxes.
(p) Labor Matters.
(i)
Neither the Company nor any of its Subsidiaries is a party to any collective bargaining agreement or other agreement with a labor union, works council or similar organization, and, as of the date of this Agreement, to the Knowledge of the Company,
there are no material activities or proceedings by any individual or group of individuals, including
28
representatives of any labor organizations or labor unions, to organize any employees of the Company or any of its Subsidiaries. To the Knowledge of the Company, as of the date of this Agreement,
no work stoppage or labor strike against the Company or any of its Subsidiaries by employees is pending or threatened, except as would not reasonably be expected to be, individually or in the aggregate, material to the Company and its Subsidiaries,
taken as a whole.
(ii) Except as has not had, and would not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect, (A) each of the Company and its Subsidiaries is, and has at all times since January 1, 2019 been, in compliance with all applicable Laws respecting labor, employment, fair employment practices (including equal employment
opportunity Laws), terms and conditions of employment, workers compensation, occupational safety and health, and wages and hours and (B) none of the Company or any of its Subsidiaries is liable for any payment that is past due to any
trust or other fund or to any Governmental Authority, with respect to unemployment compensation benefits, social security or other benefits or obligations for employees of the Company or any of its Subsidiaries (other than payments to be made in the
ordinary course of business).
(iii) Except as has not had, and would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect, (A) none of the Company or any of its Subsidiaries is subject to, is a party to or has been threatened in writing with any action, proceeding, dispute, grievance, arbitration or investigation before any
Governmental Authority, charge or lawsuit relating to labor or employment matters involving any current or former employees of the Company or any of its Subsidiaries, including matters involving labor, employment, fair employment practices
(including equal employment opportunity Laws), terms and conditions of employment, occupational safety and health, affirmative action, employee privacy, plant closings, and wages and hours and (B) as of the date of this Agreement, none of the
Company or any of its Subsidiaries has received written notice, or, to the Knowledge of the Company, oral notice of any controversy pending or threatened between the Company or any of its Subsidiaries and any of their respective current or former
employees or consultants, which controversy has resulted or would reasonably be likely to result in an action, proceeding, dispute, grievance, arbitration, investigation before any Governmental Authority, charge or lawsuit. Except as has not had,
and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, there is no pending or, to the Knowledge of the Company, threatened Action that has been asserted or instituted against the Company or any of
its Subsidiaries by any Governmental Authority or any individual relating to the legal status or classification of an individual classified by the Company or any of its Subsidiaries as a non-employee (such as an independent contractor, a leased
employee, a consultant or special consultant).
(iv) Since January 1, 2019, to the Knowledge of the Company, no allegations of
sexual or other unlawful harassment or discrimination have been made against (i) any officer of the Company or its Subsidiaries or (ii) any employee of the Company or its Subsidiaries at a level of Vice President or above. During such
period, there have been no actions, proceedings, grievances, arbitrations, material investigations or settlements involving such matters or Persons.
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(vi) (A) Neither the manufacture, use, import, offer for sale or other disposition of any
Company Products nor the conduct of the businesses of the Company and its Subsidiaries as currently conducted infringes, misappropriates or otherwise violates, or has infringed, misappropriated or otherwise violated, the Intellectual Property Rights
of any Person; (B) no Action asserting the same is pending or, to the Knowledge of the Company, threatened in writing against the Company or any of its Subsidiaries; and (C) none of the Company or its Subsidiaries has received any written
notice (including cease and desist letters and invitations to take a license), or, to the Knowledge of the Company, oral notice or other communication alleging infringement, misappropriation, or violation of or offering to enter into
licensing negotiations with respect to any Intellectual Property Right of another Person.
(vii) To the Knowledge of the Company, no
Person has infringed, misappropriated or otherwise violated or currently infringes, misappropriates or otherwise violates any Owned Intellectual Property. None of the Company or any of its Subsidiaries has asserted or threatened an Action against
any other Person alleging infringement, misappropriation or violation of any Owned Intellectual Property.
(viii) Except as would not,
individually or in the aggregate, reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole, each of the Company and its Subsidiaries has obtained from all Persons (including any and all current or former employees,
consultants, independent contractors, officers or directors of any of the Company and its Subsidiaries) that have created any portion of, or otherwise that would have any rights in or to, Owned Intellectual Property, valid and enforceable written
assignments to the Company or one of its Subsidiaries of any such work, invention, improvement or other rights and a valid and enforceable waiver of any and all rights (including moral rights) that such Person may have in such Owned
Intellectual Property.
(ix) The Company and its Subsidiaries have taken commercially reasonable measures to protect, safeguard and
maintain the confidentiality of all material Trade Secrets that are owned, used or held by the Company or any of its Subsidiaries, and no such material Trade Secrets have been disclosed to or, to the Knowledge of the Company, misappropriated by any
Person except pursuant to written, valid and appropriate non-disclosure and/or license agreements which, to the Knowledge of the Company, have not been breached.
(x) The Company and its Subsidiaries have not deposited, disclosed, or delivered to any Person, or agreed to or permitted the deposit,
disclosure, or delivery to any Person of, any Source Code of any Company Products. No event has occurred, and no circumstances or conditions exist, that (with or without notice, lapse of time or both) will result in the disclosure or delivery to any
Person of any Source Code for any Company Product. The consummation of the transactions contemplated in this Agreement will not result in the delivery, license or disclosure of any Source Code for any Company Product to any other Person who is
not, as of the date of this Agreement, either an employee of the Company or any of its Subsidiaries, or a Person to whom the Company or any of its Subsidiaries otherwise makes any such Source Code available in the ordinary course of business
pursuant to reasonable confidentiality terms. No Person has, or shall have any right to lease, license, purchase, or otherwise obtain any proprietary Source Code or Technology incorporated into or embodied in any Company Products.
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Third-Party Processor to implement commercially reasonable measures to protect Personal Information received from the Company and its Subsidiaries from unauthorized disclosure or use and to
refrain from disclosing such Personal Information except with the express written consent of the Company or one of its Subsidiaries. To the Knowledge of the Company, no such Third-Party Processors are in breach of any of their contractual
requirements with the Company.
(xxiv) For purposes of this Agreement, the following terms have the following meanings:
Company Products means the products and services made commercially available by or on behalf of the
Company or any of its Subsidiaries as of or prior to the Effective Time or under development and contemplated in business plans disclosed to Parent to be made available by or on behalf of the Company or any of its Subsidiaries after the Effective
Time.
Intellectual Property Rights means any or all of the following in any jurisdiction of the
world: (a) patents (including design patents) and utility models of any kind, patent applications, including provisional applications, statutory invention registrations, inventions, discoveries and invention disclosures (whether or not
patented), and all related continuations, continuations-in-part, divisions, renewals, reissues, re-examinations, substitutions,
extensions, continuing prosecution applications, provisionals, divisions and substitutions thereof or relating thereto, as well as all related foreign patents and patent applications that are counterparts to such patents and patent applications
(collectively, (Patents), (b) rights in trademarks, service marks, trade names, corporate names, service names, brand names, symbols, logos, trade dress, packaging design, slogans, certification marks, collective marks,
d/b/as, Internet domain names, uniform resource locators and other similar identifiers of origin, in each case whether or not registered, and any and all common law and any applicable moral rights thereto, and registrations and applications
for registration thereof, including all renewals of the same, and any goodwill associated therewith (collectively, Trademarks), (c) rights in published and unpublished works of authorship whether or not copyrightable
(including rights in Software, databases and other compilations of information), whether or not registered or sought to be registered, copyrights in and to the foregoing, and other similar exclusive exploitation rights and moral rights, together
with all common law rights and moral rights therein, and any applications and registrations therefor, and all renewals, extensions, restorations, derivatives, translations, localizations, adaptations, and reversions thereof, (d) rights under
applicable trade secret Law in confidential or proprietary information of a confidential nature, including without limitation rights in, arising out of, or associated with information that is not generally known or readily ascertainable through
proper means, whether tangible or intangible, including without limitation ideas, know-how, processes, schematics, methods, formulae, drawings, programs, systems, techniques, prototypes, models, designs,
customer lists and supplier lists, including without limitation rights granted under the Uniform Trade Secrets Act (collectively, Trade Secrets), (e) mask work rights, (f) rights in digital representations or digital
assets pertaining to any intellectual property identified in this paragraph, including but not limited to non-fungible tokens (NFTs) or other records recorded on a blockchain or similar technology and
(g) all other intellectual property rights and/or proprietary rights.
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IT Assets means computers, computer software,
firmware, middleware, servers, workstations, routers, hubs, switches, data communications lines and all other information technology equipment, and all associated documentation, in each case, used by the Company or any of its Subsidiaries.
Malicious Code means any back door, drop dead device, time bomb,
Trojan horse, virus, worm, spyware (as such terms are commonly understood in the software industry) or any other code designed to have any of the following functions: (i) disrupting, disabling or
harming the operation of, or providing unauthorized access to, a computer system or network or other device on which such code is stored or installed or (ii) compromising the privacy or data security of a user or damaging or destroying any data
or file, in each case, without authorization and without the applicable users consent.
Open Source
License means any license or other obligation that (i) is identified as an open source license by the Open Source Initiative (www.opensource.org/) or (ii) would require any hardware design of a Company Product to be made
publicly available.
Open Source Materials means any Software or content subject to an Open
Source License.
Owned Intellectual Property means all Intellectual Property Rights owned or
purported to be owned by the Company or any of its Subsidiaries.
Personal Information means any
information that, alone or in combination with other information collected or used by the Company or any of its Subsidiaries, identifies, relates to, describes, is capable of being associated with or could reasonably be linked, directly or
indirectly, with a particular consumer or household, and constitutes personal information, personal data or personally identifiable information, or any other equivalent term, as defined in applicable Laws relating
to privacy and data protection.
Registered means issued by, registered with, renewed by or the
subject of a pending application before any Governmental Authority or Internet domain name registrar.
Registered Intellectual Property means all Owned Intellectual Property that is Registered.
Software means (i) computer programs, including operating systems, applications, firmware
or other software code, whether in Source Code, object code or other form; (ii) computerized databases and other computerized compilations and collections of data or information, including all data and information included in such databases,
compilations or collections (whether machine readable or otherwise); (iii) screens, user interfaces, command structures, report formats, templates, menus, buttons and icons; (iv) descriptions, flow-charts, architectures, development tools, and
other materials used to design, plan, organize and develop any of the foregoing; and (v) all documentation, including development, diagnostic, support, user and training documentation, related to any of the foregoing.
Source Code means Software in human-readable form.
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Technology means inventions, works of authorship
(including Software) and other tangible embodiments of Intellectual Property Rights.
(r) Insurance. Except as has not had, and
would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, all fire and casualty, general liability, business interruption, product liability, sprinkler and water damage, workers compensation and
employer liability, directors, officers and fiduciaries policies and other liability insurance policies (Insurance Policies) maintained by the Company or any of its Subsidiaries are with reputable insurance carriers and
provide coverage in such amounts and against such risks as is sufficient to satisfy applicable Law and the monetary requirements specifically provided on the face of all Contracts to which the Company or any of its Subsidiaries is bound, and as the
Company reasonably believes to be customary or in good faith adequate for companies of a comparable size in the industries in which it and its Subsidiaries operate. Each Insurance Policy maintained by or on behalf of the Company as of the date of
this Agreement is in full force and effect and all premiums due with respect to all Insurance Policies have been paid, and neither the Company nor any of its Subsidiaries has taken any action or failed to take any action that (including with respect
to the transactions contemplated by this Agreement), with notice or lapse of time or both, would constitute a breach or default, or permit a termination of any of the Insurance Policies, except as has not had, and would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect. Except as has not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, since January 1, 2019, (i) the Company and its
Subsidiaries have not been refused any insurance, nor has coverage been limited, by any insurance carrier, (ii) no insurer under any of the Insurance Policies has disputed, or given any indication that it intends to dispute, the validity of any
of the Insurance Policies on any grounds, (iii) no claims have been made, no claim is outstanding and, to the Knowledge of the Company, no fact or circumstance exists that would reasonably be expected to give rise to a claim under any of the
Insurance Policies and, to the Knowledge of the Company, no event, act, or omission has occurred that requires notification under any of the Insurance Policies, and (iv) none of the insurers under any of the Insurance Policies has refused, or
given any indication that it intends to refuse, indemnity in whole or in part in respect of any claims under the Insurance Policies, and, to the Knowledge of the Company, nothing has been done or omitted to be done by the Company and its
Subsidiaries, and, to the Knowledge of the Company, there are no facts or circumstances that would reasonably be expected, to entitle the insurers under any of the Insurance Policies to refuse indemnity in whole or in part in respect of any claims
under the Insurance Policies.
(s) Certain Business Practices. Except as has not had, and would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, the Company, its Subsidiaries and each of their respective directors and officers, and, to the Knowledge of the Company, each of their respective employees and all other Persons, in each
case while acting for and on behalf of the Company or its Subsidiaries, have complied at all times since January 1, 2017, and are in compliance, with (A) the provisions of the U.S. Foreign Corrupt Practices Act of 1977, as amended (15
U.S.C. § 78dd1, et seq.) (FCPA), and (B) the provisions of all anti-bribery, anti-corruption and anti-money laundering Laws of each jurisdiction in which the Company and its Subsidiaries operate and in which any
agent thereof is conducting or has conducted business involving the Company or any of its Subsidiaries. Except as has not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse
37
Effect, none of the Company, any of its Subsidiaries and/or, to the Knowledge of the Company, any of the Companys and its Subsidiaries respective directors, officers, employees,
consultants and agents, in each case while acting for and on behalf of the Company, have paid, offered or promised to pay, or authorized or ratified the payment, directly or indirectly, of any monies or anything of value to any national, provincial,
municipal or other Government Official or any political party or candidate for political office for the purpose of influencing any act or decision of such official or of any Governmental Authority to obtain or retain business, or direct business to
any Person or to secure any other improper benefit or advantage, in each case in violation in any material respect of the FCPA and any Laws described in clause (B) of the immediately preceding sentence. As used in this Agreement, the term
Government Official means any official, officer or employee of, or any representative or other Person acting in an official capacity for or on behalf of, any Governmental Authority, and includes any official or employee of
any entity directly or indirectly owned or controlled by any Governmental Authority, and any officer or employee of a public international organization, as well as any Person acting in an official capacity for or on behalf of any such Governmental
Authority, or for or on behalf of any such public international organization. Except as has not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, the Company and its Subsidiaries
(x) have instituted policies and procedures reasonably designed to promote compliance with the FCPA and other anti-bribery, anti-corruption and anti-money laundering Laws in each jurisdiction in which the Company or any of its Subsidiaries
operate and (y) have not revoked such policies and procedures. Neither the Company nor any of its Subsidiaries, nor, to the Knowledge of the Company, any of their respective officers, directors or employees are the subject of any allegation,
government inquiry, voluntary disclosure, investigation (whether internal or external), prosecution or other enforcement action related to any actual, alleged, or suspected violation of the FCPA or any other applicable anti-corruption or
anti-bribery Law.
(t) International Trade.
(i) Except as would not reasonably be expected to be, individually or in the aggregate, material to the Company and its Subsidiaries, taken
as a whole, since July 1, 2017, the Company and its Subsidiaries have been and are in compliance with all applicable International Trade Laws and neither the Company nor any of its Subsidiaries, nor, to the Knowledge of the Company, any other
Person acting on their behalf has engaged in or is currently engaged in any conduct that is prohibited under or otherwise in violation of applicable International Trade Laws. Without limiting any of the foregoing, since July 1, 2017, neither
the Company nor any of its Subsidiaries, nor any of their respective directors, officers or employees nor, to the Knowledge of the Company, any agent or other Person acting on behalf of any of the Company or its Subsidiaries has engaged in any
business or dealings, directly or indirectly, involving or relating to (i) any country or territory that is or whose government is, or has since July 1, 2017 been, the target of comprehensive sanctions imposed by the United States, Canada,
European Union or the United Kingdom (including Cuba, Iran, North Korea, Syria, Venezuela, the Crimea region of the Ukraine, and the so-called Donetsk and Luhansk Peoples Republics) (each a
Sanctioned Country); or (ii) a Person that is designated on, or is owned at least 50%, directly or indirectly, individually or in the aggregate, or is controlled by, Person(s) designated on, any list of sanctioned
parties maintained by the United States, including the list of Specially Designated Nationals and Blocked Persons maintained by OFAC, Canada, the United Kingdom, or the European Union (any such Person a Sanctioned Person).
38
(ii) Neither the Company nor any of its Subsidiaries, nor any of their respective
directors, officers or employees, nor, to the Knowledge of the Company, any agent or other Person acting on behalf of the Company or its Subsidiaries is (A) a Sanctioned Person; or (B) located or resident in or organized under the laws of
a Sanctioned Country.
(iii) Since July 1, 2017, neither the Company nor any of its Subsidiaries, nor any of their respective
directors, officers or employees, nor, to the Knowledge of the Company, any agent or other Person acting on behalf of the Company or its Subsidiaries has received from any Governmental Authority or any other Person any written or, to the Knowledge
of the Company, verbal notice of any violation, alleged violation, or suspected violation of any International Trade Law, or conducted any internal investigation with respect to, or made any voluntary or involuntary disclosure to a Governmental
Authority concerning, any actual, suspected, or alleged violation of any applicable International Trade Law, in each case concerning the business of the Company or any of its Subsidiaries. For purposes of this Agreement, International
Trade Laws means any of the following: (A) any Laws concerning the importation of merchandise, items (including technology, services, and software), including but not limited to those administered by U.S. Customs and Border
Protection or the U.S. Department of Commerce, (B) any Laws concerning the exportation or re-exportation of items (including technology, services, and software), including but not limited to those
administered by the U.S. Department of Commerce or the U.S. Department of State, or (C) any economic sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (OFAC), the U.S. State
Department, the United Nations, Canada, the European Union, or the United Kingdom.
(u) Anti-Slavery and Human Trafficking.
(i) Except as would not reasonably be expected to be, individually or in the aggregate, material to the Company and its Subsidiaries, taken
as a whole, each of the Company, its Subsidiaries and each of their respective directors, officers and employees in their capacities as such, has at all times complied and is complying with all applicable anti-slavery and human trafficking Laws,
statutes, regulations and codes from time to time in force including, but not limited to, the California Transparency in Supply Chains Act, the Uyghur Forced Labor Prevention Act, the United Kingdom Modern Slavery Act 2015, and similar Laws in the
jurisdictions in which the Company and the its Subsidiaries, directly or indirectly, conduct business.
(ii) The Company and its
Subsidiaries have in place adequate policies, procedures and systems designed to ensure in all material respects its compliance with all applicable anti-slavery and human trafficking Laws from time to time in force.
(iii) Neither the Company, its Subsidiaries, nor any of their respective directors, officers or, to the Knowledge of the Company, employees
in their capacities as such, has engaged or is engaging in any activity, practice or conduct related to slavery and/or human trafficking, including but not limited to: (A) holding another person in slavery or servitude or requiring another
person to perform forced or compulsory labor, (B) arranging or facilitating human trafficking or (C) intending to commit or facilitate any act of human trafficking.
39
(v) Quality and Safety of Products.
(i) Except as has not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, neither
the Company nor any of its Subsidiaries has, since December 28, 2019, received written notice, or, to the Knowledge of the Company, oral notice in connection with any Company Product sold, produced or distributed by or on behalf of the Company
or its Subsidiaries of any claim or allegation against the Company or any of its Subsidiaries, or been a party to, subject to or threatened with, any Action or investigation against or affecting, the Company or any of its Subsidiaries as a result of
manufacturing, storage, quality, packaging or labeling of any Company Product produced, sold or distributed by or on behalf of the Company or its Subsidiaries.
(ii) Except as has not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, the
inventory held for sale to customers by the Company or any of its Subsidiaries which is held at, or is in transit from or to, any of the Companys or any of its Subsidiaries premises, whether or not reflected in the consolidated financial
statements (the Company Inventory), (A) is of a quality and condition merchantable in the ordinary course of business, (B) is subject to reasonably designed procedures for storage and handling in conformity with
industry standards and reasonably good business practice and (C) since December 28, 2019, has not been subject to a voluntary recall by the Company or its Subsidiaries, by the manufacturer or distributor of the Company Inventory or any
Governmental Authority nor subject to, to the Knowledge of the Company, a written threat of any such recall.
(iii) Except as would not
reasonably be expected to be, individually or in the aggregate, material to the Company and its Subsidiaries, taken as a whole, each Company Product manufactured, sold, licensed, leased or delivered by the Company and its Subsidiaries since
December 28, 2019 has been in conformity with the specifications for such Company Product, all applicable contractual commitments and all applicable express and implied warranties. Except as would not reasonably be expected to be, individually
or in the aggregate, material to the Company and its Subsidiaries, taken as a whole, since December 28, 2019, there have been no product liability claims asserted against the Company and its Subsidiaries relating to any Company Products, or, to
the Knowledge of the Company, threatened in writing against the Company and its Subsidiaries relating to any Company Products. Except as would not reasonably be expected to be, individually or in the aggregate, material to the Company and its
Subsidiaries, taken as a whole, neither the Company nor its Subsidiaries have any liability or obligation (and to the Knowledge of the Company, there is no basis for any present or future Action against the Company or its Subsidiaries) for
replacement or repair thereof or other damages in connection therewith except liabilities or obligations for replacement or repair incurred in the ordinary course of business consistent with past practice. Except as, individually or in the
aggregate, is not, and would not reasonably be expected to be, material to the Company and its Subsidiaries, taken as a whole, no Company Product is subject to any guaranty, warranty, right of return, right of credit or other indemnity beyond the
applicable standard terms and conditions of sale, license or lease or beyond that implied or imposed by applicable Law.
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(iv) Except as would not reasonably be expected to be, individually or in the aggregate,
material to the Company and its Subsidiaries, taken as a whole, (A) all subscription services provided by the Company and its Subsidiaries to any third party in the past three (3) years (Company Services) were
performed in conformity with the terms and requirements of all applicable express and implied warranties and all applicable services agreements, and (B) there is no Action pending, or to the Knowledge of the Company, threatened in writing
against the Company or its Subsidiaries relating to any Company Services.
(v) Except as would not reasonably be expected to be,
individually or in the aggregate, material to the Company and its Subsidiaries, taken as a whole, the Company and its Subsidiaries are and since December 28, 2019 have been in compliance with (i) EU Directive 2002/95/EC, the Restriction of
the Use of certain Hazardous Substances in Electrical and Electronic Equipment, and other Laws restricting or requiring the reporting of the presence of Hazardous Substances in the Company Products, and (ii) EU Directive 2012/19/EU on Waste
Electrical and Electronic Equipment, and other Laws regulating the disposal of electrical and electronic equipment.
(w) Brokers and
Finders. The Company has not employed any broker or finder or incurred any liability for any brokerage fees, commissions or finders fees in connection with the Merger or the other transactions contemplated in this Agreement, except that
the Company has employed Qatalyst Partners LP (the Financial Advisor) as its outside financial advisor.
(x)
Opinion of Financial Advisor. The Company Board has received the opinion of the Financial Advisor to the effect that, as of the date of such opinion, and based upon and subject to the various qualifications, assumptions, limitations
and other matters considered in the preparation thereof as set forth therein, the Merger Consideration to be received pursuant to and in accordance with the terms of this Agreement by the holders of Shares (other than Parent or any Affiliate of
Parent) is fair, from a financial point of view, to such holders. The Company has made available to Parent true and complete copies of the Companys engagement letter with the Financial Advisor and all other agreements under which any fees or
expenses may become payable to the Financial Advisor in connection with the Merger and the other transactions contemplated by this Agreement.
(y) No Other Representations or Warranties. Except for the representations and warranties in this
Section 5.1, neither the Company nor any Person on behalf of the Company makes any express or implied representation or warranty with respect to the Company or any of its Subsidiaries or their respective businesses,
operations, properties, assets, liabilities or condition (financial or otherwise) or any information regarding any of the foregoing. Neither the Company nor any Person on behalf of the Company makes any express or implied representation or warranty
with respect to any estimates, projections, forecasts and other forward-looking information or business and strategic plan or other information regarding the Company and its Subsidiaries, notwithstanding the delivery or disclosure to Parent, Merger
Sub or any of their respective Representatives of any documentation, forecasts or other information with respect to any one or more of the foregoing, and, except for the representations and warranties of the Company in this
Section 5.1, any other information provided or made available to Parent or Merger Sub or their respective Representatives in connection with the Merger or the other transactions contemplated by this Agreement (including any
information, documents, projections, forecasts, estimates, predictions or other material made available to Parent or Merger Sub or their respective Representatives in data rooms, management presentations or due diligence sessions in
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(ii) The execution, delivery and performance by Parent and Merger Sub of this Agreement and
the consummation by Parent and Merger Sub of the transactions contemplated in this Agreement do not and will not (A) conflict with or result in any violation or breach of any provision of the certificate of incorporation or bylaws of Parent or
Merger Sub, respectively, or the similar organizational documents of any of their respective Subsidiaries, (B) assuming compliance with the matters referred to in Section 5.2(c)(i), conflict with or result in a
violation or breach of any applicable Law or (C) assuming compliance with the matters referred to in Section 5.2(c)(i), require any consent by any Person, except in the case of clauses (B) and (C) above, any such
violation, breach or conflict that would not, individually or in the aggregate, reasonably be expected to prevent or materially delay the ability of Parent or Merger Sub to consummate the Merger.
(d) Litigation. As of the date of this Agreement, there are no pending or, to the knowledge of the executive officers of Parent,
threatened Actions against Parent or Merger Sub that seek to enjoin, or would reasonably be expected to have the effect of preventing, making illegal, or otherwise interfering with, any of the transactions contemplated by this Agreement, except as
would not, individually or in the aggregate, reasonably be expected to prevent or materially delay the ability of Parent or Merger Sub to consummate the Merger by the Outside Date.
(e) Sufficiency of Funds. As of the Effective Time, Parent and Merger Sub will have available to them cash and other sources of
immediately available funds sufficient to pay the aggregate Merger Consideration and all other cash amounts payable pursuant to this Agreement. Parent and Merger Sub expressly acknowledge and agree that their obligations under this Agreement,
including their obligations to consummate the Merger or any of the other transactions contemplated by this Agreement, are not subject to, or conditioned on, the receipt or availability of any funds or financing.
(f) Ownership of Merger Sub; No Prior Activities. The authorized capital stock of Merger Sub consists solely of 100
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 direct or indirect wholly
owned Subsidiary of Parent, and there are (i) no other shares of capital stock or voting securities of Merger Sub, (ii) no securities of Merger Sub convertible into or exchangeable for shares of capital stock or voting securities of Merger
Sub and (iii) no options or other rights to acquire from Merger Sub, and no obligations of Merger Sub to issue, any capital stock, voting securities or securities convertible into or exchangeable for capital stock or voting securities of Merger
Sub. Merger Sub has not conducted any business prior to the date of this Agreement and has no, and prior to the Effective Time will have no, business activities, assets, liabilities or obligations of any nature, in each case, other than those
incident to its formation and pursuant to this Agreement and the Merger and the other transactions contemplated by this Agreement.
(g)
Ownership of Shares; Affiliated Stockholders. None of Parent, Merger Sub or any of their respective Subsidiaries (i) beneficially owns, directly or indirectly, any Shares, any rights or options to acquire any Shares or any
securities or instruments convertible into, exchangeable for or exercisable for Shares or (ii) is, or has been at any time during the period commencing three years prior to the date of this Agreement, an interested stockholder of
the Company, as such term is defined in Section 203 of the DGCL.
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(ii) (x) merge or consolidate the Company or any of its Subsidiaries with any other Person,
except for any such transaction between or among any of its wholly owned Subsidiaries that would not impose, individually or in the aggregate, any changes or restrictions on its assets, operations or business or on the assets, operations and
businesses of the Company and its Subsidiaries taken as a whole that would be adverse to Parent or any of its Subsidiaries or (y) restructure, reorganize or completely or partially liquidate or otherwise enter into any agreement or arrangement
imposing, individually or in the aggregate, any changes or restrictions on the assets, operations or business or on the assets, operations and businesses of the Company or any of its Subsidiaries that would be adverse to Parent or any of its
Subsidiaries;
(iii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any assets,
securities, properties, interests or businesses, other than (A) acquisitions of inventory, supplies, raw materials, equipment and similar assets in the ordinary course of business consistent with past practice, (B) acquisitions pursuant to
Contracts in effect on the date of this Agreement which have been disclosed in unredacted form to Parent prior to the date hereof, (C) in accordance with the Companys capital and research and development expenditure budget made available
to Parent prior to the date of this Agreement and set forth in the Company Disclosure Schedule (the Company Budget), or (D) any other acquisitions for consideration that are not in excess of $5,000,000 in the
aggregate; provided, that such aggregate cap shall be deemed to be increased to $10,000,000 effective upon the First Outside Date Extension;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber or authorize the issuance, sale, pledge, disposition, grant, transfer, lease,
license, guarantee or Lien against, or otherwise enter into any Contract or understanding with respect to the voting of, any shares of capital stock of the Company or any of its Subsidiaries, or securities convertible or exchangeable into or
exercisable for any shares of such capital stock, or any options, warrants, restricted shares, restricted share units, performance share units, stock appreciation rights, phantom stock or other rights of any kind to acquire any shares of such
capital stock or such convertible or exchangeable securities, in each case, other than (A) any such transaction solely among the Company and its wholly owned Subsidiaries or among the Companys wholly owned Subsidiaries that would not be
adverse to Parent or any of its Subsidiaries, (B) any issuance, sale, grant or transfer of Shares pursuant to the exercise or settlement of Company Options, Company RSU Awards, Company PSU Awards or Company DSU Awards outstanding as of the date
of this Agreement or granted after the date of this Agreement in accordance with Section 6.1(b)(xv) below, or (C) the issuance of Shares for the Final Offering in accordance with the terms of the ESPP;
(v) make any loans, advances or capital contributions to, or investments in, any Person (other than (A) to the Company or any of its
wholly owned Subsidiaries or (B) extensions of refunds, credit terms, rebates or other allowances to customers or vendors in the ordinary course of business consistent with past practice);
(vi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any
of its capital stock (except for dividends or other distributions paid by any wholly owned Subsidiary of the Company to the Company or to any other wholly owned Subsidiary of the Company);
45
(vii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire,
directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock (except for (A) any such transaction by a wholly owned Subsidiary of the Company that would not
be adverse to Parent or any of its Subsidiaries and (B) acquisitions of Shares in satisfaction of withholding obligations in respect of Company Options, Company RSU Awards or Company PSU Awards or payment of the exercise price in respect of
Company Options, in each case, outstanding as of the date of this Agreement pursuant to its terms or granted thereafter not in violation of this Agreement);
(viii) create, incur, assume, guarantee, endorse, suffer to exist or otherwise be liable with respect to any indebtedness for borrowed money,
issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except (A) guarantees of indebtedness of the Company or any of its wholly owned Subsidiaries,
(B) intercompany indebtedness between or among the Company and/or any of its wholly owned Subsidiaries, (C) in connection with the financing of accounts payable in the ordinary course of business consistent with past practice,
(D) indebtedness for borrowed money incurred in the ordinary course of business in accordance with Contracts (x) in effect prior to the date hereof, including the Existing Credit Agreement, that have been disclosed in unredacted form to
Parent prior to the date hereof or (y) entered into after the date hereof as set forth in Section 6.1(b)(viii) of the Company Disclosure Schedule and (E) other indebtedness for borrowed money in an amount not to
exceed $7,500,000 in the aggregate; provided, that such aggregate cap shall be deemed to be increased to $15,000,000 effective upon the First Outside Date Extension;
(ix) other than in accordance with the Company Budget, (1) incur or commit to any capital or research and development expenditure, that,
in the aggregate, exceeds the amount of the capital or research and development expenditures contemplated by the Company Budget, except the Company may make capital or research and development expenditures of less than $1,000,000 individually or
$2,000,000 in the aggregate; provided, that such aggregate cap shall be deemed to be increased to $4,000,000 effective upon the First Outside Date Extension, or (2) fail to incur or commit to any capital or research and development
expenditures in the amounts and on the time frames set forth in the Company Budget in all material respects;
(x) except as set forth on
Section 6.1(b)(x) of the Company Disclosure Schedule, enter into, amend or modify in any material respect or terminate any Material Contract or any Contract that would have been a Material Contract had it been entered into
prior to the date of this Agreement, or otherwise waive, release or assign (other than assignments between or among the Company and/or any of its wholly owned Subsidiaries) any material rights, claims or benefits of the Company or any of its
Subsidiaries thereunder, other than the expiration of any such Contract in accordance with its terms;
(xi) make any material changes
with respect to financial accounting policies or procedures, except as required by Law, proposed Law or by U.S. GAAP or statutory or regulatory accounting rules or interpretations with respect thereto or by any Governmental Authority or
quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
46
(xii) settle any action, suit, claim, hearing, arbitration, investigation or other
proceedings (other than any audit or other proceeding in respect of Taxes, which shall be governed solely by Section 6.1(b)(xiii) of the Agreement), for an amount in excess of $1,500,000 individually or $3,000,000 in the
aggregate or any obligation or liability of it in excess of such amount or on a basis that would result in the imposition of any writ, judgment, decree, settlement, award, injunction or similar order of any Governmental Authority that would restrict
the future activity or conduct of Parent, the Company or any of their respective Subsidiaries or a finding or admission of a violation of Law or violation of the rights of any Person other than with respect to monetary settlements only, settlements
or compromises of any action, suit, claim, hearing, arbitration, investigation or other proceedings to the extent reflected or reserved against in the balance sheet (or the notes thereto) of the Company included in the Company Reports filed prior to
the date of this Agreement for an amount not in excess of the amount so reflected or reserved;
(xiii) (A) make (other than consistent
with past practice) or change any material Tax election, (B) change any entity classification for federal income tax purposes of any Subsidiary, (C) create an entity outside of the United States that is (x) a direct Subsidiary of the
Company or any of its domestic Subsidiaries and (y) treated as a disregarded entity or partnership for U.S. federal income tax purposes, (D) knowingly create a permanent establishment outside of the Company or any
Subsidiarys place of incorporation or formation, (E) file any amended income Tax Return or other material amended Tax Return, (F) adopt or change any material accounting method for Taxes, (G) settle or compromise any material
Tax claim, other than with respect to settlements or compromises of any Tax claim for an amount that does not exceed the amount disclosed, reflected or reserved in accordance with U.S. GAAP in the Company Reports filed prior to the date of this
Agreement, (H) surrender any material claim for a refund of Taxes, (I) enter into any closing agreement relating to a material amount of Taxes, (J) file any income Tax Return or other material Tax Return that is materially
inconsistent with past practice, (K) other than in the ordinary course of business, consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment or (L) transfer (including any controlled
transaction or controlled transfer as described in Treasury Regulation Section 1.482-7 related to a cost sharing arrangement), sell, assign, pledge, convey, or otherwise dispose of, for legal or Tax
purposes, any Intellectual Property Rights currently owned by the Company or any of its Subsidiaries out of the United States including through any such transaction that is intended to or could reasonably be expected to be considered as a transfer
(including any controlled transaction or controlled transfer as described in Treasury Regulation Section 1.482-7 related to a cost sharing arrangement), sale, assignment, pledge, conveyance or disposition
for U.S. federal income Tax purposes;
(xiv) (1) transfer, sell, lease, license, divest, pledge, cancel or otherwise dispose of, abandon
or permit to lapse, or permit or suffer to exist the creation of any Lien upon, any assets of the Company or any of its Subsidiaries (including any Intellectual Property Rights or Technology), including capital stock of any of its Subsidiaries,
except (A) for sales of Company Products to customers in the ordinary course of business consistent with past practice, (B) for sales of obsolete tangible assets, (C) for sales, leases, licenses or other dispositions of tangible
assets having a value not in excess of $1,250,000 individually or $2,500,000 in the aggregate (provided, that such aggregate cap shall be deemed to be increased to $5,000,000 effective upon the First Outside Date Extension), (D) pursuant to
Contracts or written commitments existing as of the date hereof, in each case, which have been disclosed in unredacted form to Parent prior to the date hereof, (E) for non-exclusive licenses of
Intellectual Property Rights to customers, vendors or service providers of the Company or its Subsidiaries in the ordinary course of business consistent with past practice, and (F) for sales of tangible inventory or used tangible equipment in
the ordinary course of business consistent with past practice, (2) abandon or permit to lapse any Trademarks included in the Owned Intellectual Property, or (3) disclose any Trade Secret of the Company or any of its Subsidiaries, except in
the ordinary course of business consistent with past practice and pursuant to a written confidentiality agreement;
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(c) From and after the date of this Agreement and until the Effective Time, Parent shall
comply with the obligations set forth on Section 6.1(c) of the Company Disclosure Schedule.
(d) No later than
five (5) Business Days prior to making any broad-based written (or prepared oral) communications to the officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit entitlements to be provided following
the Closing Date, the Company shall provide Parent with a copy of the intended communication (including, in the case of any such oral communications, copies of scripts, talking points or other similar materials). Any such communication shall be
subject to Parents consent (which shall not be unreasonably withheld, conditioned or delayed), and Parent and the Company shall cooperate in providing any such communication.
(e) Nothing contained in this Agreement is intended to give Parent, its Subsidiaries or Merger Sub, directly or indirectly, the right to
control or direct the operations of the Company and 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, supervision and
decision making authority over its and its Subsidiaries respective operations. Furthermore, nothing contained in this Agreement shall restrict the Company and its Subsidiaries from, or require the approval of Parent prior to, continuing any
necessary or advisable changes in their respective business practices adopted prior to the date hereof, or taking such further actions from and after the date hereof, based on the advice of outside legal counsel, in response to (x) COVID-19 or any COVID-19 Measures, including to (A) protect the health and safety of the Companys and its Subsidiaries employees, suppliers, partners
and other individuals having business dealings with the Company and its Subsidiaries or (B) respond to third-party supply or service disruptions caused by COVID-19 or any
COVID-19 Measures, or (y) sanctions imposed in connection with the current conflict between the Russian Federation and Ukraine; provided, however, that the Company as promptly as practicable
shall give Parent prior written notice of any such action to the extent reasonably practicable, which notice shall describe in reasonable detail the action and the reason(s) that such action is being taken pursuant to this paragraph and take into
account in good faith the reasonable suggestions of Parent with such action to be taken by the Company, and, in the event that it is not reasonably practicable for the Company to give the prior written notice described in this proviso, the Company
shall instead give such written notice to Parent promptly after taking such action.
Section 6.2
Acquisition Proposals; Change of Recommendation.
(a) No Solicitation or Negotiation.
Except as expressly permitted by this Section 6.2, the Company shall not, and shall cause its Subsidiaries and the directors, officers and employees of it and its Subsidiaries not to, and shall instruct and use its
reasonable best efforts to cause its and its Subsidiaries investment bankers, attorneys, accountants and other advisors or representatives (such directors, officers, employees, investment bankers, attorneys, accountants and other advisors or
representatives, collectively, Representatives) not to, directly or indirectly:
(i) initiate, solicit, propose,
knowingly encourage or knowingly facilitate any inquiry, proposal, indication of interest or offer that constitutes, or would reasonably be expected to lead to, an Acquisition Proposal;
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in each case, if, and only if, prior to taking any action described in clauses (i) or (ii) above, the
Company Board determines in good faith after consultation with outside legal counsel and an outside financial advisor that, (A) based on the information then available and after consultation with its outside financial advisor, such Acquisition
Proposal (x) either constitutes a Superior Proposal or would reasonably be expected to result in a Superior Proposal and (y) did not result from a breach of this Section 6.2 and (B) the failure to take such
action would be inconsistent with the directors fiduciary duties under applicable Law.
(c) The Company shall promptly (and, in any
event, within 24 hours) give written notice to Parent if the Company or any of its Subsidiaries receives (i) any inquiry, proposal, indication of interest or offer with respect to an Acquisition Proposal, (ii) any request by any Person or
group for information in connection with or with respect to any Acquisition Proposal or (iii) any request by any Person or group for discussions or negotiations, or to initiate or continue discussions or negotiations, with respect to an
Acquisition Proposal, setting forth in such notice the name of such Person or group and the material terms and conditions of any such Acquisition Proposals (including, if applicable, complete copies of any written request, inquiry, proposal,
indication of interest or offer, including proposed agreements and any other written communications) and thereafter shall keep Parent reasonably informed, on a reasonably current basis (and, in any event, within 24 hours), of changes in the status
and terms of any such proposals or offers (including any amendments thereto) and any changes to the status of any such discussions or negotiations.
(d) For purposes of this Agreement:
Acquisition Proposal means any inquiry, proposal, indication of interest or offer involving any
Person or group (other than Parent or its Subsidiaries) relating to (i) a merger, consolidation, dissolution, liquidation, tender offer, recapitalization, reorganization, share exchange, business combination or similar transaction involving the
Company or any of its Subsidiaries, (ii) any acquisition by any Person or group resulting in, or any inquiry, proposal, indication of interest or offer that, if consummated, would result in, any Person or group becoming the beneficial owner of,
directly or indirectly, in one or a series of related transactions, 15% or more of the total voting power or of any class of equity securities of the Company or assets representing 15% or more of the consolidated net revenues, net income or total
assets (including equity securities of any of the Companys Subsidiaries and equity securities of any other entity) of the Company or (iii) any combination of the foregoing, in each case other than the transactions contemplated by this
Agreement.
Superior Proposal means an unsolicited, bona fide written Acquisition Proposal first
made after the date of this Agreement that did not result from a breach of the Companys obligations set forth in this Section 6.2 and that would result in any Person or group becoming the beneficial owner of, directly
or indirectly, more than 50% of the total voting power or of any class of equity securities of the Company or assets representing more than 50% of the consolidated net revenues, net income or total assets (including equity securities of the
Companys Subsidiaries and equity securities of any other entity) of the Company, that the Company Board has determined in good faith, after consultation with its outside legal counsel and its outside financial advisor, taking into account all
legal, financial, financing and regulatory aspects of the Acquisition Proposal, the identity of the Person(s) making the proposal and the likelihood of the proposal being consummated in
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Section 6.3 Proxy Statement Filing;
Information Supplied.
(a) The Company shall prepare and file with the SEC, as promptly as reasonably practicable and in any event
within twenty-one (21) days after the date of this Agreement, a proxy statement in preliminary form relating to the Company Stockholders Meeting (such proxy statement, including any amendment or
supplement thereto, the Proxy Statement). The Company shall promptly notify Parent of the receipt of all comments from 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 promptly provide to Parent copies of all correspondence between the Company and/or any of its Representatives and the SEC with respect to the Proxy Statement. The Company shall 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 the Company shall cause the definitive Proxy Statement to be mailed to the stockholders of the Company as
promptly as practicable after filing the Proxy Statement with the SEC, and in any event shall use its commercially reasonable efforts to cause such mailing either (A) by the third (3rd)
Business Day after the day that is ten (10) days after filing the Proxy Statement in preliminary form if, prior to such date, the SEC does not provide comments or indicates that it does not plan to provide comments or (B) within three
(3) Business Days after the date of being informed by the SEC staff that it has no further comments on the Proxy Statement (such date, as applicable, the Clearance Date). The Company agrees, as to itself and its
Subsidiaries, that (x) the Proxy Statement will comply in all material respects with the applicable provisions of the Exchange Act and the rules and regulations thereunder and (y) none of the information supplied by it or any of its
Subsidiaries for inclusion or incorporation by reference in the Proxy Statement will, at the date of mailing to stockholders of the Company (or at the time of any amendment or supplement thereof) or at the time of the Company 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 were made, not misleading. Parent
agrees that none of the information supplied by it for inclusion in the Proxy Statement will, at the date of mailing to stockholders of the Company (or at the time of any amendment or supplement thereof) or at the time of the Company 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 were made, not misleading.
(b) The Company shall provide legal counsel to Parent with a reasonable opportunity to review and comment on drafts of (i) the Proxy
Statement, prior to filing such documents with the applicable Governmental Authority and mailing such documents to the Companys stockholders, and (ii) any communications that the Company would reasonably be required to file with the SEC
as written communications or other solicitation materials with respect to the Merger, prior to disseminating to the Companys stockholders and filing such documents with the SEC. The Company shall consider in good faith all comments
reasonably proposed by Parent or its legal counsel, and agrees that all information relating to Parent and its Subsidiaries included in the Proxy Statement shall be in form and content reasonably satisfactory to Parent.
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Section 6.4 Company Stockholders Meeting.
(a) The Company shall, in accordance with applicable Law and its certificate of incorporation and bylaws, as promptly as practicable after the
filing of the preliminary Proxy Statement with the SEC, establish a record date for (which shall be as promptly as reasonably practicable following the date of this Agreement), duly call, give notice of, convene and hold a meeting of the holders of
Shares (the Company Stockholders Meeting) (which shall be held as promptly as reasonably practicable after the Clearance Date), to consider and vote upon the approval and adoption of this Agreement and to cause such vote to
be taken, and shall not postpone or adjourn such meeting, except to the extent advised by counsel to be necessary to comply with Law or pursuant to the following sentence. The Company will schedule the Company Stockholders Meeting to be held within
thirty (30) days of the initial mailing of the Proxy Statement (or if the Companys nationally recognized proxy solicitor advises that thirty (30) days from the date of mailing the Proxy Statement is insufficient time to submit and
obtain the Requisite Stockholder Vote, such later date as advised by such proxy solicitor and to which Parent consents, such consent not to be unreasonably withheld, conditioned or delayed). Notwithstanding anything to the contrary in this
Agreement, (i) the Company may adjourn, recess or postpone, and at the request of Parent it shall adjourn, recess or postpone, the Company Stockholders Meeting for a reasonable period to solicit additional proxies, if the Company or Parent,
respectively, reasonably believes there will be insufficient Shares represented (either in person or by proxy) to constitute a quorum necessary to conduct the business of the Company Stockholders Meeting or to obtain the Requisite Stockholder Vote
(provided, that, (x) unless agreed in writing by the Company and Parent, all such adjournments, recesses or postponements shall be for periods of no more than ten (10) Business Days each and (y) in no event shall the record
date of the Company Stockholders Meeting be changed without Parents prior written consent (such consent not to be unreasonably withheld, conditioned or delayed)) and (ii) the Company may adjourn, recess or postpone the Company
Stockholders Meeting to the extent necessary to ensure that any supplement or amendment to the Proxy Statement that is required by applicable Law is provided to the stockholders of the Company for the amount of time required by Law in advance of the
Company Stockholders Meeting. Subject to Section 6.2(f), the Company Board shall include the Company Recommendation in the Proxy Statement and shall take all lawful action to obtain the Requisite Stockholder Vote. Without
the prior written consent of Parent, the adoption of this Agreement shall be the only matter (other than matters of procedure and matters required by Law to be voted on by the Company stockholders in connection with the adoption of this Agreement)
that the Company shall propose to be acted on by the Company stockholders at the Company Stockholders Meeting. Without limiting the generality of the foregoing, but subject to the Companys rights to terminate this Agreement set forth in
Article VIII, including Section 8.1(h), the Company agrees that its obligations pursuant to this Section 6.4(a) shall not be affected by the occurrence of a Change of Recommendation, the
commencement, public proposal, public disclosure or communication to the Company or any other Person of any Acquisition Proposal or any event constituting or that could constitute an Intervening Event.
(b) The Company agrees (i) to provide Parent periodic updates concerning proxy solicitation results on a timely basis (including, if
requested, promptly providing daily voting reports to the extent received from the Companys proxy solicitor) and (ii) to give written notice to Parent one (1) Business Day prior to the Company Stockholders Meeting and on the day of,
but prior to, the Company Stockholders Meeting of the status of the Requisite Stockholder Vote.
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Section 6.5 Cooperation; Antitrust and Foreign
Investment Law Matters; Status.
(a) Subject to the terms of this Agreement, including
Section 6.2, each of the Company, Parent and Merger Sub shall use reasonable best efforts to: (i) consummate and make effective the transactions contemplated by this Agreement as promptly as reasonably practicable
(and, in any event, no later than the Outside Date); (ii) obtain from any Governmental Authority any consents, licenses, permits, waivers, approvals, authorizations, clearances or orders that are required or, in the reasonable judgment of Parent
after reasonable consultation with the Company, advisable to be obtained by Parent, Merger Sub or the Company or any of their respective Subsidiaries in order to consummate the transactions contemplated by this Agreement; (iii) resolve any
objections and avoid any proceeding by any Governmental Authority, in connection with the authorization, execution and delivery of this Agreement and the consummation of the transactions contemplated by this Agreement, including the Merger;
(iv) contest and defend any lawsuits or other proceedings, whether judicial or administrative, challenging this Agreement or the consummation of the transactions contemplated by this Agreement in accordance with the terms of this Agreement,
including seeking to have any stay, temporary restraining order, injunction or judgment entered by any court or other Governmental Authority vacated, lifted, overturned or reversed; (v) as promptly as reasonably practicable, and in any event
within ten (10) Business Days after the date of this Agreement (unless otherwise agreed in writing by the parties to this Agreement), make all necessary filings and submissions under the HSR Act; (vi) as promptly as reasonably practicable
after the date of this Agreement, make all necessary filings and submissions under other applicable Antitrust Laws or Foreign Investment Laws that are, in the reasonable judgment of Parent after reasonable consultation with the Company, required or
advisable in connection with the Merger, and, in the case of each of clauses (v) and (vi), thereafter supply as promptly as reasonably practicable any additional information and documentary material that may be requested pursuant to any Law;
and (vii) as promptly as reasonably practicable, make any other registrations, declarations, submissions and filings with respect to the transactions contemplated by this Agreement required under the Exchange Act, any other applicable federal
or state securities Laws and any other applicable Law.
(b) The parties shall give (and shall cause their respective Subsidiaries to give)
any notices to third parties, and shall use, and shall cause their respective Subsidiaries to use, reasonable best efforts to obtain any third-party consents (not including for purposes of this Section 6.5(b) those consents
required or advisable under Antitrust Laws or Foreign Investment Laws) that are necessary, proper or advisable to consummate the transactions contemplated by this Agreement; provided, however, that the parties shall coordinate and
cooperate in determining whether any actions, consents, approvals or waivers are required to be obtained from parties to any Contracts of the Company or any of its Subsidiaries in connection with consummation of the transactions contemplated by this
Agreement, and following such coordination and cooperation, the Company shall, and shall cause its Subsidiaries to, use reasonable best efforts to seek any such required actions, consents, approvals or waivers as Parent directs (provided,
however, that the Company shall not be obligated to make any payment or commercial concession to any third party, or incur any liability, as a condition to (or in connection with) the seeking of such actions, consents, approvals or waivers,
unless such payment, concession or liability is conditioned and effective only upon the Closing and is consented to in writing by Parent).
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(c) Without limiting the generality of anything contained in this
Section 6.5, each party shall: (i) give the other parties prompt notice of the making or commencement of any request or proceeding by or before any Governmental Authority with respect to the transactions contemplated
by this Agreement; (ii) keep the other parties informed as to the status of any such request or proceeding; (iii) to the extent practicable, give the other parties notice and an opportunity to participate in any communication made to the
United States Federal Trade Commission (the FTC), the United States Department of Justice (the DOJ), or any other competition authority or other domestic or foreign Governmental Authority regarding
the transactions contemplated by this Agreement; and (iv) promptly notify the other parties of the substance of any communication from the FTC, DOJ, or any other domestic or foreign Governmental Authority regarding the transactions contemplated
by this Agreement. Parent shall have the right to devise and implement the strategy and timing for obtaining any clearances required or sought under any Antitrust Law or Foreign Investment Law in connection with the Merger (including, without
limitation, the right to determine whether to commit to or agree with any Governmental Authority to stay, toll or extend any applicable waiting period under the HSR Act or any other Antitrust Law or Foreign Investment Law, and whether to withdraw
and refile any Notification and Report forms pursuant to the HSR Act (i.e., pull and refile)); provided, that such strategy shall be designed to obtain such clearances as promptly as reasonably practicable but in no event later
than four (4) Business Days prior to the Outside Date; provided, further, that subject to applicable Laws relating to the exchange of information, Parent and the Company shall have the right to review in advance and, to the extent
reasonably practicable, each will consult with the other on and consider in good faith the views of the other in connection with all of the information relating to Parent or the Company and any of their respective Subsidiaries that appears in any
filing made with, or written materials submitted or communications made to, any third party and/or any Governmental Authority in connection with the transactions contemplated by this Agreement; provided, further, however, that
such materials may be redacted as necessary to comply with contractual arrangements or as necessary to address reasonable privilege or confidentiality concerns. In addition, except as may be prohibited by any Governmental Authority or by any
applicable Law, to the extent reasonably practicable each party hereto will permit authorized representatives of the other parties to be present at each meeting, conference or telephone call and to have access to and be consulted in connection with
any document, opinion or proposal made or submitted to any Governmental Authority in connection with such request or proceeding.
(d)
Notwithstanding the terms of this Section 6.5, nothing contained herein shall require, or be construed to require, (i) Parent or any of its Subsidiaries to take or refrain from taking any action (including any
divestiture, holding separate any business or assets or other similar action) or to agree to any restriction or condition, in each case, with respect to any assets, operations, business or the conduct of business of Parent or any of its Subsidiaries
(not including for this purpose the Surviving Corporation and its Subsidiaries), (ii) Parent, the Company or any of their respective Subsidiaries to take or refrain from taking any action (including any divestiture, holding separate any business or
assets or other similar action) or to agree to any restriction or condition with respect to any assets, operations, business or the conduct of business of the Company and its Subsidiaries or (iii) Parent to commit to provide prior notice or
seek prior approval from any Governmental Authority of any future transaction (not including the transactions contemplated hereby) (provided that the Company shall agree to take (and shall take) any of the actions contemplated by the foregoing
clauses (i) through (iii) with respect to the Company and its Subsidiaries and the Companys Affiliates solely to the extent (x) the Company
58
is requested in writing to do so by Parent and (y) such action is only binding on or otherwise applicable to the Company from and after the Effective Time and in the event that the Closing
occurs). The Company and its Subsidiaries shall not communicate to any Governmental Authority its willingness to consider, offer to take, or to agree to, any actions, restrictions or conditions with respect to obtaining any consents, registrations,
approvals, permits, expirations of waiting periods or authorizations in connection with the Merger and the other transactions contemplated by this Agreement without the prior written consent of Parent (which, subject to this
Section 6.5(d), may be withheld in Parents sole discretion). Without limiting Parents obligations pursuant to this Section 6.5, in the event that any actions set forth in clauses
(i) or (ii) of this Section 6.5(d) are proposed by or acceptable to a Governmental Authority, Parent shall have the sole right to determine the manner in which to implement the requirement of such Governmental
Authority.
(e) In addition to the obligations set forth in Sections 6.5(a) through 6.5(d), Parent shall defend through
litigation on the merits and, if necessary, appeal any claim asserted in court or through administrative tribunal by any Person or Governmental Authority in order to avoid entry of, or to have vacated or terminated, any Order (whether temporary,
preliminary or permanent) that would prevent the Closing from occurring as promptly as practicable (and in any event, no later than the Outside Date).
Section 6.6 Information; Access and Reports.
(a) Subject to applicable Law and the other provisions of this Section 6.6 and solely for purposes of furthering the
Merger and the other transactions contemplated hereby or integration planning relating thereto, (i) the Company and Parent each shall (and shall cause its Subsidiaries to), upon reasonable request by the other, furnish the other with reasonable
information in its possession concerning itself, its Subsidiaries, directors, officers and stockholders and such other matters as may be reasonably necessary or advisable in connection with the Proxy Statement or any other statement, filing, notice
or application made by or on behalf of Parent, the Company or any of their respective Subsidiaries to any third party and/or any Governmental Authority in connection with the Merger and the transactions contemplated by this Agreement, (ii) the
Company shall (and shall cause its Subsidiaries to), upon giving of reasonable notice by Parent, afford Parents officers and other authorized Representatives reasonable access, during normal business hours following reasonable advance notice
throughout the period prior to the Effective Time, to its officers, employees, agents, Contracts, tangible or electronic books and records, stores, offices, systems, software, distribution facilities and other facilities, and, during such period,
the Company shall (and shall cause its Subsidiaries to) furnish to Parent reasonable information in its possession concerning its businesses, properties and personnel as may reasonably be requested by Parent, including, in the case of clauses
(i) and (ii), as set forth on Section 6.6(a) of the Company Disclosure Schedule, and (iii) the Company shall continue to provide access to Parent and its Representatives to the electronic data room maintained by
or on behalf of the Company to which Parent and its Representatives were provided access prior to the date of this Agreement.
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(b) The foregoing provisions of this Section 6.6 shall not require
either the Company or Parent to permit any access to any of its officers, employees, agents, Contracts, books or records, or its stores, offices, distribution facilities or other facilities, or to permit any inspection, review, sampling or audit, or
to disclose or otherwise make available any information that, in the reasonable judgment of the Company or Parent, would (i) unreasonably disrupt the operations of such party or any of its Subsidiaries, (ii) result in the disclosure of any
Trade Secrets of any third parties or violate the terms of any confidentiality provisions in any agreement with a third party entered into prior to the date of this Agreement or any applicable Law or duty, (iii) result in the disclosure of any
information referencing the valuation of the Company and its Subsidiaries conducted in connection with the approval of this Agreement, (iv) reasonably be expected to cause the loss or waiver of the protection of any attorney-client privilege,
attorney work product or other relevant legal privilege, provided, that to the extent requested by Parent and if applicable, the Company and Parent shall enter into a customary joint defense agreement that would alleviate such loss of
privilege, or (v) jeopardize the health or safety of any officer, employee or agent of the Company or any of its Subsidiaries in light of COVID-19 (taking into account any
COVID-19 Measures). Notwithstanding the provisions of this Section 6.6 other than the immediately preceding sentence or as set forth on Section 6.6(a) of the
Company Disclosure Schedule, Parent and its Representatives shall not be permitted to perform any on-site procedures (including an on-site study) with respect to any
property of the Company or its Subsidiaries without the Companys prior written consent (which consent shall not, subject to the provisions of the immediately preceding sentence, be unreasonably withheld, delayed or conditioned). In the event
that Parent or the Company objects to any request submitted pursuant to and in accordance with this Section 6.6 and withholds information on the basis of clauses (ii) through (v) of the second preceding sentence, the
Company or Parent, as applicable, shall promptly inform the other party as to the general nature of what is being withheld and the Company and Parent shall use their respective commercially reasonable efforts to make appropriate substitute
arrangements to permit reasonable disclosure as promptly as reasonably practicable that does not suffer from any of the foregoing impediments, including through the use of commercially reasonable efforts (without payment of any consideration, fees
or expenses) to (A) obtain the required consent or waiver of any third party required to provide such information and (B) implement appropriate and mutually agreeable measures to permit the disclosure of such information in a manner to
remove the basis for the objection, including by arrangement of appropriate clean room procedures, redaction of text from documents or entry into a customary joint defense agreement with respect to any information to be so provided, if the parties
determine that doing so would reasonably permit the disclosure of such information without such impediments. Each of Parent and the Company, as it deems advisable and necessary based on the advice of its outside counsel, may reasonably and in good
faith designate competitively sensitive material provided to the other as Outside Counsel Only Material or with similar restrictions. 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. All requests for information made pursuant to this Section 6.6 shall be
directed to the Persons designated by the Company or Parent, as the case may be. All information exchanged or made available shall be governed by the terms of the Mutual Non-Disclosure Agreement, dated as of
May 20, 2015, by and between Parent and the Company, as amended by the Mutual Non-Disclosure Agreement Supplement, dated May 23, 2022 (as it may be further amended from time to time, the
Confidentiality Agreement).
(c) To the extent that any of the information or material furnished pursuant to
this Section 6.6 or otherwise in accordance with the terms of this Agreement may include material subject to the attorney-client privilege, work product doctrine or any other applicable privilege concerning pending or
threatened legal proceedings or governmental investigations, the parties
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understand and agree that they have a commonality of interest with respect to such matters and it is their desire, intention and mutual understanding that the sharing of such material is not
intended to, and shall not, waive or diminish in any way the confidentiality of such material or its continued protection under the attorney-client privilege, work product doctrine or other applicable privilege. All such information that is entitled
to protection under the attorney-client privilege, work product doctrine or other applicable privilege shall remain entitled to such protection under these privileges, this Agreement, and the joint defense doctrine.
(d) No exchange of information or investigation by Parent or its Representatives pursuant to this Section 6.6 shall
affect, modify or waive or be deemed to affect, modify or waive the representations and warranties of the Company set forth in this Agreement, and no investigation by the Company or its Representatives pursuant to this
Section 6.6 shall affect, modify or waive or be deemed to affect, modify or waive the representations and warranties of Parent or Merger Sub set forth in this Agreement.
(e) The Company shall use commercially reasonable efforts to provide Parent with prompt written notice following the Knowledge of the Company
of the occurrence of any of the events set forth on Section 6.6(e) of the Company Disclosure Schedule arising after the date of this Agreement.
Section 6.7 Stock Exchange Delisting. The Company and Parent shall cooperate to take, or cause to be
taken, all actions, and do or cause to be done all things, reasonably necessary, proper or advisable under applicable Laws and rules and policies of NASDAQ to enable the delisting by the Surviving Corporation of the Shares from NASDAQ and the
deregistration of the Shares under the Exchange Act as promptly as practicable after the Effective Time.
Section 6.8 Publicity. The initial press release relating to this Agreement shall be a joint press
release, the text of which has been agreed to by each of Parent and the Company. Thereafter until the Effective Time, neither the Company nor Parent, nor any of their respective Subsidiaries, shall issue any press release or make any other public
announcement or public statement with respect to this Agreement or the transactions contemplated by this Agreement without the prior written consent of the other party (such consent not to be unreasonably withheld, conditioned or delayed), except to
the extent (i) the press release, public announcement or public statement contains information that is consistent with the press release referred to in the preceding sentence or any other release or public statement previously issued or made in
accordance with this Section 6.8 or (ii) public disclosure is required by applicable Law or the requirements of NASDAQ, in which case the issuing party shall use its reasonable best efforts to consult with the other
party before issuing any press release or making any such public announcements or public statements, except with respect to the matters described in, and subject to the requirements of, Section 6.2 (solely in the event of a
Change of Recommendation), Section 8.1 and Section 8.2 or in connection with any dispute between the parties hereto regarding this Agreement.
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Section 6.9 Employee Benefits.
(a) Parent agrees that during the period commencing at the Effective Time and ending on the first anniversary of the Effective Time, the
employees of the Company and its Subsidiaries who continue to be employed after the Effective Time (other than those employees covered by a collective bargaining agreement, the Continuing Employees) will be provided with
(i) cash payments and target annual cash incentive compensation opportunities that are no less favorable in the aggregate than the base salary or wages and annual target cash incentive compensation opportunities provided by the Company and its
Subsidiaries to each such Continuing Employee immediately prior to the Effective Time, and (ii) other compensation and employee benefits that are substantially comparable in the aggregate to other compensation and employee benefits (excluding
any equity and long-term cash incentive compensation and any defined benefit pension and post-employment health and welfare benefits) provided by the Company and its Subsidiaries to such Continuing Employees immediately prior to the Effective Time.
(b) Parent shall cause or, with respect to employees outside the United States, use commercially reasonable efforts to cause (i) any
pre-existing conditions or limitations and eligibility waiting periods under any group health plans of Parent or its Affiliates to be waived with respect to the Continuing Employees and their eligible
dependents, (ii) the amount of eligible expenses incurred by each Continuing Employee and his or her eligible dependents that were credited to deductible and maximum
out-of-pocket co-insurance requirements under the Benefit Plans to be credited for purposes of satisfying the deductible and
maximum out-of-pocket co-insurance requirements under the corresponding benefit plans of Parent and its Affiliates and
(iii) any of its (or its Affiliates) employee benefit plans (including disability pay continuation plans) in which the Continuing Employees are entitled to participate to take into account for purposes of eligibility, vesting and benefit
accrual thereunder (except for benefit accrual under defined benefit pension plans, for purposes of qualifying for subsidized early retirement benefits or retiree medical benefits or to the extent it would result in a duplication of benefits)
service by such Continuing Employees to the Company or any of its Affiliates or predecessors as if such service were with Parent, to the same extent such service was credited under a comparable Benefit Plan.
(c) If requested by Parent in writing no later than ten (10) Business Days prior to the Effective Time, to the extent permitted by
applicable Law and the terms of the Companys 401(k) Plan (the Company 401(k) Plan), as applicable, the Company shall cause the Company 401(k) Plan to be terminated effective as of the Business Day immediately
preceding the Closing Date; provided, that the effectiveness of such termination may be conditioned on the occurrence of the Effective Time. In the event that Parent requests that the Company 401(k) Plan be terminated, the Company shall
provide Parent with evidence that such plan has been terminated (the form and substance of which shall be subject to reasonable review and approval by Parent) not later than the day immediately preceding the Closing Date. In connection with the
termination of the Company 401(k) Plan, (i) the Company may cause any unvested account balances thereunder to fully vest, (ii) the Company and Parent shall take any and all actions as may be required, including amendments to the Company
401(k) Plan and/or the tax-qualified defined contribution retirement plan designated by Parent (the Parent 401(k) Plan) to (A) permit each Continuing Employee to make rollover contributions of eligible rollover
distributions (within the meaning of Section 401(a)(31) of the Code, including of loans) in the form of cash, shares of common stock of Parent, notes (in the case of loans) or a combination thereof, in an amount equal to the full account
balance distributed or distributable to such Continuing Employee from the Company 401(k) Plan to the Parent 401(k) Plan, and (B) obtain from the IRS a favorable determination letter on termination for the Company 401(k) Plan and (iii) each
Continuing Employee shall become a participant in the Parent 401(k) Plan on the Closing Date (giving effect to the service crediting provisions of Section 6.9(b)), it being agreed that there shall be no gap in participation
in a tax-qualified defined contribution plan.
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(d) Parent hereby acknowledges that the transactions contemplated by this Agreement shall
constitute a change in control, change of control or term or concept of similar import of the Company and its Subsidiaries under the terms of the Benefit Plans. From and after the Effective Time, Parent shall, and shall cause
its Affiliates to, honor all obligations and rights under the Benefit Plans in accordance with their terms.
(e) Notwithstanding the
foregoing, nothing contained in this Agreement will (i) be treated as an amendment of any particular Benefit Plan, (ii) prevent Parent, the Surviving Corporation or any of their Affiliates from amending or terminating any of their benefit
plans or, after the Effective Time, any Benefit Plan, in each case, in accordance with their terms, (iii) obligate Parent, the Surviving Corporation or any of their Affiliates to retain the employment of any particular employee or
(iv) create any third party beneficiary rights for the benefit of any employee of the Company or any of its Subsidiaries, any beneficiary or dependent thereof, or any collective bargaining representative thereof, with respect to this
Section 6.9 or any compensation, terms and conditions of employment and/or benefits that may be provided to any Continuing Employee by Parent, the Surviving Corporation or any of their Affiliates or under any benefit plan
that Parent, the Surviving Corporation or any of their Affiliates may maintain.
(f) The Company shall use commercially reasonable efforts
to cooperate with Parent in good faith for the purpose of preparing for the on-boarding of the Continuing Employees, including providing updated information on each such employees employee identification
number, annual base salary, target annual cash bonus opportunity and target long-term incentive opportunity prior to the Closing. The Company shall use commercially reasonable efforts to cooperate with Parent in good faith for the purpose of
preparing for the on-boarding of the employees. Prior to the Closing and solely for Parents informational purposes, the Company shall update Section 5.1(b)(ii) of the Company
Disclosure Schedule to reflect any changes to such schedule that occurred between the date of this Agreement and the Closing Date, it being understood that no such update or changes shall affect, modify or waive or be deemed to affect, modify or
waive the representations and warranties of the Company set forth in this Agreement.
Section 6.10
Expenses. Except as otherwise provided in Section 8.2(b), whether or not the Merger is consummated, all costs and expenses incurred in connection with the preparation, negotiation, execution and performance of
this Agreement and the Merger and the other transactions contemplated by this Agreement, including all fees and expenses of its Representatives, shall be paid by the party incurring such expense.
Section 6.11 Indemnification; Directors and
Officers Insurance.
(a) After the Effective Time, Parent shall cause the Surviving Corporation
to indemnify and hold harmless the individuals who on or prior to the Effective Time were officers or directors of the Company or its Subsidiaries or were serving at the request of the Company as an officer, director, member, trustee or fiduciary of
any other corporation, partnership or joint venture, trust, employee benefit plan or other enterprise with respect to all acts or omissions by them in their capacities as such or taken at the request of the Company or any of its Subsidiaries
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at any time prior to the Effective Time to the fullest extent permitted by applicable Law (including with respect to advancement of expenses and attorneys fees and advancing such expenses
and fees without requiring any preliminary determination of entitlement subject to such individuals affirmation or undertaking if required under the DGCL).
(b) Parent and Merger Sub agree that all rights to exculpation or indemnification for acts or omissions occurring prior to the Effective Time
existing as of the date of this Agreement in favor of the current and former directors and officers of the Company or any of its Subsidiaries or any of their predecessors and the heirs, executors, trustees, fiduciaries and administrators of such
officer or director (each, a D&O Indemnitee), as provided in the Companys or each of its Subsidiaries respective certificates of incorporation or bylaws (or comparable organizational or governing documents)
or in any agreement, shall survive the Merger and the transactions contemplated by this Agreement and shall continue in full force and effect in accordance with their terms. After the Effective Time, Parent and the Surviving Corporation shall (and
Parent shall cause the Surviving Corporation to) fulfill and honor such obligations to the maximum extent that the Company or applicable Subsidiary would have been permitted to fulfill and honor them by applicable Law. In addition, for a period of
six years following the Effective Time, Parent shall, and shall cause the Surviving Corporation and its Subsidiaries to, cause the certificates of incorporation and bylaws (and other similar organizational documents) of the Surviving Corporation and
its Subsidiaries to contain provisions with respect to indemnification and exculpation that are at least as favorable as the indemnification and exculpation provisions contained in the certificates of incorporation and bylaws (or other similar
organizational documents) of the Company and its Subsidiaries immediately prior to the Effective Time, and, during such six-year period, such provisions shall not be amended, repealed or otherwise modified in
any respect, except as required by applicable Law.
(c) Prior to the Effective Time, the Company shall, and, if the Company is unable to,
Parent shall cause the Surviving Corporation as of the Effective Time to, obtain and fully pay the premium for tail insurance policies for the extension of (i) the directors and officers liability coverage of the
Companys existing directors and officers insurance policies and (ii) the Companys existing fiduciary liability insurance policies, in each case providing only for Side A coverage for indemnified parties where the
existing policies also include Side B coverage for the Company for a claims reporting or discovery period of six years from and after the Effective Time (the Tail Period) from one or more insurance carriers with the same or
better credit rating as the Companys insurance carrier as of the date of this Agreement with respect to directors and officers liability insurance and fiduciary liability insurance (collectively, D&O
Insurance) with terms, conditions, retentions and limits of liability that are at least as favorable to the insureds as the Companys existing policies with respect to matters existing or occurring at or prior to the Effective
Time (including in connection with this Agreement or the transactions or actions contemplated hereby). 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 the Tail Period the D&O Insurance in place as of the date of this Agreement with terms, conditions, retentions and limits of
liability that are at least as favorable to the insureds as provided in the Companys existing policies as of the date of this Agreement, or the Surviving Corporation shall, and Parent shall cause the Surviving Corporation to, purchase
comparable D&O Insurance for the Tail Period with terms, conditions, retentions and limits of liability that are at least as favorable to
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the insureds as provided in the Companys existing policies as of the date of this Agreement; provided, that in no event shall the annual cost of the D&O Insurance exceed during
the Tail Period 300% of the current aggregate annual premium paid by the Company for such purpose; and provided, further, that if the cost of such insurance coverage exceeds such amount, the Surviving Corporation shall obtain a policy
with the greatest coverage available for a cost not exceeding such amount.
(d) The provisions of this
Section 6.11 shall survive the Closing and are intended to be for the benefit of, and enforceable by, each D&O Indemnitee, and nothing in this Agreement shall affect any indemnification rights that any such D&O
Indemnitee may have under the certificate of incorporation or bylaws of the Company or any of its Subsidiaries or any Contract or applicable Law. Notwithstanding anything in this Agreement to the contrary, the obligations under this
Section 6.11 shall not be terminated or modified in such a manner as to adversely affect any D&O Indemnitee without the consent of such D&O Indemnitee.
(e) In the event that the Company, the Surviving Corporation or any of their Subsidiaries (or any of their respective successors or assigns)
shall consolidate or merge with any other Person and shall not be the continuing or surviving corporation or entity in such consolidation or merger, or transfers at least 50% of its properties and assets to any other Person, then in each case proper
provision shall be made so that the continuing or surviving corporation or entity (or its successors or assigns, if applicable), or transferee of such assets, as the case may be, shall assume the obligations set forth in this
Section 6.11.
Section 6.12 Resignations. At the request of Parent, the
Company shall (a) cause each director or officer of the Company to resign only in such capacity (and not in his or her capacity as an employee of the Company or any of its Subsidiaries) and (b) use its reasonable best efforts to cause any
officer or director of any of the Companys Subsidiaries to resign only in such capacity (and not in his or her capacity as an employee of the Company or any of its Subsidiaries), in each case, with such resignations to be effective as of the
Effective Time.
Section 6.13 Transaction Litigation. Each of Parent and the Company shall
promptly notify the other of any Transaction Litigation against it or any of its Representatives arising out of or relating to this Agreement, the Merger or the other transactions contemplated by this Agreement and shall keep the other reasonably
informed regarding any such Transaction Litigation. Until the termination of this Agreement in accordance with Article VIII, the Company shall provide Parent an opportunity to review and to propose comments to all filings or written responses
to be made by the Company in connection with any Transaction Litigation against the Company and its directors relating to any transaction contemplated by this Agreement, and the Company shall give reasonable and good faith consideration to any
comments proposed by Parent. In no event shall the Company enter into, agree to or disclose any settlement or mooting action with respect to such Transaction Litigation without Parents consent, which, except in the case of a settlement or
mooting action that includes an admission of fault, shall not be unreasonably withheld, delayed or conditioned. Each of Parent and the Company shall notify the other promptly of the commencement of any Transaction Litigation of which it has received
notice.
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Section 6.14 Other Actions by
the Company.
(a) Takeover Statutes. If any Takeover Statute is or may become applicable to the Merger or the
other transactions contemplated by this Agreement other than arising out of or resulting from a breach by Parent or Merger Sub of Section 6.15(b), the Company and the Company Board shall, to the extent permitted by
applicable Law, grant such approvals and take such actions as are necessary so that such transactions may be consummated as promptly as practicable on the terms contemplated by this Agreement and otherwise act to eliminate or minimize the effects of
such statute or regulation on such transactions.
(b) Section 16 Matters. The Company and the Company Board (or a duly formed
committee thereof consisting of non-employee directors (as such term is defined for the purposes of Rule 16b-3 promulgated under the Exchange Act)) shall, prior to the Effective Time, take all such actions as
may be necessary or appropriate to cause the transactions contemplated by this Agreement and any other dispositions of equity securities of the Company (including derivative securities) in connection with the transactions contemplated by this
Agreement by any individual who is subject to the reporting requirements of Section 16(a) of the Exchange Act with respect to the Company to be exempt under Rule 16b-3 promulgated under the Exchange Act,
to the extent permitted by applicable Law.
Section 6.15 Approval of Sole Stockholder of
Merger Sub; No Acquisition of Shares.
(a) Immediately following execution of this
Agreement, Parent (directly or through its Subsidiaries) shall cause the sole stockholder of Merger Sub to execute and deliver, in accordance with applicable Law and its certificate of incorporation and bylaws, a written consent approving and
adopting this Agreement in accordance with the DGCL and neither Parent nor its Subsidiaries shall amend, modify or withdraw such consent.
(b) From and after the date hereof through the Effective Time, other than as a result of the Merger and the other transactions contemplated by
this Agreement, Parent and Merger Sub shall not, and shall cause their respective Subsidiaries not to, directly or indirectly, acquire any Shares, any rights or options to acquire Shares or any securities or instruments convertible into,
exchangeable into or exercisable for Shares.
Section 6.16 Debt Payoff. Upon the request of
Parent, the Company and its Subsidiaries shall use its reasonable best efforts to take any actions reasonably requested by Parent that are necessary to facilitate the payoff by Parent (or, in the case of letters of credit, facilitate
the cash collateralization thereof) on the Closing Date and termination on the Closing Date (to the extent provided therein and pursuant to the terms thereof), or to facilitate negotiations with the lender party thereto and the continuation on and
after the Closing Date, of (i) the Amended and Restated Credit Agreement, dated as of December 20, 2013 (as amended by Amendment No. 1 thereto, dated as of June 29, 2018, and Amendment No. 2 thereto, dated as of May 4,
2022) by and between the Company, Bank of America, N.A., as administrative agent, and the other parties thereto (the Existing Credit Agreement), (ii) the Amended and Restated Reimbursement Agreement, dated as of
December 20, 2013 (as amended by Amendment No. 1 thereto, dated as of June 29, 2018 and Amendment No. 2 thereto, dated as of May 4, 2022), between the Company, Bank of America, N.A., as administrative agent, and the other
parties thereto, (iii) the Mizuho Bank Ltd. line of credit
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and (iv) any other indebtedness for borrowed money, including, in each case, using reasonable best efforts to obtain a payoff letter in connection therewith; provided, that any such
action described above shall not be required unless it can be and is conditioned on the occurrence of the Closing, and, it being understood that at the Closing, Parent shall provide all funds required to actually effect such payoff and
termination. Notwithstanding the provisions of Section 7.2(b), in no event shall the receipt of such payoff letter or the consummation of any payoff or termination under this Section 6.16 be a
condition to any of the obligations of Parent or Merger Sub hereunder.
ARTICLE VII
CONDITIONS
Section 7.1 Conditions to Each Partys Obligation to Effect the
Merger. The respective obligation of each party to effect the Merger is subject to the satisfaction or waiver at or prior to the Closing of each of the following conditions:
(a) Company Stockholder Approval. This Agreement shall have been duly adopted by holders of Shares constituting the Requisite
Stockholder Vote.
(b) Antitrust and Foreign Investment Law Filings. (i) The waiting period (and any extensions
thereof) applicable to the consummation of the Merger under the HSR Act or any voluntary agreement with the DOJ Antitrust Division or the FTC not to consummate the Merger shall have expired or been terminated and (ii) subject to
Section 7.1(b) of the Company Disclosure Schedule, the applicable waiting periods (or any extensions thereof) or clearances, as applicable, under the Antitrust Laws and Foreign Investment Laws set forth in
Section 7.1(b) of the Company Disclosure Schedule shall have expired, been earlier terminated or obtained.
(c)
Laws or Orders. Subject to Section 7.1(b) of the Company Disclosure Schedule, no court or other Governmental Authority of competent jurisdiction shall have enacted, issued, promulgated, enforced or
entered after the date of this Agreement any Law (whether temporary, preliminary or permanent) (collectively, an Order) that is in effect and that restrains, enjoins, renders illegal or otherwise prohibits consummation of
the Merger.
Section 7.2 Conditions to Obligations of Parent and
Merger Sub. The obligations of Parent and Merger Sub to effect the Merger are also subject to the satisfaction or waiver by Parent at or prior to the Closing of the following conditions:
(a) Representations and Warranties. (i) Each of the representations and warranties of the Company set forth in clause (ii) of
Section 5.1(f) (Absence of Certain Changes) shall have been true and correct as of the date of this Agreement and shall be true and correct as of the Closing Date (except to the extent that any such representation
and warranty expressly speaks as of a particular date or period of time, in which case such representation and warranty shall be so true and correct as of such particular date or period of time); (ii) each of the representations and warranties of
the Company set forth in the first two sentences and the fifth sentence of Section 5.1(b)(i) (Capital Structure) shall be true and correct, subject to de minimis inaccuracies in the aggregate, as of the date
of this Agreement and shall be true and correct, subject to de minimis inaccuracies in the aggregate, as of the Closing Date (except to the extent that any such representation and warranty expressly speaks as of a particular date or period of
time, in
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which case such representation and warranty shall be true and correct, subject to de minimis inaccuracies in the aggregate, as of such particular date or period of time); (iii) each of the
representations and warranties of the Company set forth in Sections 5.1(b)(i) and 5.1(b)(ii) (other than the first two sentences and the fifth sentence of Section 5.1(b)(i)) (Capital Structure),
Section 5.1(c) (Corporate Authority; Approval and Fairness), Section 5.1(m) (Takeover Statutes), Section 5.1(w) (Brokers and Finders) and
Section 5.1(x) (Opinion of Financial Advisor) shall be true and correct in all material respects as of the date of this Agreement and shall be true and correct in all material respects as of the Closing Date
(except to the extent that any such representation and warranty expressly speaks as of a particular date or period of time, in which case such representation and warranty shall be true and correct in all material respects as of such particular date
or period of time); and (iv) the other representations and warranties of the Company set forth in this Agreement (without giving effect to any limitations as to material, in all material respects and Material
Adverse Effect set forth therein) shall have been true and correct as of the date of this Agreement and shall be true and correct as of the Closing Date (except to the extent that any such representation and warranty expressly speaks as of a
particular date or period of time, in which case such representation and warranty shall be so true and correct as of such particular date or period of time), except, in the case of this clause (iv), for any failures of such representations and
warranties to be so true and correct that have not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
(b) Performance of Obligations of the Company. The Company shall have performed in all material respects all obligations
required to be performed by it under this Agreement at or prior to the Closing Date.
(c) No Material Adverse Effect. Since
the date hereof, there shall not have occurred and be continuing any change, effect, event, occurrence or development that has had a Material Adverse Effect.
(d) Company Closing Certificate. Parent and Merger Sub shall have received at the Closing a certificate signed on
behalf of the Company by the Chief Executive Officer or Chief Financial Officer of the Company certifying that the conditions set forth in Section 7.2(a), Section 7.2(b) and
Section 7.2(c) are satisfied.
Section 7.3 Conditions to Obligation of the
Company. The obligation of the Company to effect the Merger is also subject to the satisfaction or waiver by the Company at or prior to the Closing of the following conditions:
(a) Representations and Warranties. The representations and warranties of Parent and Merger Sub set forth in this Agreement shall have
been true and correct in all material respects as of the date of this Agreement and shall be true and correct in all material respects as of the Closing Date (except to the extent that any such representation and warranty expressly speaks as of a
particular date or period of time, in which case such representation and warranty shall be so true and correct in all material respects as of such particular date or period of time).
(b) Performance of Obligations of Parent and Merger Sub. Each of Parent and Merger Sub shall have performed in all
material respects all obligations required to be performed by it under this Agreement at or prior to the Closing Date.
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(c) Parent Closing Certificate. The Company shall have received
at the Closing a certificate signed on behalf of Parent and Merger Sub by an authorized officer of Parent certifying that the conditions set forth in Section 7.3(a) and Section 7.3(b) are
satisfied.
ARTICLE VIII
TERMINATION
Section 8.1 Termination. This Agreement may be terminated and the Merger may be abandoned at any time
prior to the Effective Time:
(a) by mutual written consent of the Company and Parent;
(b) by either Parent or the Company, if the Merger shall not have been consummated by the date that is the twelve (12) month anniversary
of the date of this Agreement (the Outside Date), provided, that if the Closing shall not have occurred as of the Outside Date and all the conditions to Closing, other than the conditions set forth in
Section 7.1(b) or 7.1(c) (as it relates to the HSR Act or any other Antitrust Law or Foreign Investment Law), shall have been satisfied or shall be capable of being satisfied at such time, the Outside Date shall be
automatically extended to the date that is the eighteen (18) month anniversary of the date of this Agreement (the First Outside Date Extension), and such date shall be the Outside Date, provided, further,
that if the Closing shall not have occurred as of such date and all the conditions to Closing, other than the conditions set forth in Section 7.1(b) or 7.1(c) (as it relates to the HSR Act or any other Antitrust Law
or Foreign Investment Law), shall have been satisfied or shall be capable of being satisfied at such time, the Outside Date shall be automatically extended to the date that is the twenty-four (24) month anniversary of the date of this
Agreement, and such date shall be the Outside Date; provided, further, that the right to terminate this Agreement pursuant to this Section 8.1(b) shall not be available to any party that has breached in any
material respect its obligations under this Agreement in any manner that shall have been the principal cause of the failure of a condition to the consummation of the Merger;
(c) by either Parent or the Company, if the Requisite Stockholder Vote shall not have been obtained if a vote shall have been taken thereon at
the Company Stockholders Meeting or any adjournment or postponement thereof (and such meeting, as may be so adjourned or postponed, shall have concluded);
(d) by either Parent or the Company, if any Order enacted, issued, promulgated, enforced or entered after the date of this Agreement by a
court or other Governmental Authority of competent jurisdiction over any party hereto, which Order permanently restrains, enjoins, renders illegal or otherwise prohibits consummation of the Merger shall become final and non-appealable; provided, that the right to terminate this Agreement pursuant to this Section 8.1(d) shall not be available to any party that has breached in any material respect its
obligations under this Agreement in any manner that shall have been the principal cause of the failure of a condition to the consummation of the Merger;
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(e) by Parent, if there has been a breach by the Company of any representation, warranty,
covenant or agreement set forth in this Agreement, or if any representation or warranty of the Company shall have become untrue, in either case such that any condition set forth in Section 7.2(a),
Section 7.2(b) or Section 7.2(c) would not be satisfied (and such breach or failure to be true and correct is not curable prior to the Outside Date as it may be extended or, if curable prior to the
Outside Date as it may be extended, has not been cured within the earlier of (i) thirty (30) days after the giving of notice thereof by Parent to the Company or (ii) three (3) Business Days prior to the Outside Date as it may be extended);
(f) by the Company, if there has been a breach by Parent or Merger Sub of any representation, warranty, covenant or agreement set forth
in this Agreement, or if any representation or warranty of Parent or Merger Sub shall have become untrue, in either case such that any condition set forth in Section 7.3(a) or Section 7.3(b) would
not be satisfied (and such breach or failure to be true and correct is not curable prior to the Outside Date as it may be extended or, if curable prior to the Outside Date as it may be extended, has not been cured within the earlier of
(i) thirty (30) days after the giving of notice thereof by the non-breaching party to the breaching party or (ii) three (3) Business Days prior to the Outside Date as it may be extended);
(g) by Parent, prior to the time the Requisite Stockholder Vote is obtained, if (i) a Change of Recommendation shall have been made or
occurred or (ii) at any time following receipt of an Acquisition Proposal that has not been publicly withdrawn, the Company Board failed to reaffirm its approval or recommendation of this Agreement and the Merger as promptly as reasonably
practicable (but in any event by the earlier of (A) five (5) Business Days and (B) the close of business on the second (2nd) Business Day immediately preceding the scheduled date of the
Company Stockholders Meeting at the written request to do so by Parent) after receipt of any written request to do so from Parent; provided, that Parent may not provide such a written request more than once for each Acquisition Proposal
(unless the terms of such Acquisition Proposal have been modified or amended, in which case Parent may provide another written request with respect to such Acquisition Proposal as so amended or modified); or
(h) by the Company, prior to the time the Requisite Stockholder Vote is obtained and so long as the Company is in compliance with and has not
breached the requirements of Section 6.2, in connection with entering into an Alternative Acquisition Agreement providing for a Superior Proposal in accordance with Section 6.2(f); provided,
that prior to or concurrently with such termination, the Company pays the Company Termination Fee due.
Section 8.2 Effect of Termination and Abandonment.
(a) Except to the extent provided in Sections 8.2(b), 8.2(c), 8.2(d), 8.2(e) and 8.2(f), in the event of
termination of this Agreement and the abandonment of the Merger in accordance with Section 8.1, 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 of
its Representatives or Affiliates); provided, that (x) no such termination shall relieve any party hereto of any liability or damages to the other party hereto resulting from any willful and material breach of its obligations set forth
in this Agreement and (y) the provisions set forth in Section 5.1(y) (No Other Representations or Warranties), Section 5.2(i) (No Other Representations or Warranties), this
Section 8.2 and the second and third sentences of Section 9.1 (Survival) shall survive the termination of this Agreement. For purposes of this Agreement, willful and material
breach means a material breach of this Agreement that is a consequence of an act undertaken or a failure to take an act by the breaching party with the knowledge that the taking of such act or the failure to take such act would cause a
material breach of this Agreement.
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(b) In the event that this Agreement is terminated:
(i) by (I) either the Company or Parent pursuant to (x) Section 8.1(b) (Outside Date) (at a time
when the Requisite Stockholder Vote has not been obtained or Parent has the right to terminate pursuant to Section 8.1(e) (Company Breach)) or (y) Section 8.1(c) (Requisite
Stockholder Vote Not Obtained) or (II) Parent pursuant to Section 8.1(e) (Company Breach); and
(A) a bona fide Acquisition Proposal shall have been made publicly to the Company or any of its Subsidiaries or otherwise become publicly
known, or any Person shall have publicly announced an intention (whether or not conditional) to make an Acquisition Proposal that has not been withdrawn publicly without qualification prior to the earlier of (x) five days prior to the Company
Stockholders Meeting (as such meeting may have been adjourned or postponed in accordance with this Agreement) or (y) termination of this Agreement; and
(B) within twelve (12) months after such termination, the Company or any of its Subsidiaries shall have entered into a definitive
agreement providing for, or shall have consummated or, in the case of an Acquisition Proposal that is a tender offer, shall have approved or recommended to the Companys stockholders or otherwise not opposed, such Acquisition Proposal;
provided, that, for purposes of this Section 8.2(b)(i), the references to 15% in the definition of Acquisition Proposal shall be deemed to be references to 50% and, as to clause
(i) of such definition, any such Acquisition Proposal shall result in a change in control of at least 50% of the stock or consolidated assets of the Company;
(ii) by Parent pursuant to Section 8.1(g) (Company Recommendation Matters) (or, in the event that
(A) the Company Board shall have made a Change of Recommendation and (B) this Agreement is terminated (I) by either the Company or Parent pursuant to (x) Section 8.1(b) (Outside Date) (at a time
when the Requisite Stockholder Vote has not been obtained or Parent has the right to terminate pursuant to Section 8.1(e) (Company Breach)) or (y) Section 8.1(c) (Requisite
Stockholder Vote Not Obtained) or (II) by Parent pursuant to Section 8.1(e) (Company Breach)); or
(iii) by the Company pursuant to Section 8.1(h) (Superior Proposal);
then, (1) in the case of Section 8.2(b)(i), within two (2) Business Days after consummation of such Acquisition Proposal,
(2) in the case of Section 8.2(b)(ii), within two (2) Business Days after termination of this Agreement and (3) in the case of Section 8.2(b)(iii), concurrently with or prior to
termination of this Agreement, the Company shall pay a termination fee of $56,000,000 (the Company Termination Fee) (net of any Expense Reimbursement previously paid) to Parent by wire transfer of immediately available
funds to an account designated in writing by Parent. In the event that this Agreement is terminated by either the Company or Parent pursuant to (i) Section 8.1(c) (Requisite Stockholder Vote Not Obtained)
or (ii) Section 8.1(b) (Outside Date) (at a time when the Requisite Stockholder Vote has not been obtained), the Company shall pay to
71
Parent, by wire transfer of immediately available funds to an account designated in writing by Parent, all of the reasonable and documented out-of-pocket expenses, including those of the Paying Agent, incurred by Parent and Merger Sub in connection with this Agreement and the other transactions contemplated by this Agreement, in an amount not to
exceed $17,000,000 (the Expense Reimbursement), within two (2) Business Days after the date following such termination. To the extent any portion of the Expense Reimbursement is paid by the Company to Parent, such
amount paid shall be deducted from the amount of any Company Termination Fee owed or payable.
(c) In the event that (i) (a) the
Agreement is terminated by either Parent or the Company under Section 8.1(b) (Outside Date), (b) at the time of any such termination, all of the conditions in Article VII have been satisfied
or duly waived by the parties entitled to the benefit thereof, except for (A) the conditions in Section 7.1(b) or 7.1(c) (but only as it relates to the HSR Act or any other Antitrust Law) and
(B) any other condition that by its nature is to be satisfied at the Closing (provided, that such condition would be capable of being satisfied if the Closing Date were the date of such termination), and (c) no breach by the Company
of its obligations under Section 6.5 has been the principal cause of the failure of the conditions in Section 7.1(b) or 7.1(c) to be satisfied or (ii) (a) the Agreement is terminated by
either Parent or the Company under Section 8.1(d) (Permanent Order) (but only if the applicable Order relates to the HSR Act or any other Antitrust Law) and (b) no breach by the Company of its obligations
under Section 6.5 has been the principal cause of the applicable enactment, issuance, promulgation, enforcement or entry of such Order, then within two (2) Business Days of such termination of this Agreement, Parent
shall pay Company a termination fee of $94,000,000 in cash (the Parent Termination Fee) by wire transfer of immediately available funds to an account designated in writing by the Company.
(d) Each party acknowledges that the agreements contained in this Section 8.2 are an integral part of the
transactions contemplated by this Agreement, and that, without these agreements, no party would have entered into this Agreement; accordingly, if the Company fails to timely pay Parent any amount due pursuant to
Section 8.2(b) or Parent fails to timely pay the Company any amount due pursuant to Section 8.2(c) (any such amount due, a Termination Payment), and, in order to obtain
such payment, the other party commences a suit that results in a judgment against such party for the applicable Termination Payment, or any portion thereof, the party that has failed to pay the Termination Payment shall pay to the other party such
other partys costs and expenses (including attorneys fees) in connection with such suit, together with interest thereon at the prime rate as published in The Wall Street Journal (or, if not reported therein, as reported in another
authoritative source reasonably selected by Parent) in effect on the date such Termination Payment was required to be paid from such date through the date of full payment thereof.
(e) Each of the parties acknowledges and agrees that the Company Termination Fee is not intended to be a penalty, but rather is liquidated
damages in a reasonable amount that will compensate Parent in the circumstances in which such Company Termination Fee is due and payable and which do not involve fraud or willful and material breach, for the efforts and resources expended and
opportunities forgone while negotiating this Agreement and in reliance on this Agreement and on the expectation of the consummation of the transactions contemplated by this Agreement, which amount would otherwise be impossible to calculate with
precision. Notwithstanding anything to the contrary in this Agreement, (x) in no event shall more than one
72
Company Termination Fee be payable under this Agreement and (y) the parties agree that the payment of the Company Termination Fee shall be the sole and exclusive remedy available to Parent
and Merger Sub with respect to this Agreement in the event any such payment becomes due and payable and is paid, and, upon payment of the Company Termination Fee, the Company (and the Companys Affiliates and its and their respective directors,
officers, employees, stockholders and Representatives) shall have no further liability to Parent and Merger Sub under this Agreement, in law, equity or otherwise, and neither Parent nor Merger Sub shall seek to obtain any recovery, judgment, or
damages of any kind, including consequential, indirect, or punitive damages, against the Company or any of the Companys Subsidiaries or any of their respective directors, officers, employees, partners, managers, members, shareholders or
Affiliates or their respective Representatives in connection with this Agreement or the transactions contemplated hereby.
(f) Each of the
parties acknowledges and agrees that the Parent Termination Fee is not intended to be a penalty, but rather is liquidated damages in a reasonable amount that will compensate the Company in the circumstances in which such Parent Termination Fee is
due and payable and which do not involve fraud or willful and material breach for the efforts and resources expended and opportunities forgone while negotiating this Agreement and in reliance on this Agreement and on the expectation of the
consummation of the transactions contemplated by this Agreement, which amount would otherwise be impossible to calculate with precision. Notwithstanding anything to the contrary in this Agreement, (x) in no event shall more than one Parent
Termination Fee be payable under this Agreement and (y) the parties agree that the payment of the Parent Termination Fee shall be the sole and exclusive remedy available to the Company with respect to this Agreement in the event any such
payment becomes due and payable and is paid, and, upon payment of the Parent Termination Fee, each of Parent and Merger Sub (and Parents Affiliates and its and their respective directors, officers, employees, stockholders and Representatives)
shall have no further liability to the Company under this Agreement, in law, equity or otherwise, and the Company shall not seek to obtain any recovery, judgment, or damages of any kind, including consequential, indirect, or punitive damages,
against Parent, Merger Sub or any of Parents Subsidiaries or any of their respective directors, officers, employees, partners, managers, members, shareholders or Affiliates or their respective Representatives in connection with this Agreement
or the transactions contemplated hereby.
ARTICLE IX
MISCELLANEOUS AND GENERAL
Section 9.1 Survival. This Article IX and the agreements of the Company, Parent and Merger Sub
contained in Article IV, Section 6.11 (Indemnification; Directors and Officers Insurance) and any other covenant or agreement contained in this Agreement that by its
terms applies in whole or in part after the Effective Time, shall survive the consummation of the Merger. This Article IX and the agreements of the Company, Parent and Merger Sub contained in Section 6.10
(Expenses) and Section 8.2 (Effect of Termination and Abandonment) and the Confidentiality Agreement shall survive the termination of this Agreement. All other representations, warranties, covenants and
agreements in this Agreement shall not survive the consummation of the Merger or the termination of this Agreement.
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Section 9.2 Modification or Amendment. Subject to
the provisions of applicable Law, at any time prior to the Effective Time, this Agreement may be amended, modified or waived if, and only if, such amendment, modification or waiver is in writing and signed, in the case of an amendment or
modification by Parent, Merger Sub and the Company, or in the case of a waiver, by the party against whom the waiver is to be effective; provided, that after the receipt of the Requisite Stockholder Vote, no amendment shall be made which by
applicable Law requires further approval by the holders of Shares without obtaining such further approval.
Section 9.3 Waiver. The conditions to each of the respective parties obligations to consummate
the Merger and the other transactions contemplated by this Agreement are for the sole benefit of such party and may be waived by such party in whole or in part to the extent permitted by applicable Law. No failure or delay by any party in exercising
any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies
herein provided shall be cumulative and not exclusive of any rights or remedies provided by Law (except to the extent specifically provided otherwise in Section 8.2).
Section 9.4 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. Delivery of an executed counterpart of a signature page to this Agreement by facsimile transmission or by email of a .pdf
attachment shall be effective as delivery of a manually executed counterpart of this Agreement.
Section 9.5
Governing Law and Venue; Waiver of Jury Trial; Specific Performance.
(a) This Agreement shall be governed by, and construed and enforced in accordance with, the Laws of the State of Delaware, without regard to
any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the Laws of any jurisdiction other than the State of Delaware. In addition, each of the parties
(a) agrees that it shall not bring any claim, action or proceeding against any other parties hereto relating to this Agreement or the transactions contemplated hereby in any court other than (i) the Delaware Court of Chancery in and for
New Castle County, (ii) in the event (but only in the event) that such court does not have subject matter jurisdiction over such suit, action or other proceeding, the Delaware Superior Court, (iii) in the event (but only in the event) such
courts identified in clauses (i) or (ii) do not have subject matter jurisdiction over such suit, action or other proceeding, the United States District Court for the District of Delaware or (iv) in the event (but only in the event) such
courts identified in clauses (i), (ii) and (iii) do not have subject matter jurisdiction over such suit, action or other proceeding, any other Delaware state court (the Chosen Courts), in the event any dispute between
the parties hereto (whether in contract, tort or otherwise) arises out of this Agreement or the transactions contemplated hereby, (b) expressly submits to the personal jurisdiction and venue of the Chosen Courts and (c) expressly waives
any claim of lack of personal jurisdiction or improper venue and any claims that such courts are an inconvenient forum with respect to such a claim. Each party hereby irrevocably consents to the service of process of any of the aforementioned courts
in any such suit, action or proceeding by the mailing of copies thereof by registered or certified mail or by overnight courier service, postage prepaid, to its address set forth in Section 9.6, such service to become
effective ten (10) days after
74
such mailing. EACH PARTY HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM, ACTION OR PROCEEDING DIRECTLY OR
INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY (i) CERTIFIES THAT 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 AND (ii) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 9.5.
(b) Each of the parties to this Agreement acknowledges and agrees that the rights of each party to consummate the
Merger and the other transactions contemplated by this Agreement are special, unique and of extraordinary character and that if for any reason any of the provisions of this Agreement are not performed in accordance with their specific terms or are
otherwise breached, immediate and irreparable harm or damage would be caused for which money damages would not be an adequate remedy. Accordingly, each party agrees that, in addition to any other available remedies a party may have in equity or at
law, each party shall be entitled to enforce specifically the terms and provisions of this Agreement and to obtain an injunction restraining any breach or violation or threatened breach or violation of the provisions of this Agreement, including in
each case Parents and Merger Subs obligation to effect the Closing, on the terms of, and subject to the conditions set forth in, this Agreement and in each case without necessity of posting a bond or other form of security. In the event
that any action or proceeding should be brought in equity to enforce the provisions of this Agreement, no party shall allege or assert, and each party hereby waives the defense, that there is an adequate remedy at law.
Section 9.6 Notices. All notices, requests, instructions or other communications or documents to be
given or made hereunder by any party to the other parties to this Agreement shall be in writing and (a) served by personal delivery upon the party for whom it is intended, (b) delivered by an internationally recognized overnight courier
service upon the party for whom it is intended, (c) delivered by registered or certified mail, return receipt requested, or (d) sent by email (as set forth below), provided, that the transmission of the email is followed up within
one (1) Business Day by dispatch pursuant to one of the other methods described herein:
If to Parent or
Merger Sub:
Amazon.com, Inc.
410 Terry Avenue North
Seattle, WA 98109
Attention:
General Counsel
Email:
75
with copies to (which shall not constitute notice):
Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, NY 10019
Attention:
Krishna Veeraraghavan, Kyle T. Seifried
Email:
kveeraraghavan@paulweiss.com; kseifried@paulweiss.com
If to the
Company:
iRobot Corporation
8 Crosby Drive
Bedford, MA
01730
Attention: Chief Legal Officer
Email: As set forth in Section 9.6 of the Company Disclosure
Schedule
with a copy to (which shall not constitute notice):
Goodwin Procter LLP
100
Northern Avenue
Boston, Massachusetts 02210
Attention: Stuart M. Cable; Mark T. Bettencourt; Joshua M. Zachariah
Email: scable@goodwinlaw.com; mbettencourt@goodwinlaw.com;
jzachariah@goodwinlaw.com
or to such other
Person or addressees as has or have been designated in writing by the party to receive such notice provided above. Any notice, request, instruction or other communications or document given as provided above shall be deemed given to the receiving
party (w) upon actual receipt, if delivered personally or by email transmission (provided that (1) no bounce back or similar message of non-delivery is received with
respect thereto and (2) emails sent by email transmission after 6:00 p.m. recipients local time shall be deemed delivered on the Business Day following the date of transmission), (x) on the next Business Day after deposit with an
overnight courier, if sent by an overnight courier or (y) three (3) Business Days after deposit in the mail, if sent by registered or certified mail. Copies to outside counsel are for convenience only and failure to provide a copy to outside
counsel does not alter the effectiveness of any notice, request, instruction or other communication otherwise given in accordance with this Section 9.6.
Section 9.7 Entire Agreement. This Agreement (including any exhibits, annexes and
schedules hereto) and the documents and other agreements among the parties hereto as contemplated by or referred to herein, including the Company Disclosure Schedule, together with each other agreement entered into by or among any of Parent, Merger
Sub and the Company as of the date of this Agreement that makes reference to this Section 9.7, 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, other than the Confidentiality Agreement.
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Section 9.8 No Third Party Beneficiaries. Except as
provided in this Section 9.8, Parent and the Company hereby agree 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 if, and only if, the Effective Time occurs, (a) the holders of Shares shall be third party beneficiaries of, and entitled to rely on, Section 4.1 (Effect on Capital
Stock), (b) the holders of Company Options, Company PSU Awards, Company RSU Awards and Company DSU Awards shall be third party beneficiaries of, and entitled to rely on, Section 4.3 (Treatment of Stock-Based Awards;
ESPP) and (c) the D&O Indemnitees shall be third party beneficiaries of, and entitled to rely on, Section 6.11 (Indemnification; Directors and Officers
Insurance). The parties hereto further agree that the rights of third party beneficiaries under the proviso of this Section 9.8 shall not arise unless and until the Effective Time occurs.
Section 9.9 Obligations of Parent and of the Company.
Whenever this Agreement requires a Subsidiary of Parent to take any action, such requirement shall be deemed to include an undertaking on the part of Parent to cause such Subsidiary to take such action. Whenever this Agreement requires a Subsidiary
of the Company to take any action, such requirement shall be deemed to include an undertaking on the part of the Company to cause such Subsidiary to take such action and, after the Effective Time, on the part of the Surviving Corporation to cause
such Subsidiary to take such action.
Section 9.10 Transfer Taxes. Except as
otherwise provided in Section 4.2(c)(iv), all transfer, documentary, sales, use, stamp, registration and other similar Taxes and fees imposed with respect to the Merger or the transfer of Shares pursuant to the Merger shall
be borne by Parent or the Company and expressly shall not be a liability of holders of Shares.
Section 9.11
Definitions. Each of the terms set forth in Annex A is defined in the Section of this Agreement set forth opposite such term.
Section 9.12 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 of such provision to any Person or any circumstance, is 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 of such provision, in any other jurisdiction.
Section 9.13 Interpretation;
Construction.
(a) 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. 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.
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(b) If a term is defined as one part of speech (such as a noun), it shall have a
corresponding meaning when used as another part of speech (such as a verb). Unless the context of this Agreement clearly requires otherwise, words importing the masculine gender shall include the feminine and neutral genders and vice versa, and the
definitions of terms contained in this Agreement are applicable to the singular as well as the plural forms of such terms. The words includes and including shall mean including without limitation, the words
hereof, hereby, herein, hereunder and similar terms in this Agreement shall refer to this Agreement as a whole and not any particular section or article in which such words appear, the word
extent in the phrase to the extent shall mean the degree to which a subject or other thing extends and such phrase shall not mean simply if, any reference to a Law shall include any rules and regulations
promulgated thereunder, and any reference to any Law in this Agreement shall mean such Law as from time to time amended, modified or supplemented. Currency amounts referenced herein are in U.S. Dollars. Each reference to a wholly owned
Subsidiary or wholly owned Subsidiaries of a Person shall be deemed to include any Subsidiary of such Person where all of the equity interests of such Subsidiary are directly or indirectly owned by such Person (other than
directors qualifying shares, nominee shares or other equity interests that are required by law or regulation to be held by a director or nominee). The terms provided to and made available to, with respect to documents
required to be provided by the Company to Parent or Merger Sub, include without limitation documents filed or furnished by the Company with the SEC as an exhibit after the Applicable Date and prior to the date of this Agreement.
(c) 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.
Section 9.14 Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors, legal representatives and permitted assigns. No party to this Agreement may assign any of its rights or delegate any of its obligations under this Agreement, by operation of Law or otherwise,
without the prior written consent of the other parties, except that Merger Sub may assign any and all of its rights under this Agreement, by written notice to the Company, to another wholly owned direct or indirect Subsidiary of Parent to be a
Constituent Corporation in lieu of Merger Sub, in which event all references to Merger Sub in this Agreement shall be deemed references to such other Subsidiary, except that all representations and warranties made in this Agreement with respect to
Merger Sub as of the date of this Agreement shall be deemed representations and warranties made with respect to such other Subsidiary as of the date of such designation; provided, that (a) no assignment shall be permitted if such
assignment would, or would reasonably be expected to, prevent or materially delay Parent or Merger Sub from performing their respective obligations under this Agreement or consummating the Merger and the other transactions contemplated by this
Agreement and (b) no assignment shall relieve Parent of any of its obligations pursuant to this Agreement. Any purported assignment in violation of this Agreement is void.
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[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.
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AMAZON.COM, INC. |
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By: |
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/s/ Peter Krawiec |
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Name: Peter Krawiec
Title: Senior Vice President, Worldwide Corporate Development |
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IROBOT CORPORATION |
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By: |
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/s/ Colin M. Angle |
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Name: Colin M. Angle Title: Chief Executive
Officer |
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MARTIN MERGER SUB, INC. |
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By: |
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/s/ Peter Krawiec |
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Name: Peter Krawiec Title:
President |
[Signature Page to
Merger Agreement]
ANNEX A
DEFINED TERMS
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|
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Term |
|
Section |
Acquisition Proposal |
|
6.2(d) |
Action |
|
5.1(g)(i) |
Affiliate |
|
5.1(a) |
Agreement |
|
Preamble |
Alternative Acquisition Agreement |
|
6.2(e)(vi) |
Antitrust Laws |
|
5.1(b)(iii) |
Applicable Date |
|
5.1(e)(i) |
Benefit Plans |
|
5.1(h)(i) |
Book-Entry Share |
|
4.1(a) |
Business Day |
|
1.2 |
Bylaws |
|
2.2 |
Cancelled Shares |
|
4.1(a) |
CCPA |
|
5.1(q)(xx) |
Certificate of Merger |
|
1.3 |
Change of Recommendation |
|
6.2(e)(vi) |
Charter |
|
2.1 |
Child |
|
5.1(q)(xx) |
Chosen Courts |
|
9.5(a) |
Clearance Date |
|
6.3(a) |
Closing |
|
1.2 |
Closing Date |
|
1.2 |
Code |
|
4.2(h) |
Company |
|
Preamble |
Company 401(k) Plan |
|
6.9(c) |
Company Board |
|
Recitals |
Company Budget |
|
6.1(b)(iii) |
Company Disclosure Schedule |
|
5.1 |
Company DSU Award |
|
4.3(d) |
Company Inventory |
|
5.1(v)(ii) |
Company IP Agreements |
|
5.1(j)(i)(L) |
Company Option |
|
4.3(a) |
Company Permits |
|
5.1(i)(ii) |
Company Products |
|
5.1(q)(xxiv) |
Company PSU Award |
|
4.3(c) |
Company Recommendation |
|
5.1(c)(ii) |
Company Reports |
|
5.1(e)(i) |
Company RSU Award |
|
4.3(b) |
Company Services |
|
5.1(v)(iv) |
Company Stockholders Meeting |
|
6.4(a) |
Company Termination Fee |
|
8.2(b)(iii) |
Confidentiality Agreement |
|
6.6(b) |
A-1
|
|
|
Term |
|
Section |
Conflict Minerals |
|
5.1(n) |
Constituent Corporations |
|
Preamble |
Continuing Employees |
|
6.9(a) |
Contract |
|
5.1(g)(ii)(D) |
COVID-19 |
|
5.1(a)(E) |
COVID-19 Measures |
|
5.1(a)(E) |
D&O Indemnitee |
|
6.11(b) |
D&O Insurance |
|
6.11(c) |
DGCL |
|
Recitals |
Dissenting Shares |
|
4.1(a) |
DOJ |
|
6.5(c) |
Effective Time |
|
1.3 |
Employee Census |
|
5.1(h)(x) |
Employees |
|
5.1(h)(i) |
Environmental Law |
|
5.1(n) |
ERISA |
|
5.1(h)(i) |
ERISA Affiliate |
|
5.1(h)(v) |
ERISA Plan |
|
5.1(h)(ii) |
ESPP |
|
4.3(e) |
ESPP Termination Date |
|
4.3(e) |
Exchange Act |
|
5.1(d)(i) |
Excluded Shares |
|
4.1(a) |
Existing Credit Agreement |
|
6.16 |
Expense Reimbursement |
|
8.2(b)(iii) |
FCPA |
|
5.1(s) |
Final Offering |
|
4.3(e) |
Financial Advisor |
|
5.1(w) |
First Outside Date Extension |
|
8.1(b) |
Fiscal Year 2021 |
|
5.1(j)(i)(C) |
Fiscal Year 2022 |
|
5.1(j)(i)(C) |
Fiscal Year 2023 |
|
5.1(j)(i)(C) |
Foreign Investment Laws |
|
5.1(d)(i) |
FTC |
|
6.5(c) |
Government Official |
|
5.1(s) |
Governmental Authority |
|
5.1(d)(i) |
Hazardous Substance |
|
5.1(n) |
HSR Act |
|
5.1(b)(iii) |
Insurance Policies |
|
5.1(r) |
Intellectual Property Rights |
|
5.1(q)(xxiv) |
International Trade Laws |
|
5.1(t)(iii) |
Intervening Event |
|
6.2(f) |
IRS |
|
5.1(h)(ii) |
IT Assets |
|
5.1(q)(xxiv) |
Knowledge |
|
5.1(g)(ii)(E) |
Laws |
|
5.1(i)(i) |
A-2
|
|
|
Term |
|
Section |
Leased Real Property |
|
5.1(l)(iii)(A) |
Letter of Transmittal |
|
4.2(c)(i) |
Lien |
|
5.1(d)(ii) |
Malicious Code |
|
5.1(q)(xxiv) |
Material Adverse Effect |
|
5.1(a) |
Material Contract |
|
5.1(j)(i) |
Material Real Property Leases |
|
5.1(l)(iii)(B) |
material weakness |
|
5.1(e)(iii) |
Merger |
|
Recitals |
Merger Consideration |
|
4.1(a) |
Merger Sub |
|
Preamble |
Multiemployer Plan |
|
5.1(h)(ii) |
NASDAQ |
|
5.1(a)(F) |
Non-U.S. Benefit Plans |
|
5.1(h)(ii) |
OFAC |
|
5.1(t)(iii) |
Open Source License |
|
5.1(q)(xxiv) |
Open Source Materials |
|
5.1(q)(xxiv) |
Order |
|
7.1(c) |
Outside Date |
|
8.1(b) |
Owned Intellectual Property |
|
5.1(q)(xxiv) |
Parent |
|
Preamble |
Parent 401(k) Plan |
|
6.9(c) |
Parent Termination Fee |
|
8.2(c) |
Patents |
|
5.1(q)(xxiv) |
Paying Agent |
|
4.2(a) |
Payment Fund |
|
4.2(b) |
Permitted Liens |
|
5.1(l)(iii)(C) |
Person |
|
4.2(e) |
Personal Information |
|
5.1(q)(xxiv) |
Preferred Shares |
|
5.1(b)(i) |
Proxy Statement |
|
6.3(a) |
PSU Payment |
|
4.3(c) |
Real Property Leases |
|
5.1(l)(iii)(D) |
Registered |
|
5.1(q)(xxiv) |
Registered Intellectual Property |
|
5.1(q)(xxiv) |
Representatives |
|
6.2(a) |
Requisite Stockholder Vote |
|
5.1(c)(i) |
RSU Payment |
|
4.3(b) |
Sanctioned Country |
|
5.1(t)(i) |
Sanctioned Person |
|
5.1(t)(i) |
SEC |
|
5.1(e)(i) |
Securities Act |
|
5.1(e)(i) |
Share Certificate |
|
4.1(a) |
Shares |
|
Recitals |
significant deficiency |
|
5.1(e)(iii) |
A-3
|
|
|
Term |
|
Section |
Software |
|
5.1(q)(xxiv) |
Source Code |
|
5.1(q)(xxiv) |
Stock Plan |
|
5.1(b)(i) |
Subsidiary |
|
5.1(a) |
Superior Proposal |
|
6.2(d) |
Surviving Corporation |
|
1.1 |
Tail Period |
|
6.11(c) |
Takeover Statute |
|
5.1(m) |
Tax |
|
5.1(o)(viii) |
Tax Return |
|
5.1(o)(viii) |
Taxes |
|
5.1(o)(viii) |
Technology |
|
5.1(q)(xxiv) |
Termination Payment |
|
8.2(d) |
Third-Party Processor |
|
5.1(q)(xxiii) |
Top Distributors |
|
5.1(k) |
Top Suppliers |
|
5.1(k) |
Trade Secrets |
|
5.1(q)(xxiv) |
Trademarks |
|
5.1(q)(xxiv) |
Transaction Litigation |
|
5.1(a)(J) |
U.S. Benefit Plans |
|
5.1(h)(ii) |
U.S. GAAP |
|
5.1(a)(C) |
willful and material breach |
|
8.2(a) |
A-4
Exhibit 3.1
FIRST AMENDMENT TO THE
AMENDED AND RESTATED BY-LAWS
OF
IROBOT
CORPORATION
The Amended and Restated By-laws of iRobot Corporation are hereby amended by insertion of the
following provision after Section 10 of Article VI thereof:
ARTICLE VI
SECTION 11. Exclusive Jurisdiction of Delaware Courts. Unless the Corporation consents in writing to the selection of an alternative
forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of, or a claim based on, a
breach of a fiduciary duty owed by any current or former director, officer or other employee or stockholder of the Corporation to the Corporation or the Corporations stockholders, (iii) any action asserting a claim arising pursuant to any
provision of the DGCL or the Certificate or these By-laws (including the interpretation, validity or enforceability thereof) or as to which the DGCL confers jurisdiction on the Court of Chancery of the State
of Delaware, or (iv) any action asserting a claim governed by the internal affairs doctrine; provided, however, that this sentence will not apply to any causes of action arising under the Securities Act of 1933, as amended, or the Exchange Act,
or to any claim for which the federal courts have exclusive jurisdiction. Unless the Corporation consents in writing to the selection of an alternative forum, the federal district courts of the United States of America shall be the sole and
exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act of 1933, as amended, the Exchange Act, and the rules and regulations promulgated thereunder. To the fullest extent permitted by law, any person
or entity purchasing or otherwise acquiring any interest in shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Section 11 of Article VI.
Adopted and effective as of August 4, 2022
Exhibit 99.1
Amazon and iRobot sign an agreement for Amazon to acquire iRobot
Since introducing the Roomba vacuum in 2002, iRobot has continued to delight customers with every
product generation, saving customers valuable time previously spent on household chores
The team at iRobot has developed innovative cleaning products that customers love
SEATTLE & BEDFORD (BUSINESS WIRE) Aug. 5, 2022 Today Amazon (NASDAQ:AMZN) and iRobot (NASDAQ:IRBT) announced that they have entered
into a definitive merger agreement under which Amazon will acquire iRobot. iRobot has a history of making customers lives easier with innovative cleaning products for the home. iRobot has continued to innovate with every product generation,
solving hard problems to help give customers valuable time back in their day.
We know that saving time matters, and chores take precious time that
can be better spent doing something that customers love, said Dave Limp, SVP of Amazon Devices. Over many years, the iRobot team has proven its ability to reinvent how people clean with products that are incredibly practical and
inventive from cleaning when and where customers want while avoiding common obstacles in the home, to automatically emptying the collection bin. Customers love iRobot products and Im excited to work with the iRobot team to invent
in ways that make customers lives easier and more enjoyable.
Since we started iRobot, our team has been on a mission to create
innovative, practical products that make customers lives easier, leading to inventions like the Roomba and iRobot OS, said Colin Angle, chairman and CEO of iRobot. Amazon shares our passion for building thoughtful innovations that
empower people to do more at home, and I cannot think of a better place for our team to continue our mission. Im hugely excited to be a part of Amazon and to see what we can build together for customers in the years ahead.
Amazon will acquire iRobot for $61 per share in an all-cash transaction valued at approximately $1.7 billion,
including iRobots net debt. Completion of the transaction is subject to customary closing conditions, including approval by iRobots shareholders and regulatory approvals. On completion, Colin Angle will remain as CEO of iRobot.
About Amazon
Amazon is guided by four principles:
customer obsession rather than competitor focus, passion for invention, commitment to operational excellence, and long-term thinking. Amazon strives to be Earths Most Customer-Centric Company, Earths Best Employer, and Earths
Safest Place to Work. Customer reviews, 1-Click shopping, personalized recommendations, Prime, Fulfillment by Amazon, AWS, Kindle Direct Publishing, Kindle, Career Choice, Fire tablets, Fire TV, Amazon Echo,
Alexa, Just Walk Out technology, Amazon Studios, and The Climate Pledge are some of the things pioneered by Amazon. For more information, follow @AmazonNews.
About iRobot
iRobot is a global consumer robot company
that designs and builds thoughtful robots and intelligent home innovations that make life better. iRobot introduced the first Roomba robot vacuum in 2002. Today, iRobot is a global enterprise that has sold millions of robots worldwide. iRobots
product portfolio features technologies and advanced concepts in cleaning, mapping and navigation. Working from this portfolio, iRobot engineers are building robots and smart home devices to help consumers make their homes easier to maintain and
healthier places to live. For more information about iRobot, please visit www.irobot.com.
Cautionary Statement Regarding Amazon Forward-Looking Statements
Amazons statements related to the proposed acquisition of iRobot contain forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding expected benefits of the acquisition. Actual results
could differ materially from those projected or forecast in the forward-looking statements. Factors that could cause actual results to differ materially include the following: the conditions to the completion of the transaction may not be satisfied,
or the regulatory approvals required for the transaction may not be obtained on the terms expected, on the anticipated schedule, or at all; closing of the transaction may not occur or may be delayed, either as a result of litigation related to the
transaction or otherwise; Amazon may be unable to achieve the anticipated benefits of the transaction; revenues following the transaction may be lower than expected; the duration and scope of the COVID-19
pandemic, including any recurrence, may affect the results of operations; operating costs, customer loss, and business disruption (including, without limitation, difficulties in maintaining relationships with employees, partners, and commercial
counterparties) may be greater than expected; Amazon may assume unexpected risks and liabilities; completing the transaction may distract Amazons management from other important matters; and the other factors discussed in Risk
Factors in Amazons Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and in Amazons other filings with the SEC, which are available at http://www.sec.gov.
Amazon assumes no obligation to update the information in this press release, except as otherwise required by law. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof.
Cautionary Statements Regarding iRobot Forward-Looking Statements
This communication contains forward-looking statements within the meaning of the federal securities laws, including Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Exchange Act. These forward-looking statements are based on iRobots current expectations, estimates and projections about the expected date of closing of the proposed transaction
and the potential benefits thereof, its business and industry, managements beliefs and certain assumptions made by iRobot and Amazon, all of which are subject to change. In this context, forward-looking statements often address expected future
business and financial performance and financial condition, and often contain words such as expect, anticipate, intend, plan, believe, could, seek, see,
will, may, would, might, potentially, estimate, continue, expect, target, similar expressions or the negatives of these words or other
comparable terminology that convey uncertainty of future events or outcomes. All forward-looking statements by their nature address matters that involve risks and uncertainties, many of which are beyond iRobots control, and are not guarantees
of future results, such as statements about the consummation of the proposed transaction and the anticipated benefits thereof. These and other forward-looking statements, including the failure to consummate the proposed transaction or to make or
take any filing or other action required to consummate the transaction on a timely matter or at all, are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause actual results to differ materially
from those expressed in any forward-looking statements. Accordingly, there are or will be important factors that could cause actual results to differ materially from those indicated in such statements and, therefore, you should not place undue
reliance on any such statements and caution must be exercised in relying on forward-looking statements. Important risk
factors that may cause such a difference include, but are not limited to: (i) the ability of the parties to consummate the proposed transaction in a timely manner or at all; (ii) the
satisfaction (or waiver) of closing conditions to the consummation of the proposed transaction, including with respect to the approval of iRobots stockholders; (iii) potential delays in consummating the proposed transaction; (iv) the
ability of iRobot to timely and successfully achieve the anticipated benefits of the proposed transaction; (v) the occurrence of any event, change or other circumstance or condition that could give rise to the termination of the merger
agreement; (vi) the impact of the COVID-19 pandemic and the current conflict between the Russian Federation and Ukraine on iRobots business and general economic conditions; (vii) iRobots
ability to implement its business strategy; (viii) significant transaction costs associated with the proposed transaction; (ix) potential litigation relating to the proposed transaction; (x) the risk that disruptions from the proposed
transaction will harm iRobots business, including current plans and operations; (xi) the ability of iRobot to retain and hire key personnel; (xii) potential adverse reactions or changes to business relationships resulting from the
announcement or completion of the proposed transaction; (xiii) legislative, regulatory and economic developments affecting iRobots business; (xiv) general economic and market developments and conditions; (xv) the evolving legal,
regulatory and tax regimes under which iRobot operates; (xvi) potential business uncertainty, including changes to existing business relationships, during the pendency of the merger that could affect iRobots financial performance;
(xvii) restrictions during the pendency of the proposed transaction that may impact iRobots ability to pursue certain business opportunities or strategic transactions; and (xviii) unpredictability and severity of catastrophic events,
including, but not limited to, acts of terrorism or outbreak of war or hostilities, as well as iRobots response to any of the aforementioned factors. These risks, as well as other risks associated with the proposed transaction, will be fully
discussed in the Proxy Statement to be filed with the SEC in connection with the proposed transaction. Additional risks and uncertainties that could cause actual outcomes and results to differ materially from those contemplated by the
forward-looking statements are included under the caption Risk Factors in iRobots most recent annual and quarterly reports filed with the SEC and any subsequent reports on Form 10-K, Form 10-Q or Form 8-K filed from time to time and available at www.sec.gov. While the list of factors presented here is, and the list of factors presented in the Proxy Statement
will be, considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking
statements. Consequences of material differences in results as compared with those anticipated in the forward-looking statements could include, among other things, business disruption, operational problems, financial loss, legal liability and
similar risks, any of which could have a material adverse effect on iRobots financial condition, results of operations, or liquidity. The forward-looking statements included herein are made only as of the date hereof. iRobot does not assume
any obligation to publicly provide revisions or updates to any forward-looking statements, whether as a result of new information, future developments or otherwise, should circumstances change, except as otherwise required by securities and other
applicable laws.
Important Information and Where to Find It
In connection with the proposed transaction between iRobot and Amazon, iRobot will file with the SEC a Proxy Statement, the definitive version of which will be
sent or provided to iRobot stockholders. iRobot may also file other documents with the SEC regarding the proposed transaction. This document is not a substitute for the Proxy Statement or any other document which iRobot may file with the SEC.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS AND DOCUMENTS INCORPORATED BY
REFERENCE THEREIN, CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND RELATED MATTERS. Investors and security holders
may obtain free copies of the Proxy Statement (when it is available) and other documents that are filed or will be filed with the SEC by iRobot through the website maintained by the SEC at www.sec.gov, iRobots investor relations website at
investor.irobot.com or by contacting iRobots investor relations department at the following:
Andrew Kramer
akramer@irobot.com
(781)
430-3003
Participants in the Solicitation
iRobot and certain of its directors and executive officers may be deemed to be participants in the solicitation of proxies from iRobots stockholders in
respect of the proposed transaction and any other matters to be voted on at the special meeting. Information regarding iRobots directors and executive officers, including a description of their direct interests, by security holdings or
otherwise, is contained in iRobots proxy statement for its 2022 annual meeting of stockholders, which was filed with the SEC on April 11, 2022, and will be included in the Proxy Statement (when available). iRobot stockholders may obtain
additional information regarding the direct and indirect interests of the participants in the solicitation of proxies in connection with the proposed transaction, including the interests of iRobot directors and executive officers in the transaction,
which may be different than those of iRobot stockholders generally, by reading the Proxy Statement and any other relevant documents that are filed or will be filed with the SEC relating to the transaction. You may obtain free copies of these
documents using the sources indicated above.