As filed with the Securities and Exchange Commission on
December 17, 2009
Registration No. 333-163215
UNITED STATES SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
Amendment No. 1
to
Form S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
JDA SOFTWARE GROUP,
INC.
(Exact name of registrant as
specified in its charter)
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Delaware
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7371
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86-0787377
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(State or other jurisdiction
of
incorporation or organization)
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(Primary Standard Industrial
Classification Code Number)
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(I.R.S. Employer
Identification Number)
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14400 North 87th Street
Scottsdale, Arizona 85260
(480) 308-3000
(Address, including zip code,
and telephone number, including area code, of registrants
principal executive offices)
G. Michael Bridge, Esq.
Senior Vice President, General Counsel
and Corporate Secretary
JDA Software Group, Inc.
14400 North 87th Street
Scottsdale, Arizona 85260
(480) 308-3000
(Name, address, including zip
code, and telephone number, including area code, of agent for
service)
Copies to:
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Steven D. Pidgeon, Esq.
Richard S. Millard, Esq.
David P. Lewis, Esq.
DLA Piper LLP (US)
2525 East Camelback Road, Suite 1000
Phoenix, Arizona 85016
(480) 606-5100
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John Harvey, Esq.
Senior Vice President,
General Counsel, and
Corporate Secretary
i2 Technologies, Inc.
11701 Luna Road
Dallas, Texas 75234
(469) 357-1000
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A. Michael Hainsfurther, Esq.
Peter E. Lorenzen, Esq.
Munsch Hardt Kopf & Harr, P.C.
500 N. Akard Street, Suite 3800
Dallas, Texas 75201
(214) 855-7500
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Approximate date of commencement of proposed sale of the
securities to the public:
As soon as practicable
after this registration statement becomes effective and all
other conditions to the proposed merger described herein have
been satisfied or waived.
If the securities being registered on this Form are being
offered in connection with the formation of a holding company
and there is compliance with General Instruction G, check
the following
box.
o
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act,
check the following box and list the Securities Act registration
statement number of the earlier effective registration statement
for the same
offering.
o
If this Form is a post-effective amendment filed pursuant to
Rule 462(d) under the Securities Act, check the following
box and list the Securities Act registration statement number of
the earlier effective registration statement for the same
offering.
o
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of
large accelerated filer, accelerated
filer and smaller reporting company in Rule
12b-2
of the
Exchange Act. (Check one):
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Large
accelerated
filer
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Accelerated
filer
þ
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Non-accelerated
filer
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Smaller reporting
company
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(Do not check if a smaller
reporting company)
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Proposed Maximum
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Proposed Maximum
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Amount of
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Title of Each Class of
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Amount to be
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Offering Price per
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Aggregate Offering
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Registration
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Securities to be Registered
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Registered
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Share
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Price
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Fee
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Common Stock, par value $0.01 per share
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8,093,571(1)
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N/A
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$186,069,989(2)
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$10,383
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(1)
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The number of shares of common
stock of the registrant being registered is based upon
(x) an estimate of the maximum number of shares of common
stock, par value $0.00025 per share, of i2 Technologies,
Inc. (i2) presently outstanding or issuable or
expected to be issued in connection with the merger of a
wholly-owned subsidiary of the registrant with i2 multiplied by
(y) the exchange ratio of 0.2562 shares of common
stock, par value $0.01 per share, of the registrant, for each
such share of common stock of i2.
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(2)
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Estimated solely for the purpose of
calculating the registration fee required by Section 6(b)
of the Securities Act and computed pursuant to
Rule 457(f)(1) and (f)(3) and 457(c) of the Securities Act.
The proposed maximum aggregate offering price of the
registrants common stock was calculated based upon the
market value of shares of i2 common stock, calculated in
accordance with Rule 457(c) under the Securities Act, as
follows: (i) the product of (A) $18.59, the average of
the high and low prices per share of i2 common stock on the
Nasdaq Stock Market on November 17, 2009 and
(B) 31,590,830, the maximum possible number of shares of i2
common stock which may be canceled and exchanged in the merger,
less (ii) the estimated amount of cash that would be paid
by JDA in exchange for such maximum possible number of shares of
i2 common stock which may be canceled and exchanged in the
merger (which equals $401,203,541).
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The Registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the Registrant shall file a further Amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a)
of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission,
acting pursuant to said Section 8(a), may determine.
The
information in this proxy statement/prospectus is not complete
and may be changed. JDA Software Group, Inc. may not sell these
securities until the registration statement filed with the
Securities and Exchange Commission, of which this document is a
part, is declared effective. This proxy statement/prospectus is
not an offer to sell these securities and it is not soliciting
an offer to buy these securities in any jurisdiction where the
offer, solicitation or sale is not permitted or would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. Any representation to
the contrary is a criminal offense.
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PRELIMINARY SUBJECT
TO COMPLETION DATED DECEMBER 17, 2009
To the stockholders of i2 Technologies, Inc.:
The board of directors of i2 Technologies, Inc.
(i2) has approved a strategic merger combining i2
with JDA Software Group, Inc. (JDA). We believe that
the proposed merger will firmly establish the combined company
as a leading enterprise software company with a deep focus on
supply chain management and a full complement of managed and
hosted services offerings.
In the proposed merger, each issued and outstanding share of i2
common stock (other than shares held by i2, JDA, Merger Sub and
dissenting i2 stockholders) will be converted into the right to
receive 0.2562 of a share of JDA common stock and $12.70 in
cash, without interest, and each issued and outstanding share of
i2 Series B 2.5% Convertible Preferred Stock will be
converted into the right to receive $1,100.00 per share in cash,
which is equal to the stated change of control liquidation value
of each such share, plus all accrued and unpaid dividends
thereon through the effective time of the merger, without
interest. Subject to certain limited exceptions, the exchange
ratio is fixed, and will not be adjusted to reflect stock price
changes prior to the closing. Accordingly, the value of the
merger consideration to be received in exchange for each share
of i2 common stock will fluctuate with the market price of JDA
common stock.
Based on the closing sale price for JDA common stock on
November 4, 2009, the last trading day before public
announcement of the merger, the merger consideration represented
approximately $18.00 in value for each share of i2 common stock.
Based on the closing sale price for JDA common stock on
December 15, 2009, the latest practicable date before the
printing of this proxy statement/prospectus, which we refer to
as this Proxy Statement, the merger consideration
represented approximately $18.65 in value for each share of i2
common stock.
JDA common stock is listed on The Nasdaq Stock Market under the
symbol JDAS. i2 common stock is listed on The Nasdaq
Stock Market under the symbol ITWO. We urge you to
obtain current market quotations for the shares of JDA and i2.
Your vote is very important.
The merger cannot be
completed unless i2 stockholders adopt and approve the merger
agreement. i2 is holding a special meeting of its stockholders
to vote on the proposals necessary to complete the merger.
Information about this meeting and the merger is contained in
this Proxy Statement. We urge you to read this Proxy Statement
carefully.
You should also carefully consider the risk
factors beginning on page 20.
Whether or not you plan to attend i2s special meeting
of stockholders, please submit your proxy as soon as possible to
make sure that your shares are represented at that meeting.
The i2 board of directors recommends that you vote FOR each
of the proposals described in this proxy statement.
Jackson L. Wilson, Jr.
Chairman of the Board of Directors, President and Chief
Executive Officer
i2 Technologies, Inc.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of the
securities to be issued in connection with the merger or
determined if this Proxy Statement is accurate or complete. Any
representation to the contrary is a criminal offense.
This Proxy Statement is
dated ,
2009, and is first being mailed to stockholders of i2 on or
about ,
2009.
i2 TECHNOLOGIES,
INC.
11701 LUNA ROAD
DALLAS, TEXAS 75234
NOTICE OF SPECIAL MEETING OF
STOCKHOLDERS
To Be Held
On ,
2010
To the stockholders of i2 Technologies, Inc.:
Notice is hereby given that a special meeting of stockholders of
i2 Technologies, Inc. (i2) will be held at the
i2 corporate headquarters at 11701 Luna Road, Dallas, Texas
75234,
on ,
2010 at 8:00 a.m. local time to consider and vote upon the
following proposals:
1. To adopt and approve the Agreement and Plan of Merger,
which we refer to as the merger agreement, that i2
entered into on November 4, 2009 with JDA Software Group,
Inc. (JDA), and Alpha Acquisition Corp., a
wholly-owned subsidiary of JDA, as the same may be amended from
time to time (the Merger Proposal); and
2. To grant each of the persons named in the accompanying
proxy materials as proxies with discretionary authority to vote
to adjourn or postpone the special meeting, if necessary, to
satisfy the conditions to completing the merger as set forth in
the merger agreement, including for the purpose of soliciting
additional proxies if there are insufficient votes at the time
of the special meeting to approve the Merger Proposal (the
Adjournment/Postponement Proposal).
Approval of the Merger Proposal requires the affirmative vote of
the holders of outstanding shares having at least a majority of
the combined voting power of i2 common stock and i2
Series B 2.5% Convertible Preferred Stock, voting on
an as-converted-to-common stock basis as a single class with the
i2 common stock.
The approval of the Merger Proposal is required for completion
of the merger. The accompanying proxy statement/prospectus,
which we refer to as the Proxy Statement, further
describes the matters to be considered at the meeting. A copy of
the merger agreement has been included as
Annex A
to the Proxy Statement. We urge you to carefully read
the Proxy Statement, including the annexes and the other
documents referred to therein.
The i2 board of directors has
set ,
2009 as the record date for the special meeting. Only holders of
record of shares of i2 common stock and i2 Series B
2.5% Convertible Preferred Stock at the close of business
on ,
2009 will be entitled to notice of and to vote at the special
meeting and any adjournments or postponements thereof. The
special meeting will begin promptly at 8:00 a.m., local
time. Check-in will begin at 7:30 a.m., local time, and you
should allow ample time for check-in procedures.
To ensure
your representation at the special meeting, please complete and
return the enclosed proxy card or submit your proxy by telephone
or through the Internet.
Please submit your proxy promptly
whether or not you expect to attend the special meeting.
Submitting a proxy now will not prevent you from being able to
vote at the special meeting by attending in person and casting a
vote.
The board of directors of i2 has determined that the merger
is advisable and in the best interests of i2 and its
stockholders, and recommends that you vote FOR the Merger
Proposal, and FOR the Adjournment/Postponement Proposal
. We
are not aware of any other business to come before the meeting.
By Order of the Board of Directors
John Harvey
Secretary
Dallas, Texas
December , 2009
PLEASE SUBMIT A PROXY FOR YOUR SHARES PROMPTLY. YOU CAN
FIND INSTRUCTIONS FOR SUBMITTING A PROXY ON THE ENCLOSED
PROXY CARD. IF YOU HAVE QUESTIONS ABOUT THE PROPOSALS OR
ABOUT SUBMITTING A PROXY FOR YOUR SHARES, PLEASE CALL D.F.
KING & CO., INC. AT
(800) 859-8511
(TOLL FREE) OR
(212) 269-5550
(COLLECT) OR VIA EMAIL AT ensco@dfking.com.
ADDITIONAL
INFORMATION
This Proxy Statement incorporates by reference important
business and financial information about JDA and i2 from other
documents that are not included in or delivered with this Proxy
Statement. For a listing of the documents incorporated by
reference into this Proxy Statement, see Where You Can
Find More Information beginning on page 106. This
information is available to you without charge upon your written
or oral request. You may obtain the documents incorporated by
reference into this document through the Securities and Exchange
Commission website at
http://www.sec.gov
or by requesting them in writing or by telephone at the
appropriate address below:
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JDA Software Group, Inc.
Attn: Mike Burnett
14400 North 87th Street
Scottsdale, Arizona 85260
(480) 308-3000
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i2 Technologies, Inc.
Attn: Tom Ward
11701 Luna Road
Dallas, Texas 75234
(469) 357-1000
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In addition, you may obtain copies of this information by making
a request through JDAs or i2s investor relations
departments by sending an email to investor.relations@jda.com or
investor_relations@i2.com, respectively.
You may also obtain documents incorporated by reference into
this Proxy Statement by requesting them in writing or by
telephone from D.F. King & Co., Inc., i2s proxy
solicitation agent, at the appropriate address and telephone
number below:
D.F King & Co., Inc.
48 Wall Street
New York, NY 10005
Bank and brokers call:
(212) 269-5550
All others call:
(800) 859-8511
To receive timely delivery of the documents in advance of the
meetings, you should make your request no later
than ,
2010.
SUBMITTING
A PROXY BY INTERNET OR BY TELEPHONE
i2 stockholders of record on the close of business
on ,
2009, the record date for the i2 special meeting, may submit
their proxies by telephone or Internet by following the
instructions on their proxy card or voting form. If you have any
questions regarding whether you are eligible to submit your
proxy by telephone or by Internet, please contact D.F.
King & Co., Inc. by telephone at
(800) 859-8511
(toll free) or
(212) 269-5550
(collect) or via email at ensco@dfking.com.
ABOUT
THIS PROXY STATEMENT/PROSPECTUS
This Proxy Statement, which forms a part of a Registration
Statement on
Form S-4
filed with the Securities and Exchange Commission by JDA,
constitutes a prospectus of JDA under Section 5 of the
Securities Act of 1933, as amended, which is referred to as the
Securities Act in this Proxy Statement, with respect
to the shares of JDA common stock to be issued to i2
stockholders in connection with the merger, and a proxy
statement under Section 14(a) of the Securities Exchange
Act of 1934, as amended, which is referred to as the
Exchange Act in this Proxy Statement, and a notice
of meeting with respect to the meeting of i2 stockholders to
consider and vote upon, among other matters, the Merger Proposal.
TABLE OF
CONTENTS
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Page
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ii
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Agreement and Plan of Merger, dated as of
November 4, 2009, among JDA Software Group, Inc., Alpha
Acquisition Corp., and i2 Technologies, Inc.
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A-1
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Form of Voting Agreement by and among JDA, i2,
and the directors, officers of i2
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B-1
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Form of Voting Agreement by and among JDA, i2 and
the sole holder of i2s Series B 2.5% Convertible
Preferred Stock
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C-1
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Opinion of Thomas Weisel Partners LLC
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D-1
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Section 262 of the Delaware General
Corporation Law
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E-1
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iii
QUESTIONS
AND ANSWERS
The following questions and answers briefly address some
commonly asked questions about the merger and the i2 special
meeting. The following questions and answers may not include all
the information that is important to stockholders of i2. We urge
stockholders to carefully read this entire Proxy Statement,
including the annexes and the other documents referred to herein.
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Q:
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Why am I receiving these materials?
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A:
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JDA has agreed to acquire i2 under the terms of a merger
agreement that is described in this Proxy Statement. We are
sending you these materials to help you decide how to vote your
shares of i2 stock with respect to the proposed merger and
related transactions.
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We are delivering this document to you as both a proxy statement
of i2 and prospectus of JDA. It is a proxy statement of i2
because the i2 board of directors is soliciting proxies from the
i2 stockholders. It is a prospectus because JDA will exchange
shares of its common stock, as well as cash, for shares of i2
common stock in the merger.
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This Proxy Statement contains important information about the
merger, the merger agreement, and the special meeting of i2, and
you should carefully read this Proxy Statement, including the
annexes and the other documents referred to herein. In order to
complete the merger, i2 stockholders must adopt and approve the
merger agreement.
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Your vote is important. We encourage you to vote by submitting
your proxy as soon as possible.
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Q:
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What will stockholders receive in the merger?
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A:
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At the effective time of the merger, each issued and outstanding
share of i2 common stock (other than shares held by i2, JDA,
Merger Sub and dissenting i2 stockholders) will be converted
into the right to receive 0.2562 of a share of JDA common stock
and $12.70 in cash, without interest, and each outstanding share
of i2 Series B 2.5% Convertible Preferred Stock, which
is referred to in this Proxy Statement as the
Series B Preferred Stock, will be converted
into the right to receive $1,100.00 per share in cash, which is
equal to the stated change of control liquidation value of each
such share, plus all accrued and unpaid dividends thereon
through the effective time of the merger, without interest.
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Based on the closing sale price for JDA common stock on
November 4, 2009, the last trading day before public
announcement of the merger, the merger consideration represented
approximately $18.00 in value for each share of i2 common stock.
Based on the closing sale price for JDA common stock on
December 15, 2009, the latest practicable date before the
printing of this Proxy Statement, the merger consideration
represented approximately $18.65 in value for each share of i2
common stock.
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Holders of i2 common stock will not receive any fractional JDA
shares in the merger. Instead, the total number of shares that
each holder of i2 common stock will receive in the merger will
be rounded down to the nearest whole number, and JDA will pay
cash for any resulting fractional share that an i2 stockholder
otherwise would be entitled to receive. The amount of cash
payable for a fractional share of JDA common stock will be
determined by multiplying the fraction by the average closing
price for JDA common stock on The Nasdaq Stock Market for the
five trading day period ending three days prior to the effective
date of the merger. JDAs stockholders will continue to own
their existing shares, and will not need to exchange their
existing shares in connection with the merger.
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Q:
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When do JDA and i2 expect to complete the merger?
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A:
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JDA and i2 expect to complete the merger after all conditions to
the merger in the merger agreement are satisfied or waived,
including the receipt of the requisite stockholder approval at
the special meeting of i2 and the receipt of all required
regulatory approvals. JDA and i2 currently expect to complete
the merger during the first quarter of 2010. However, it is
possible that factors outside of either companys control
could cause the merger to be completed at a later time or not at
all.
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iv
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Q:
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How does the board of directors of i2 recommend that I
vote?
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A:
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The i2 board of directors recommends that i2 stockholders vote
FOR the proposal to adopt and approve the merger agreement,
which is referred to in this Proxy Statement as the Merger
Proposal, and FOR the proposal to grant each of the
persons named in the accompanying proxy materials as proxies
with discretionary authority to vote to adjourn or postpone the
i2 special meeting, if necessary, to satisfy the conditions for
completing the merger as set forth in the merger agreement,
including for the purpose of soliciting additional proxies if
there are insufficient votes at the time of the special meeting
to approve the Merger Proposal, which is referred to in this
Proxy Statement as the Adjournment/Postponement
Proposal.
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Q:
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What vote is required to approve each proposal?
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A:
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The affirmative vote of at least a majority of the voting power
of i2s outstanding shares of common stock and
Series B Preferred Stock voting on an
as-converted-to-common stock basis as a single class with the i2
common stock, is required to adopt and approve the Merger
Proposal and the affirmative vote of at least a majority of the
voting power, present in person or represented by proxy at the
i2 special meeting, of i2s outstanding shares of common
stock and Series B Preferred Stock, voting on an
as-converted-to-common stock basis as a single class with the i2
common stock, is required to adopt and approve the
Adjournment/Postponement Proposal.
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Q:
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What if I do not vote, abstain from voting or
submit a proxy without indicating my vote?
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A:
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If you are a record holder of i2 common stock and you fail to
attend the i2 special meeting and you fail to submit a proxy, or
if you own your shares of i2 common stock through a broker or
other nominee and do not provide voting instructions to the
broker or nominee on any of the proposals submitted for approval
at the i2 special meeting, your shares will not be counted as
present for purposes of determining whether a quorum is present
at the i2 special meeting. If you are a record holder of i2
common stock and you do attend the i2 special meeting, or if you
do not attend the special meeting but submit a proxy (including
any proxy that is marked abstain with respect to one
or more proposals), your shares will be counted as present for
purposes of determining whether a quorum is present at the i2
special meeting. If you own your shares of i2 common stock
through a broker or other nominee and provide the broker or
nominee voting instructions on any proposal, your shares will be
counted as present for purposes of determining whether a quorum
is present at the i2 special meeting. If you submit a proxy but
do not indicate how you want your shares to be voted, your
shares will be counted as present for purposes of determining
whether a quorum is present at the i2 special meeting.
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If you are a record holder of i2 stock and you are not deemed
present in person or by proxy at the i2 special meeting, or if
you own your i2 stock through a broker or other nominee and fail
to instruct your broker or other nominee how to vote on the
Merger Proposal, your shares will be counted in the same manner
as shares that vote against approval of the Merger Proposal. If
you abstain from voting on the Merger Proposal, your
shares will be counted as voting against the Merger
Proposal. If you submit a proxy but do not indicate how you want
your shares to be voted on the Merger Proposal, your shares will
be voted in favor of the Merger Proposal. If you are a record
holder of i2 stock and you are not deemed present in person or
by proxy at the i2 special meeting, or if you own your i2 stock
through a broker or other nominee and fail to instruct your
broker or other nominee how to vote on the
Adjournment/Postponement Proposal, your shares will have no
effect on the outcome of this proposal. If you
abstain from voting on the Adjournment/Postponement
Proposal, your shares will be counted as voting
against this proposal. If you submit a proxy but do
not indicate how you want your shares to be voted on the
Adjournment/Postponement Proposal, your shares will be voted in
favor of the Adjournment/Postponement Proposal.
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Q:
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How do I submit my proxy?
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A:
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You may submit a proxy before your companys special
meeting in one of the following ways:
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by telephone, using the toll free number shown on
your proxy card;
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via the Internet, by visiting the website shown on
your proxy card; or
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by mail, by completing, signing, dating and
returning the enclosed proxy card in the enclosed postage-paid
envelope.
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You may also cast your vote in person at your companys
special meeting.
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If your shares are held in street name, through a
broker, bank or other nominee, that institution will send you
separate instructions describing the procedure for voting your
shares. Street name stockholders who wish to vote at
the meeting will need to obtain a proxy from the institution
that holds their shares.
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Q:
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What do I need to do now?
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A:
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After carefully reading and considering the information
contained in this Proxy Statement, please submit a proxy to vote
your shares as soon as possible so that your shares will be
represented at the i2 special meeting. Please follow the
instructions set forth on the proxy card or on the voting
instruction form provided by the record holder if your shares
are held in the name of your broker or other nominee.
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Q:
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When and where is the i2 special meeting of stockholders?
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A:
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The special meeting of i2 stockholders will be held
on ,
2010 at 8:00 a.m. local time at i2 corporate headquarters
at 11701 Luna Road, Dallas, Texas 75234. Subject to space
availability, all stockholders as of the record date, or their
duly appointed proxies, may attend the meeting. Since seating is
limited, admission to the meeting will be on a first-come,
first-served basis. Registration and seating will begin at
7:30 a.m. local time.
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Q:
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If my shares are held in street name by my broker
or other nominee, will my broker or nominee vote my shares for
me?
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A:
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Your broker or other nominee does not have authority to vote on
the proposals described in this Proxy Statement without
receiving instructions from the beneficial owner as to how the
shares are to be voted. Your broker or other nominee will vote
your shares held by it in street name with respect
to these matters ONLY if you provide instructions to it on how
to vote. You should follow the directions that your broker or
other nominee provides.
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Q:
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What constitutes a quorum?
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A:
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Stockholders who hold a majority in voting power of the i2
common stock and Series B Preferred Stock, voting on an
as-converted-to-common stock basis, issued and outstanding as of
the close of business on the record date for the i2 special
meeting and who are entitled to vote must be present or
represented by proxy in order to constitute a quorum to conduct
business at the i2 special meeting.
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Q:
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May I vote in person?
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A:
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Yes. You may vote in person at the i2 special meeting, rather
than signing and returning your proxy card, if you own shares in
your own name. However, i2 encourages you to return your signed
proxy card to ensure that your shares are voted. You may also
vote in person at the special meeting if your shares are held in
street name through a broker or bank if you bring a
legal proxy from your broker or bank and present it at the
special meeting. You may be asked to present photo
identification for admittance.
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Q:
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Can I change my vote after I have voted by proxy?
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A:
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Yes. You may change your vote at any time before your proxy is
voted at the i2 special meeting. You may do this in one of four
ways:
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delivering a written notice of revocation bearing a
later date than your proxy to the corporate secretary of i2;
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delivering a duly executed proxy relating to the
same shares and bearing a later date than your original proxy to
the corporate secretary of i2;
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submitting a later dated proxy via the Internet or
by calling the telephone number specified on your proxy card, in
each case in accordance with the instructions on the proxy card;
or
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attending the special meeting and voting such shares
in person.
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Stockholders should note, however, that merely attending the i2
special meeting in person without casting a vote at the meeting
will not alone constitute a revocation of a proxy. If you choose
any of the first three methods, you must take the described
action no later than the beginning of the special meeting. If
your shares are held in an account at a broker or other nominee,
you should contact your broker or other nominee to change your
vote.
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Q:
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What will happen to i2 as a result of the merger?
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A:
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If the merger is completed, i2 will become a wholly-owned
subsidiary of JDA and i2 common stock will no longer be listed
on Nasdaq.
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Q:
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What will happen to i2 stock options and other equity awards
in the merger?
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A:
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In the merger, each outstanding option to acquire i2 common
stock will be canceled and terminated at the effective time and
converted into the right to receive the merger consideration
with respect to the number of shares of i2 common stock that
would be issuable upon a net exercise of such option assuming
the market value of the i2 common stock at the time of such
exercise were equal to the value of the merger consideration as
of the close of trading on the trading day immediately prior to
the effective time. Any outstanding option with a per-share
exercise price that is greater than or equal to such amount will
be canceled and terminated as of the effective time, and no
payment will be made with respect thereto.
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Also, at the effective time of the merger, each i2 restricted
stock unit award outstanding immediately prior to the effective
time of the merger will become fully vested (except that with
respect to any restricted stock unit which by the terms of the
award agreement pursuant to which it was granted provides for a
lesser percentage of such restricted stock unit to become vested
upon the consummation of the merger, such restricted stock unit
shall only become vested as to such lesser percentage), and then
shall be canceled and terminated at the effective time, and the
holder of such vested restricted stock unit shall be entitled to
receive the common stock merger consideration for each share of
i2 common stock into which the vested portion of the restricted
stock unit would otherwise be convertible. Each restricted stock
award will become fully vested immediately prior to the
effective time of the merger.
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Q:
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What happens if I sell my shares of i2 before the i2 special
meeting?
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A:
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The record date for i2s special meeting is earlier than
the expected completion date of the merger. If you hold your
shares of i2 common stock on the record date but transfer those
shares after the record date and before the merger, you may
retain your right to vote at the i2 special meeting but not the
right to receive the merger consideration. This right to receive
the merger consideration will pass to the person to whom you
transferred your shares of i2 common stock.
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Q:
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What are the material United States federal income tax
consequences of the merger to i2 stockholders?
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A:
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JDA and i2 expect that the merger will be a fully taxable
transaction for United States federal income tax purposes.
Accordingly, each United States holder of i2 common stock will
generally recognize capital gain or loss as a result of the
merger equal to the difference between (1) the sum of the
amount of cash and the fair market value of JDA common stock
received by the stockholder in the merger and (2) the
stockholders adjusted tax basis in the i2 common stock
surrendered in the merger. Gain or loss and holding period will
be determined separately for each block of i2 stock (that is,
shares acquired at the same price per share in a single
transaction). Generally, if a stockholder has held the
i2 shares of stock for more than one year as of the closing
date of the merger, any gain will be characterized as long-term
capital gain. The deductibility of capital losses is subject to
limitations.
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For a more complete discussion of the U.S. federal income tax
consequences of the merger, please see the section entitled
The Merger Material United States Federal
Income Tax Consequences of the Merger beginning on
page 59 of this Proxy Statement.
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Tax matters are very complicated and the consequences of the
merger to each i2 stockholder will depend on that
stockholders particular facts and circumstances. i2
stockholders are strongly urged to consult their own tax
advisors to determine their own tax consequences from the merger.
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vii
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Q:
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Do I have appraisal rights?
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A:
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i2 has concluded that its stockholders are entitled under
Section 262 of the General Corporation Law of the State of
Delaware (the DGCL) to appraisal rights in
connection with the merger. To exercise appraisal rights if you
are an i2 stockholder, you must:
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before the taking of the vote upon the Merger
Proposal, deliver to i2 a written demand for appraisal;
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NOT vote in favor of the Merger Proposal;
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continue to hold your i2 stock through the effective
date of the merger; and
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comply with other procedures as is required by DGCL
Section 262.
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A copy of the relevant provisions of DGCL Section 262 is
attached to this proxy statement as
Annex E
.
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Q:
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Should I send in my stock certificates now, and when do I
receive the merger consideration?
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A:
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No. Please do not send your stock certificates with your
proxy card. Following the merger, a letter of transmittal will
be sent to i2 stockholders informing them where to deliver their
i2 stock certificates in order to receive the merger
consideration, including any cash in lieu of a fractional share
of JDA common stock. You should not send in your i2 stock
certificates prior to receiving this letter of transmittal. When
you properly complete and return the required documentation
described in the written instructions, you will promptly receive
from the exchange agent the merger consideration, including any
cash in lieu of a fractional share of JDA common stock, in
exchange for your shares.
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Q:
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Whom should I contact if I have additional questions?
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A:
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If you have any questions about the merger or if you need
assistance in submitting your proxy or voting your shares or
need additional copies of the Proxy Statement or the enclosed
proxy card, you should contact i2s investor relations
department at
(469) 357-1000
or i2s proxy solicitation agent at
(800) 859-8511.
If your shares are held in a stock brokerage account or by a
bank or other nominee, you should call your broker or other
nominee for additional information.
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Q:
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Have any i2 stockholders entered into voting agreements?
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A:
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i2s directors and certain executive officers, and the
holder of the Series B Preferred Stock, executed voting
agreements, dated November 4, 2009, agreeing to vote their
shares of i2 stock for the Merger Proposal. As of the record
date, such persons beneficially owned and were entitled to vote
shares of i2 stock having votes representing approximately 18.4%
of the combined voting power of the i2 common stock and Series B
Preferred Stock, voting on an as-converted-to-common stock
basis, outstanding on that date. In connection with the
agreement by the holder of the Series B Preferred Stock to vote
in favor of the Merger Proposal, i2 agreed not to redeem, or
call for redemption, any shares of Series B Preferred Stock
until after termination of the merger agreement.
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viii
SUMMARY
This summary highlights selected information contained in
this Proxy Statement related to the merger and does not contain
all of the information that may be important to you. Each
section of this summary is qualified in its entirety by
reference to the full discussions of the related matters in the
body of this Proxy Statement, and to understand the merger fully
and for a more complete description of the terms of the merger
agreement, you should carefully read this entire document,
including the annexes and the other documents referred to
herein. Additional important information is also contained in
the documents incorporated by reference into this Proxy
Statement see Where You Can Find More
Information beginning on page 106.
Unless otherwise indicated or unless the context requires
otherwise, all references in this document to i2
refer to i2 Technologies, Inc. and its subsidiaries; all
references in this document to JDA refer to JDA
Software Group, Inc.; all references in this document to
Merger Sub refer to Alpha Acquisition Corp.; all
references in this document to Series B Preferred
Stock refer to i2s Series B
2.5% Convertible Preferred Stock; all references in this
document to the merger agreement refer to the
Agreement and Plan of Merger, dated as of November 4, 2009,
among JDA, Merger Sub, and i2, a copy of which is attached as
Annex A
to this Proxy Statement; and all references
to the merger refer to the merger contemplated by
the merger agreement.
The
Merger
Each of the boards of directors of JDA and i2 has approved a
strategic merger of JDA and i2. Pursuant to the merger
agreement, Merger Sub will merge with and into i2, with i2 being
the surviving corporation. After the merger, JDA will own all of
i2s outstanding stock and i2s common stock will no
longer be listed on Nasdaq. A copy of the merger agreement is
attached as
Annex A
to this Proxy Statement.
We encourage you to read the merger agreement carefully and
fully as it is the definitive agreement that governs the merger.
For more information on the merger agreement, see Merger
Agreement and Other Related Agreements beginning on
page 61.
The
Companies Involved in the Merger
i2 Technologies, Inc.
11701 Luna Road
Dallas, TX 75234
469-357-1000
www.i2.com
Throughout its more than
20-year
history of innovation and value delivery, i2 has dedicated
itself to building successful customer partnerships. As a
full-service supply chain company, i2 is uniquely positioned to
help its clients achieve world-class business results through a
combination of consulting, technology, and managed services.
i2s solutions are pervasive in a wide cross section of
industries. i2s common stock is currently listed on The
Nasdaq Stock Market (Nasdaq) under the symbol
ITWO. Information contained on i2s website
does not constitute a part of this Proxy Statement.
JDA Software Group, Inc.
14400 N. 87th Street
Scottsdale, AZ
85260-3649
480-308-3000
www.JDA.com
JDA is focused on helping companies realize real supply chain
and revenue management results fast. JDA Software
delivers integrated merchandising as well as supply chain and
revenue management planning, execution, and optimization
solutions for the consumer-driven supply chain and services
industries. Through its industry leading solutions, leading
manufacturers, distributors, retailers and services companies
around the world are growing their businesses with greater
predictability and more profitably. JDAs common stock is
listed on Nasdaq
1
under the symbol JDAS. Information contained on
JDAs website does not constitute a part of this Proxy
Statement.
Alpha Acquisition Corp.
14400 N. 87th Street
Scottsdale, AZ
85260-3649
Alpha Acquisition Corp., which we refer to as Merger
Sub, is a wholly-owned subsidiary of JDA formed for the
purpose of merging with and into i2. Merger Sub is not engaged
in any business activity other than in connection with the
merger. Merger Sub is incorporated under the laws of the State
of Delaware.
The i2
Board of Directors Recommendation and Reasons for the
Merger (see page 39)
In the course of determining that the merger and the merger
agreement are advisable and in the best interests of i2 and its
stockholders, the i2 board of directors consulted with i2s
management, as well as its financial and legal advisors.
i2s board of directors considered a number of factors in
making its determination that the merger and the merger
agreement are advisable and in the best interests of i2 and its
stockholders, including the following:
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the risks and benefits to the i2 stockholders of effecting the
transaction as compared with the risks and benefits of the other
various alternatives considered, including remaining as a
stand-alone company;
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the process undertaken by i2, with the assistance of Thomas
Weisel Partners, LLC, who we refer to as Thomas Weisel
Partners, and other financial advisers, which began in
December 2006 and included contacting or being contacted by more
than 80 potential strategic and financial buyers; and
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the opinion of Thomas Weisel Partners that the merger
consideration payable to i2s common stockholders (other
than JDA, the holders of Series B Preferred Stock, and
their respective affiliates, and dissenting i2 stockholders)
under the merger agreement was, as of the date of the opinion
and based upon and subject to factors and assumptions set forth
therein, fair from a financial point of view to such
stockholders.
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The i2 board of directors also considered a number of other
factors and risks concerning the merger, which are described in
greater detail beginning on page 39.
What i2
Stockholders Will Receive in the Merger (see
page 61)
Each issued and outstanding share of i2 common stock (other than
shares held by i2, JDA, Merger Sub and dissenting i2
stockholders) will be converted into the right to receive 0.2562
of a share of JDA common stock and $12.70 in cash. The fraction
of a share of JDA common stock to be issued as part of the
merger consideration is referred to in this Proxy Statement as
the exchange ratio.
Holders of i2 common stock will not receive any fractional JDA
shares in the merger. Instead, the total number of shares that
each holder of i2 common stock will receive in the merger as
part of the merger consideration will be rounded down to the
nearest whole number, and JDA will pay cash for any resulting
fractional share that an i2 stockholder otherwise would be
entitled to receive. The amount of cash payable for a fractional
share of i2 common stock will be determined by multiplying the
fraction by the average closing price of JDA common stock on
Nasdaq for the five consecutive trading days ending three days
prior to the effective time of the merger.
Example: If you currently own 100 shares of
i2 common stock, you would be entitled to receive
(i) $1,270.00 in cash (100 shares of i2 common stock
multiplied by $12.70 in cash per share) and
(ii) 25.62 shares of JDA common stock (100 shares
of i2 common stock multiplied by the exchange ratio of 0.2562).
Since fractional shares will not be issued, you will be entitled
to receive, in lieu of the 25.62 shares of JDA common stock
referenced above, 25 shares of JDA common stock and a check
for the market value of 0.62 of a share of JDA common stock,
calculated as provided above.
Each outstanding share of Series B Preferred Stock will be
converted into the right to receive $1,100.00 per share in cash,
which is equal to the stated change of control liquidation value
of each such share, plus all accrued and unpaid dividends
thereon through the effective time, without interest.
2
Subject to certain limited exceptions described in the next
paragraph, the exchange ratio is fixed, and will not be adjusted
to reflect stock price changes prior to the closing.
Accordingly, the value of the merger consideration to be
received in exchange for each share of i2 common stock under
either structure will fluctuate with the market price of JDA
common stock.
The exchange ratio will be adjusted immediately prior to the
effective time if the exchange ratio would result in JDA issuing
in excess of 19.9% of its outstanding common stock as a result
of the merger. At the time of the execution of the merger
agreement, the number of shares of JDA common stock (and
securities convertible or exercisable for JDA common stock)
expected to be issued in the merger constituted less than 19.9%
of JDAs outstanding shares of common stock. To the extent
that JDAs stock price increases prior to the effective
time of the merger, then the spread between the exercise price
of outstanding, in the money i2 stock options and
the implied value of the merger consideration would also
increase, leading to an increase in the number of shares of JDA
stock payable in respect of such outstanding i2 stock options.
Also, a greater number of outstanding stock options of i2 could
become in the money and entitled to receive merger
consideration, thereby further increasing the number of shares
of JDA common stock issuable in connection with the merger.
However, since JDAs stock price would need to exceed
approximately $80.00 per share in order to cause any such
adjustment to the exchange ratio, JDA and i2 currently do not
expect any such adjustment to the exchange ratio to occur. In
the unexpected event that the adjustment is required, the
exchange ratio will be reduced to the minimum extent necessary
so that the number of shares of JDA common stock issued or
issuable as a result of the merger will equal no more than 19.9%
of its outstanding common stock and the cash portion of the
merger consideration will be increased (up to a maximum of
$10 million in the aggregate) by an equivalent value (based
on the volume weighted average price of JDA common stock for the
five consecutive trading days ending two days prior to the
effective time of the merger, as such prices are reported on
Nasdaq). A vote by i2 stockholders for the adoption of the
merger agreement constitutes approval of the merger whether or
not the exchange ratio and cash portion are adjusted as
described above.
The exchange ratio will also be adjusted if between signing of
the merger agreement and the effective time of the merger the
outstanding JDA common stock or i2 common stock is changed into
a different number of shares or different class by reason of any
reclassification, recapitalization, stock split,
split-up,
combination or exchange of shares or the declaration of a stock
dividend or dividend payable in any other securities is declared
with a record date within such period, or any similar event
occurs, in which case the exchange ratio will be adjusted such
that the holders of i2 common stock will be provided with the
same economic effect as contemplated by the merger agreement.
Treatment
of Stock Options, Restricted Stock Units and Restricted Stock
(see page 63)
In the merger, each outstanding option to acquire i2 common
stock will be canceled and terminated at the effective time and
converted into the right to receive the merger consideration
with respect to the number of shares of i2 common stock that
would be issuable upon a net exercise of such option assuming
the market value of the i2 common stock at the time of such
exercise were equal to the value of the merger consideration as
of the close of trading on the trading day immediately prior to
the effective time. Any outstanding option with a per-share
exercise price that is greater than or equal to such amount will
be canceled and terminated as of the effective time, and no
payment will be made with respect thereto.
Example: If the value of the merger consideration as of the
close of trading on the trading day immediately prior to the
effective time is $18.00 per share of i2 common stock, then a
holder of an option to purchase 100 shares of i2 common stock at
an exercise price of $9.00 per share would receive merger
consideration in respect of 50 shares of i2 common stock
(calculated by multiplying the 100 shares subject to such option
by a fraction, the numerator of which is the difference between
the merger consideration value of $18.00 per share and the
exercise price of $9.00 per share, and the denominator of which
is equal to the merger consideration value of $18.00 per share).
Accordingly, such option holder would be entitled to receive
(i) $635.00 in cash (50 shares of i2 common stock
multiplied by $12.70 in cash per share) and
(ii) 12.81 shares of JDA common stock (50 shares of i2
common stock multiplied by the exchange ratio of 0.2562). Since
fractional shares will not be issued, such holder would be
entitled to receive, in lieu of the 12.81 shares of JDA common
stock referenced above, 12 shares of JDA common stock and a
check for the market value of 0.81 of a share of JDA common
stock, calculated as provided above. Alternatively, if the value
of the merger consideration as of the close of trading on the
trading day immediately prior to effective time is $20.00 per
share of i2 common stock, then a holder of an option to purchase
100 shares of i2
3
common stock with an exercise price of $9.00 per share of i2
common stock would instead receive merger consideration in
respect of 55 shares of i2 common stock (calculated by
multiplying the 100 shares subject to such option by a fraction,
the numerator of which is the difference between the merger
consideration value of $20.00 per share and the exercise price
of $9.00 per share, and the denominator of which is equal to the
merger consideration value of $20.00 per share).
Also, at the effective time of the merger, each i2 restricted
stock unit award outstanding immediately prior to the effective
time of the merger will become fully vested (except that with
respect to any restricted stock unit which by the terms of the
award agreement pursuant to which it was granted provides for a
lesser percentage of such restricted stock unit to become vested
upon the consummation of the merger, such restricted stock unit
shall only become vested as to such lesser percentage), and then
will be canceled and terminated at the effective time, and the
holder of such vested restricted stock unit will be entitled to
receive the merger consideration for each share of i2 common
stock into which the vested portion of the restricted stock unit
would otherwise be convertible. Each restricted stock award will
become fully vested immediately prior to the effective time.
Treatment
of Warrants (see page 64)
At the effective time of the merger, each warrant to purchase
shares of i2s common stock that is outstanding and
unexercised immediately prior to the effective time of the
merger will cease to represent a right to acquire i2s
common stock and will be assumed by JDA and converted
automatically into a warrant of JDA under which the holder will
have the right to receive, upon exercise of the warrant, the
merger consideration which such holder would have received as a
holder of i2 common stock if such i2 warrant had been exercised
for i2 common stock immediately prior to the effective time of
the merger.
Financing
On December 10, 2009, JDA issued $275 million
aggregate principal amount of its 8.0% senior notes due
2014. The notes were issued pursuant to an indenture, dated as
of December 10, 2009, among JDA, certain of its
subsidiaries, and U.S. Bank National Association, as
trustee. The net proceeds from the issuance of the notes totaled
$266.7 million. On the date of the offering, the net
proceeds of the offering, together with an additional amount
funded by JDA, were deposited into an escrow account established
pursuant to an escrow and security agreement, dated
December 10, 2009, by and between JDA, U.S. Bank
National Association, as escrow agent and U.S. Bank
National Association, as trustee under the Indenture. The
proceeds from the sale of the notes, together with cash on hand
at JDA and i2, will be used to pay the cash portion of the
merger consideration.
Comparative
Per Share Market Price (see page 17)
JDA common stock is listed on Nasdaq under the symbol
JDAS. i2 common stock is listed on Nasdaq under the
symbol ITWO. The following table shows the closing
sale prices of JDA common stock and i2 common stock as reported
on Nasdaq on November 4, 2009, the last trading day before
the merger agreement was announced, and on December 15,
2009, the latest practicable date before the printing of this
Proxy Statement. The table also shows the implied value of the
merger consideration proposed for each share of i2 common stock,
which was calculated by adding (i) the amount of the cash
consideration per share, and (ii) and the closing price of
JDA common stock as of the specified date, multiplied by the
exchange ratio.
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Implied Value of
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JDA
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i2
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Merger
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Date
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Common Stock
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Common Stock
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Consideration
|
|
November 4, 2009
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$
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20.70
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$
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16.51
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$
|
18.00
|
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December 15, 2009
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$
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23.23
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$
|
18.45
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$
|
18.65
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The prices set forth in the table above will fluctuate prior to
the special meeting and the consummation of the merger, and
stockholders are urged to obtain current market quotations prior
to making any decision with respect to the merger.
With certain limited exceptions not expected to apply to the
merger, the exchange ratio is fixed, and will not be adjusted to
reflect stock price changes prior to the closing. Accordingly,
the value of the merger consideration to be received in exchange
for each share of i2 common stock will fluctuate with the market
price of JDA common stock.
4
Directors
and Executive Management Following the Merger
The JDA board of directors has agreed to consider adding one
mutually agreeable i2 director to its board. If an
additional director is appointed, then upon the consummation of
the merger, JDA will increase the size of its board of directors
by one member, to six directors, and appoint one person,
mutually acceptable to JDA and i2, as a member of the board of
directors of JDA. The other members of the board of directors of
JDA will remain the same.
Recommendation
of the i2 Board of Directors (see page 39)
After careful consideration, the i2 board of directors
recommends that holders of i2 common stock vote FOR the Merger
Proposal and FOR the Adjournment/Postponement Proposal.
Opinion
of i2s Financial Advisor (see page 42)
The i2 board of directors considered the analyses of Thomas
Weisel Partners and the opinion of Thomas Weisel Partners to
i2s board of directors that, as of November 4, 2009,
and based upon and subject to the factors and assumptions set
forth therein, the merger consideration payable to i2s
common stockholders (other than JDA, the holders of
Series B Preferred Stock, and their respective affiliates,
and dissenting i2 stockholders) pursuant to the merger agreement
was, as of such date, fair from a financial point of view to
such stockholders.
The full text of the written opinion of Thomas Weisel Partners,
dated November 4, 2009, which sets forth assumptions made,
procedures followed, matters considered and limitations on the
review undertaken in connection with the opinion, is attached as
Annex D
to this Proxy Statement. The summary
of the opinion of Thomas Weisel Partners in this Proxy Statement
is qualified in its entirety by reference to the full text of
the opinion. Thomas Weisel Partners provided its opinion for the
information and assistance of i2s board of directors in
connection with its consideration of the transaction. The
opinion of Thomas Weisel Partners is not a recommendation as to
how any holder of i2s common stock should vote with
respect to the transaction or any other matter. Pursuant to an
engagement letter between i2 and Thomas Weisel Partners, as
compensation for its services in connection with the merger, i2
paid Thomas Weiser Partners a retainer fee and, upon the
delivery of Thomas Weisel Partners opinion, a fee of
$400,000. Additional compensation of 1.25% of the aggregate
consideration (including outstanding indebtedness) in the
merger, or approximately $4.5 million based on the closing
share prices of i2 and JDA as of November 4, 2009, will be
payable to Thomas Weisel Partners upon completion of the merger,
against which the amounts paid for the retainer and for the
opinion will be credited. In addition, i2 has agreed to
reimburse Thomas Weisel Partners for certain of its expenses in
connection with its engagement and to indemnify Thomas Weisel
Partners and its affiliates against certain damages and
liabilities in connection with or resulting from its engagement.
Interests
of i2s Directors, Executive Officers, and Certain
Significant Stockholders in the Merger (see
page 50)
You should be aware that some of i2s directors, executive
officers and significant stockholders have interests in the
merger that are different from, or are in addition to, the
interests of i2 stockholders generally. These interests relate
to equity and equity-linked securities held by such persons;
change of control severance arrangements covering i2s
executive officers; indemnification of i2s directors and
officers by JDA following the merger; the relationship of the
director elected by holder of the Series B Preferred Stock
with affiliates of such holder; and the potential appointment of
a current i2 director, mutually acceptable to JDA and i2,
as a member of the board of directors of JDA.
Material
United States Federal Income Tax Consequences of the Merger (see
page 59)
JDA and i2 expect that the merger will be a fully taxable
transaction for United States federal income tax purposes.
Accordingly, each United States holder of i2 common stock will
generally recognize capital gain or loss as a result of the
merger equal to the difference between (1) the sum of the
amount of cash and the fair market value of JDA common stock
received by the stockholder in the merger and (2) the
stockholders adjusted tax basis in the i2 common stock
surrendered in the merger. Gain or loss and holding period will
be determined separately for each block of i2 stock (that is,
shares acquired at the same price per share in a single
transaction). Generally, if a
5
stockholder has held the i2 shares of stock for more than
one year as of the closing date of the merger, any gain will be
characterized as long-term capital gain. The deductibility of
capital losses is subject to limitations.
Tax matters can be complicated and the tax consequences of
the merger to you will depend on the facts of your own
situation. You are urged to read the discussion in the section
entitled Material United States Federal Income Tax
Considerations and should consult your own tax advisor to
understand fully the tax consequences of the merger to you.
Accounting
Treatment (see page 56)
In accordance with accounting principles generally accepted in
the United States, JDA will account for the merger using the
acquisition method of accounting for business combinations.
Appraisal
Rights (see page 53)
i2 has concluded that i2 stockholders are entitled under DGCL
Section 262 to appraisal rights in connection with the
merger. To exercise appraisal rights, an i2 stockholder must:
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before the taking of the vote upon the Merger Proposal, deliver
to i2 a written demand for appraisal;
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NOT vote in favor of the Merger Proposal;
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continue to hold its i2 stock through the effective date of the
merger; and
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comply with other procedures as is required by DGCL
Section 262.
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A copy of the relevant provisions of DGCL Section 262 is
attached to this proxy statement as
Annex E
.
Governmental
Regulatory Filings Required in Connection with the Merger (see
page 56)
The merger is subject to the expiration or termination of the
waiting period under the United States antitrust laws and the
receipt of any consents or approvals required under applicable
foreign competition laws. JDA and i2 have each agreed to use
their reasonable best efforts to take all actions proper or
advisable under the merger agreement and applicable laws, rules
and regulations to complete the merger, as well as other
specified actions, as promptly as practicable. However, the
foregoing does not require JDA to agree to accept any
undertaking or condition, enter into any consent decree, make
any divestiture, accept any operational restriction or take or
commit to take any action that would reasonably be expected to
limit: (i) the freedom of action of JDA with respect to the
operation of, or JDAs ability to retain, i2 or any
businesses, product lines or assets of i2, or
(ii) JDAs ability to retain, own or operate any
portion of the businesses, product lines or assets of JDA, or
alter or restrict in any way the business or commercial
practices of JDA or i2. Each of JDA and i2 has the right to
terminate the merger agreement if any law, injunction, judgment
or ruling enacted, promulgated, issued, entered, amended or
enforced by any governmental authority competent jurisdiction
located in the United States or in another jurisdiction outside
the United States in which JDA or i2 engages in material
business activities shall be in effect enjoining, restraining,
preventing or prohibiting consummation of the merger or making
the consummation of the merger illegal, except that such right
is not available to any party if the restraint was primarily due
to such partys breach or failure to perform any of its
representations, warranties, covenants, or agreements set forth
in the merger agreement. In such a case, the terminating party
would not be required to pay a termination fee.
Conditions
to Completion of the Merger (see page 70)
JDA and i2 expect to complete the merger after all the
conditions to the merger in the merger agreement are satisfied
or waived, including after the receipt of stockholder approval
at the i2 special meeting and the receipt of all required
regulatory approvals. JDA and i2 currently expect to complete
the merger during the first quarter of 2010. However, it is
possible that factors outside of either companys control
could cause the merger to be competed at a later time or not at
all.
6
Each partys obligation to complete the merger is subject
to the satisfaction or waiver of various conditions, including
the following:
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the approval of the Merger Proposal by the requisite vote of
i2s stockholders;
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the expiration or termination of the applicable waiting period
under the
Hart-Scott-Rodino
Act of 1976 (the
Hart-Scott-Rodino
Act) and other applicable competition laws;
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the effectiveness of the registration statement of which this
Proxy Statement is a part, and the registration statement not
being subject to any stop order, or stop order threatened in
writing;
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the absence of any action or litigation in which a governmental
authority is a party and of any law, injunction, judgment or
ruling that enjoins, restrains, prevents or prohibits the
completion of the merger or makes the completion of the merger
illegal;
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the accuracy of the other partys representations and
warranties, subject to certain materiality exceptions;
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the other partys compliance in all material respects with
its obligations under the merger agreement;
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in the case of JDA:
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the absence of any injunctions or other legal prohibitions that
would prevent the consummation of the merger, impose limitations
on JDAs ability to effectively exercise full rights of
ownership of i2 in a manner that materially and adversely
affects the value of i2 and its subsidiaries, taken as a whole,
limit JDAs rights with respect to its ability to operate
i2, or result in a material adverse effect on i2;
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i2 having unrestricted cash on hand of at least
$160,000,000; and
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i2 having paid in full specified accounts payable and accrued
expenses in the estimated amount of $10,000,000.
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the absence of any change, event, occurrence or state of facts
since the date of the merger agreement that, individually or in
the aggregate, has had or would reasonably be expected to have a
material adverse effect on the other party.
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No-Shop
Provisions (see page 69)
i2 has agreed not to solicit, initiate, cause, facilitate or
encourage a business combination or other similar transaction
with another party while the merger is pending, and not to enter
into discussions or negotiations with another party regarding a
business combination or similar transaction while the merger is
pending, except under certain specified circumstances set forth
in the merger agreement.
Termination
of the Merger Agreement (see page 73)
Generally, the merger agreement may be terminated and the merger
may be abandoned at any time prior to the completion of the
merger (including after stockholder approval):
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by mutual written consent of i2 and JDA;
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by either i2 or JDA if:
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the merger is not consummated on or before March 31, 2010;
except that (i) the passage of such period will be tolled
for any point during which any party to the merger agreement is
subject to a legal prohibition or injunction on the consummation
of the merger, or that makes the consummation of the merger
illegal, in each case that is non-final and appealable,
(ii) either party may extend such date to May 4, 2010,
and (iii) such right is not available to any party if the
failure of the merger to have been consummated on or before such
date was primarily due to such partys breach or failure to
perform any of its representations, warranties, covenants, or
agreements set forth in the merger agreement (we refer to
March 31, 2010, as it may be extended, as the outside
date);
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7
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any legal prohibition or injunction that enjoins, restrains,
prevents, or prohibits the consummation of the merger or makes
the consummation of the merger illegal becomes final and
non-appealable, except that such right is not available to any
party if the restraint was primarily due to such partys
breach or failure to perform any of its representations,
warranties, covenants, or agreements set forth in the merger
agreement; or
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the approval of i2s stockholders has not been obtained at
the i2 stockholders meeting or any adjournment or postponement
thereof, except that such right is not available to any party if
the failure to obtain the required vote was primarily due to
such partys breach or failure to perform any of its
representations, warranties, covenants, or agreements set forth
in the merger agreement.
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i2 breaches or fails to perform in any material respect any of
its material covenants or agreements set forth in the merger
agreement, or if any representation or warranty of i2 becomes
untrue, in either case subject to certain specified materiality
conditions and i2s inability to cure such breach;
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any injunction or other legal prohibition that is final and
non-appealable prevents the consummation of the merger, imposes
limitations on JDAs ability to effectively exercise full
rights of ownership of i2 in a manner that materially and
adversely affects the value of i2 and its subsidiaries, taken as
a whole, limits JDAs rights with respect to its ability to
operate i2, or results in a material adverse effect on i2;
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i2 enters into an acquisition agreement with another party or,
before i2s stockholders have approved the Merger Proposal,
the i2 board of directors or any committee of the i2 board of
directors either changes its recommendation that its
stockholders vote in favor of the Merger Proposal or does not
reject any bona fide publicly announced offer for a takeover
proposal within ten business days of the making of the offer;
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i2 violates any of its material obligations under the no-shop
provisions set forth in the merger agreement;
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a material adverse effect on i2 occurs and is continuing and is
not cured by i2 within 20 business days of receipt of written
notice of such event from JDA and prior to the outside
date; or
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the merger is not consummated as a result of a financing failure
and JDA pays the break fee described below to i2.
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JDA or Merger Sub breach or fail to perform in any material
respect any of their respective material covenants or agreements
set forth in the merger agreement, or if any representation or
warranty of JDA becomes untrue, in either case subject to
certain specified materiality conditions and JDAs
inability to cure such breach, except that JDA will not have the
right to cure breaches of the escrow obligations related to the
financing;
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before i2s stockholders have approved the Merger Proposal,
i2 concurrently enters into a definitive agreement in accordance
with the no-shop provisions of the merger agreement providing
for a superior proposal and i2 pays the termination fee
described below to JDA;
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a material adverse effect on JDA occurs and is continuing to
occur and is not cured by JDA within 20 business days of receipt
of written notice of such event from JDA and prior to the
outside date; or
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if the merger is not consummated as a result of a financing
failure.
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The merger agreement provides that a financing failure will be
deemed to exist if JDA has complied with all of its obligations
to obtain financing in connection with the merger and such
financing is not available on the closing date on the terms and
conditions specified in the financing documents relating thereto
in an amount necessary to enable JDA to pay the cash portion of
the merger consideration and other amounts payable by JDA in
connection with the merger.
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8
Termination
Fees and Expenses (see page 74)
Except as described below, whether or not the merger is
completed, all fees and expenses incurred in connection with the
merger agreement, the merger, or the transactions related
thereto will be paid by the party incurring such fees and
expenses. JDA and i2 shall share equally (i) the filing fee
of JDAs
Hart-Scott-Rodino
pre-merger notification report, and (ii) all fees and
expenses, other than accountants and attorneys fees,
incurred with respect to this Proxy Statement. The merger
agreement requires:
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i2 to pay JDA a termination fee in the amount of $15,000,000 if
the merger agreement is terminated:
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by either i2 or JDA if either the outside date has passed prior
to approval by i2 stockholders or the required i2 stockholder
vote has not been obtained at the i2 stockholder meeting, and
(i) prior to such termination, there has been a publicly
announced alternative takeover proposal for i2 and
(ii) within twelve months after such termination, i2
consummates an alternative transaction or enters into an
acquisition agreement relating to an alternative proposal, or
there is otherwise consummated a takeover proposal with respect
to i2 in the form of a tender offer, exchange offer or similar
transaction (treating in the definition of takeover proposal, as
described on page 70, references to 20% as references to
50%);
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by JDA if i2 enters into an acquisition agreement with another
party or, before i2s stockholders have approved the Merger
Proposal, the i2 board of directors or any committee of the i2
board of directors changes its recommendation that its
stockholders vote in favor of the Merger Proposal or do not
reject any bona fide publicly announced offer for a takeover
proposal within ten business days of the making of the
offer; or
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by i2 before the i2 stockholders meeting to accept a superior
proposal.
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JDA to pay i2 a termination fee in the amount of $30,000,000, if
the agreement is terminated by either i2 or JDA as a result of a
financing failure.
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Timing of
the Merger (see page 64)
The merger is expected to be completed during the first quarter
of 2010, subject to the receipt of necessary regulatory
approvals and the satisfaction or waiver of other closing
conditions.
Matters
to be Considered at the i2 Special Meeting (see
page 87)
At the i2 special meeting, i2 stockholders will be asked to vote
on the following proposals:
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to adopt and approve the merger agreement, which we refer to in
this Proxy Statement as the Merger Proposal; and
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to grant each of the persons named in the accompanying proxy
materials as proxies with discretionary authority to vote to
adjourn or postpone the special meeting, if necessary, to
satisfy the conditions to completing the merger as set forth in
the merger agreement, including for the purpose of soliciting
additional proxies if there are insufficient votes at the time
of the special meeting to approve the Merger Proposal, which we
refer to in this Proxy Statement as the
Adjournment/Postponement Proposal.
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The merger is contingent upon the approval of the Merger
Proposal, but not the Adjournment/Postponement Proposal.
The i2 board of directors recommends that i2 stockholders vote
FOR all of the proposals set forth above.
Vote
Required (see page 87)
The affirmative vote of the holders of at least a majority of
the voting power of the outstanding shares of i2 common stock
and the Series B Preferred Stock, voting on an
as-converted-to-common stock basis as a single class with the
common stock, is required to approve the Merger Proposal. The
affirmative vote of at least a majority of the voting power,
present in person or represented by proxy at the i2 special
meeting, of i2s outstanding shares of
9
common stock and Series B Preferred Stock voting on an
as-converted-to-common stock basis as a single class with the i2
common stock, is required to approve the
Adjournment/Postponement Proposal.
Voting
Agreements (see page 75)
i2s directors and certain executive officers, and the
holder of the Series B Preferred Stock, executed voting
agreements, dated November 4, 2009, agreeing to vote their
shares of i2 stock for the Merger Proposal. As of the record
date, such persons beneficially owned and were entitled to vote
shares of i2 stock having 5,104,684 votes representing
approximately 18.4% of the combined voting power of the i2
common stock and Series B Preferred Stock, voting on an
as-converted-to-common stock basis, outstanding on that date. In
connection with the agreement by the holder of the Series B
Preferred Stock to vote in favor of the Merger Proposal, i2
agreed not to redeem, or call for redemption, any shares of
Series B Preferred Stock until after termination of the
merger agreement.
Risk
Factors (see page 20)
The merger may not achieve the expected benefits because of the
risks and uncertainties discussed in the sections entitled
Risk Factors beginning on page 20 and
Forward-Looking Statements beginning on
page 18. Such risks include risks relating to the
uncertainty that JDA and i2 will be able to integrate their
businesses successfully, uncertainties as to whether the merger
will achieve expected synergies, and uncertainties relating to
the performance of the combined company following the merger.
10
SELECTED
HISTORICAL FINANCIAL DATA OF JDA
The following table sets forth selected historical financial
data of JDA as of and for each of the periods indicated. The
financial information as of, and for the years ended,
December 31, 2008, 2007, 2006, 2005, and 2004 is derived
from JDAs audited consolidated financial statements. The
audited consolidated financial statements as of, and for the
years ended, December 31, 2008, 2007, and 2006 are
incorporated by reference into this Proxy Statement. The
consolidated financial information as of September 30,
2009, and for the nine month periods ended, September 30,
2009 and September 30, 2008 is derived from JDAs
unaudited condensed consolidated financial statements, which are
incorporated by reference into this Proxy Statement and which,
in JDAs opinion, include all adjustments (consisting of
normal recurring adjustments) necessary for a fair statement of
JDAs financial position and results of operations for such
periods. Interim results for the nine months ended
September 30, 2009 are not necessarily indicative of, and
are not projections for, the results to be expected for the full
year ending December 31, 2009. The selected historical
financial data below should be read in conjunction with the
consolidated financial statements that are incorporated by
reference into this document and their accompanying notes.
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Nine Months Ended
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Year Ended December 31,
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September 30,
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2008
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2007
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2006
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2005
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2004
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2009
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2008
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(In thousands, except per share data)
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Statement of Income Data:
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Revenues:
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Software licenses
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$
|
92,898
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$
|
73,599
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$
|
48,971
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|
$
|
58,508
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$
|
59,211
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|
|
$
|
60,160
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$
|
58,593
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Maintenance services
|
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182,844
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|
|
178,198
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|
129,290
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|
|
86,417
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|
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|
80,240
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|
132,378
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|
138,843
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Product revenues
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275,742
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|
251,797
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|
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|
178,261
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|
|
|
144,925
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|
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|
139,451
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|
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|
192,538
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|
|
|
197,436
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Consulting services
|
|
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104,072
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|
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|
110,893
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|
|
|
90,085
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|
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|
64,901
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71,251
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|
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78,965
|
|
|
|
78,901
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Reimbursed expenses
|
|
|
10,518
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|
|
|
10,885
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|
|
|
9,121
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|
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|
5,997
|
|
|
|
6,172
|
|
|
|
7,174
|
|
|
|
7,780
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service revenues
|
|
|
114,590
|
|
|
|
121,778
|
|
|
|
99,206
|
|
|
|
70,898
|
|
|
|
77,423
|
|
|
|
86,139
|
|
|
|
86,681
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
390,332
|
|
|
|
373,575
|
|
|
|
277,467
|
|
|
|
215,823
|
|
|
|
216,874
|
|
|
|
278,677
|
|
|
|
284,117
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Revenues
|
|
|
146,982
|
|
|
|
148,134
|
|
|
|
114,973
|
|
|
|
86,226
|
|
|
|
86,725
|
|
|
|
106,693
|
|
|
|
109,288
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit
|
|
|
243,350
|
|
|
|
225,441
|
|
|
|
162,494
|
|
|
|
129,597
|
|
|
|
130,149
|
|
|
|
171,984
|
|
|
|
174,829
|
|
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product development
|
|
|
53,866
|
|
|
|
51,173
|
|
|
|
56,262
|
|
|
|
44,351
|
|
|
|
52,800
|
|
|
|
37,732
|
|
|
|
40,196
|
|
Sales and marketing
|
|
|
66,468
|
|
|
|
63,154
|
|
|
|
48,153
|
|
|
|
40,386
|
|
|
|
45,608
|
|
|
|
46,310
|
|
|
|
47,738
|
|
General and administrative
|
|
|
44,963
|
|
|
|
44,405
|
|
|
|
34,803
|
|
|
|
27,071
|
|
|
|
24,922
|
|
|
|
35,001
|
|
|
|
32,406
|
|
Amortization of intangibles
|
|
|
24,303
|
|
|
|
15,852
|
|
|
|
9,556
|
|
|
|
3,572
|
|
|
|
3,388
|
|
|
|
17,880
|
|
|
|
18,227
|
|
Restructuring charges
|
|
|
8,382
|
|
|
|
6,208
|
|
|
|
6,225
|
|
|
|
2,439
|
|
|
|
6,105
|
|
|
|
6,705
|
|
|
|
3,954
|
|
Costs of terminated i2 acquisition
|
|
|
25,060
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other operating (income) expense, net
|
|
|
|
|
|
|
(4,128
|
)
|
|
|
200
|
|
|
|
9,913
|
|
|
|
1,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
223,042
|
|
|
|
176,664
|
|
|
|
155,199
|
|
|
|
127,732
|
|
|
|
133,923
|
|
|
|
143,628
|
|
|
|
142,521
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income (Loss)
|
|
|
20,308
|
|
|
|
48,777
|
|
|
|
7,295
|
|
|
|
1,865
|
|
|
|
(3,774
|
)
|
|
|
28,356
|
|
|
|
32,308
|
|
Interest expense and loan fees
|
|
|
(10,349
|
)
|
|
|
(11,836
|
)
|
|
|
(7,645
|
)
|
|
|
(162
|
)
|
|
|
(205
|
)
|
|
|
(971
|
)
|
|
|
(7,313
|
)
|
Finance costs on terminated acquisition of i2 Technologies
|
|
|
(5,292
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(637
|
)
|
Interest income and other, net
|
|
|
2,791
|
|
|
|
3,476
|
|
|
|
771
|
|
|
|
2,799
|
|
|
|
3,535
|
|
|
|
886
|
|
|
|
2,764
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) Before Income Taxes
|
|
|
7,458
|
|
|
|
40,417
|
|
|
|
421
|
|
|
|
4,502
|
|
|
|
(444
|
)
|
|
|
28,271
|
|
|
|
27,122
|
|
Income tax (provision) benefit
|
|
|
(4,334
|
)
|
|
|
(13,895
|
)
|
|
|
(867
|
)
|
|
|
2,458
|
|
|
|
2,453
|
|
|
|
10,429
|
|
|
|
10,451
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
Year Ended December 31,
|
|
|
September 30,
|
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
2005
|
|
|
2004
|
|
|
2009
|
|
|
2008
|
|
|
|
(In thousands, except per share data)
|
|
|
Net Income (Loss)
|
|
|
3,124
|
|
|
|
26,522
|
|
|
|
(446
|
)
|
|
|
6,960
|
|
|
|
2,009
|
|
|
|
17,842
|
|
|
|
16,671
|
|
Adjustment to increase the carrying amount of the Series B
Preferred Stock to its redemption value
|
|
|
|
|
|
|
|
|
|
|
(10,898
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consideration paid in excess of carrying value on the repurchase
of redeemable preferred stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(8,593
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) Applicable to Common Shareholders
|
|
$
|
3,124
|
|
|
$
|
26,522
|
|
|
$
|
(11,344
|
)
|
|
$
|
6,960
|
|
|
$
|
2,009
|
|
|
$
|
9,249
|
|
|
$
|
16,671
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings (Loss) Per Share Applicable to Common
Shareholders
|
|
$
|
0.09
|
|
|
$
|
0.79
|
|
|
$
|
(0.39
|
)
|
|
$
|
0.24
|
|
|
$
|
0.07
|
|
|
$
|
0.26
|
|
|
$
|
0.49
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings (Loss) Per Share Applicable to Common
Shareholders
|
|
$
|
0.09
|
|
|
$
|
0.76
|
|
|
$
|
(0.39
|
)
|
|
$
|
0.24
|
|
|
$
|
0.07
|
|
|
$
|
0.26
|
|
|
$
|
0.47
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
September 30,
|
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
2005
|
|
|
2004
|
|
|
2009
|
|
|
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
32,696
|
|
|
$
|
95,288
|
|
|
$
|
53,599
|
|
|
$
|
71,035
|
|
|
$
|
61,344
|
|
|
$
|
85,477
|
|
Working capital
|
|
|
32,139
|
|
|
|
67,863
|
|
|
|
41,103
|
|
|
|
119,032
|
|
|
|
94,820
|
|
|
|
69,717
|
|
Goodwill and other intangible assets(1)
|
|
|
282,489
|
|
|
|
311,355
|
|
|
|
345,000
|
|
|
|
103,436
|
|
|
|
121,588
|
|
|
|
261,655
|
|
Total assets(1),(2)
|
|
|
524,776
|
|
|
|
622,225
|
|
|
|
624,744
|
|
|
|
330,572
|
|
|
|
332,567
|
|
|
|
536,055
|
|
Long-term debt(1),(2)
|
|
|
|
|
|
|
92,536
|
|
|
|
137,813
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable preferred stock(1)
|
|
|
50,000
|
|
|
|
50,000
|
|
|
|
50,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders equity(3)
|
|
|
341,495
|
|
|
|
335,796
|
|
|
|
290,352
|
|
|
|
281,966
|
|
|
|
276,185
|
|
|
|
401,532
|
|
|
|
|
(1)
|
|
The increase in total assets in 2006 resulted primarily from the
goodwill and other intangible assets recorded in the acquisition
of Manugistics Group, Inc. in July 2006. To finance the
acquisition, JDA entered into a credit agreement for
$175 million of aggregate long-term loans and issued
50,000 shares of Series B Preferred Stock for
$50 million in cash to a private equity investment firm.
See the footnotes to the JDAs consolidated financial
statements, which are incorporated by reference into this Proxy
Statement, for a complete discussion of the transaction.
|
|
(2)
|
|
The decrease in total assets in 2008 resulted primarily from the
payment of a $20 million one-time reverse termination fee
and $6.8 million of other finance and related costs
associated with the terminated acquisition of
i2 Technologies, and the remaining $99.6 million of
long-term borrowings. See Item 7, Managements
Discussion and Analysis of Financial Condition and Results of
Operations in JDAs Annual Report on
Form 10-K
for the year ended December 31, 2008, and the footnotes to
JDAs consolidated financial statements, which are
incorporated by reference into this Proxy Statement, for a
complete discussion of these transactions.
|
|
(3)
|
|
JDA has never declared or paid a cash dividend on its common
stock.
|
12
SELECTED
HISTORICAL FINANCIAL DATA OF i2
The following table sets forth certain of i2s consolidated
financial data as of and for each of the periods indicated. The
financial information as of, and for the years ended,
December 31, 2008, 2007, 2006, 2005, and 2004 is derived
from i2s audited consolidated financial statements, as
adjusted. The audited consolidated financial statements as of,
and for the years ended, December 31, 2008, 2007, and 2006,
as adjusted, are incorporated by reference into this Proxy
Statement. The consolidated financial information as of
September 30, 2009, and for the nine month periods, ended
September 30, 2009 and September 30, 2008, as
adjusted, is derived from i2s unaudited condensed
consolidated financial statements, which are incorporated by
reference into this Proxy Statement and which, in i2s
opinion, include all adjustments (consisting of normal recurring
adjustments) necessary for a fair statement of i2s
financial position and results of operations for such periods.
Interim results for the nine months ended September 30,
2009 are not necessarily indicative of, and are not projections
for, the results to be expected for the full year ending
December 31, 2009. The selected historical financial data
below should be read in conjunction with the consolidated
financial statements that are incorporated by reference into
this document and their accompanying notes.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
Year Ended December 31,
|
|
|
September 30,
|
|
|
|
2008(1)
|
|
|
2007(1)
|
|
|
2006(1)
|
|
|
2005(1)
|
|
|
2004
|
|
|
2009
|
|
|
2008(1)
|
|
|
|
(In thousands, except per share data)
|
|
|
Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Software solutions
|
|
$
|
46,852
|
|
|
$
|
47,721
|
|
|
$
|
76,243
|
|
|
$
|
89,937
|
|
|
$
|
54,155
|
|
|
$
|
40,689
|
|
|
$
|
34,802
|
|
Services
|
|
|
123,564
|
|
|
|
122,682
|
|
|
|
106,493
|
|
|
|
103,792
|
|
|
|
118,731
|
|
|
|
71,357
|
|
|
|
92,666
|
|
Maintenance
|
|
|
85,397
|
|
|
|
87,457
|
|
|
|
92,828
|
|
|
|
100,612
|
|
|
|
116,765
|
|
|
|
56,021
|
|
|
|
64,588
|
|
Contract
|
|
|
|
|
|
|
2,450
|
|
|
|
4,113
|
|
|
|
42,526
|
|
|
|
72,877
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
255,813
|
|
|
|
260,310
|
|
|
|
279,677
|
|
|
|
336,867
|
|
|
|
362,528
|
|
|
|
168,067
|
|
|
|
192,056
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Software solutions
|
|
|
9,316
|
|
|
|
8,567
|
|
|
|
12,862
|
|
|
|
14,720
|
|
|
|
20,137
|
|
|
|
7,214
|
|
|
|
7,784
|
|
Services
|
|
|
89,928
|
|
|
|
97,397
|
|
|
|
87,472
|
|
|
|
91,578
|
|
|
|
107,349
|
|
|
|
45,797
|
|
|
|
68,313
|
|
Maintenance
|
|
|
10,139
|
|
|
|
11,074
|
|
|
|
10,488
|
|
|
|
12,180
|
|
|
|
14,155
|
|
|
|
6,749
|
|
|
|
7,866
|
|
Contract
|
|
|
|
|
|
|
|
|
|
|
311
|
|
|
|
1,575
|
|
|
|
4,718
|
|
|
|
|
|
|
|
|
|
Amortization of acquired technology
|
|
|
4
|
|
|
|
25
|
|
|
|
21
|
|
|
|
|
|
|
|
369
|
|
|
|
|
|
|
|
4
|
|
Sales and marketing
|
|
|
45,135
|
|
|
|
41,872
|
|
|
|
48,185
|
|
|
|
51,727
|
|
|
|
74,946
|
|
|
|
28,020
|
|
|
|
35,540
|
|
Research and development
|
|
|
29,241
|
|
|
|
33,513
|
|
|
|
35,200
|
|
|
|
37,337
|
|
|
|
56,279
|
|
|
|
20,124
|
|
|
|
22,558
|
|
General and administrative
|
|
|
42,062
|
|
|
|
37,770
|
|
|
|
56,129
|
|
|
|
61,117
|
|
|
|
71,646
|
|
|
|
25,695
|
|
|
|
29,830
|
|
Amortization of intangibles
|
|
|
100
|
|
|
|
78
|
|
|
|
17
|
|
|
|
|
|
|
|
39
|
|
|
|
25
|
|
|
|
75
|
|
Restructuring charges and adjustments
|
|
|
(95
|
)
|
|
|
3,955
|
|
|
|
(403
|
)
|
|
|
11,269
|
|
|
|
2,688
|
|
|
|
2,975
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses, subtotal
|
|
|
225,830
|
|
|
|
234,251
|
|
|
|
250,282
|
|
|
|
281,503
|
|
|
|
352,326
|
|
|
|
136,599
|
|
|
|
171,970
|
|
Intellectual property settlement, net
|
|
|
(79,860
|
)
|
|
|
921
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
562
|
|
|
|
(79,860
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total costs and expenses
|
|
|
145,970
|
|
|
|
235,172
|
|
|
|
250,282
|
|
|
|
281,503
|
|
|
|
352,326
|
|
|
|
137,161
|
|
|
|
92,110
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
109,843
|
|
|
|
25,138
|
|
|
|
29,395
|
|
|
|
55,364
|
|
|
|
10,202
|
|
|
|
30,906
|
|
|
|
99,946
|
|
13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
Year Ended December 31,
|
|
|
September 30,
|
|
|
|
2008(1)
|
|
|
2007(1)
|
|
|
2006(1)
|
|
|
2005(1)
|
|
|
2004
|
|
|
2009
|
|
|
2008(1)
|
|
|
|
(In thousands, except per share data)
|
|
|
Non-operating income (expense), net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
3,876
|
|
|
|
5,488
|
|
|
|
5,305
|
|
|
|
7,697
|
|
|
|
4,179
|
|
|
|
261
|
|
|
|
3,339
|
|
Interest expense
|
|
|
(7,473
|
)
|
|
|
(7,372
|
)
|
|
|
(8,395
|
)
|
|
|
(16,555
|
)
|
|
|
(17,873
|
)
|
|
|
(899
|
)
|
|
|
(5,596
|
)
|
Gain recognized by i2 Technologies on terminated acquisition
|
|
|
11,535
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5,311
|
)
|
Other income (expense), net
|
|
|
(1,725
|
)
|
|
|
(1,454
|
)
|
|
|
(178
|
)
|
|
|
1,396
|
|
|
|
(1,979
|
)
|
|
|
(1,995
|
)
|
|
|
(1,027
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
|
|
116,056
|
|
|
|
21,800
|
|
|
|
26,127
|
|
|
|
47,902
|
|
|
|
(5,471
|
)
|
|
|
28,273
|
|
|
|
91,351
|
|
Provision (benefit) for income taxes
|
|
|
8,382
|
|
|
|
6,133
|
|
|
|
3,821
|
|
|
|
4,664
|
|
|
|
(674
|
)
|
|
|
4,180
|
|
|
|
5,349
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations
|
|
|
107,674
|
|
|
|
15,667
|
|
|
|
22,306
|
|
|
|
43,238
|
|
|
|
(4,797
|
)
|
|
|
24,093
|
|
|
|
86,002
|
|
Income from discontinued operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
43,884
|
|
|
|
3,445
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
107,674
|
|
|
|
15,667
|
|
|
|
22,306
|
|
|
|
87,122
|
|
|
|
(1,352
|
)
|
|
|
24,093
|
|
|
|
86,002
|
|
Preferred stock dividend and accretion of discount
|
|
|
3,140
|
|
|
|
3,071
|
|
|
|
2,940
|
|
|
|
3,020
|
|
|
|
1,720
|
|
|
|
2,400
|
|
|
|
2,346
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) applicable to common stockholders
|
|
$
|
104,534
|
|
|
$
|
12,596
|
|
|
$
|
19,366
|
|
|
$
|
84,102
|
|
|
$
|
(3,072
|
)
|
|
$
|
21,693
|
|
|
$
|
83,656
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per common share applicable to common
stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
3.97
|
|
|
$
|
0.49
|
|
|
$
|
0.76
|
|
|
$
|
3.49
|
|
|
$
|
(0.17
|
)
|
|
$
|
0.80
|
|
|
$
|
3.20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
$
|
3.91
|
|
|
$
|
0.47
|
|
|
$
|
0.75
|
|
|
$
|
3.44
|
|
|
$
|
(0.17
|
)
|
|
$
|
0.80
|
|
|
$
|
3.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
September 30,
|
|
|
|
2008(1)
|
|
|
2007(1)
|
|
|
2006(1)
|
|
|
2005
|
|
|
2004
|
|
|
2009
|
|
|
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents(2)
|
|
$
|
238,013
|
|
|
$
|
120,978
|
|
|
$
|
109,419
|
|
|
$
|
112,882
|
|
|
$
|
133,273
|
|
|
$
|
185,513
|
|
Restricted cash
|
|
|
5,777
|
|
|
|
8,456
|
|
|
|
4,626
|
|
|
|
4,773
|
|
|
|
7,717
|
|
|
|
6,737
|
|
Working capital (deficiency)
|
|
|
187,435
|
|
|
|
63,565
|
|
|
|
17,368
|
|
|
|
(34,336
|
)
|
|
|
101,152
|
|
|
|
145,890
|
|
Total assets
|
|
|
313,025
|
|
|
|
201,005
|
|
|
|
188,563
|
|
|
|
200,523
|
|
|
|
390,673
|
|
|
|
251,420
|
|
Long-term debt
|
|
|
64,520
|
|
|
|
61,362
|
|
|
|
58,307
|
|
|
|
50,565
|
|
|
|
316,800
|
|
|
|
|
|
Redeemable preferred stock
|
|
|
106,591
|
|
|
|
103,450
|
|
|
|
101,686
|
|
|
|
100,065
|
|
|
|
97,045
|
|
|
|
108,293
|
|
Stockholders equity (deficit)
|
|
|
149,879
|
|
|
|
36,436
|
|
|
|
(1,329
|
)
|
|
|
(47,450
|
)
|
|
|
(173,033
|
)
|
|
|
168,851
|
|
|
|
|
(1)
|
|
i2 filed a Current Report on
Form 8-K
on November 18, 2009 to retrospectively adjust portions of
its Annual Report on
Form 10-K
for the year ended December 31, 2008 to reflect the
adoption of certain provisions contained in Accounting Standard
Codification (ASC)
470-Debt
related to the accounting for convertible debt instruments that
may be settled in cash upon conversion (including partial cash
settlement). The adoption of ASC 470 decreased i2s net
income in fiscal years 2008 and 2007 by $2.1 million and in
fiscal year 2006 by $1.9 million.
|
|
(2)
|
|
The increase in cash and cash equivalents in 2008 resulted
primarily from a $79.9 million net gain on an intellectual
property settlement with SAP and an $11.5 million gain on
the 2008 terminated acquisition with JDA, which includes a
$20 million one-time termination fee received from JDA, net
of approximately $8.5 million in finance and other related
costs associated with the terminated acquisition.
|
14
SUMMARY
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL
STATEMENTS
The following selected unaudited pro forma condensed combined
financial information is designed to show how the merger of JDA
and i2 might have affected historical financial statement
information. The pro forma condensed combined statement of
income for the nine months ended September 30, 2009
combines the historical JDA condensed consolidated statement of
income for the nine months ended September 30, 2009 with
the historical i2 condensed consolidated statement of operations
for the nine months ended September 30, 2009, giving effect
to the merger as if it had occurred on January 1, 2009. The
pro forma condensed combined statement of income for the year
ended December 31, 2008 combines the historical JDA
consolidated statement of income for the year ended
December 31, 2008 with the historical i2 consolidated
statement of operations for the year ended December 31,
2008, as adjusted, giving effect to the merger as if it had
occurred on January 1, 2008. The unaudited pro forma
condensed combined balance sheet combines the historical balance
sheets of JDA and i2 as of September 30, 2009, and gives
effect to the merger as if it had occurred on September 30,
2009.
The unaudited pro forma condensed combined financial information
provided herein does not purport to represent the results of
operations or financial position of JDA that would have actually
resulted had the merger been completed as of the dates
indicated, nor should the information be taken as indicative of
the future results of operations or financial position of the
combined company. The following information should be read in
conjunction with the Unaudited Pro Forma Condensed
Combined Financial Statements and related notes beginning
on page 78 and with the audited consolidated financial
statements, unaudited condensed consolidated financial
statements and accompanying notes of JDA and i2, which are
incorporated by reference into this Proxy Statement.
|
|
|
|
|
|
|
|
|
|
|
Nine Months
|
|
|
|
|
Ended
|
|
Year Ended
|
|
|
September 30,
|
|
December 31,
|
|
|
2009
|
|
2008
|
|
|
(In thousands, except per share data)
|
|
Unaudited Pro Forma Condensed Combined Statement of Income
Data:
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
446,744
|
|
|
$
|
646,145
|
|
Cost of Revenues
|
|
|
166,453
|
|
|
|
256,369
|
|
Gross Profit
|
|
|
280,291
|
|
|
|
389,776
|
|
Operating Expenses
|
|
|
221,004
|
|
|
|
259,525
|
|
Net Income
|
|
|
28,779
|
|
|
|
91,513
|
(1)
|
Income Applicable to Common Stockholders
|
|
$
|
20,186
|
|
|
$
|
91,513
|
(1)
|
Diluted Earnings Per Share
|
|
$
|
0.49
|
|
|
$
|
2.21
|
(1)
|
|
|
|
|
|
|
|
As of
|
|
|
September 30,
|
|
|
2009
|
|
|
(In thousands)
|
|
Unaudited Pro Forma Condensed Combined Balance Sheet Data:
|
|
|
|
|
Working Capital
|
|
$
|
55,067
|
|
Total Assets
|
|
|
1,018,484
|
|
Long-Term Debt
|
|
|
272,217
|
|
Stockholders Equity
|
|
|
529,175
|
|
|
|
|
(1)
|
|
Pro forma net income, income applicable to common stockholders
and diluted earnings per share for the year ended
December 31, 2008 include the following non-recurring
items: (1) i2s $79.9 million net gain from its
intellectual property settlement with SAP, and
(ii) $18.8 million in net costs incurred by JDA and i2
in connection with their 2008 terminated acquisition.
|
15
UNAUDITED
COMPARATIVE PER SHARE DATA
The following table summarizes earnings per share data
applicable to common stockholders of JDA and i2 on an historical
and on a pro forma combined basis, giving effect to the merger.
The pro forma combined earnings applicable to common
stockholders were computed as if the merger had been completed
on January 1, 2008 for the year ended December 31,
2008 and on January 1, 2009 for the nine months ended
September 30, 2009. The pro forma book value per share
information was computed as if the merger had been completed on
September 30, 2009. The unaudited comparative per share
data provided herein does not purport to represent the earnings
per share applicable to common stockholders or book value per
share of JDA that would have actually resulted had the merger
been completed as of the dates indicated, nor should the
information be taken as indicative of the future results of
operations or financial position of the combined company. The
following information should be read in conjunction with the
Unaudited Pro Forma Condensed Combined Financial
Statements and related notes beginning on page 78 and
with the audited consolidated financial statements, unaudited
condensed consolidated financial statements and accompanying
notes of JDA and i2, which are incorporated by reference into
this Proxy Statement.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2008
|
|
|
|
|
|
|
|
|
Pro Forma
|
|
|
|
|
|
|
|
|
Combined
|
|
|
JDA
|
|
i2
|
|
Pro Forma
|
|
Equivalent
|
|
|
(Historical)
|
|
(Historical)
|
|
Combined(1)
|
|
Data(2)
|
|
Basic Earnings Per Share Applicable to Common Stockholders(3)
|
|
$
|
0.09
|
|
|
$
|
3.97
|
|
|
$
|
2.26
|
|
|
$
|
0.58
|
|
Diluted Earnings Per Share Applicable to Common Stockholders(3)
|
|
$
|
0.09
|
|
|
$
|
3.91
|
|
|
$
|
2.21
|
|
|
$
|
0.57
|
|
Book value per share at end of period(4)
|
|
$
|
10.96
|
|
|
$
|
1.97
|
|
|
$
|
12.57
|
|
|
$
|
3.22
|
|
Cash Dividends Per Share(5)
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2009
|
|
|
|
|
|
|
|
|
Pro Forma
|
|
|
|
|
|
|
|
|
Combined
|
|
|
JDA
|
|
i2
|
|
Pro Forma
|
|
Equivalent
|
|
|
(Historical)
|
|
(Historical)
|
|
Combined(1)
|
|
Data(2)
|
|
Basic Earnings Per Share Applicable to Common Stockholders
|
|
$
|
0.26
|
|
|
$
|
0.80
|
|
|
$
|
0.49
|
|
|
$
|
0.13
|
|
Diluted Earnings Per Share Applicable to Common Stockholders
|
|
$
|
0.26
|
|
|
$
|
0.80
|
|
|
$
|
0.49
|
|
|
$
|
0.13
|
|
Book value per share at end of period(4)
|
|
$
|
11.64
|
|
|
$
|
2.66
|
|
|
$
|
13.01
|
|
|
$
|
3.33
|
|
Cash Dividends Per Share(5)
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
The pro forma combined per share amounts reflect the combination
of the historical JDA consolidated statement of income for the
year ended December 31, 2008 with the historical i2
consolidated statement of operations for the year ended
December 31, 2008, as adjusted, and the historical JDA
consolidated statement of income for the nine months ended
September 30, 2009 with the historical i2 consolidated
statement of operations for the nine months ended
September 30, 2009, in each case, as adjusted for the pro
forma adjustments.
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|
(2)
|
|
Pro forma combined equivalent data has been calculated by
multiplying the combined pro forma amounts by the exchange ratio
of 0.2562. This information shows how each share of i2 common
stock would have participated in the combined companies
earnings applicable to common stockholders and book value per
share if the merger had been completed on the relevant dates.
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|
(3)
|
|
Pro forma basic and diluted earnings per share applicable to
common stockholders for the year ended December 31, 2008,
as adjusted, include the following non-recurring items:
(i) i2s $79.9 million net gain from its
intellectual property settlement with SAP, and
(ii) $18.8 million in net costs incurred by JDA and i2
in connection with their 2008 terminated acquisition.
|
|
(4)
|
|
Historical book value per share has been calculated by dividing
common stockholders equity by the number of JDA or i2
common shares outstanding at December 31, 2008 or
September 30, 2009, as applicable. Pro forma book value per
share has been calculated by dividing pro forma common
stockholders equity by the pro forma number of JDA common
shares outstanding.
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|
(5)
|
|
JDA and i2 have never declared or paid a cash dividend on their
common stock, and have no plans to do so in the future.
|
16
COMPARATIVE
PER SHARE MARKET PRICE DATA
Market
Prices
JDA common stock is listed on Nasdaq under the symbol
JDAS. i2 common stock is listed on Nasdaq under the
symbol ITWO. The table below sets forth, for the
calendar quarters indicated, the high and low sales prices per
share of JDA common stock and i2 common stock, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
JDA Common Stock
|
|
i2 Common Stock
|
|
|
High
|
|
Low
|
|
High
|
|
Low
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter
|
|
$
|
20.74
|
|
|
$
|
15.65
|
|
|
$
|
14.35
|
|
|
$
|
10.97
|
|
Second Quarter
|
|
$
|
20.97
|
|
|
$
|
16.96
|
|
|
$
|
14.09
|
|
|
$
|
10.01
|
|
Third Quarter
|
|
$
|
20.14
|
|
|
$
|
14.88
|
|
|
$
|
14.55
|
|
|
$
|
11.50
|
|
Fourth Quarter
|
|
$
|
15.18
|
|
|
$
|
10.07
|
|
|
$
|
14.60
|
|
|
$
|
5.50
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter
|
|
$
|
13.64
|
|
|
$
|
9.04
|
|
|
$
|
8.48
|
|
|
$
|
5.74
|
|
Second Quarter
|
|
$
|
16.15
|
|
|
$
|
10.62
|
|
|
$
|
13.00
|
|
|
$
|
7.37
|
|
Third Quarter
|
|
$
|
23.87
|
|
|
$
|
14.71
|
|
|
$
|
16.95
|
|
|
$
|
12.04
|
|
Fourth Quarter (through December 15, 2009)
|
|
$
|
25.58
|
|
|
$
|
19.57
|
|
|
$
|
18.80
|
|
|
$
|
15.15
|
|
The following table shows the closing sale prices of JDA common
stock and i2 common stock as reported on Nasdaq on
November 4, 2009, the last trading day before the merger
agreement was announced, and on December 15, 2009, the
latest practicable date before the printing of this Proxy
Statement. The table also shows the implied value of the merger
consideration proposed for each share of i2 common stock, which
was calculated by adding (i) the amount of the cash
consideration per share, and (ii) and the closing price of
JDA common stock as of the specified date, multiplied by the
exchange ratio.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Implied Value of
|
|
|
JDA
|
|
i2
|
|
Merger
|
Date
|
|
Common Stock
|
|
Common Stock
|
|
Consideration
|
|
November 4, 2009
|
|
$
|
20.70
|
|
|
$
|
16.51
|
|
|
$
|
18.00
|
|
December 15, 2009
|
|
$
|
23.23
|
|
|
$
|
18.45
|
|
|
$
|
18.65
|
|
The prices set forth in the tables above will fluctuate prior to
the special meeting and the consummation of the merger, and
stockholders are urged to obtain current market quotations prior
to making any decision with respect to the merger.
With certain limited exceptions not expected to apply to the
merger, the exchange ratio is fixed, and will not be adjusted to
reflect stock price changes prior to the closing. Accordingly,
the value of the merger consideration to be received in exchange
for each share of i2 common stock under either structure will
fluctuate with the market price of JDA common stock.
Dividends
and Other Distributions
JDA has never declared or paid any cash dividend on its common
stock. JDA presently intends to retain future earnings to
finance the growth and development of its business, and does not
anticipate paying cash dividends on its common stock in the
foreseeable future. The terms of any debt financing contemplated
to be undertaken in connection with the merger may also restrict
its ability to pay dividends.
i2 has never declared or paid cash dividends on its common
stock. If the merger is not consummated, i2 currently intends to
retain any earnings for use in its business and does not
anticipate paying any cash dividends in the foreseeable future.
Future dividends, if any, would be determined by i2s board
of directors. In addition, subject to certain exceptions, so
long as any shares of Series B Preferred Stock remain
outstanding, i2 may not declare any cash dividends on its common
stock without first obtaining the written consent of the holders
of a majority of the shares of Series B Preferred Stock
then outstanding.
17
FORWARD-LOOKING
STATEMENTS
Certain statements and assumptions contained, or incorporated by
reference, in this Proxy Statement constitute forward-looking
statements made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. These
forward-looking statements relate to outlooks or expectations
for earnings, revenues, expenses, asset quality, or other future
financial or business performance, strategies, or expectations,
or the impact of legal, regulatory, or supervisory matters on
business, results of operations, or financial condition.
Specifically, forward looking statements may include:
|
|
|
|
|
statements relating to the benefits of the merger, including
anticipated synergies and cost savings estimated to result from
the merger;
|
|
|
|
statements relating to future business prospects, revenue,
income, and financial condition; and
|
|
|
|
statements preceded by, followed by or that include the words
estimate, plan, project,
forecast, intend, expect,
anticipate, believe, seek,
target, or similar expressions.
|
These statements reflect management judgments based on currently
available information and involve a number of risks and
uncertainties that could cause actual results to differ
materially from those in the forward-looking statements. Future
performance cannot be ensured. Actual results may differ
materially from those in the forward-looking statements. Some
factors that could cause actual results to differ include:
|
|
|
|
|
the ability to receive the approval of stockholders holding a
majority of the voting power of i2s outstanding shares of
common stock and Series B Preferred Stock, voting on an
as-converted-to-common stock basis as a single class with the
common stock;
|
|
|
|
the unprecedented volatility in the global economy;
|
|
|
|
the risk that customer retention and revenue expansion goals for
the merger will not be met and that disruptions from the merger
will harm relationships with customers, employees and suppliers;
|
|
|
|
|
|
the risk that unexpected costs will be incurred;
|
|
|
|
|
|
the ability to obtain governmental approvals of the merger on
the proposed terms and time schedule, and without the imposition
of significant conditions, obligations, or restrictions;
|
|
|
|
the risk that JDA will not integrate the business, or its other
acquired businesses, successfully;
|
|
|
|
the risk that expected cost savings from the merger may not be
fully realized within the expected time frames or at all;
|
|
|
|
the risk that the combined companys revenues following the
merger may be lower than expected;
|
|
|
|
the effects of vigorous competition in the markets in which JDA
and i2 operate;
|
|
|
|
the possibility of one or more of the markets in which JDA and
i2 compete being impacted by changes in political or other
factors such as monetary policy, legal, and regulatory changes
or other external factors over which they have no control;
|
|
|
|
dilution to stockholders of the combined company as a result of
any financing that involves equity or equity-linked securities;
|
|
|
|
changes in general economic and market conditions; and
|
18
|
|
|
|
|
other risks referenced from time to time in JDAs and
i2s filings with the SEC and those factors listed or
incorporated by reference into this Proxy Statement under
Risk Factors beginning on page 20.
|
You are cautioned not to place undue reliance on any
forward-looking statements, which speak only as of the date of
this Proxy Statement, or in the case of a document incorporated
by reference, as of the date of that document. Except as
required by law, neither JDA nor i2 undertakes any obligation to
publicly update or release any revisions to these
forward-looking statements to reflect any events or
circumstances after the date hereof or to reflect the occurrence
of unanticipated events.
Additional factors that could cause actual results to differ
materially from those expressed in the forward-looking
statements are discussed in reports filed with the SEC by JDA
and i2. See Where You Can Find More Information
beginning on page 106 for a list of the documents
incorporated by reference.
19
RISK
FACTORS
In addition to the other information contained or
incorporated by reference into this Proxy Statement, you should
carefully consider the following risk factors in deciding how to
vote on the merger. In addition, you should read and consider
the risks associated with each of the businesses of JDA and i2
because these risks will also relate to JDA following completion
of the merger. Certain of these risks can be found in the
documents incorporated by reference into this Proxy Statement.
See Where You Can Find More Information beginning on
page 106 for a list of the documents incorporated by
reference.
Risk
Factors Relating to the Merger
Because
the market price of JDA common stock will fluctuate, i2
stockholders cannot be sure of the market value of the JDA
common stock that they will receive.
If we complete the merger, shares of i2 common stock (other than
those held by i2, JDA, Merger Sub, and dissenting stockholders)
would be converted into the right to receive 0.2562 of a share
of JDA common stock and $12.70 in cash per share. The merger
agreement does not provide for any price-based adjustment of the
exchange ratio or termination right for either party.
Accordingly, the market value of the shares of JDA common stock
that i2 stockholders will be entitled to receive when the
parties complete the merger will depend on the market value of
shares of JDA common stock at the time that the parties complete
the merger and could vary significantly from the market value on
the date of this Proxy Statement or the date of the i2 special
meeting. The market value of JDA common stock will continue to
fluctuate after the completion of the merger.
These variations could result from changes in the business,
operations, or prospects of JDA or i2 prior to or following the
merger, market assessments as to whether and when the merger
will be consummated, regulatory considerations, general market
and economic conditions, and other factors both within and
beyond the control of JDA or i2. The parties may complete the
merger a considerable period after the date of the i2 special
meeting.
Uncertainty
about the merger and diversion of management could harm JDA and
i2, whether or not the merger is completed.
In response to the announcement of the merger, existing or
prospective customers of JDA or i2 may delay or defer their
purchasing or other decisions concerning JDA or i2, or they may
seek to change their existing business relationship. In
addition, as a result of the merger, current and prospective
employees could experience uncertainty about their future with
JDA or i2, and either organization could lose key employees as a
result. In addition to retention, these uncertainties may also
impair each companys ability to recruit or motivate key
personnel. Completion of the merger will also require a
significant amount of time and attention from management. The
diversion of management attention away from ongoing operations
could adversely affect ongoing operations and business
relationships.
Failure
to complete the merger could adversely affect JDAs and
i2s stock prices and their future business and financial
results.
Completion of the merger is conditioned upon, among other
things, receipt of certain governmental approvals and approval
of stockholders at the special meeting of i2. There is no
assurance that the parties will receive the necessary approvals
or satisfy the other conditions to the completion of the merger.
Failure to complete the proposed merger would prevent JDA and i2
from realizing the anticipated benefits of the merger. Each
company will also remain liable for significant transaction
costs, including legal, accounting, and financial advisory fees,
and may be required to pay a termination fee to the other party.
In addition, the market price of each companys common
stock may reflect various market assumptions as to whether the
merger will occur. Consequently, the completion of, or failure
to complete, the merger could result in a significant change in
the market price of JDAs and i2s common stock.
20
Any
delay in completion of the merger may significantly reduce the
benefits expected to be obtained from the merger.
In addition to the required regulatory clearances and approvals,
the merger is subject to a number of other conditions beyond the
control of JDA and i2 that may prevent, delay, or otherwise
materially adversely affect completion of the merger. See
The Merger Regulatory Approvals Required for
the Merger and Merger Agreement and Other Related
Agreements Conditions to Completion of the
Merger. JDA and i2 cannot predict with certainty whether
and when these other conditions will be satisfied. Further, the
requirements for obtaining the required clearances and approvals
could delay the completion of the merger for a significant
period of time or prevent it from occurring. Any delay in
completing the merger may significantly reduce the synergies and
other benefits that JDA and i2 expect to achieve if they
successfully complete the merger within the expected timeframe
and integrate their respective businesses.
The
combined company may not realize the anticipated benefits of the
merger, including potential synergies, due to challenges
associated with integrating the companies or other
factors.
The success of the merger will depend in part on the success of
management of the combined company in integrating the
operations, technologies and personnel of JDA and i2 following
the closing of the Merger. The inability of the combined company
to meet the challenges involved in integrating successfully the
operations of JDA and i2 or otherwise to realize the anticipated
benefits of the merger could seriously harm the combined
companys results of operations. In addition, the overall
integration of the two companies will require substantial
attention from the combined companys management,
particularly in light of the geographically dispersed operations
of the two companies, which could further harm the combined
companys results of operations.
The challenges involved in integration include:
|
|
|
|
|
integrating the two companies operations, processes,
people, technologies, products and services;
|
|
|
|
coordinating and integrating sales and marketing and research
and development functions;
|
|
|
|
demonstrating to the combined companys clients that the
merger will not result in adverse changes in business focus,
products and service deliverables (including customer
satisfaction);
|
|
|
|
assimilating and retaining the personnel of both companies and
integrating the business cultures, operations, systems and
clients of both companies; and
|
|
|
|
consolidating corporate and administrative infrastructures and
eliminating duplicative operations and administrative functions.
|
JDA and i2 may not be able to successfully integrate their
operations in a timely manner, or at all, and the combined
company may not realize the anticipated benefits of the merger,
including potential synergies or sales or growth opportunities,
to the extent or in the time frame anticipated. The anticipated
benefits and synergies of the merger are based on assumptions
and current expectations, not actual experience, and assume a
successful integration and reallocation of resources among our
facilities without unanticipated costs and our efforts do not
have unforeseen or unintended consequences. In addition, the
combined companys ability to realize the benefits and
synergies of the business combination could be adversely
impacted to the extent that JDAs or i2s
relationships with existing or potential clients, suppliers or
strategic partners is adversely affected as a consequence of the
merger or as a result of further weakening of global economic
conditions, or by practical or legal constraints on its ability
to combine operations. Furthermore, a portion of our ability to
realize synergies and cost savings following the closing of the
merger depends on our ability to migrate work from certain of
our facilities to other facilities.
In addition, in connection with the closing of the merger, JDA
expects JDA and i2 to incur certain one-time costs related to
the merger, including legal, investment banking, accounting and
other costs related to completing the offering, which JDA
estimates will total approximately $20 million. JDA expects
to achieve net annual cost savings related to employee
reductions and other savings of approximately $20 million
per year following the closing of the merger. JDA also expects
that the employee severance, lease and other costs necessary to
achieve such expected cost savings will be approximately
$12 million. These estimated costs do not include any costs
related to additional site consolidation or rationalization that
JDA might consider following the closing of the merger, and the
21
exact magnitude of these costs is not yet known. In addition,
there may be unanticipated costs associated with the integration
of the two companies. Although JDA and i2 expect that the
elimination of duplicative costs and other efficiencies may
offset incremental transaction and merger-related costs over
time, these benefits may not be achieved in the near term, or at
all.
JDA
will incur substantial additional indebtedness to finance the
merger, which may decrease JDAs business flexibility and
will increase its borrowing costs.
In connection with the merger, JDA completed an offering of
senior unsecured notes in the aggregate principal amount of
$275 million. The net proceeds of $266.7 million from
the offering of senior notes have been placed in escrow and will
be used to fund in part the cash consideration for the merger
and pay certain fees and expenses in connection with the merger.
Covenants to which JDA has agreed under the indenture relating
to the notes, and JDAs increased indebtedness and higher
debt-to-equity
ratio in comparison to that of JDA on a recent historical basis,
may have the effect, among other things, of reducing JDAs
flexibility to respond to changing business and economic
conditions and will increase borrowing costs.
The
ability to complete the merger is subject to the receipt of
consents and approvals from government entities, which may
impose conditions that could have an adverse effect on JDA or i2
or could cause either party to abandon the merger.
JDA and i2 will each make the required filings of a Notification
and Report Form pursuant to the
Hart-Scott-Rodino
Act with the Federal Trade Commission and the Department of
Justice with respect to the merger. i2 and JDA do not believe
any foreign regulatory approvals will be required or advisable
in connection with the consummation of the merger.
In deciding whether to grant antitrust and competition
approvals, the relevant governmental entities will consider the
effect of the merger on competition within their relevant
jurisdictions. The terms and conditions of the approvals that
are granted, if accepted, may impose requirements, limitations,
or costs or place restrictions on the conduct of JDAs
business following the merger.
Neither JDA nor i2 can provide any assurance that either company
will obtain the necessary approvals or that any other
conditions, terms, obligations, or restrictions sought to be
imposed, and if accepted, would not have a material adverse
effect on JDA following the merger. In addition, we can provide
no assurance that these conditions, terms, obligations, or
restrictions will not result in the delay or abandonment of the
merger. See The Merger Regulatory Approvals
Required for the Merger and Merger Agreement and
Other Related Agreements Conditions to Completion of
the Merger.
Because
i2s directors and executive officers have interests in
seeing the merger completed that are different than those of
i2s other stockholders, these persons may have conflicts
of interest in recommending that i2 stockholders vote to adopt
and approve the merger agreement.
i2s directors and executive officers have interests in the
merger that are different from, or are in addition to, the
interests of i2 stockholders generally. This difference of
interests stems from the equity and equity-linked securities
held by such persons; the change of control severance
arrangements covering i2s executive officers under which
such officers are entitled to severance payments and other
benefits if their employment is terminated following the merger;
JDAs obligation under the merger agreement to indemnify
i2s directors and officers following the merger; and the
potential employment by JDA of certain of these individuals
following completion of the merger. In addition, one director is
a senior operating partner of an affiliate of the holder of the
Series B Preferred Stock, which has interests in the merger
that are different from the interests of the holders of i2
common stock. These and other material interests of the
directors and executive officers of i2 in the merger that are
different than those of the other i2 stockholders are described
under The Merger Interests of i2s
Directors and Executive Officers in the Merger.
The
merger agreement contains provisions that could discourage a
potential alternative acquirer that might be willing to pay more
to acquire i2.
The merger agreement contains no shop provisions
that restrict i2s ability to solicit or facilitate
proposals regarding a merger or similar transaction with another
party. Further, there are only limited exceptions to i2s
agreement that its board of directors will not withdraw or
adversely qualify its recommendation regarding the
22
merger agreement. Although i2s board of directors is
permitted to terminate the merger agreement in response to an
unsolicited third party proposal to acquire i2, which i2s
board of directors determines to be more favorable than the
merger with JDA, if i2s board of directors determines that
a failure to do so would be inconsistent with its fiduciary
duties, its doing so would entitle JDA to collect a $15,000,000
termination fee from i2. In addition, JDA is entitled to be paid
the termination fee by i2 if (i) either JDA or i2
terminates the merger agreement because the outside date has
passed prior to approval by i2 stockholders or i2 does not
obtain its required stockholder vote, (ii) at the time of
the merger termination, a third party has publicly announced a
takeover proposal, or intent to make a takeover proposal, for i2
that was not withdrawn and abandoned, and (iii) within
twelve months of the date of the merger termination, i2
consummates an acquisition transaction or enters into an
acquisition agreement relating to a takeover proposal, or there
is otherwise consummated a takeover proposal in the form of a
tender offer, exchange offer or similar transaction. We describe
these provisions under Merger Agreement and Other Related
Agreements Termination beginning on
page 73 and Fees and Expenses
beginning on page 74.
These provisions could discourage a potential third party
acquirer from considering or proposing an alternative
acquisition, even if it were prepared to pay consideration with
a higher value than that proposed to be paid in the merger, or
might result in a potential third party acquirer proposing to
pay a lower per share price than it might otherwise have
proposed to pay because of the added expense of the termination
fee.
Legal
proceedings in connection with the merger, the outcomes of which
are uncertain, could delay or prevent the completion of the
merger.
Since the announcement of the merger agreement, several putative
class action lawsuits have been filed on behalf of common
stockholders of i2 (alleging, among other things, breach of
fiduciary duty and that the merger consideration is too low).
The complaints seek, among other things, class action status, an
order preliminarily and permanently enjoining the proposed
transaction, rescission of the transaction if it is consummated,
damages, and attorneys fees and expenses. Such legal
proceedings, and other similar proceedings that might be brought
against i2 or JDA, could delay or prevent the merger from
becoming effective within the agreed upon timeframe. For
additional information regarding these lawsuits, see The
Merger Litigation beginning on page 57.
Resales
of shares of JDA common stock following the merger and
additional obligations to issue shares of JDA common stock may
cause the market price of JDA common stock to
fluctuate.
As of October 31, 2009, JDA had 34,514,707 shares of
common stock outstanding and 1,534,714 shares of common
stock subject to outstanding, fully vested stock options and
other unvested rights to purchase or acquire its shares. JDA
currently expects to issue approximately 6.2 million shares
of JDA common stock in connection with the merger. The issuance
of these new shares of JDA common stock and the sale of
additional shares of JDA common stock that may become eligible
for sale in the public market from time to time upon exercise of
options and other equity-linked securities could have the effect
of depressing the market price for shares of JDA common stock.
Future
results of the combined company may differ materially from the
unaudited pro forma financial statements presented in this Proxy
Statement.
JDAs future results may be materially different from those
shown in the unaudited pro forma financial statements presented
in this Proxy Statement that show only a combination of
JDAs and i2s historical results. For example, the
unaudited pro forma financial statements for the year ended
December 31, 2008 include a $79.9 million net gain
from i2s intellectual property settlement with SAP. JDA
expects to incur significant costs associated with completing
the merger and combining the operations of the two companies,
and the exact magnitude of these costs is not yet known.
Furthermore, these costs may decrease JDAs capital that
could be used for income-earning investments in the future.
The
opinion obtained by the i2 board of directors from its financial
advisor does not and will not reflect changes in circumstances
subsequent to the date of the merger agreement.
On November 4, 2009, Thomas Weisel Partners delivered its
opinion to the i2 board of directors regarding the fairness,
from a financial point of view, as of such date of the merger
consideration payable pursuant to the merger agreement to the
holders of i2 common stock (other than JDA, the holders of
Series B Preferred Stock, and their respective affiliates,
and dissenting i2 stockholders). i2 has not obtained, and will
not obtain, an updated opinion. Changes in the operations and
prospects of JDA or i2, general market and economic conditions
and other factors
23
that may be beyond the control of JDA or i2, and on which the
Thomas Weisel Partners opinion was based may alter the value of
JDA or i2 or the price of shares of JDA common stock or i2
common stock by the time the merger is completed. The opinion
rendered by Thomas Weisel Partners does not speak to the time
when the merger will be completed or to any other date other
than the date of such opinion. As a result, the opinion rendered
by Thomas Weisel Partners does not and will not address the
fairness, from a financial point of view, of the merger
consideration payable pursuant to the merger agreement to the
holders of i2 common stock at the time the merger is completed
or at any time other than November 4, 2009. For a more
complete description of the opinion rendered by Thomas Weisel
Partners, see The Merger Opinion of i2s
Financial Advisor beginning on page 42 and the full
text of the opinion contained in
Annex D
to
this Proxy Statement.
The
trading price of shares of JDA common stock after the merger may
be affected by factors different from those affecting the price
of shares of JDA common stock or shares of i2 common stock
before the merger.
When the merger is completed, holders of i2 common stock will
become holders of JDA common stock. The results of operations of
JDA, as well as the trading price of JDA common stock, after the
merger may be affected by factors different from those currently
affecting JDAs or i2s results of operations and the
trading price of JDA and i2 common stock. For a discussion of
the businesses of JDA and i2 and of certain factors to consider
in connection with those businesses, see the documents
incorporated by reference into this Proxy Statement and referred
to under Where You Can Find More Information.
The merger will result in an ownership change for i2 under
Section 382 of the Internal Revenue Code, limiting the use
of i2s NOL carryforwards and other tax attributes to
offset future taxable income of the combined company
.
At December 31, 2008, i2 had approximately
$1.7 billion of U.S. federal net operating loss, or
NOL, carryforwards for U.S. federal income tax purposes.
Certain amounts of the NOLs are to expire commencing in 2019. In
addition, at December 31, 2008, i2 had approximately
$38.9 million of U.S. federal research and development
tax credit carryforwards scheduled to expire in the years 2009
through 2028. The merger will result in an ownership change
under Section 382 of the Internal Revenue Code, limiting
the use of the i2 NOL carryforwards and other tax attributes to
offset future taxable income of the combined company. The
utilization of i2s NOL carryforwards depends on the timing
and amount of taxable income earned in the future, which neither
JDA nor i2 is able to predict. In addition, the combined
companys effective tax rates may be affected by the timing
of income recognition and limitations, if any, resulting from
ownership changes.
Risk
Factors Relating to JDA and i2
JDAs and i2s businesses are and will be subject to
the risks described above relating to the merger. In addition,
JDA and i2 are, and will continue to be, subject to the risks
described in Part I, Item 1A in each of JDAs
Annual Report on
Form 10-K
for the year ended December 31, 2008 and i2s Annual
Report on
Form 10-K
for the year ended December 31, 2008, and Part II,
Item 1A in each of JDAs Quarterly Report on
Form 10-Q
for the quarter ended September 30, 2009 and i2s
Quarterly Report on
Form 10-Q
for the quarter ended September 30, 2009, in each case as
filed with the SEC and incorporated by reference in this proxy
statement/prospectus. See Where You Can Find More
Information for the location of information incorporated
by reference in this proxy statement/prospectus.
24
INFORMATION
ABOUT THE COMPANIES
JDA
Software Group, Inc.
JDA is a leading provider of sophisticated enterprise software
solutions designed to enable planning, optimization and
execution of supply chain processes for manufacturers,
wholesale/distributors and retailers, as well as government and
aerospace defense contractors. Additionally, JDA provides
pricing, yield management and demand management solutions for
travel, transportation, hospitality and media organizations.
JDAs solutions enable customers to manage and optimize the
coordination of supply, demand and flows of inventory throughout
the supply chain to the consumer. Not including the merger, JDA
has invested over $930 million in developed and acquired
technology since 1996 when JDA became a public company. JDA has
licensed its software to more than 5,900 companies
worldwide.
As of September 30, 2009, JDA employed approximately 1,800
associates and conducted business from 26 offices in three
geographic regions: the Americas (includes the United States,
Canada, and Latin America), Europe (Europe, Middle East and
Africa), and Asia/Pacific. For the year ended December 31,
2008, JDA had revenues of $390.3 million and net income of
$3.1 million. For the nine months ended September 30,
2009, JDA had revenues of $278.7 million and net income of
$17.8 million.
JDAs headquarters are located at 14400 North
87th Street, Scottsdale, Arizona 85260, and its telephone
number
(480) 308-3000.
For more information regarding JDA, see Where You Can Find
More Information on page 106.
i2 Technologies,
Inc.
i2 is a provider of supply chain management solutions,
consisting of various software and service offerings. In
addition to licensed application software, i2 offers software as
a service. i2s service offerings include business
optimization and technical consulting, managed services,
training, solution maintenance, software upgrades and
development. i2 operates its business in one business segment.
Supply chain management is the set of processes, technology and
expertise involved in managing supply, demand and fulfillment
throughout divisions within a company and with its customers,
suppliers and partners. The business goals of i2s
solutions include increasing supply chain efficiency and
enhancing customer and supplier relationships by managing
variability, reducing complexity, improving operational
visibility and increasing operating velocity. i2s
offerings are designed to help customers better achieve the
following critical operational objectives:
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Visibility
a clear and unobstructed view up
and down the supply chain
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Planning
supply chain optimization to match
supply and demand considering system-wide constraints
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Collaboration
interoperability with supply
chain partners and elimination of functional silos
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Control
management of data and business
processes across the extended supply chain
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As of September 30, 2009, i2 had approximately 1,170 full
time employees and operations in the United States, Australia,
Belgium, Canada, China, Finland, Germany, India, Japan, Korea,
the Netherlands, Singapore, South Africa, Taiwan and the United
Kingdom.
For the year ended December 31, 2008, i2 had revenues of
$255.8 million and net income of $107.7 million, as
adjusted. For the nine months ended September 30, 2009, i2
had revenues of $168.1 million and net income of
$24.1 million.
i2s headquarters are located at 11701 Luna Road, Dallas,
Texas 75234, and its telephone number
(469) 357-1000.
For more information regarding i2, see Where You Can Find
More Information on page 106.
25
THE
MERGER
This section describes material aspects of the merger,
including the merger agreement. This summary may not contain all
of the information that is important to you. You should read
carefully this entire document, the merger agreement attached as
Annex A, and the other documents referred to in this Proxy
Statement for a more complete understanding of the merger and
the merger agreement.
Background
of the Merger
The merger agreement with JDA is the culmination of a process
that started in October 2006 when i2 initially sought to explore
the potential for obtaining a premium for its common stock
through discussions with a very small, targeted group of
potential industry buyers. After interviewing several potential
investment banking firms, the board selected JPMorgan
Securities, Inc., who we refer to as JPMorgan, based
in part on its familiarity with i2 from having been i2s
banker in the past. Initially, i2s management worked with
JPMorgan to put together a presentation targeted at three
identified large potential strategic acquirers. The presentation
contained only publicly available information as the strategic
acquirers were not asked to sign a non-disclosure agreement.
JPMorgan presented to all three of the identified strategic
acquirers during the fourth quarter of 2006 and early 2007.
JPMorgan reported the results of the discussions at a regularly
scheduled meeting of the i2 board of directors in January 2007.
All three of the potential strategic acquirers had reviewed the
information and, after internal consideration, all had opted not
to pursue any further discussions regarding a transaction.
However, prior to the board meeting, one financial buyer
communicated to Mr. Sanjiv Sidhu, who was then Chairman of
the i2 board of directors, an interest in exploring a potential
transaction. After a discussion of the options available to i2,
including remaining independent and seeking a strategic business
combination or acquisition of i2, the i2 board of directors
determined to continue the process and asked JPMorgan to expand
the project to explore the possible interest of large private
equity firms as well as other strategic acquirers, both in the
U.S. and internationally, in a possible transaction with
i2. A written agreement between JPMorgan and i2 was finalized in
March 2007 and amended in February 2008 and July 2008 as the
process continued.
During early 2007, JPMorgan contacted a number of private equity
firms and potential strategic acquirers as well as parties who
might participate in a merger of equals. With the assistance of
i2 management, JPMorgan identified certain financial buyers who
had a history of making investments in the industry, and
prospective strategic acquirers with whom potential synergies
appeared to otherwise outweigh the concerns of approaching
competitors in the marketplace. JPMorgans contacts
resulted in several meetings between i2 management and various
potential acquirers. No indications of interest or offers were
made by these companies, and many of the discussions were
terminated upon the announcement of i2s earnings in May
2007, which were below expectations, and the subsequent
announcement that its then-current chief executive officer
intended to resign. Discussions did continue, however, with a
select group of interested parties who had been contacted during
the process, and JPMorgan instructed those parties to submit
their indications of interest in July 2007. This process
resulted in three high level indications of interest; however,
all were withdrawn in early August 2007 when i2 announced that
its earnings were again below expectations, its chief executive
officer followed up the announcement of his intended resignation
by resigning, and the credit markets became constricted.
One of the three parties that had submitted an indication of
interest regarding a transaction in July 2007 (Party
M) was a privately held software company whose products
both competed with and complemented those of i2. Party M
continued discussions regarding various scenarios with i2,
including a merger of equals. These discussions continued
through June 2008 when they were terminated as the parties were
never able to agree upon the appropriate valuation of one
another, among other reasons. Party M later reemerged as having
interest in January 2009 but terminated discussions in March of
2009.
In August 2007, as a result of contacts with Thoma Cressey
Bravo, the then owner of preferred stock of JDA, a draft
non-disclosure agreement was sent to JDA to initiate
discussions. This agreement was not executed and no discussions
took place between JDA and i2 or with JPMorgan at that time.
On October 13, 2007, the i2 board of directors met to
discuss three strategic alternatives available to i2: a
potential acquisition/merger of equals, continuing as a
stand-alone entity, and sale of the Company to a strategic
26
buyer or financial sponsor. JPMorgan made a presentation
relating to these alternatives. The i2 board of directors also
discussed the creation of a special committee of the board to
review and analyze strategic alternatives. On October 15,
2007, JPMorgan again made a presentation to the board including
an update on the status of its efforts to locate prospective
buyers, the valuation of i2, and a pro forma analysis of a
possible acquisition target. JPMorgan advised the board of the
low probability of finding a buyer for the company in the
then-current environment. At the continuation of the board
meeting on October 16, 2007, Mr. Sidhu expressed his
views as to the alternatives available to i2 and suggested that
a strategy team be formed to evaluate alternatives such as
maximizing the value and utilization of i2s net operating
loss carry forwards, monetizing the companys intellectual
property, making strategic acquisitions, and pursuing strategies
to differentiate itself from competitors. The i2 board of
directors discussed the merits of having a special committee
study the various alternatives to maximize shareholder value. On
October 25, 2007, the i2 board of directors decided to
establish the strategic review committee, which we refer to as
the SRC, comprised of Messrs. Wilson, Clemmer
and Waterhouse, each of whom was then an independent director.
In November 2007, JPMorgan again contacted JDA, however
discussions did not advance at that time based upon the
inability of i2 and JDA to agree on the terms of a
non-disclosure/standstill agreement. Talks recommenced between
i2 and JDA in December 2007 and on December 12, 2007, JDA
and the Company signed a non-disclosure/standstill agreement.
i2s management then worked with JDA to prepare for and
arrange a management meeting in January 2008. In January of
2008, JDA sent JPMorgan an indication of interest to acquire all
of i2s stock, subject to substantial due diligence.
Discussions continued with JDA, during which JDA gave an oral
indication of possible interest at $14.00 a share.
In the meantime, JPMorgans contacts with potential
purchasers resulted in a number of other proposals and
indications of interest. During the first half of 2008, i2
continued discussions with JDA and others, with JDA dropping in
and out of the process at various times. By June 2008,
discussions were continuing with three potential acquirers: JDA
and two financial acquirers (Party A and Party
B). During July 2008 and the first week of August 2008,
there were extensive negotiations and meetings with JDA and the
other two parties, as well as with Mr. Sidhu and the holder
of i2s Series B Preferred Stock.
On August 10, 2008, JDA, Iceberg Acquisition Corp., a
Delaware corporation and wholly-owned subsidiary of JDA, and i2
entered into an Agreement and Plan of Merger, which we refer to
as the prior merger agreement, pursuant to which
Iceberg Acquisition Corp. was to merge with and into i2, with i2
becoming a wholly-owned subsidiary of JDA, which we refer to as
the prior merger. Pursuant to the prior merger
agreement, if the prior merger would have been completed, i2
common stockholders would have been entitled to receive $14.86
in cash per share, without interest, and the holder of i2s
Series B Preferred Stock would have been entitled to
receive $1,095.3679 per share plus all accrued and unpaid
dividends thereon.
i2 called a special meeting of stockholders to be held on
November 6, 2008 to consider and vote upon the prior merger
agreement. On October 30, 2008, JDA received notice from
its lenders of revised indicative terms which the lenders
represented would be necessary to provide financing for the
prior merger. The board of directors of JDA determined that the
revised terms would have created unacceptable risks and costs to
the combined company, and on the evening of November 4,
2008, JDA requested that i2 adjourn its stockholder meeting
scheduled for November 6, 2008 in order for JDA and i2 to
negotiate a reduced purchase price given the revised financing
terms stated by the lenders. On November 6, 2008, JDA
delivered to i2 a written offer for a reduced purchase price of
$9.50 per share for the i2 common stock (assuming discounts of
25% to the amounts that would have been paid to the holder of
the Series B Preferred Stock and i2s noteholders from
the payments they would have received had the prior merger been
consummated), which the i2 board of directors rejected. On
November 6, 2008, the i2 stockholders adopted and approved
the prior merger agreement.
On November 26, 2008, the commitment letter from the
lenders that had agreed to provide financing to JDA for the
prior merger expired by its terms. On December 3, 2008, i2
sent a notice to JDA terminating the prior merger agreement
pursuant to terms thereof. On December 8, 2008, JDA paid i2
a termination fee of $20 million in accordance with the
provisions of the prior merger agreement as the sole and
exclusive remedy of i2 and its affiliates against JDA and its
affiliates.
27
In December 2008, following the termination of the prior merger
agreement, the i2 board of directors appointed Jackson L.
Wilson, Jr. as i2s President and Chief Executive
Officer. The board also decided that i2 should contact parties
that had expressed an interest in a strategic transaction with
i2 since the November 5, 2008 announcement to assist the
board in determining whether to continue efforts to sell the
company in the difficult economic conditions prevailing at that
time. The board directed the SRC to manage this process, with
Richard L. Hunter replacing Mr. Wilson as a member of the
SRC as of December 31, 2008, and to report back to the
board at its regularly scheduled meeting on January 26,
2009.
Between December 17, 2008 and the January 26, 2009 i2
board meeting, representatives of JPMorgan or i2 contacted
eleven parties that had previously expressed an interest in
discussions with i2, including JDA, Party M, Party B, three
multinational software companies and several smaller software
companies and potential financial buyers. Four of these parties
indicated that they were no longer interested in pursuing
discussions, four (including Party B) indicated that they
were evaluating whether to proceed, and three indicated they
were interested in pursuing discussions. The three interested
parties were JDA, Party M and one of the multinational software
companies. Mr. Hamish Brewer, the President and Chief
Executive Officer of JDA, called Mr. Wilson on
January 14, 2009 to let Mr. Wilson know that JDA was
still interested in acquiring i2, although he did not indicate
any proposed terms. On January 22, 2009, JDA submitted a
non-binding indication of interest providing for the acquisition
of the company at a price of $8.50 per common share and assumed
payment, without any change of control premium, of
$109.3 million for the Series B Preferred Stock and
$89.2 million to i2s noteholders. On January 14,
2009, after an informational meeting with i2 management, the
multinational software company informed JPMorgan that it had
decided to pass on pursuing the opportunity further. On
January 25, 2009, Party M submitted a non-binding
indication of interest, subject to due diligence and other
conditions, to acquire i2 for $8.50 per share of
common stock for all shares other than those of Mr. Sidhu,
who would instead exchange his shares for shares of common stock
in the new company, and approximately $109 million for the
Series B Preferred Stock. Mr. Wilson also met during
this period with a representative of Party A, who did not
discuss an acquisition of i2, but instead discussed the
possibility of making a minority investment in i2 and several
possible opportunities involving i2 acquisitions or joint
ventures involving companies in which Party A had invested.
The SRC met on January 26, 2009 prior to a regularly
scheduled i2 board meeting to review the status of i2 and the
strategic alternatives available. This meeting was also attended
by representatives of JPMorgan and Munsch Hardt,
Kopf & Harr P.C., i2s outside legal counsel, who
we refer to as Munsch Hardt. The SRC reviewed the
various strategic options that it and the i2 board had evaluated
over the past year, including (1) changes to i2s
business model and operations; (2) actions or transactions
to enhance the value or utilization of i2s existing assets
(including i2s intellectual property and net operating
loss carry forwards), (3) joint ventures or strategic
partnerships; and (4) selective acquisitions, dispositions
or other capital transactions, including the sale of i2. The SRC
considered the challenges with respect to i2s growth, the
status of the business, the anticipated decline in revenues in
2009 and the uncertainty regarding its customers
willingness to buy services from i2 in the current economic
environment. A key consideration discussed by the SRC was the
need to rebuild the organization and restore employee morale and
focus, which had suffered as the result of the terminated
transaction with JDA. The SRC also discussed market trends and
the movement of i2s customer base towards an integrated
software solution provided by a single provider. The SRC further
discussed the view that a long-term increase in value for
i2s stockholders would depend on the companys
ability to expand the scope of the services it could provide to
its customers and to attract new customers. After consideration
of these factors, the SRC recommended to the i2 board of
directors that management continue discussions with JDA and
Party M.
On January 26, 2009, following the meeting of the SRC, a
meeting of the i2 board of directors was held. The i2 board of
directors received an update regarding the results of the
SRCs meeting. The i2 board of directors directed
management to seek improvement to the proposals from JDA and
Party M with respect to price, speed and deal certainty. Also at
that meeting, the i2 board of directors authorized management to
negotiate with the holders of i2s senior convertible notes
to repurchase some or all the notes at the best prices
available. Based on management interviews with several potential
investment banks, the board selected Thomas Weisel Partners to
assist in negotiations with the noteholders due to its
familiarity with i2 and its independence from the noteholders.
Over the next three months, all the notes were purchased in
separately negotiated transactions and the related indenture was
subsequently discharged in late April 2009.
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Also at the January 26, 2009 board meeting, Mr. Pope,
one of the board designees of the holder of i2s
Series B Preferred Stock, and Mr. Sidhu each announced
that they would no longer continue as directors after the 2009
Annual Meeting.
On January 27, 2009, Mr. Wilson called Mr. Brewer
to inform him that several parties, in addition to JDA, had
expressed an interest in pursuing a transaction with i2 and that
the SRC had considered JDAs indicated terms.
Mr. Wilson stated that any potential transaction would
require an increase in the price to be paid for the common
stock. Mr. Wilson discussed several factors that might help
JDA to increase the price, such as the possible repurchase of
the senior convertible notes at a discount and the possibility
that the holder of i2s Series B Preferred Stock might
agree to accept a lower price. In addition, Mr. Wilson
stated that in light of the effects of the termination of the
2008 proposed merger on i2s customers, employees and
stockholders, neither the SRC nor the i2 board of directors
would be willing to pursue another transaction with JDA unless
there were some means to increase the certainty that the
transaction would close. Mr. Wilson and Mr. Brewer
discussed the possibility of prefunding any transaction, but
Mr. Brewer indicated that he believed that JDAs
funding sources might have technical problems with that
approach. Later that day, Mr. Brewer called Mr. Wilson
to tell him that he had received a positive response from
JDAs board of directors, subject to receiving updated data
concerning i2, and that JDAs management intended to meet
with its bankers in the near future to discuss the matter
further. JDA held several calls and meetings with prospective
sources of financing between this date and the end of February
2009 with the objective of establishing a mechanism to pre-fund
the acquisition of i2 or establish a secure committed form of
financing.
The i2 SRC met on March 3, 2009, and was informed by
JPMorgan that Party M, as well as Party A and Party B, all of
whom had engaged in discussions with i2 during 2008, had
confirmed they were not interested at this time in pursuing a
transaction. However, JDA and a financial buyer (Party
C) were interested in pursuing discussions. At this
meeting, the SRC also discussed the possibility of acquiring
other companies, including JDA, as an alternative to pursuing a
sale of i2.
On March 10, 2009, Mr. Brewer called Mr. Wilson
to advise him that JDAs board of directors had decided
that it was not feasible for JDA to establish reliable financing
for an acquisition of i2 and that until financing sources became
more readily available discussions between the two companies
would cease. Mr. Brewer also informed Mr. Wilson that
JDAs board had decided to focus on repurchasing its common
stock. That afternoon, JDA announced a program to use up to
$30 million of its cash to purchase common stock in the
market. Between March 10, 2009 and August 11, 2009,
management of i2 and JDA did not engage in any discussions of a
possible combination of the two companies.
On April 9, 2009, i2s SRC met to review the status of
various discussions, review i2s operating plan and related
assumptions and authorize management to interview and retain an
investment banker. After discussions with JPMorgan regarding the
fees for renewing their engagement and after interviewing
various investment banking firms, the SRC authorized the
retention of Thomas Weisel Partners to assist the i2 board of
directors with respect to a possible sale of the company. Thomas
Weisel Partners was selected primarily because it lacked
conflicting interests, it had assisted i2 with the repurchases
of its senior convertible notes, and its lead banker had
familiarity with i2 through the experience he had obtained when
he had worked at JPMorgan.
Between March 2009 and recommencing discussions with JDA in
August 2009 i2 and its advisors continued discussions with
several parties that had previously expressed an interest in
acquiring i2 and four additional prospective parties that made
inquiries concerning a potential transaction. A number of these
discussions did not proceed beyond a preliminary stage, either
because the other party could not provide assurances that it
would be able to finance a transaction or because the other
party concluded that it would not be able to make an attractive
offer in view of the increasing price of i2s common stock
through this period. In three cases, the parties continued their
discussions as follows:
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Party C was a private equity firm that had initially expressed
an interest in a transaction with i2 in February 2007. In
February 2009, Mr. Wilson met with the chief executive
officer of a portfolio company of Party C. In March, Party C
contacted JPMorgan to express an interest in pursuing the
acquisition of i2 and combining it with one of Party Cs
portfolio companies. On March 16, 2009, members of
i2s management met in Dallas with representatives of Party
C to discuss a potential transaction. On April 16, 2009,
the portfolio company delivered a written letter of intent to
acquire all the capital stock of i2 for a purchase price of
$344 million in
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cash payable to the holders of i2s common and preferred
stockholders, yielding an effective price of $9.56 per
common share (assuming payment of the full 110% change of
control price due the holder of i2s Series B
Preferred Stock). The closing price of i2s common stock on
that day was $8.20. This proposal also requested a
45-day
exclusivity period and was conditioned on obtaining financing
and on i2s having a minimum unrestricted cash balance at
closing of $166 million.
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Party Cs proposal was considered at meetings of the SRC on
April 17 and April 22, 2009 and of the i2 board of
directors on April 20, 2009. Although another party
(Party D, discussed below) had also recently
expressed an interest in a transaction, the SRC did not regard
the interest of Party D as sufficiently compelling, due to its
preliminary nature, to preclude agreeing to Party Cs
request for exclusivity and, at its April 22, 2009 meeting,
the SRC authorized management to grant up to 45 days of
exclusivity to Party C if its indication of interest were
increased to $10.00 per share or higher for the holders of i2
common stock. On April 22, 2009, the closing price of
i2s common stock was $7.74.
On April 30, 2009, Party C submitted a revised proposal
providing for a total equity purchase price of
$355 million, or approximately $10.05 per common share. The
SRC met again on Sunday, May 3, 2009, to review the request
from Party C for exclusivity noting that in the revised proposal
from Party C the threshold of $10.00 per share for holders of
Common Stock had been met. The SRC noted Party Ds
interest, as well as that of another party (Party E,
discussed below) and concluded that neither was sufficiently
compelling to preclude granting exclusivity to Party C. The SRC
authorized management to enter into an exclusivity agreement
with Party C as long as there were no developments that might
affect this conclusion. On May 6, 2009, after Party C
delivered another revised proposal reducing the amount of i2
cash required to help fund the acquisition, i2 entered into an
agreement to pursue discussions exclusively with Party C until
the earlier of June 19, 2009, or the execution of a
definitive merger agreement.
Throughout this period, the price of the i2 common stock had
been increasing from $8.20 per share when Party C had first
submitted a written proposal to $9.63 on May 6, 2009. The
price continued to increase and, at a May 16, 2009 meeting
of the SRC (when the price of i2s common stock was $10.40
per share), Mr. Wilson advised the SRC that, in light of
i2s stock price, he had requested that Party C submit a
revised indication of interest early in the week of May 18.
At this meeting, the SRC also discussed seeking a contribution
from the holder of the Series B Preferred Stock to increase
the consideration available for the holders of i2 common stock.
The SRC met on May 27, 2009, and received an update from
Mr. Wilson regarding the interest of Party C. Party C had
advised Mr. Wilson that it was prepared to move forward
with a valuation that would equal $11.00 per share for the
holders of common stock, with a 110% change of control payment
for the Series B holder. On May 27, 2009, i2s
stock closed at $12.18.
The SRC, without making any conclusion as to the adequacy of
Party Cs valuation, noted the difficulty of effecting a
transaction in which the holders of common stock would receive
less than the current market price for their shares. The SRC
discussed various alternatives to increase common stockholder
value, including an accommodation by the Series B holder,
noting that with the 104% payment to the Series B holder
upon a redemption the holders of common stock would receive
approximately an additional $0.25 per share, or a total of
$11.25 per share. The SRC also considered the potential for
Party C or other parties to be able to support a higher
valuation. The SRC discussed the possibility of selling only
i2s operating assets and whether to terminate or suspend
further efforts to sell i2 in the current market. The SRC
determined to continue to explore all alternatives to increase
stockholder value and directed management to approach the holder
of the Series B Preferred Stock to determine if it would
contribute to the amount to be received by the holders of i2
common stock.
Before management was able to arrange a meeting with the
Series B holder, Party C expressed its inability to
approach i2s current valuation in the market and, on
June 11, 2009, agreed to terminate its exclusivity. On that
day, i2s common stock closed at $11.87. On July 10,
2009, Thomas Weisel Partners again contacted Party C, which
confirmed that it was not interested in pursuing a transaction
at a higher valuation than it had previously indicated.
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On March 11, 2009, a representative of Party D, a private
equity firm, contacted Mr. Wilson to indicate its interest
in discussing a potential transaction. On April 20, 2009,
Party D provided a letter, which did not contain an indication
of price or conditions, expressing its interest in evaluating a
potential transaction. Party Ds interest was discussed by
the SRC at its meetings on April 17 and 22, 2009 and was
communicated to the i2 board of directors at its April 20,
2009 meeting. On May 1, 2009, representatives of Party D
attended management presentations at i2s offices.
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As indicated above, i2 entered into an exclusivity agreement
with Party C on May 6, 2009. This agreement was terminated
on June 11, 2009. On July 17, 2009, after several
attempts by Thomas Weisel Partners to obtain an indication from
Party D, Party D advised Thomas Weisel Partners that at
i2s current stock price, which closed at $12.61 on that
day, it was not interested in pursuing a transaction.
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Party E, a private equity firm, contacted i2 through a series of
informal discussions in late April and early May 2009. i2 did
not pursue discussions with Party E until after the termination
of its exclusive discussions with Party C in June 2009, when i2
asked Thomas Weisel Partners to contact Party E to determine its
interest and ability to effect a transaction. On June 15,
2009, after confirming Party Es interest in i2 and its
recognition that a premium would be required to complete a
transaction and obtaining approval of the SRC, i2 entered into a
non-disclosure agreement with Party E.
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On July 15, 2009, Party E provided i2 with a written
indication of interest and a request for exclusivity. Party
Es proposal expressed a range of $12.50 to $13.00 to be
paid to the holders of i2 common stock and anticipated a
redemption of the Series B Preferred Stock at the 104%
redemption price. On that day, the closing price of i2s
common stock was $12.59.
On July 16, 2009, Thomas Weisel Partners obtained
clarifying information from Party E prior to the SRC meeting
that day. At the SRC meeting, the proposal from Party E was
discussed, as well as the request for exclusivity. Among other
things, the SRC discussed the risks to i2s capital
structure if it committed to redeeming the Series B
Preferred Stock at a 104% redemption premium if an acquisition
was not assured. The SRC instructed Thomas Weisel Partners to go
back to Party E to confirm that i2 would not bear the risk of
committing to redeem the Series B Preferred Stock and to
confirm the willingness of Party E to act quickly. Upon receipt
of confirmation of these issues, the SRC authorized the grant of
exclusivity. Between July 16, 2009, and July 24, 2009,
Thomas Weisel Partners and Party E had various phone calls and
e-mails,
as
well as due diligence meetings. On July 24, 2009, i2 signed
an exclusivity agreement with Party E for a 31 day period
plus an automatic extension to September 7, 2009 if certain
conditions were met.
On July 27, 2009, the SRC reported to the i2 board of
directors with respect to the process with Party E and the views
of the SRC regarding the status of i2 as a stand-alone entity as
compared with effecting a transaction involving a sale of the
company.
On August 11, 2009, Party E contacted i2 to indicate that
it did not believe that it would be able to offer a premium to
the current market price, which was then $14.77 per share.
However, Party E expressed an interest in completing its work so
that it would be able to move quickly if the stock price moved
into a range at which it would be comfortable in proceeding. On
August 17, 2009, after confirming that i2s stock
price, then $15.69, exceeded the value which Party E was willing
to pay, i2 and Party E terminated the exclusivity agreement.
During this period the SRC also considered strategies other than
the sale of i2 to increase long-term stockholder value,
including the following:
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At its May 27, 2009 meeting, the SRC considered whether
stockholder value could be increased if i2 sold its operating
assets only, while retaining its net operating loss
carryforwards and patent litigation rights, including the patent
infringement litigation action i2 brought against Oracle in
April 2009 and other similar actions that might be brought by i2
in the future, but decided that the cost and time that would be
required, and the uncertainty as to the values that might be
realized, did not justify pursuing such a course at that time.
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At the May 27 and July 24, 2009 meetings, the SRC
considered the prospects if i2 continued as a stand-alone
entity, including an evaluation of potential growth products and
strategies, the quality of existing management and foreign
operations and the status of key departments.
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At the August 20, 2009 meeting, the SRC discussed with
management and Thomas Weisel Partners a potential merger
of equals between i2 and another supply chain software
company. The SRC authorized one of i2s directors to
discuss a merger transaction with a director of the other
company. However, the other company subsequently advised i2 that
it was not interested in pursuing discussions at that time.
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Throughout August 2009, the SRC also considered on several
occasions whether it would be possible to increase the amount
received by holders of common stock by reducing the 110% payment
the Series B holder was entitled to receive upon a change
of control under the certificate of designations for the
Series B Preferred Stock. On several occasions, the SRC
considered redeeming the Series B Preferred Stock at a
redemption payment of 104%, which would increase the amount
available to the common stock by approximately $0.25 per share.
However, in order to redeem the Series B Preferred Stock,
i2 would be required to give a
30-day
unconditional notice of redemption. The SRC determined that the
damage to i2s capital structure that would occur if an
acquisition transaction failed to close presented an
unacceptable risk that outweighed the potential benefit of the
additional payment to the common stockholders. The SRC also
considered whether the Series B holder might be willing to
make concessions in the amount to be received on a change of
control in order to increase the amount available for the common
stock to a level where it might be more attractive to the i2
common stock holders. On May 27, 2009, the SRC directed
Mr. Wilson to discuss this possibility with the
Series B holder in order to enable Party C to make an offer
at a premium to the then current price of the i2 common stock.
Following that meeting, Mr. Wilson had conversations with
Michael Simmons, a director of i2 who had been appointed by the
Series B holder, seeking to arrange a meeting with
Mr. Geoffrey Raynor, a representative of the Series B
holder, to discuss the Series B holders view.
Mr. Simmons arranged a meeting for June 17, 2009, at
which Mr. Raynor confirmed that his desire was that a sale
of i2 occur and that the Series B holder receive its full
110% change of control payment. On June 23, 2009,
Mr. Raynor confirmed this view in a letter to the i2 board
of directors in which Mr. Raynor reiterated the view of the
Series B holder that i2 should not attempt to continue as a
stand-alone entity, and that the i2 board should attempt to sell
i2 at the best price available, even if that price was at or
below the current market price of the common stock.
Meanwhile, JDA had continued to review strategic opportunities
that would be earnings and cash flow accretive to JDA, and that
would grow JDAs revenue and gross margin while expanding
JDAs addressable markets within the supply chain
management segment of the software industry. Additionally, JDA
monitored the conditions of the capital markets in order to
facilitate such strategic opportunities. As part of its ongoing
growth strategy, JDA regularly reviews possible strategic
actions, including acquisitions and combinations, and has
discussions from time to time with various parties regarding
such possible actions. As a result of this ongoing strategic
review, by August 2009, JDA began to focus on three potential
acquisition targets, including i2.
On August 11, 2009 while attending an industry conference,
Mr. Brewer and Mr. Wilson met in person at
Mr. Brewers request. Mr. Brewer indicated
JDAs interest in reopening discussions with i2 and
inquired as to i2s interest in a possible transaction. Due
to the exclusivity agreement with Party E, Mr. Wilson
informed Mr. Brewer that he did not wish to discuss the
matter at that time. Mr. Wilson thereafter informed the
SRC, and Mr. Brewer thereafter informed the JDA board of
directors, of their meeting.
Following several back and forth communications, on
August 27, 2009, in response to a request from
Mr. Brewer and after consulting with the SRC,
Mr. Wilson sent an email to Mr. Brewer that set forth
a list of issues, concerns and questions that i2 had regarding a
transaction with JDA, focusing in particular, in light of the
termination of the prior merger agreement and the potentially
adverse impact on i2 of repeating such an event, on the issue of
deal certainty due to JDAs need for a firm, third party
financing commitment to consummate a transaction. JDA did not
provide i2 with a written response to the August 27, 2009
email from Mr. Wilson.
During the last week of August 2009, representatives of JDA met
with representatives of Goldman Sachs to discuss engaging
Goldman Sachs to act as financial advisor to JDA, and to
evaluate the merits of, and assist in discussions regarding, a
possible strategic business combination. By letter agreement
dated October 23, 2009, JDA engaged Goldman Sachs to act as
its financial advisor in connection with the merger.
32
On September 1, 2009, the JDA board of directors met and
reviewed several possible acquisition targets, including i2, and
also reviewed preliminary analyses of Goldman Sachs regarding
each of the potential targets. Following a discussion with JDA
management regarding the benefits and considerations of the
three potential targets, the JDA board of directors authorized
management to continue evaluating a potential strategic
transaction.
Following the JDA board meeting, Mr. Brewer called
Mr. Wilson and informed him that the JDA board of directors
did want to pursue a transaction with i2, and requested guidance
from Mr. Wilson as to terms that might be acceptable to the
i2 SRC. In particular, Mr. Brewer sought input on the
SRCs thoughts on financing. Mr. Brewer also inquired
whether the SRC would be willing to consider merger
consideration that included JDA stock. Mr. Wilson indicated
that he did not speak for the SRC, but stated that in his
opinion the SRC would be more likely to consider a proposal that
involved a cash offer at a premium to market and a means of
assuring a significant degree of certainty, such as pre-funding
the purchase price. Mr. Wilson also stressed that JDA must
be prepared to proceed quickly if it wished the SRC to consider
a proposal from JDA. Mr. Wilson informed the SRC of this
conversation and asked for the SRCs guidance on further
communications.
On September 4, 2009, following discussions with each
member of the SRC, Mr. Wilson sent an email to
Mr. Brewer. Mr. Wilsons email set forth two
criteria for a transaction with JDA: a purchase price at a
premium to market and deal certainty. The email detailed the
improvements i2 had made since the prior merger, thereby
justifying a higher price than the $14.86 per share from the
prior merger. Mr. Wilson noted that applying the same
valuation methodology from the prior merger would result in a
valuation increase from $14.86 per share to $16.82 per share.
Mr. Wilson also noted that i2s SRC would consider a
mixture of cash and JDA stock as merger consideration.
On September 9, 2009, at, Mr. Brewers request,
Mr. Wilson met in person with Mr. Raynor to determine
the interest of the Series B holder in providing bridge
financing to a potential buyer were a transaction to be
developed. No specifics were discussed; however, Mr. Raynor
said that the Series B holder would be willing in concept
to consider providing such financing and Mr. Wilson advised
Mr. Brewer later that day of the Series B
holders willingness to consider the opportunity.
On September 11, 2009, the JDA board of directors convened
a telephonic meeting at which Mr. Brewer provided an update
regarding his talks with Mr. Wilson, and representatives of
Goldman Sachs provided an updated preliminary analysis of a
proposed transaction with i2. Following this meeting, the JDA
board of directors authorized management to continue evaluating
a potential strategic transaction with i2.
On September 16, 2009, Mr. Wilson, Mr. John
Harvey, i2s Senior Vice President and General Counsel, and
Mr. Michael Berry, i2s Executive Vice President and
Chief Financial Officer, had a telephone conference with
representatives of a potential financial purchaser. This party
ultimately did not make a proposal for a transaction with i2.
The following day, a representative of a different potential
purchaser contacted i2 to inquire about the interest in a
management led buyout and the call was referred to Thomas Weisel
Partners. This was not pursued as the SRC was not inclined to
effect a management led buyout at that time in light of the
increased financial and execution risks of, as well as the
additional time required to negotiate and complete, such a
transaction.
On September 17, 2009, JDA and i2 entered into a mutual
nondisclosure agreement. Later that same day, i2 delivered
certain financial due diligence materials to JDA, including
information regarding its current cash position and
capitalization.
On September 20, 2009, Mr. Brewer spoke with a
representative of the Series B holder about the possibility
of entering into a non-disclosure agreement in order to be able
to discuss a potential transaction with i2 and relating
financing issues. Thereafter, while the Series B holder
prepared a financing proposal, JDA management also discussed
with Goldman Sachs the possibility of Goldman Sachs providing
bridge financing for a transaction with i2 and with Wells Fargo
Securities LLC (WFS) and Wells Fargo Foothill LLC
(WFF, and together with WFS, the Wells Fargo
Parties) with regard to a long-term, senior credit
facility to finance the acquisition. On September 24, 2009,
Mr. Brewer called Mr. Wilson to update him on the
discussions.
On September 27, 2009, the Series B holder submitted a
proposal to JDA to finance a potential JDA acquisition of i2
through a combination of exchanging its Series B Preferred
Stock investment into new securities of JDA and additional
short-term loans. On October 2, 2009, the Wells Fargo
Parties submitted a term sheet for a long-term,
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committed senior credit facility to finance the acquisition. On
October 5, 2009, Goldman Sachs submitted a term sheet for a
short-term bridge loan to finance the acquisition.
On September 30, 2009, the i2 SRC met to discuss proceeding
on a transaction with JDA. Mr. Wilson and representatives
of Thomas Weisel Partners and Munsch Hardt also attended the
meeting. Mr. Wilson summarized his knowledge of the status
of discussions to his knowledge between JDA and the
Series B holder and the expected timing of the process.
After discussions with counsel and Thomas Weisel Partners, the
i2 SRC decided, subject to confirmation of the Series B
holders willingness to provide financing for the
transaction, to request that Thomas Weisel Partners prepare
to discuss with the SRC a potential transaction with JDA in
order to assist the SRC in evaluating the terms of such a
transaction. The SRC also determined to review managements
revised three-year forecast that had been prepared in response
to the SRCs request to update the forecast prepared during
the first quarter of 2009.
On October 2, 2009, the JDA board of directors met to
discuss the status of talks with i2 and possible methods of
financing a transaction in light of the current state of the
credit markets. As part of the financing discussion, the board
and management analyzed the separate financing proposals that
had been submitted by each of the Series B holder and
Goldman Sachs. Following a detailed discussion of the proposals,
the JDA board of directors authorized management to continue its
discussions with the Series B holder, Goldman Sachs and
other potential financing sources about financing a possible
transaction with i2. It also directed management to continue
discussions with i2 about a possible transaction. Thereafter,
JDAs management began working with i2, Goldman Sachs and
JDAs outside counsel, DLA Piper LLP (US), who we refer to
as DLA Piper, to review and update the due diligence
from the prior merger and to consider potential transaction
structures generally, including structures that would involve
the issuance of JDA common stock.
On October 5, 2009, JDA management determined that its
other financing options were superior to the proposal of the
Series B holder. Following this determination, JDA informed
the Series B holder that JDA intended to investigate
financing from alternative sources as a priority.
On October 5, 2009, i2 sent JDA an initial due diligence
request list requesting business and legal information and
documents relating to JDA. From October 5, 2009 through the
execution of the merger agreement, i2 and its representatives
conducted extensive due diligence on JDA covering a broad range
of topics.
On October 14, 2009, JDA delivered to i2 a draft term sheet
for a potential transaction as well as a proposed exclusivity
agreement pursuant to which i2 would agree to negotiate
exclusively with JDA for an agreed period of time. The term
sheet did not include a purchase price or range.
On October 15, 2009, Mr. Brewer and Peter S. Hathaway,
JDAs Executive Vice President and Chief Financial Officer,
met with Mr. Wilson, Michael J. Berry, i2s Chief
Financial Officer, and Mr. Richard Hunter, i2s lead
independent director and a member of the SRC. At this meeting,
Messrs. Brewer and Hathaway discussed the status of
JDAs financing discussions with Goldman Sachs and the
Wells Fargo Parties. Mr. Brewer also indicated that JDA was
contemplating an offer in the range of $17.00 to $18.00 per
share and a structure that would involve merger consideration to
the Series B holder of cash (as required under the terms of
i2s charter) and merger consideration to i2s common
stockholders payable approximately
2
/
3
in cash and
1
/
3
in JDA common stock, with the cash portion of the merger
consideration to be financed through a combination of debt and
the parties cash on hand. The closing price of the i2
common stock on the previous day was $16.69 per share.
Mr. Brewer noted that, while JDA would be issuing stock
under this structure, the number of shares to be issued would
not rise to the level that would require JDA stockholder
approval. Messrs. Wilson, Berry, and Hunter noted that any
possible transaction would have to be priced at a premium and
again reiterated their concern regarding JDAs ability to
provide deal certainty as a result of its need to finance the
cash portion of the merger consideration. Based on these
discussions, the parties agreed to move forward and to have
representatives of the parties and their outside advisors meet
in Phoenix, Arizona at the offices of DLA Piper the following
week to engage in due diligence discussions, including financial
and business updates, and to begin negotiations of a merger
agreement. In addition, on October 19, 2009, JDA provided
i2 with a draft of the commitment letter with the Wells Fargo
Parties with respect to the long-term, senior financing
proposal. From October 15, 2009 through the execution of
the merger agreement, JDA and i2 and their respective
representatives continued to discuss these issues.
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On October 16, 2009, i2 delivered to JDA an initial draft
of the merger agreement. From October 16, 2009 until the
execution of the merger agreement, JDA, i2 and their
representatives exchanged drafts of the merger agreement and
held extensive negotiations relating to its terms and conditions.
On October 17, 2009, JDA management determined that the
Wells Fargo Parties long-term financing proposal
represented the best alternative with respect to a proposed
transaction with i2 and determined not to pursue the financing
proposal of Goldman Sachs.
Also on October 17, 2009, the JDA board of directors and
members of management participated in a teleconference with
representatives of Goldman Sachs during which Goldman Sachs
provided an update of its preliminary financial analysis of the
proposed transaction, and management provided an update on the
status of discussions with i2. After these discussions, the
board authorized management to continue to pursue the potential
transaction and related financing.
On October 20, 2009, the SRC met to review the status of
the discussions with JDA and to consider JDAs request that
i2 agree to negotiate exclusively with JDA. Mr. Wilson
updated the SRC on the discussions, as well as the status of
proposed financing for the transaction. Mr. Hunter reported
on his views following his attendance at the meetings with JDA
and management the previous week. The SRC, together with
representatives of Munsch Hardt, compared the proposed financing
terms to the terms of the financing for the prior merger
agreement and discussed the potential remedies if the financing
did not occur. The SRC also discussed with Mr. Berry
managements revised fourth quarter forecast and the
revised three-year outlook, based on recent company performance
and market data. The SRC discussed various issues related to the
possible JDA transaction, including stockholder reception of
such a transaction, JDAs board structure following a
transaction, pricing for the common stock, the potential
benefits to i2 of achieving scale, synergies and a more complete
product line, and the risks that the transaction might not be
completed. Following this discussion, the SRC authorized
management to enter into an agreement to negotiate exclusively
with JDA for a period of time not to extend past
November 16, 2009 and to attempt to negotiate a merger
agreement with JDA for review and approval by the SRC and the i2
board of directors.
On October 21, 2009, JDA sent i2 an additional due
diligence request list requesting updates to the business and
legal information and documents relating to i2 that JDA had
reviewed in connection with the prior merger. From
October 21, 2009 through the execution of the merger
agreement, JDA and its representatives conducted an extensive
review of the changes that had occurred in the i2 business since
the fall of 2008 and updated its pre-existing financial models
and due diligence on i2 covering a broad range of topics.
On October 21 and 22, 2009, financial and operations teams from
each of JDA and i2, as well as their respective financial and
legal advisors, met in Phoenix, Arizona at the offices of DLA
Piper to discuss various due diligence and operational issues
and to engage in negotiations of the merger agreement and
discussions regarding the terms of voting agreements that JDA
stated would be required from i2s directors and officers
and one or both of the Series B holder or Mr. Sidhu.
At these meetings, the parties engaged in extensive discussions
regarding the issues of financing risk and deal certainty, as
well as potential structures that would mitigate these risks to
the extent possible. Also at these meetings, the parties entered
into an exclusivity agreement, dated October 21, 2009,
whereby i2 agreed to negotiate exclusively with JDA from the
date of the agreement until November 5, 2009.
As a result of these meetings, and i2s expressed concerns
with regard to relying on the long-term WFF commitment to
finance the acquisition, principally due to the size of the
commitment and syndication requirements, the parties agreed to
pursue a deal framework that provided for two possible deal
structures:
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A structure (referred to as the intended structure)
pursuant to which the merger consideration to i2s common
stockholders would be payable approximately 2/3 in cash and 1/3
in JDA common stock. Under this structure, following execution
of the merger agreement, JDA would seek approximately
$275 million in debt financing on a best efforts basis
which, together with the parties cash on hand, would be
used to finance the cash portion of the purchase price,
including the cash merger consideration payable to the
Series B holder; and
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An alternative structure, which would be pursued if financing
necessary to effect the intended structure could not be
obtained, pursuant to which the merger consideration to
i2s common stockholders would be payable approximately 2/3
in JDA common stock and 1/3 in cash. Under the alternative
structure, JDA would seek
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approximately $120 million in debt financing pursuant to a
binding, fully underwritten commitment to be in place at
signing, which, together with the parties cash on hand,
would be used to finance the cash portion of the purchase price,
including the cash merger consideration payable to the
Series B holder. While the parties believed that this
structure mitigated the financing risk due to the lower amount
of outside financing required to complete the transaction, the
parties also understood that the number of shares of JDA common
stock to be issued under the alternative structure would require
JDA to seek stockholder approval of the share issuance in
connection with the transaction.
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Thereafter, JDA requested that the Wells Fargo Parties modify
their previous commitment proposal to reflect a potential
financing option for the alternative structure.
Between October 22, 2009 and the execution of the merger
agreement, the parties continued to discuss, negotiate and
refine this dual structure approach, and exchanged numerous
drafts of the merger agreement reflecting these discussions and
negotiations. During this period Mr. Wilson updated the i2
board members individually on a regular basis with respect to
the status of the discussions. JDA also sought to receive an
alternative proposal from the Series B holder to provide
the financing for the alternative structure. However, a proposal
received from the Series B holder was significantly more
costly and restrictive than terms that could be obtained in the
market, and JDA thereafter focused exclusively on obtaining the
Wells Fargo Parties commitment to provide the debt
financing necessary to effect the alternative structure.
On October 25, 2009, the JDA board of directors convened a
special meeting to consider the proposed transaction with i2.
Representatives of senior management of JDA, Goldman Sachs and
DLA Piper were present at the meeting. At this meeting,
Mr. Brewer reviewed the current status of negotiations with
i2, and Mr. Brewer and Mr. G. Michael Bridge,
JDAs Senior Vice President and General Counsel, reviewed
the current deal terms, including terms related to structure,
financing, and treatment of i2 employees.
Messrs. Hathaway and Brewer then reviewed the business
reasons for the transaction. Following managements
presentations, Goldman Sachs provided a general analysis of the
credit markets in the U.S. and a preliminary financial
analysis of i2 on a stand-alone basis and on a combined basis
with JDA, and discussed with the board JDAs ability to
finance the transaction, taking into account the current status
of the U.S. credit markets. DLA Piper also advised the JDA
board of directors regarding the boards fiduciary duties
with respect to its consideration of the proposed combination
with i2. The JDA board of directors authorized management to
continue pursuing a definitive agreement with i2 and related
financing options.
The i2 SRC met on October 29 and 31, 2009 to review the proposed
transaction. In both cases Mr. Wilson, Mr. Berry,
Mr. Harvey, and representatives of Thomas Weisel Partners
and Munsch Hardt also participated. At these meetings,
Mr. Wilson reviewed the status of the negotiations and
described the current deal terms, including the proposed
structures and the status of JDAs financing efforts.
Thomas Weisel Partners reviewed the financial aspects of the two
structures, and Munsch Hardt reviewed the terms and conditions
of each structure. After considering the implications of the two
structures to i2s stockholders, the effects of the
structures on deal certainty and the remedies available to i2 if
the transaction failed, and discussing pricing parameters, the
SRC authorized management to continue negotiations of the merger
agreement with JDA.
On October 30, 2009, a third party contacted
Mr. Wilson by
e-mail
and
requested a meeting to discuss i2s interest in pursuing an
unspecified transaction involving an investment in the company.
In view of the exclusivity agreement with JDA and the
preliminary nature of the inquiry, i2 did not respond to the
inquiry. The third party did not follow up on its
e-mail.
On November 1, 2009, Messrs. Brewer and Wilson
communicated several times. During the course of these
communications, Messrs. Brewer and Wilson discussed the
dual structure approach and various terms and conditions related
to that approach, ultimately agreeing on a December 18,
2009 deadline for JDA to raise the financing and meet the other
conditions for selecting the intended structure, a requirement
for JDA to escrow the debt financing proceeds under either
structure, and the minimum cash balance that i2 would be
required to deliver at closing. Mr. Brewer also reiterated
JDAs requirement that i2 obtain a voting agreement from
one or both of the Series B holder or Mr. Sidhu.
On the evening of November 1, 2009, the JDA board of
directors convened a telephonic meeting to consider the proposed
transaction with i2. Representatives of senior management of
JDA, Goldman Sachs, Deloitte &
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Touche LLP, JDAs auditors, and DLA Piper were present at
the meeting. Mr. Brewer reviewed the current status of
negotiations with i2 and Messrs. Brewer and Bridge reviewed
the current deal terms, including terms related to structure,
financing, and treatment of i2 employees.
Messrs. Hathaway and Brewer then provided the board with an
updated review of the business reasons for the transaction, as
well as the status of negotiations with the Wells Fargo Parties.
Following managements presentations, Goldman Sachs
delivered an updated analysis of the U.S. credit markets
and an updated preliminary financial analysis of i2 on a
stand-alone basis and on a combined basis with JDA. At this
meeting, the JDA board of directors authorized management to
pursue the acquisition of i2 at a price of up to $18.00 per
share and to make an initial offer of $17.55 per share.
Thereafter, Mr. Brewer conveyed the $17.55 per share offer
to Mr. Wilson.
Between November 1 and 4, 2009, i2 engaged in discussions with
the Series B holder and Mr. Sidhu regarding the terms
of the requested voting agreement. Mr. Sidhu requested that
i2 resolve his earlier requests for registration rights and
reimbursement of certain legal expenses and insisted upon the
ability to be able to sell his shares without restriction
through the closing of the merger. However, JDA refused to enter
into a voting agreement under which Mr. Sidhu would be
permitted to sell his shares of i2 common stock. With respect to
the Series B holder, as part of the discussions concerning
a voting agreement, i2 initially sought to have the
Series B holder agree to reduce its change of control
premium from 110% of liquidation value (as provided in i2s
charter with respect to transactions like the proposed
transaction with JDA) to 107% of liquidation value in exchange
for i2s agreement not to redeem the Series B holder
prior to closing at 104% of liquidation value (as provided in
i2s charter with respect to redemption transactions), but
the Series B holder rejected this proposal. Following the
founders refusal to sign a voting agreement that was
acceptable to JDA and in light of JDAs requirement that it
must receive a voting agreement from one or both of the founder
or the Series B holder to proceed with the transaction, i2
agreed not to redeem the Series B Preferred Stock between
the date of the definitive merger agreement and the closing of
the transaction in exchange for the Series B holders
agreement to sign a voting agreement to vote in favor of the
transaction with JDA.
On November 2, 2009, i2 countered JDAs offer with a
proposal of $18.25 per share. Later that day, JDA countered with
an offer of $18.00 per share.
On the morning of November 3, 2009, i2 accepted the $18.00
per share offer, subject to agreement on final terms for the
merger agreement. The closing price of the i2 common stock on
the previous day was $16.17 per share.
Also on the morning of November 3, 2009, the JDA board of
directors convened a meeting to review the transaction. At this
meeting, Mr. Brewer updated the board regarding the status
of the negotiations regarding the dual structure, and
Mr. Hathaway provided an update regarding the status of the
financing discussions with the Wells Fargo Parties.
Mr. Bridge and a representative of DLA Piper then reviewed
the terms of the merger agreement and updated the JDA board of
directors regarding changes from the terms discussed at the
prior meeting and on the remaining open issues. DLA Piper again
advised the JDA board of directors regarding the boards
fiduciary duties with respect to its consideration of the
proposed combination with i2. A representative of Goldman Sachs
then presented a preliminary financial analysis of the proposed
transaction under both of the proposed structures. The JDA board
of directors discussed the various presentations and the terms
of the transaction, noting that the final exchange ratios and
certain other terms discussed at the meeting would be finalized
later that day or on the following day within the ranges
discussed at the meeting, and unanimously approved a definitive
agreement to acquire i2, under either of the proposed
structures, at a price of $18.00 per share and authorized
management to engage in the necessary actions to obtain the debt
financing to consummate the transaction. The JDA board of
directors also authorized a special committee composed of its
Chairman, Mr. James D. Armstrong, to review and confirm
that the exchange ratios and final terms of the merger agreement
were within the parameters discussed at the meeting, and,
subject to such review and confirmation, authorized management
to execute and deliver the merger agreement.
The i2 SRC also met on the morning of November 3, 2000 to
review the status of the transaction. Mr. Wilson described
the status of negotiations with JDA and the discussions directed
at obtaining voting agreements from Mr. Sidhu and the
holder of the Series B Preferred Stock. Representatives of
Munsch Hardt and Thomas Weisel Partners reviewed the terms of
the transaction and matters that had not yet been resolved. The
SRC discussed various aspects of the transaction, including
pricing, the dual structure, required escrow arrangements, seats
on JDAs board of directors, the remedies and fees payable
on termination of the merger agreement, i2s minimum cash
37
requirement and the voting agreements. After the discussion, the
SRC directed management to continue in its negotiations with JDA.
On the morning of November 4, 2009, the i2 SRC met at
i2s offices to review the transaction. All members of the
i2 board of directors attended the initial part of the meeting
in order to participate in presentations from management, Thomas
Weisel Partners and Munsch Hardt. Mr. Wilson described the
major terms of the transaction, including the price, the mix of
consideration under the dual structures, and the timing and
conditions of JDAs ability to select the intended
structure. A representative of Munch Hardt reviewed the terms of
the merger agreement. Representatives of Thomas Weisel Partners
presented a financial analysis of the consideration proposed to
be paid in the transaction. It was noted that the price of
$18.00 per share of i2 common stock and the approximate mix of
consideration to be delivered under each structure had been
agreed, with the exchange ratios to be calculated based on the
closing prices of JDA and i2 common stock later that day. Thomas
Weisel Partners indicated that it would be in a position to
deliver its fairness opinion to i2s board of directors
later in the day after the final exchange ratios had been
calculated, assuming no material changes in the factors
considered by Thomas Weisel Partners. Following these
presentations, the SRC discussed the transaction and determined
that the proposed transaction was in the best interest of
i2s stockholders and recommended that the i2 board of
directors approve the merger agreement and recommend that
i2s stockholders approve and adopt the merger agreement,
subject to delivery of the Thomas Weisel Partners fairness
opinion and confirmation that the exchange ratios and the final
terms of the agreement were consistent in all material respects
with the boards approval.
Immediately following the meeting of the SRC, the i2 board of
directors met to consider the proposed transaction. All
directors had participated in the presentations of Thomas Weisel
Partners and Munsch Hardt at the SRC meeting earlier that day.
The i2 board of directors first discussed and approved
managements updated and revised three-year forecast, which
had been provided to Thomas Weisel Partners and used in its
analysis of the transaction. The revised forecast reflected the
positive results through the third quarter of 2009, which
resulted in an improved forecast for 2010 and 2011. The i2 board
then turned to consideration of the proposed transaction with
JDA. Members of the SRC reviewed the SRCs consideration of
the alternatives to the proposed transaction, including
continuing as a stand-alone company, evaluation of various
proposals to enhance the value of i2s assets, including
its net loss carry-forwards and its intellectual property
portfolio, joint ventures or selective acquisitions to increase
i2s competitiveness and the merger or sale of the company.
Before turning to consideration of the proposed merger
agreement, the i2 board noted that Michael J. Simmons had been
appointed to the board by the holder of the Series B
Preferred Stock, whose interests differ from those of the common
stockholders and with whom discussions had been held concerning
providing financing for the transaction. Mr. Simmons was
also employed by and had an interest in one or more affiliates
of such holder. Mr. Simmons left the meeting for this
discussion. In Mr. Simmons absence, the i2 board concluded
that it was desirable that Mr. Simmons continue to
participate actively in the consideration of the merger.
Mr. Clemmer, the chairman of the SRC, described the
SRCs deliberations and the factors, both positive and
negative, the SRC considered in arriving at its conclusion to
recommend that the i2 board approve the transaction.
Representatives of Munsch Hardt reviewed their previous advice
to the i2 board with regard to the directors fiduciary
duty to i2s stockholders, and representatives of Thomas
Weisel Partners reviewed its methodology in evaluating the
consideration proposed to be paid in the transaction and the
purpose and limitations of its fairness opinion, and the
assumptions on which it was to be based, and repeated its advice
to the SRC that it would be in a position to deliver its
fairness opinion to the i2 board of directors later in the day
after the final exchange ratios had been calculated, assuming no
material changes in the factors considered by Thomas Weisel
Partners. Mr. Berry made a presentation of the
compensation, equity awards and bonuses of the officers,
including Mr. Wilson, that would be paid at the closing of
the transaction. Following a discussion with management and
representatives of Munsch Hardt and Thomas Weisel Partners, the
board noted that the final exchange ratios and certain other
terms discussed at the meeting would be finalized later in the
day and that the fairness opinion of Thomas Weisel Partners
would be delivered at that time. The i2 board of directors
unanimously determined that the merger and merger agreement were
advisable and in the best interest of i2s stockholders and
approved the merger agreement. The i2 board of directors
directed that Mr. Hunter confirm the delivery of the Thomas
Weisel Partners opinion and that the exchange ratios and final
terms of the merger agreement were consistent in all material
respects with the boards approval prior to execution and
delivery of the merger agreement by i2.
38
On the evening of November 4, 2009, after negotiation of
the final terms of the merger agreement and the related
agreements, JDAs special committee convened a meeting at
which Mr. Brewer reviewed the final terms of the merger
agreement and related agreements and, after consulting with
representatives of management, DLA Piper and Goldman Sachs,
confirmed that the exchange ratios and terms of the merger
agreement were within the parameters discussed at the meeting of
the JDA board of directors, and representatives of Goldman Sachs
reviewed its financial analyses of the proposed transaction
under both of the proposed structures, and delivered its oral
opinion, which was subsequently confirmed in writing, to the
effect that, as of the date of its opinion, and subject to and
based on the qualifications and assumptions set forth in its
opinion, the merger consideration to be paid by JDA in respect
of each share of i2 common stock pursuant to the merger
agreement was fair from a financial point of view to JDA.
During the evening of November 4, 2009, Mr. Hunter,
after consulting with representatives of Munsch Hardt and Thomas
Weisel Partners, confirmed that the exchange ratios and terms of
the merger agreement were consistent in all material respects
with the approval of the i2 board of directors. Also at that
time, Thomas Weisel Partners delivered its written opinion to
the i2 board of directors dated November 4, 2009, that
based upon and subject to the various considerations described
in its opinion, the merger consideration to be received by the
holders of i2 common stock (other than JDA, the holders of
Series B Preferred Stock, and their affiliates, and
dissenting i2 stockholders) pursuant to the merger was fair to
such stockholders from a financial point of view, as of such
date. The full text of the Thomas Weisel Partners opinion, which
sets forth, among other things, the procedures followed,
assumptions made, matters considered and limitations on the
scope of the review undertaken by Thomas Weisel Partners in
rendering its opinion, is attached as
Annex D
to this Proxy Statement.
On the evening of November 4, 2009, following the foregoing
meetings, JDA and i2 executed the merger agreement.
Concurrently, i2s directors, certain executive officers
and the Series B holder executed voting agreements. On
November 4, 2009, JDA and the Wells Fargo Parties also
finalized and executed a commitment letter and fee letter to
provide the necessary financing for, and JDAs directors
and certain executive officers executed voting agreements in
respect of, the alternative structure, if necessary.
On the morning of November 5, 2009, JDA and i2 issued a
joint press release announcing the transaction and the execution
of the merger agreement.
The i2
Board of Directors Recommendation and Reasons for the
Merger
The i2 board has determined that the merger agreement and the
transactions contemplated thereby, including the merger, are
advisable and in the best interests of i2 and its stockholders
and has approved the merger agreement and the transactions
contemplated thereby.
i2s board recommends that holders
of i2 common stock and Series B Preferred Stock vote FOR
the proposal to approve and adopt the merger agreement and the
transactions contemplated thereby (including the merger).
In the course of reaching its decision to approve the merger
agreement and the merger and recommending that the holders of i2
stock vote to approve the merger agreement and the transactions
contemplated thereby (including the merger), the i2 board
consulted i2s legal and financial advisors and considered
a number of factors that it believed supports its decision,
including the following:
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the premium that the merger consideration payable to the i2
common stockholders represents in comparison to the market price
of the stock over recent periods. The i2 board noted that an
$18.00 value of the merger consideration as of November 4,
2009 represents a premium of 10.4% over the closing price of
$16.30 on November 3, 2009; a premium of approximately 9.6%
over the average closing price of $16.42 for the prior month;
and a premium of approximately 28.5% over the average closing
trading price of $14.01 for the prior six months;
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the process undertaken by i2, with the assistance of Thomas
Weisel Partners and, prior to that, JPMorgan, which began in
December 2006 and included contacting or being contacted by more
than 80 potential strategic and financial buyers, including 18
since December 2008. Prior to execution of the prior merger
agreement, seven of those parties provided indications of
interest, three of which were written. Since the termination of
the prior merger agreement, four parties provided written
indications of interest, and two parties, in addition to JDA,
entered into exclusivity agreements with i2;
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the opinion of Thomas Weisel Partners that the merger
consideration payable to i2s common stockholders (other
than JDA, the holders of Series B Preferred Stock, and
their respective affiliates, and dissenting i2 stockholders)
under the merger agreement was, as of the date of the opinion
and based upon and subject to factors and assumptions set forth
therein, fair from a financial point of view to such
stockholders (see The Merger Opinion of
i2s Financial Advisor below);
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the fact that a portion of the merger consideration will be paid
in cash, giving common stockholders an opportunity to
immediately realize value for a portion of their investment and
providing some certainty of value, and that the shares of JDA
common stock to be received would be freely transferable should
i2s common stockholders wish to sell those shares;
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the benefits to the combined company that could result from the
merger, including an enhanced competitive and financial
position, increased diversity in its product line and additional
scale in specific geographic areas, potential cost and synergies
and the fact that, since a portion of the merger consideration
will be paid in JDA stock, i2s common stockholders would,
if they determine to retain the JDA shares payable in the
merger, have the opportunity to participate in any future
earnings or growth of the combined company and future
appreciation in the value of the JDA shares following the merger;
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the likelihood that the merger will be consummated, in light of
improving conditions in capital markets, the terms of JDAs
financing commitment, the financial capability of JDA, the
financing commitment from the Wells Fargo Parties, the escrow
requirements, and the likelihood of no significant antitrust
delays;
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the likelihood that the merger will be consummated, in light of
JDAs experience, reputation and financial capability; the
absence of any financing condition to JDAs obligation to
complete the merger; the likelihood of no significant antitrust
delays;
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the business, financial, market and execution risks associated
with remaining independent and the challenges of successfully
executing i2s current business strategies, with the
resulting uncertainty as to the future value of i2s common
stock;
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the availability of appraisal rights;
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the terms and conditions of the merger agreement, including:
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the scope of the representations, warranties and covenants being
made by i2;
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the limited conditions to the consummation of the merger,
including the requirement that the merger agreement be approved
by i2s stockholders and the definition of material adverse
effect with respect to i2 in the merger agreement;
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the ability of the i2 board of directors, if the failure to do
so would be inconsistent with its fiduciary duty, to provide
information to and engage in negotiations with another party in
connection with an unsolicited, bona fide written proposal that
the i2 board determines in good faith and after consultation
with outside legal counsel is reasonably likely to lead to a
superior proposal and, subject to paying a $15,000,000
termination fee to JDA, which is approximately 3.46% of the
common stock merger consideration, 2.70% of the total merger
consideration and 3.79% of i2s enterprise value (assuming
a cash balance of $160,000,000), accept a superior proposal;
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the i2 board of directors belief that the $15,000,000
termination fee payable to JDA in certain circumstances is
reasonable in the context of termination fees payable in
comparable transactions and would not be likely to preclude
another party from making a competing proposal;
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the fact that the merger agreement provides that i2 may
specifically enforce JDAs obligations, and that i2 may
pursue damages reflecting the economic benefits of the
transaction to its stockholders if JDA fails to close in breach
of the merger agreement (except as the result of the failure to
obtain financing in certain circumstances in which case JDA will
be obligated to pay i2 a break fee of $30,000,000);
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the fact that JDA will be obligated to pay i2 a vote down fee of
$7,000,000, in the event JDAs stockholders do not approve
proposals to issue the shares in the merger and to approve a
charter amendment to increase the number of authorized shares of
JDA common stock necessary to consummate the merger, if such
approval is required and if i2s stockholders approve the
merger;
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the provisions of the merger agreement that require JDA to take
certain actions designed to conserve cash which would facilitate
the ability of JDA, through the financing commitments JDA has
obtained and the cash resources of JDA and i2, to finance the
merger;
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the fact that because the stock portion of the merger
consideration will be based on a fixed exchange ratio, i2s
stockholders will have the opportunity to benefit from any
increase in the trading price of JDAs shares between the
signing of the merger agreement and the completion of the
merger; and
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the fact that, under the intended structure, the approval of the
transaction by JDAs stockholders will not be required.
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The i2 board of directors also considered a number of
potentially countervailing factors in its deliberations
concerning the merger, including the following:
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the requirement by JDA that either i2s founder,
Mr. Sidhu, or the holder of the Series B Preferred Stock
deliver a voting agreement and that Mr. Sidhu had
requested, among other things, registration rights for his
shares and would not agree to restrictions on his ability to
continue to sell his shares as required by JDA, so that, in
order to satisfy JDAs requirement, i2 would be required to
enter into a voting agreement with the holder of the
Series B Preferred Stock, who had insisted that i2 waive
its right of redemption during the term of the merger agreement
in order for such holder to agree to vote in favor of the
transaction;
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the potential for arbitrage of the transaction due to the mix of
consideration not being fixed;
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the fact that because the stock portion of the merger
consideration is a fixed exchange ratio of shares of JDA common
stock to i2 common stock, i2s common stockholders could be
adversely affected by a decrease in the trading price of JDA
common stock during the pendency of the merger, and the fact
that the merger agreement does not provide i2 with a price-based
termination right or other similar protection;
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the fact that, under the intended structure, a smaller portion
of the merger consideration will be in the form of JDA common
stock, so that i2s stockholders will have a smaller
ongoing equity participation in the combined company (and, as a
result, a smaller opportunity to participate in any future
earnings or growth of the combined company and future
appreciation in the value of JDA common stock following the
merger) than they have in i2. i2s board of directors
noted, however, that i2s stockholders would be able to
reinvest the cash received in the merger in JDA common stock;
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the risk that the potential benefits and synergies sought in the
merger will not be realized or will not be realized within the
expected time period, and the risks associated with the
integration by JDA of i2;
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the possibility that the merger might not be completed as a
result of the failure of i2 to meet the minimum cash requirement
of $160 million, the failure of i2s stockholders to
adopt the merger agreement or, if required, the failure of
JDAs stockholders to approve the Stock Issuance Proposal
and the Charter Amendment Proposal, and the effect the
termination of the transaction may have on the trading price of
i2s common stock and operating results;
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the possible effects of the pendency and termination of the
merger agreement on i2s employees and customers, which
effects on i2 would be exacerbated by the substantial costs
incurred in connection with the merger;
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that, under the terms of the merger agreement, i2 cannot solicit
other acquisition proposals and must pay or cause to be paid to
JDA a termination fee of $15,000,000 in cash if the merger
agreement is terminated under certain circumstances specified in
the merger agreement, including if the i2 board exercises its
right to terminate the merger agreement and enter into an
alternative superior transaction, which may deter others from
proposing an alternative transaction that may be more
advantageous to i2s stockholders;
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that any gains from this transaction are expected to be taxable
to i2s stockholders for U.S. federal income tax
purposes;
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the fact that upon the closing of the merger, stockholders will
be required to surrender their shares involuntarily in exchange
for a price determined by the i2 board and that stockholders
will not have the right to liquidate their shares of i2 at a
time and price of their choosing;
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the fact that if JDA fails to complete the merger and is in
breach of the merger agreement, the provisions of the merger
agreement which allow i2 to seek specific performance or damages
will be expensive and lengthy to pursue and uncertain in results
and, alternatively, depending upon the reason for not closing,
the vote down fee (which would be payable under the alternative
structure) or break fee payable by JDA will be inadequate to
compensate i2 for the damage caused and there is no other remedy
in those situations allowed by the merger agreement;
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the fact that i2 is subject to the same remedies of damages and
specific performance should it fail to complete the merger and
be in breach of the merger agreement;
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that the restrictions imposed by the merger agreement on the
conduct of i2s business prior to completion of the merger,
requiring i2 to conduct its business only in the ordinary course
and imposing additional specific restrictions, may delay, limit
or prevent i2 from undertaking business opportunities that may
arise during that period; and
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that the mix of consideration to be received by holders of i2
common stock might not be finalized until December 18,
2009, and this uncertainty might be confusing to some of
i2s stockholders until the mix is determined.
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The i2 board also considered the interests of its directors and
executive officers in the transactions contemplated by the
merger agreement, which are described below under The
Merger Interests of Certain Persons in the
Merger.
The i2 board concluded that, on balance, the potential benefits
to i2 and its stockholders of the transactions contemplated by
the merger agreement outweighed the potential disadvantages and
risks associated with those transactions. The foregoing
discussion of the information and factors considered by the i2
board is not intended to be exhaustive. In view of the variety
of factors considered in connection with its evaluations, the i2
board did not find it practicable to, and did not quantify or
otherwise assign relative weight to, the specific factors
considered in reaching its determination. Instead, the i2 board
conducted an overall analysis of the factors described above,
including summaries of discussions of i2s management with
i2s legal, financial, accounting, tax, and other advisors
and made its determination based on the totality of the
information provided. In considering the factors described
above, individual directors may have given different weights to
different factors.
Opinion
of i2s Financial Advisor
Thomas Weisel Partners began assisting i2s board of
directors in April 2009. On July 21, 2009, i2 signed an
engagement letter with Thomas Weisel Partners, retaining Thomas
Weisel Partners to act as i2s exclusive financial advisor
in connection with the possible sale of i2. On November 4,
2009, Thomas Weisel Partners delivered to the i2 board of
directors its oral and written opinion that, as of that date,
and subject to the limitations, qualifications and assumptions
set forth therein, the merger consideration to be received by
the holders of i2 common stock (other than JDA, holders of
Series B Preferred Stock, and their respective affiliates,
and dissenting i2 stockholders) pursuant to the merger was fair
to such stockholders from a financial point of view.
i2 determined the amount and form of the merger consideration
its stockholders would receive in the merger through
negotiations between i2 and JDA. i2 did not impose any
limitations on Thomas Weisel Partners with respect to the
investigations made or procedures followed in rendering its
opinion. Thomas Weisel Partners opinion and presentation
to the i2 board of directors was one of many factors that the i2
board of directors took into consideration in making its
determination to approve the merger agreement.
The full text of the written opinion of Thomas Weisel
Partners, dated November 4, 2009, is attached as
Annex D
to this Proxy Statement. This summary of
Thomas Weisel Partners opinion is qualified in its
entirety by reference to the full text of such opinion. You
should read this opinion carefully and in its entirety.
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Thomas Weisel Partners directed its opinion to the i2 board
of directors for its information in its consideration of the
merger. Such opinion is not a recommendation to any stockholder
or any other person as to how to vote or otherwise act with
respect to the merger or otherwise. The opinion addresses only
the financial fairness of the consideration to be received by
the holders of i2s common stock (other than JDA, holders
of Series B Preferred Stock, and their respective
affiliates, and dissenting i2 stockholders) as of the date of
the opinion and does not address the relative merits of the
merger and any alternatives to the merger, i2s underlying
decision to proceed with or effect the merger, or any aspect of
the transactions contemplated by the merger agreement. In
addition, the opinion does not address the fairness of the
merger to, or any consideration to be received in connection
therewith by, the holders of any other class of securities,
including Series B Preferred Stock, creditors or other
constituencies of i2; nor does it address the fairness,
financial or otherwise, of the amount or nature of any
consideration or compensation to be paid or payable to any of
such persons or to the officers, directors or employees of JDA
or i2, or any class of such persons, in connection with the
merger, whether relative to the consideration payable to the
holders of i2 common stock or otherwise.
In connection with its opinion, Thomas Weisel Partners:
(1) reviewed certain publicly available financial and other
data with respect to i2 and JDA, including the consolidated
financial statements for recent years and interim periods to
September 30, 2009 and certain other relevant financial and
operating data relating to i2 and JDA made available to Thomas
Weisel Partners from published sources and from the internal
records of i2 and JDA;
(2) reviewed the financial terms and conditions of the
draft of the merger agreement dated November 4, 2009;
(3) reviewed certain publicly available information
concerning the trading of, and the trading market for, i2 common
stock and JDA common stock;
(4) compared i2 and JDA from a financial point of view with
certain other companies in the technology industry which Thomas
Weisel Partners deemed to be relevant;
(5) considered the financial terms, to the extent publicly
available, of selected recent business combinations of companies
in the technology industry which Thomas Weisel Partners deemed
to be relevant;
(6) reviewed and discussed with representatives of the
management of i2 and JDA certain information of a business and
financial nature regarding i2 and JDA, furnished to Thomas
Weisel Partners by i2 and JDA, including financial forecasts and
related assumptions for i2 and JDA;
(7) made inquiries regarding and discussed the merger and
the merger agreement and other matters related thereto with
i2s counsel; and
(8) performed such other analyses and examinations as
Thomas Weisel Partners deemed appropriate.
In preparing its opinion, Thomas Weisel Partners did not assume
any obligation to independently verify, and Thomas Weisel
Partners did not independently verify, the information referred
to above or any other information made available to or reviewed
by them, and Thomas Weisel Partners relied on all such
information being accurate and complete in all material
respects. Thomas Weisel Partners also made the following
assumptions:
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with respect to the financial forecasts for i2 and JDA provided
to Thomas Weisel Partners by i2s and JDAs
managements, upon i2s advice and with the i2 board of
directors consent, Thomas Weisel Partners assumed that the
forecasts had been reasonably prepared on bases reflecting the
best available estimates and judgments of their respective
managements (or, in the case of financial forecasts for JDA
provided to Thomas Weisel Partners by i2, management of i2) at
the time of preparation as to the future financial performance
of i2 and JDA and that they provided a reasonable basis upon
which Thomas Weisel Partners could form its opinion, and Thomas
Weisel Partners did not assume any liability or responsibility
for any financial forecasts for i2 and JDA provided to Thomas
Weisel Partners by i2s and JDAs managements or for
the assumptions on which they were based;
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there had been no material changes in i2s or JDAs
assets, financial condition, results of operations, business or
prospects since the respective dates of their last financial
statements made available to Thomas Weisel Partners;
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the merger will be consummated in a manner that complies in all
respects with the applicable provisions of the Securities Act,
the Exchange Act and all other applicable federal and state
statutes, rules and regulations;
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the merger will be consummated in accordance with the terms
described in the draft of the merger agreement dated
November 4, 2009, without any further amendments thereto,
and without waiver by i2, JDA or Merger Sub of any of the
conditions to their obligations thereunder; and
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in the course of obtaining regulatory or third party approvals,
consents and releases for the merger, no delay, limitation,
restriction or condition will be imposed that would have an
adverse effect on i2, JDA or the contemplated benefits of the
merger.
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In addition:
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Thomas Weisel Partners relied on advice of counsel and
independent accountants to i2 as to all legal and financial
reporting matters with respect to i2, JDA, the merger and the
merger agreement;
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Thomas Weisel Partners did not make or obtain any analysis of
any pending or threatened litigation to which i2 or JDA is a
party or may become subject, and did not consider the possible
outcomes of any such matters;
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Thomas Weisel Partners did not assume responsibility for
obtaining or making an independent evaluation, appraisal or
physical inspection of any of the assets or liabilities
(contingent or otherwise) of i2 or JDA, nor was Thomas Weisel
Partners furnished with any such materials;
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Thomas Weisel Partners did not evaluate or receive any
evaluations of the solvency or fair value of i2, JDA, or Merger
Sub under any laws relating to bankruptcy, insolvency or similar
matters;
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Thomas Weisel Partners expressed no opinion regarding what the
value of JDA common stock will be when issued in connection with
the merger or the price at which i2 common stock or JDA common
stock may trade at any time; Thomas Weisel Partners also noted
that a portion of the consideration to be received by the
stockholders is based upon a fixed exchange ratio and,
accordingly, the market value of the consideration may vary
significantly;
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Thomas Weisel Partners did not address any legal, regulatory,
accounting or tax matters; and
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the Thomas Weisel Partners opinion was based on economic,
monetary, market and other conditions in effect on, and the
information made available to Thomas Weisel Partners as of, the
date of its opinion. Accordingly, although subsequent
developments may affect its opinion, Thomas Weisel Partners has
not assumed any obligation to update, revise or reaffirm its
opinion at any time.
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Valuation
Methods and Analyses
The following is a summary of the material financial analyses
performed by Thomas Weisel Partners in connection with providing
its opinion to the i2 board of directors. Some of the summaries
of financial analyses performed by Thomas Weisel Partners
include information presented in tabular format. In order to
fully understand the financial analyses performed by Thomas
Weisel Partners, you should read the tables together with the
text of each summary. The tables alone do not constitute a
complete description of the financial analyses. Considering the
data set forth in the tables without considering the full
narrative description of the financial analyses, including the
methodologies and assumptions underlying the analyses, could
create a misleading or incomplete view of the financial analyses
performed by Thomas Weisel Partners.
The following description is not a comprehensive description of
all analyses and examinations actually conducted by Thomas
Weisel Partners. The preparation of a fairness opinion
necessarily is not susceptible to partial analysis or summary
description. Thomas Weisel Partners believes that its analyses
must be considered as a whole and that selecting portions of its
analyses and of the factors considered, without considering all
analyses and factors, could create a misleading or incomplete
view of the process underlying its opinion. In addition, Thomas
Weisel
44
Partners may have given various analyses more or less weight
than other analyses, and may have deemed various assumptions
more or less probable than other assumptions. The fact that any
specific analysis has been referred to in the summary below is
not meant to indicate that this analysis was given greater
weight than any other analysis. Accordingly, the ranges of
valuations resulting from any particular analysis described
above should not be taken to be the view of Thomas Weisel
Partners with respect to the actual value of i2 or JDA.
Valuation
of i2
Selected Public Company Analysis.
Based on
public and other available information, Thomas Weisel Partners
calculated i2s implied enterprise value (Thomas Weisel
Partners defined enterprise value as equity value plus net
debt), implied equity value and implied per share value based on
multiples of projected calendar year 2009 and 2010 revenues,
earnings before interest, taxes, depreciation and amortization
(referred to as EBITDA) (adjusted for restructuring and other
non-recurring expenses), free cash flow and price-earnings
ratios of the following six public companies (referred to as the
selected companies) in the technology sector. Thomas Weisel
Partners believes that these six companies have operations
similar to some of the operations of i2, but noted that none of
these companies have the same management, composition, size or
combination of businesses as i2.
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The Descartes Systems Group Inc.
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Epicor Software Corporation
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Exact Holding N.V.
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Lawson Software, Inc.
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Manhattan Associates, Inc.
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PROS Holdings, Inc.
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In conducting this analysis with respect to i2, Thomas Weisel
Partners also included JDA in the selected companies.
The following table sets forth the first quartile, median and
third quartile multiples for the selected companies indicated by
this analysis:
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Enterprise Value/
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Enterprise Value/
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Equity Value/Free
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Share Price/
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Revenue
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Adjusted EBITDA
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Cash Flow
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Earnings
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2009
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2010
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2009
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2010
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2009
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2010
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2009
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2010
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3rd Quartile
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2.2
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x
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2.1
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x
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11.4
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x
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10.5
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x
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17.8
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x
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19.4
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x
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24.2
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x
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23.0
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x
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Median
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1.7
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x
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1.6
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x
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10.0
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x
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9.6
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x
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17.0
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x
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12.7
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x
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17.1
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x
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14.5
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x
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1st Quartile
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1.6
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x
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1.5
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x
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7.7
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x
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6.8
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x
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12.4
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x
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10.7
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x
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15.0
|
x
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13.7
|
x
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Based on this analysis, Thomas Weisel Partners derived ranges of
implied per share values for i2 common stock as set forth in the
following table:
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Enterprise Value/
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Enterprise Value/
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Equity Value/Free
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Share Price/
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Revenue
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Adjusted EBITDA
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Cash Flow
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Earnings
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2009
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2010
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2009
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2010
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2009
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2010
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2009
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2010
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$
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19.15
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$
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18.73
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$
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26.33
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$
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22.87
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$
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23.25
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$
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13.60
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$
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24.29
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$
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16.33
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$
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15.17
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$
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15.14
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$
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19.06
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$
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15.25
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$
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10.83
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$
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8.30
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$
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18.33
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$
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11.94
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Selected Precedent Transactions
Analysis.
Based on public and other available
information, Thomas Weisel Partners calculated i2s implied
enterprise value, implied equity value and implied per share
value based on multiples, to the extent available, of last
twelve months and projected next twelve months revenue and
EBITDA indicated for the target companies in the following nine
acquisitions (referred to as the selected transactions) of
technology companies that have been announced since
January 1, 2009. Thomas Weisel Partners believes that the
45
target companies in the selected transactions have operations
similar to some of the operations of i2, but noted that none of
these companies have the same management, composition, size or
combination of businesses as i2.
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Announcement Date
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Name of Acquiror
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Name of Target
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7/7/09
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Symphony Technology Elliot Associates
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MSC Software
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6/12/09
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Infor/Golden Gate
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SoftBrands
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5/6/09
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Open Text
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Vignette
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5/6/09
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MicroFocus
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Borland
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5/6/09
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MicroFocus
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Compuware
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4/13/09
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Thoma Bravo
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Entrust
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4/6/09
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Vista Equity Partners
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SumTotal
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1/22/09
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Autonomy
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Interwoven
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1/12/09
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Vector Capital
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Aladdin
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The following table sets forth the first quartile, median and
third quartile multiples for the selected transactions indicated
by this analysis:
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Enterprise Value/Adjusted
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Enterprise Value/Revenue
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EBITDA
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Last Twelve
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Next Twelve
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Last Twelve
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Next Twelve
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Months
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Months
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Months
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Months
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3rd Quartile
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1.3
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x
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1.1
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x
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12.4
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x
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9.7
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x
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Median
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1.0
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x
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1.0
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x
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10.8
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x
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8.9
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x
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1st Quartile
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1.0
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x
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|
1.0
|
x
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7.8
|
x
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7.8
|
x
|
Based on this analysis, Thomas Weisel Partners derived ranges of
implied per share values for i2 common stock as set forth in the
following table:
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|
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Enterprise Value/Revenue
|
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Enterprise Value/Adjusted EBITDA
|
Last Twelve
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Next Twelve
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Last Twelve
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Next Twelve
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Months
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Months
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Months
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Months
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$
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12.69
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$
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13.05
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$
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27.76
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$
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21.26
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$
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12.49
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$
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12.57
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$
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21.28
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$
|
19.15
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Discounted Cash Flow Analysis.
Thomas Weisel
Partners used financial forecasts for i2, as provided by
i2s management, to perform a discounted cash flow
analysis. In conducting this analysis, Thomas Weisel Partners
assumed that i2 would perform in accordance with these
forecasts. Thomas Weisel Partners first estimated the terminal
value of the projected cash flows, using estimated long-term
growth rates of 2% to 4%, as provided by i2s management.
Thomas Weisel Partners then discounted the cash flows projected
and the terminal values to present values using discount rates
ranging from 11.0% to 19.0%. This analysis indicated a range of
enterprise values, which were then increased by i2s
estimated net cash, to calculate a range of equity values. These
equity values were then divided by fully diluted shares
outstanding to calculate implied equity values per share ranging
from $14.32 to $18.83, based on long-term growth rates of 2.5%
to 3.5% and discount rates of 13% to 17%.
Valuation
of JDA
Selected Public Company Analysis.
Based on
public and other available information, Thomas Weisel Partners
calculated JDAs implied enterprise value, implied equity
value and implied per share value based on multiples of
projected calendar year 2009 and 2010 revenues, EBITDA (adjusted
for restructuring and other non-recurring expenses), free cash
flow and share price-earnings ratios for the selected companies
(as described above). Thomas Weisel Partners believes that the
selected companies have operations similar to some of the
operations of JDA, but noted that none of these companies have
the same management, composition, size or combination of
businesses as JDA.
In conducting this analysis with respect to JDA, Thomas Weisel
Partners also included i2 in the selected companies.
46
The following table sets forth the first quartile, median and
third quartile multiples for the selected companies indicated by
this analysis:
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|
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|
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|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
Enterprise Value/
|
|
Enterprise Value/
|
|
Equity Value/Free
|
|
Share Price/
|
|
|
Revenue
|
|
Adjusted EBITDA
|
|
Cash Flow
|
|
Earnings
|
|
|
2009
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
2010
|
|
3rd Quartile
|
|
|
2.2
|
x
|
|
|
2.1
|
x
|
|
|
11.4
|
x
|
|
|
10.5
|
x
|
|
|
17.8
|
x
|
|
|
19.4
|
x
|
|
|
24.2
|
x
|
|
|
23.0
|
x
|
Median
|
|
|
1.7
|
x
|
|
|
1.6
|
x
|
|
|
10.0
|
x
|
|
|
9.6
|
x
|
|
|
17.0
|
x
|
|
|
15.2
|
x
|
|
|
17.1
|
x
|
|
|
14.8
|
x
|
1st Quartile
|
|
|
1.5
|
x
|
|
|
1.4
|
x
|
|
|
7.7
|
x
|
|
|
7.0
|
x
|
|
|
13.7
|
x
|
|
|
11.7
|
x
|
|
|
15.3
|
x
|
|
|
14.3
|
x
|
Based on this analysis, Thomas Weisel Partners derived ranges of
implied per share values for JDA common stock as set forth in
the following table:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Enterprise Value/
|
|
Enterprise Value/
|
|
Equity Value/Free
|
|
Share Price/
|
Revenue
|
|
Adjusted EBITDA
|
|
Cash Flow
|
|
Earnings
|
2009
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
2010
|
|
$
|
26.14
|
|
|
$
|
26.80
|
|
|
$
|
33.73
|
|
|
$
|
30.41
|
|
|
$
|
48.11
|
|
|
$
|
33.83
|
|
|
$
|
38.43
|
|
|
$
|
38.88
|
|
$
|
18.77
|
|
|
$
|
18.99
|
|
|
$
|
23.80
|
|
|
$
|
21.28
|
|
|
$
|
37.13
|
|
|
$
|
20.71
|
|
|
$
|
24.21
|
|
|
$
|
24.14
|
|
Selected Precedent Transactions
Analysis.
Based on public and other available
information, Thomas Weisel Partners calculated JDAs
implied enterprise value, implied equity value and implied per
share value, based on multiples, to the extent available, of
last twelve months and projected next twelve months revenue and
EBITDA indicated for the target companies in the selected
transactions (as described above). Thomas Weisel Partners
believes that the target companies in the selected transactions
have operations similar to some of the operations of JDA, but
noted that none of these companies have the same management,
composition, size or combination of businesses as JDA.
The following table sets forth the first quartile, median and
third quartile multiples for the selected transactions indicated
by this analysis:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Enterprise Value/Adjusted
|
|
|
Enterprise Value/Revenue
|
|
EBITDA
|
|
|
Last Twelve
|
|
Next Twelve
|
|
Last Twelve
|
|
Next Twelve
|
|
|
Months
|
|
Months
|
|
Months
|
|
Months
|
|
3rd Quartile
|
|
|
1.3
|
x
|
|
|
1.1
|
x
|
|
|
12.4
|
x
|
|
|
9.7
|
x
|
Median
|
|
|
1.0
|
x
|
|
|
1.0
|
x
|
|
|
10.8
|
x
|
|
|
8.9
|
x
|
1st Quartile
|
|
|
1.0
|
x
|
|
|
1.0
|
x
|
|
|
7.8
|
x
|
|
|
7.8
|
x
|
Based on this analysis, Thomas Weisel Partners derived ranges of
implied per share values for JDA common stock as set forth in
the following table:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Enterprise Value/Revenue
|
|
Enterprise Value/Adjusted EBITDA
|
Last Twelve
|
|
Next Twelve
|
|
Last Twelve
|
|
Next Twelve
|
Months
|
|
Months
|
|
Months
|
|
Months
|
|
$
|
16.64
|
|
|
$
|
15.04
|
|
|
$
|
36.59
|
|
|
$
|
28.43
|
|
$
|
13.46
|
|
|
$
|
13.89
|
|
|
$
|
24.19
|
|
|
$
|
23.54
|
|
Discounted Cash Flow Analysis.
Thomas Weisel
Partners used financial forecasts for JDA, as estimated by
JDAs management, to perform a discounted cash flow
analysis with respect to JDA. In conducting this analysis,
Thomas Weisel Partners assumed that JDA would perform in
accordance with these forecasts. Thomas Weisel Partners first
estimated the terminal value of the projected cash flows, using
estimated long-term growth rates of 2% to 4%, as provided by i2
management. Thomas Weisel Partners then discounted the cash
flows projected and the terminal values to present values using
discount rates ranging from 10.0% to 18.0%. This analysis
indicated a range of enterprise values, which were then
increased by the JDAs estimated net cash, to calculate a
range of equity values. These equity values were then divided by
fully diluted shares outstanding to calculate implied equity
values per share ranging from $15.51 to $21.98, based on
long-term growth rates of 2.5% to 3.5% and discount rates of 12%
to 16%.
47
Transaction
Analyses
Historical Exchange Ratio Analysis.
Thomas
Weisel Partners compared historical implied exchange ratios for
i2s and JDAs common stock, based on their respective
trading prices. Thomas Weisel Partners noted that the implied
exchange ratio for i2 common stock and JDA common stock as of
November 4, 2009, the last trading day before public
announcement of the merger, was 0.798x; the
ten-day
exchange ratio range was between 0.798x and 0.740x; the
one-month exchange ratio range was between 0.798x and 0.695x;
the three-month exchange ratio range was between 0.834x and
0.599x; the six-month exchange ratio range was between 0.849x
and 0.589x; and the twelve-month exchange ratio range was
between 0.852x and 0.448x. Thomas Weisel Partners noted that the
implied share exchange ratio in the merger was 0.870x, based on
an implied offer price per share of i2 common stock in the
merger of $18.00 and the closing price of JDA common stock on
November 4, 2009 of $20.70.
Earnings Per Share Accretion/Dilution
Analysis.
Thomas Weisel Partners analyzed the
potential pro forma GAAP and non-GAAP earnings per share for JDA
implied by the calendar year 2010 forecasts for i2 and JDA
provided by the management of i2 and JDA, along with certain
financial assumptions for the combined entity, including net
synergies, as provided by i2 and JDA. This analysis implied that
the merger would result in dilution of JDAs GAAP earnings
per share of approximately 43.8%, and accretion of JDAs
non-GAAP earnings per share of approximately 28.2%.
General
In performing its analyses, Thomas Weisel Partners made numerous
assumptions with respect to industry performance, general
business and economic conditions and other matters, many of
which are beyond the control of i2 and JDA. The analyses
performed by Thomas Weisel Partners are not necessarily
indicative of actual values or actual future results, which may
be significantly more or less favorable than those suggested by
these analyses. These analyses were prepared solely as part of
the analysis performed by Thomas Weisel Partners with respect to
the financial fairness to the holders of i2 common stock (other
than JDA, the holders of Series B Preferred Stock, and
their respective affiliates, and dissenting i2 stockholders) of
the consideration to be received by such holders pursuant to the
merger as of the date of Thomas Weisel Partners opinion,
and were provided to the i2 board of directors in connection
with the delivery of the Thomas Weisel Partners opinion. Thomas
Weisel Partners has expressed no opinion as to the relative
fairness of the consideration that would be received by the
holders of i2 common stock and the holders of any other class of
securities, including the Series B Preferred Stock,
creditors or other constituencies of i2. The analyses do not
purport to be appraisals or to reflect the prices at which a
company might actually be sold or the prices at which any
securities may trade at any time in the future.
Pursuant to an engagement letter between i2 and Thomas Weisel
Partners dated July 21, 2009, i2 engaged Thomas Weisel
Partners as a financial advisor with respect to the merger and
to deliver its opinion as to the fairness, from a financial
point of view and as of the date of the opinion, of the merger
consideration to be received by the holders of i2 common stock
(other than JDA, the holders of Series B Preferred Stock,
and their respective affiliates, and dissenting i2 stockholders)
pursuant to the merger. The i2 board of directors selected
Thomas Weisel Partners to act as its financial advisor and to
render the fairness opinion based on Thomas Weisel
Partners experience, expertise and reputation, and its
familiarity with i2s business. As compensation for its
services in connection with the merger, i2 paid Thomas Weiser
Partners a retainer fee and, upon the delivery of Thomas Weisel
Partners opinion, a fee of $400,000. Additional
compensation of 1.25% of the aggregate consideration (including
outstanding indebtedness) in the merger, or approximately
$4.5 million based on the closing share prices of i2 and
JDA as of November 4, 2009, will be payable to Thomas
Weisel Partners upon completion of the merger, against which the
amounts paid for the retainer and for the opinion will be
credited. Further, i2 has agreed to reimburse Thomas Weisel
Partners for its
out-of-pocket
expenses and to indemnify Thomas Weisel Partners, its
affiliates, and their respective partners, directors, officers,
agents, consultants, employees and controlling persons against
specific liabilities, including liabilities under the federal
securities laws. The i2 board of directors was aware of this fee
structure and took it into account in considering the Thomas
Weisel Partners opinion and in approving the merger.
In the ordinary course of business, Thomas Weisel Partners
actively trades the equity securities of i2 and JDA for its own
account and for the accounts of customers and, accordingly, may
at any time hold a long or short position
48
in such securities. Thomas Weisel Partners has previously
performed various investment banking services for i2, including
acting as i2s financial advisor in connection with its
repurchase of its convertible notes, and has received
compensation in connection with such relationship.
Projected
Financial Information
i2 does not as a matter of course make public projections as to
future performance, earnings or other results beyond the current
fiscal quarter due to the unpredictability of the underlying
assumptions and estimates. However, i2 provided certain
non-public financial information to Thomas Weisel Partners in
its capacity as i2s financial advisor, including
projections by i2s management of i2s fiscal years
ending December 31, 2009 through 2012. These projections
were in turn used by Thomas Weisel Partners in performing their
analyses described on page 42 through 49 of this Proxy
Statement. The projections of i2s fiscal years ending
December 31, 2009 through 2012 and certain historical i2
financial information were also provided to JDA. i2 employed the
following key assumptions in preparing the i2 projections:
|
|
|
|
|
Overall, the information for fiscal year 2009 through fiscal
year 2012 is based on the assumption that new investment in
sales, marketing and research and development in fiscal years
2009 and 2010 will result in additional bookings, revenue and
cash collections starting in the second half of fiscal year 2010
through the remainder of the periods shown.
|
|
|
|
Revenue for the fourth quarter of fiscal year 2009 and by
quarter for fiscal year 2010 was based on the existing backlog
and projected new and renewal bookings for license and service.
Maintenance revenue is based on the current trends for renewals
and cancellations for the same time period. For fiscal years
2011 and 2012, annual revenue was based on the additional
headcount in sales to be added in fiscal years 2009 and 2010 and
the resulting assumed
ramp-up
time
and productivity to add new bookings. Maintenance revenue
continues to decline through fiscal year 2011 before flattening
out in fiscal year 2012 due largely to additional license
bookings that results in assumed new maintenance revenue.
|
|
|
|
Operating expenses were based on the current expense structure
and additional investment in sales, marketing and intellectual
property legal expenses. Additional sales personnel in fiscal
years 2009 and 2010 reflect i2s plan to increase the sales
headcount across all major geographies, which is accompanied by
additional marketing expenditures and targeted increases in
research and development.
|
|
|
|
These additional investments are assumed to result in operating
margins declining from a projected level of 18.0% in fiscal year
2009 to 15.7% in fiscal year 2010 and then increasing to 18.9%
in fiscal year 2012. Gross profit margins decline slightly from
64.3% in fiscal year 2009 to 63.2% in fiscal year 2012 due
mainly to additional pricing pressure in services and
maintenance.
|
|
|
|
Income tax expense assumes the continued utilization of deferred
tax assets during the fiscal year 2009 through fiscal year 2012
periods.
|
|
|
|
Cash flow from operations declines from $30.5 million in
fiscal year 2009 to $25.3 million in fiscal year 2010 due
to the additional investments in operating expenses before
increasing in fiscal years 2011 and 2012 due to the additional
cash collections associated with new bookings.
|
A summary of these projections, which assume i2 operations on a
stand-alone basis, is set forth below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ending December 31,
|
|
|
|
2009E
|
|
|
2010E
|
|
|
2011E
|
|
|
2012E
|
|
|
|
(In millions)
|
|
|
Revenue
|
|
$
|
220.9
|
|
|
|
223.1
|
|
|
|
235.6
|
|
|
|
252.5
|
|
Operating Income
|
|
$
|
39.7
|
|
|
|
35.1
|
|
|
|
38.8
|
|
|
|
47.7
|
|
Pre-tax Income
|
|
$
|
36.5
|
|
|
|
33.9
|
|
|
|
37.7
|
|
|
|
46.6
|
|
Net Income
|
|
$
|
30.7
|
|
|
|
27.1
|
|
|
|
30.1
|
|
|
|
37.3
|
|
Cash Flow From Operations
|
|
$
|
30.5
|
|
|
|
25.3
|
|
|
|
35.0
|
|
|
|
38.0
|
|
The prospective financial information included in this Proxy
Statement has been prepared by, and is the responsibility of,
i2s management. This projected financial information was
not prepared with a view toward
49
public disclosure and it was not prepared with a view toward
compliance with published guidelines of the SEC, the guidelines
established by the American Institute of Certified Public
Accountants for preparation and presentation of financial
forecasts, or generally accepted accounting principles. Grant
Thornton LLP, i2s registered independent public accounting
firm, has not examined, compiled, or performed any procedures
with respect to the accompanying prospective financial
information and, accordingly, Grant Thornton LLP expresses no
opinion or any other form of assurance with respect thereto.
Grant Thornton LLPs report included in this Proxy
Statement relates to i2s historical financial information.
It does not extend to the prospective financial information and
should not be read to do so. The summary of these projections is
not being included in this Proxy Statement to influence an i2
stockholders decision whether to vote in favor of the
Merger Proposal, but because it represents an assessment by
i2s management of future cash flows that was used in
Thomas Weisel Partners financial analysis and on which the
i2 board of directors relied in making its recommendation to
i2s stockholders.
The projected financial information was based on numerous
variables and assumptions that are inherently uncertain and may
be beyond the control of i2. Important factors that may affect
actual results and result in the forecast results not being
achieved include, but are not limited to, fluctuations in demand
for the companys products; the risk that increased sales,
marketing and research and development expenditures might not
result in additional bookings and revenues; change in customer
budgets; failure of the company to retain, recruit and hire key
management, sales and technical personnel; inability to achieve
cost saving initiatives; the failure to adequately enable the
sales force to achieve certain sales performance objectives;
adverse reactions to the merger by customers, suppliers and
strategic partners; and other risks described in this Proxy
Statement under the headings Forward Looking
Statements and Risk Factors. The assumptions
upon which the projections were based necessarily involve
judgments with respect to, among other things, future economic
and competitive conditions and financial market conditions,
which are difficult to predict accurately and many of which are
beyond either i2s or JDAs control.
Accordingly, there can be no assurance that the projections will
be realized, and actual results may vary materially from those
shown. The inclusion of the projections in this Proxy Statement
should not be regarded as an indication that any of i2, JDA or
any of their respective affiliates, advisors or representatives
considered or consider the projections to be predictive of
actual future events, and the projections should not be relied
upon as such. None of i2, JDA or any of their respective
affiliates, advisors, officers, directors or representatives can
give any assurance that actual results will not differ from
these projections, and none of them undertakes any obligation to
update or otherwise revise or reconcile the projections to
reflect circumstances existing after the date such projections
were generated or to reflect the occurrence of future events
even in the event that any or all of the assumptions underlying
the projections are shown to be in error. Neither i2 nor JDA
intends to make publicly available any update or other revisions
to the projections, except as required by law. None of i2, JDA
or their respective affiliates, advisors, officers, directors or
representatives has made or makes any representation to any
stockholder or other person regarding the ultimate performance
of the combined company compared to the information contained in
the projections or that forecasted results will be achieved. i2
has made no representation to JDA, in the merger agreement or
otherwise, concerning the projections.
i2s stockholders are cautioned not to place undue
reliance on the projected financial information included in this
Proxy Statement.
Interests
of i2s Directors and Executive Officers in the
Merger
In considering the recommendation of the i2 board of directors
in favor of the merger, you should be aware that there are
provisions of the merger agreement and other existing agreements
that will result in certain benefits to i2s directors and
executive officers that are not available to stockholders
generally. The i2 board of directors was aware of, and
considered the interests of, its directors and executive
officers and the potential conflicts arising from such interests
in its deliberations of the merits of the merger and in
approving the merger agreement and the merger. Other than the
provisions of the merger agreement described below, the
arrangements described below were in existence before the merger
discussions. Stockholders should take these benefits into
account in deciding whether to vote for approval of the merger
agreement.
50
Stock
Options, Restricted Stock Units and Restricted
Stock.
In the merger, each outstanding option to acquire i2 common
stock will be canceled and terminated at the effective time and
converted into the right to receive the merger consideration
with respect to the number of shares of i2 common stock that
would be issuable upon a net exercise of such option assuming
the market value of the i2 common stock at the time of such
exercise were equal to the value of the merger consideration as
of the close of trading on the trading day immediately prior to
the effective time. Any outstanding option with a per-share
exercise price that is greater than or equal to such amount will
be canceled and terminated as of the effective time, and no
payment will be made with respect thereto.
Also, at the effective time of the merger, each i2 restricted
stock unit award outstanding immediately prior to the effective
time of the merger will become fully vested (except that with
respect to any restricted stock unit which by the terms of the
award agreement pursuant to which it was granted provides for a
lesser percentage of such restricted stock unit to become vested
upon the consummation of the merger, such restricted stock unit
shall only become vested as to such lesser percentage), and then
will be canceled and terminated at the effective time, and the
holder of such vested restricted stock unit will be entitled to
receive the merger consideration for each share of i2 common
stock into which the vested portion of the restricted stock unit
would otherwise be convertible. Each restricted stock award will
become fully vested immediately prior to the effective time.
The following tables set forth (i) the number of vested
options held by i2s executive officers and directors;
(ii) the number of shares of i2 common stock subject to
options held by such persons that will vest as a result of the
merger; (iii) the number of shares underlying restricted
stock units that will be converted as a result of the merger;
(iv) the number of shares of restricted stock that will
vest as a result of the merger; and (v) the estimated value
of the merger consideration that such persons will receive
pursuant to the acceleration and conversion of their options and
restricted stock units. The implied value of the merger
consideration payable at the effective time of the merger may
vary, and the table is based on the implied value of the merger
consideration of $18.65 as of December 15, 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Options that Vest as a
|
|
|
|
|
|
|
Vested Stock Options*
|
|
|
Result of the Merger
|
|
|
All Stock Options
|
|
|
|
Shares of
|
|
|
Weighted
|
|
|
|
|
|
Shares of
|
|
|
Weighted
|
|
|
|
|
|
|
|
|
|
Common
|
|
|
Average
|
|
|
Realizable
|
|
|
Common
|
|
|
Average
|
|
|
Realizable
|
|
|
Realizable
|
|
|
|
Stock
|
|
|
Exercise
|
|
|
Value at
|
|
|
Stock
|
|
|
Exercise
|
|
|
Value at
|
|
|
Value at
|
|
|
|
Subject to
|
|
|
Price per
|
|
|
Closing of
|
|
|
Subject to
|
|
|
Price per
|
|
|
Closing of the
|
|
|
Closing of the
|
|
Name
|
|
Options
|
|
|
Share
|
|
|
Merger
|
|
|
Options
|
|
|
Share
|
|
|
Merger
|
|
|
Merger
|
|
|
Michael Berry
|
|
|
66,988
|
|
|
$
|
14.33
|
|
|
$
|
289,580.20
|
|
|
|
19,772
|
|
|
$
|
12.44
|
|
|
$
|
122,743.00
|
|
|
$
|
412,323.20
|
|
John Harvey
|
|
|
14,111
|
|
|
$
|
11.82
|
|
|
$
|
96,368.63
|
|
|
|
11,622
|
|
|
$
|
12.34
|
|
|
$
|
73,389.00
|
|
|
$
|
169,757.63
|
|
Adita Srivastava
|
|
|
56,156
|
|
|
$
|
11.34
|
|
|
$
|
410,405.36
|
|
|
|
11,803
|
|
|
$
|
12.42
|
|
|
$
|
73,486.94
|
|
|
$
|
483,892.30
|
|
Hiten Varia
|
|
|
102,570
|
|
|
$
|
12.06
|
|
|
$
|
676,310.66
|
|
|
|
15,839
|
|
|
$
|
12.45
|
|
|
$
|
98,258.14
|
|
|
$
|
774,568.80
|
|
Jackson Wilson, Jr.
|
|
|
54,061
|
|
|
$
|
11.61
|
|
|
$
|
380,433.81
|
|
|
|
47,774
|
|
|
$
|
11.10
|
|
|
$
|
360,456.39
|
|
|
$
|
740,890.20
|
|
Stephen Bradley
|
|
|
24,011
|
|
|
$
|
12.55
|
|
|
$
|
146,381.90
|
|
|
|
17,802
|
|
|
$
|
12.46
|
|
|
$
|
110,170.52
|
|
|
$
|
256,552.42
|
|
J. Coley Clark
|
|
|
4,596
|
|
|
$
|
12.27
|
|
|
$
|
29,322.48
|
|
|
|
19,322
|
|
|
$
|
12.26
|
|
|
$
|
123,476.94
|
|
|
$
|
152,799.42
|
|
Richard Clemmer
|
|
|
25,159
|
|
|
$
|
12.46
|
|
|
$
|
155,735.76
|
|
|
|
17,559
|
|
|
$
|
12.42
|
|
|
$
|
109,412.36
|
|
|
$
|
265,148.12
|
|
Richard Hunter
|
|
|
4,596
|
|
|
$
|
12.27
|
|
|
$
|
29,322.48
|
|
|
|
19,322
|
|
|
$
|
12.26
|
|
|
$
|
123,476.94
|
|
|
$
|
152,799.42
|
|
Michael Simmons
|
|
|
10,745
|
|
|
$
|
13.49
|
|
|
$
|
55,494.60
|
|
|
|
20,426
|
|
|
$
|
12.58
|
|
|
$
|
123,991.21
|
|
|
$
|
179,485.81
|
|
Lloyd Waterhouse
|
|
|
24,011
|
|
|
$
|
12.55
|
|
|
$
|
146,381.90
|
|
|
|
17,802
|
|
|
$
|
12.46
|
|
|
$
|
110,170.52
|
|
|
$
|
256,552.42
|
|
Steve Estrada(1)
|
|
|
1,379
|
|
|
$
|
15.88
|
|
|
$
|
3,814.48
|
|
|
|
0
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
3,814.48
|
|
David Pope(2)
|
|
|
3,401
|
|
|
$
|
15.46
|
|
|
$
|
10,849.19
|
|
|
|
0
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
10,849.19
|
|
Surku Sinnadurai(3)
|
|
|
3,917
|
|
|
$
|
16.13
|
|
|
$
|
9,882.30
|
|
|
|
0
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
9,882.30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
395,701
|
|
|
|
|
|
|
$
|
2,440,283.75
|
|
|
|
219,043
|
|
|
|
|
|
|
$
|
1,429,031.96
|
|
|
$
|
3,869,315.71
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
51
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock Units
|
|
|
Restricted Stock Awards
|
|
|
|
|
|
|
Outstanding that Vest as a
|
|
|
Outstanding that Vest
|
|
|
|
|
|
|
Result of the Merger
|
|
|
as a Result of the Merger
|
|
|
All Equity Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Estimated
|
|
|
|
Shares of
|
|
|
|
|
|
|
|
|
|
|
|
Merger Consideration
|
|
|
|
Common
|
|
|
Realizable
|
|
|
|
|
|
Realizable
|
|
|
Payment in respect of
|
|
|
|
Stock
|
|
|
Value at
|
|
|
Shares of
|
|
|
Value at
|
|
|
Options, RSUs and
|
|
|
|
Subject to
|
|
|
Closing of
|
|
|
Restricted
|
|
|
Closing of the
|
|
|
Restricted
|
|
Name
|
|
RSUs
|
|
|
Merger
|
|
|
Stock
|
|
|
Merger
|
|
|
Stock Awards
|
|
|
Michael Berry
|
|
|
93,462
|
|
|
$
|
1,743,066.30
|
|
|
|
0
|
|
|
$
|
|
|
|
$
|
2,155,389.50
|
|
John Harvey
|
|
|
25,926
|
|
|
$
|
483,519.90
|
|
|
|
0
|
|
|
$
|
|
|
|
$
|
653,277.53
|
|
Aditya Srivastava
|
|
|
39,259
|
|
|
$
|
732,180.35
|
|
|
|
0
|
|
|
$
|
|
|
|
$
|
1,216,072.65
|
|
Hiten Varia
|
|
|
66,149
|
|
|
$
|
1,233,678.85
|
|
|
|
0
|
|
|
$
|
|
|
|
$
|
2,008,247.65
|
|
Jackson Wilson, Jr.
|
|
|
143,310
|
|
|
$
|
2,672,731.50
|
|
|
|
0
|
|
|
$
|
|
|
|
$
|
3,413,621.70
|
|
Stephen Bradley
|
|
|
0
|
|
|
$
|
|
|
|
|
8,499
|
|
|
$
|
158,506.35
|
|
|
$
|
415,058.77
|
|
J. Coley Clark
|
|
|
0
|
|
|
$
|
|
|
|
|
9,857
|
|
|
$
|
183,833.05
|
|
|
$
|
336,632.47
|
|
Richard Clemmer
|
|
|
0
|
|
|
$
|
|
|
|
|
8,499
|
|
|
$
|
158,506.35
|
|
|
$
|
423,654.47
|
|
Richard Hunter
|
|
|
0
|
|
|
$
|
|
|
|
|
9,857
|
|
|
$
|
183,833.05
|
|
|
$
|
336,632.47
|
|
Michael Simmons
|
|
|
0
|
|
|
$
|
|
|
|
|
8,499
|
|
|
$
|
158,506.35
|
|
|
$
|
337,992.16
|
|
Lloyd Waterhouse
|
|
|
0
|
|
|
$
|
|
|
|
|
8,499
|
|
|
$
|
158,506.35
|
|
|
$
|
415,058.77
|
|
Steve Estrada(1)
|
|
|
0
|
|
|
$
|
|
|
|
|
0
|
|
|
$
|
|
|
|
$
|
3,814.48
|
|
David Pope(2)
|
|
|
0
|
|
|
$
|
|
|
|
|
0
|
|
|
$
|
|
|
|
$
|
10,849.19
|
|
Surku Sinnadurai(3)
|
|
|
0
|
|
|
$
|
|
|
|
|
0
|
|
|
$
|
|
|
|
$
|
9,882.30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
368,106
|
|
|
$
|
6,865,176.90
|
|
|
|
53,710
|
|
|
$
|
1,001,691.50
|
|
|
$
|
11,736,184.11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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(1)
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Mr. Estrada resigned as an executive officer effective as
of January 29, 2009.
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(2)
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Mr. Pope resigned as a director on May 28, 2009.
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(3)
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Mr. Sinnadurai resigned as an executive officer effective
as of February 18, 2009.
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Stock Ownership.
i2s officers and
directors also beneficially owned
approximately shares
of i2 common stock as of the record date, and such shares will
be treated similar to all other outstanding i2 common stock in
connection with the merger.
Existing Employment and Severance
Agreements.
In February 2008, i2 entered into
executive retention agreements with executive officers
Mr. Berry, Mr. Varia, Mr. Srivastava, and
Mr. Harvey. The agreements entitle these individuals to
benefits including a lump sum payment of one year base salary,
target bonus plus the pro-rata portion of target bonus for the
year of termination and one year of COBRA payments in the event
the officer is terminated by i2 other than for cause
(as defined in the applicable agreement), or the officer
terminates for good reason (as defined in the
applicable agreement). All unvested equity awards will
accelerate and become immediately exercisable in the event of
the executive officers termination without cause. These
payments are limited under Code Section 280G(b)(2)
governing parachute payments, to the greater of (i) the
amount of those payments which would not constitute such a
parachute payment or (ii) the amount which yields the
officer the greatest after-tax amount of benefits after taking
into account any excise tax imposed under Code Section 4999
on the payments and benefits provided. Under the terms of the
merger agreement, all unvested equity awards will fully vest at
the time of the merger. The agreements also contain
non-competition and non-interference covenants, which restrict
the executive officers for a term of 12 months after their
separation from i2. These agreements supersede all other
employment agreements with the executive officers.
Upon his appointment as Executive Chairman of the i2 board of
directors in May 2008, i2 and Mr. Wilson entered into an
employment agreement. This agreement was superseded in January
2009 when Mr. Wilson was appointed as Chief Executive
Officer and President of i2. This agreement, as amended,
entitles him to a base salary of $500,000 and provides for a
target bonus of $500,000. The agreement entitles him to benefits
including a lump sum payment of one year base salary, target
bonus plus the pro-rata portion of target bonus for the year of
52
termination and one year of COBRA payments in the event the
officer is terminated by i2 other than for cause (as
defined in the agreement), or if he terminates for good
reason (as defined in the agreement). The agreement also
provided for a grant of restricted stock units with respect to
160,513 shares of common stock, subject to certain terms
and conditions. This grant was increased by an award of
restricted stock units with respect to an additional
86,106 shares of common stock in April 2009. All unvested
equity awards and restricted stock units held by Mr. Wilson
will accelerate and become immediately vested in the event of a
change of control (which would include the merger). These
payments are limited under Code Section 280G(b)(2)
governing parachute payments, to the greater of (i) the
amount of those payments which would not constitute such a
parachute payment or (ii) the amount which yields
Mr. Wilson the greatest after-tax amount of benefits after
taking into account any excise tax imposed under Code
Section 4999 on the payments and benefits provided. This
agreement also contains non-competition and non-interference
covenants, which restrict Mr. Wilson for a term of
12 months after his separation from i2. This agreement
supersedes any prior agreements between the parties.
Director Designated by Holder of Series B Preferred
Stock.
Michael J. Simmons, was appointed to the
i2 board of directors by the holder of the Series B
Preferred Stock. Mr. Simmons is also employed by and has an
interest in one or more affiliates of such holder. The interests
of the holder of the Series B Preferred Stock differ from
those of the common stockholders. The holder of the
Series B Preferred Stock will not receive a combination of
cash and JDA common stock in the merger. Instead, the
Series B holder will receive cash in the amount of
$1,100,00 per share, which is equal to the 110% change of
control liquidation value provided in the certificate of
designations of the Series B Preferred Stock, plus all
accrued dividends and interest thereon through the effective
time of the merger. Under the certificate of designation, any
outstanding shares of Series B Preferred Stock that remain
outstanding on June 3, 2014 will automatically convert into
shares of i2 common stock on that date at a conversion price of
$23.15 per share. As a result, unless a change of control (such
as the merger with JDA) occurs or i2 determines to redeem the
Series B Preferred Stock at a redemption price of $1,040.00
per share, each share of the Series B Preferred Stock will
convert on June 3, 2014 into approximately 43.2 shares
of i2 common stock having a value, based on the $16.51 closing
price of the i2 common stock on November 4, 2009, of
$713.17. Thus, unless the market price of the i2 common stock
rises to levels significantly in excess of current levels, the
holder of the Series B Preferred Stock has a financial
incentive to favor a transaction, such as the merger with JDA,
that will result in a change of control regardless of the price
that might be received by the holders of i2 common stock. The i2
board of directors was aware of, and considered, the
relationship between Mr. Simmons and the holder of the
Series B Preferred Stock and the interests of such holder,
in its deliberations of the merger agreement and in approving
the merger agreement and the merger. In addition, prior to
approval of the merger by the i2 board of directors, discussions
were held between JDA and the Series B holder concerning
providing financing for the merger. Although those discussions
were no longer continuing at the time the merger agreement was
approved, the i2 board of directors were aware of, and
considered, such discussions and the fact that participation by
the holder of the Series B Preferred Stock in the financing
for the merger remained a possibility.
Indemnification of Directors and Executive Officers and
Insurance.
The merger agreement provides that JDA
will cause i2, as the surviving corporation in the merger, to
indemnify i2s directors and officers with respect to
actions or omissions by them as such at any time prior to the
closing date to the fullest extent permitted by i2s
charter documents and any applicable contract, provided that
such persons shall not be indemnified for any criminal conduct
or fraud. The merger agreement further provides that, after the
merger, JDA will, or will cause i2 as the surviving corporation
to, provide, for a period of not less than six years,
directors and officers liability insurance covering
those persons who, as of the date of the merger agreement, were
covered by i2s directors and officers
liability insurance policy, on terms no less favorable than
those in effect on the date of the merger agreement, subject to
certain limits based on the cost of providing such insurance.
Appraisal
Rights of i2 Stockholders
The following is a summary of the statutory procedures that a
stockholder of i2 must follow in order to exercise appraisal
rights under Delaware law. This summary is not complete and is
qualified in its entirety by reference to DGCL Section 262,
the text of which is set forth in full in
Annex E
to this Proxy Statement.
Under the DGCL, i2 stockholders have the right to dissent from
the merger and to receive payment in cash for the fair value of
their stock of i2 as determined by the Delaware Court of
Chancery, together with a fair rate of
53
interest, if any, as determined by the court, in lieu of the
consideration they would otherwise be entitled to pursuant to
the merger agreement. These rights are known as appraisal
rights. i2 stockholders electing to exercise appraisal
rights must comply with the provisions of DGCL Section 262
in order to perfect their rights.
The following is intended as a brief summary of the material
provisions of the Delaware statutory procedures required to be
followed by an i2 stockholder in order to dissent from the
merger and perfect appraisal rights. This summary, however, is
not a complete statement of all applicable requirements and we
encourage i2 stockholders to review DGCL Section 262, the
full text of which appears in
Annex E
to this
Proxy Statement. Failure to precisely follow any of the
statutory procedures set forth in DGCL Section 262 may
result in a termination or waiver of an i2 stockholders
appraisal rights.
DGCL Section 262 requires that stockholders be notified
that appraisal rights will be available not less than
20 days before the stockholders meeting to vote on
the merger. A copy of DGCL Section 262 must be included
with such notice. This Proxy Statement constitutes our notice to
you of the availability of appraisal rights in connection with
the merger in compliance with the requirements of DGCL
Section 262. If you are an i2 stockholder and wish to
consider exercising your appraisal rights, you should carefully
review the text of DGCL Section 262 contained in
Annex E
to this Proxy Statement since failure
to timely and properly comply with the requirements of DGCL
Section 262 will result in the loss of your appraisal
rights under Delaware law.
If you are an i2 stockholder and elect to demand appraisal of
your shares, you must satisfy each of the following conditions:
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you must deliver to i2 a written demand for appraisal of your
shares before the vote with respect to the merger agreement is
taken. This written demand for appraisal must be in addition to
and separate from any proxy or vote abstaining from or voting
against the approval and adoption of the merger agreement.
Voting against or failing to vote for the approval and adoption
of the merger agreement by itself does not constitute a demand
for appraisal within the meaning of DGCL Section 262;
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you must not vote in favor of the approval and adoption of the
merger agreement. A vote in favor of the approval and adoption
of the merger agreement, by proxy, over the Internet, by
telephone, or in person, will constitute a waiver of your
appraisal rights in respect of the shares so voted and will
nullify any previously filed written demands for appraisal;
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you must continuously hold your i2 stock from the date you make
your demand for appraisal through the effective date of the
merger; and
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you must comply with the other procedures required by DGCL
Section 262.
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If you fail to comply with any of these conditions and the
merger is completed, you will be entitled to receive the merger
consideration for your shares of i2 stock as provided for in the
merger agreement, but you will have no appraisal rights with
respect to your shares of i2 stock.
All demands for appraisal should be addressed to Tom Ward,
Director, Investor Relations, i2 Technologies, Inc., 11701
Luna Road, Dallas, Texas 75234,
469-357-1000,
and must be delivered before the vote upon the merger agreement
is taken at the special meeting, and should be executed by, or
on behalf of, the registered (record) holder of the shares of i2
stock. The demand must reasonably inform i2 of the identity of
the stockholder and the intention of the stockholder to demand
appraisal of his, her, or its shares.
To be effective, a demand for appraisal by a holder of i2 stock
must be made by, or in the name of, such registered stockholder,
fully and correctly, as the stockholders name appears on
his or her stock certificate(s).
Beneficial owners who do not
also hold the shares of record may not directly make appraisal
demands to i2. The beneficial holder must, in such cases, have
the registered owner, such as a broker or other nominee who is
the registered owner, submit the required demand in respect of
those shares.
If shares are owned of record in a fiduciary
capacity, such as by a trustee, guardian, or custodian,
execution of a demand for appraisal should be made by or for the
fiduciary; and if the shares are owned of record by more than
one person, as in a joint tenancy or tenancy in common, the
demand should be executed by or for all joint owners. An
authorized agent, including an authorized agent for two or more
joint owners, may execute the demand for appraisal for a
stockholder of record; however, the agent must identify the
record owner or owners and expressly disclose the fact that, in
executing the
54
demand, he or she is acting as agent for the record owner. A
record owner, such as a broker, who holds shares as a nominee
for others, may exercise his or her right of appraisal with
respect to the shares held for one or more beneficial owners,
while not exercising this right for other beneficial owners. In
that case, the written demand should state the number of shares
as to which appraisal is sought. Where no number of shares is
expressly mentioned, the demand will be presumed to cover all
shares held in the name of the record owner.
If you hold your shares of i2 stock in a brokerage account or
in other nominee form and you wish to exercise appraisal rights,
you should consult with your broker or the other nominee to
determine the appropriate procedures for the making of a demand
for appraisal by the nominee.
Within 10 days after the effective time of the merger, the
surviving corporation must give written notice that the merger
has become effective to each i2 stockholder who has properly
filed a written demand for appraisal and who did not vote in
favor of the merger agreement. At any time within 60 days
after the effective time, any i2 stockholder who has demanded an
appraisal has the right to withdraw the demand and to accept the
payment specified by the merger agreement for his or her shares
of i2 stock. Within 120 days after the effective date of
the merger, the surviving corporation or any i2 stockholder who
has complied with DGCL Section 262, upon written request to
the surviving corporation, shall be entitled to receive a
written statement setting forth the aggregate number of
i2 shares not voted in favor of the merger agreement and
with respect to which demands for appraisal rights have been
received and the aggregate number of holders of such shares.
Within 120 days after the effective time, either the
surviving corporation or any i2 stockholder who has complied
with the requirements of DGCL Section 262 may file a
petition in the Delaware Court of Chancery demanding a
determination of the fair value of the shares held by all i2
stockholders entitled to appraisal. Upon the filing of the
petition by an i2 stockholder, service of a copy of such
petition shall be made upon the surviving corporation. The
surviving corporation has no obligation to file such a petition
in the event there are dissenting stockholders. Accordingly, the
failure of an i2 stockholder to file such a petition within the
period specified could nullify the i2 stockholders
previously written demand for appraisal.
If a petition for appraisal is duly filed by an i2 stockholder
and a copy of the petition is delivered to the surviving
corporation, the surviving corporation will then be obligated,
within 20 days after receiving service of a copy of the
petition, to provide the Chancery Court with a duly verified
list containing the names and addresses of all i2 stockholders
who have demanded an appraisal of their shares and with whom
agreements as to the value of their shares have not been reached
by the surviving corporation. After notice to dissenting
stockholders who demanded appraisal of their shares, the
Chancery Court is empowered to conduct a hearing upon the
petition, and to determine those i2 stockholders who have
complied with DGCL Section 262 and who have become entitled
to the appraisal rights provided thereby. The Chancery Court may
require the i2 stockholders who have demanded payment for their
shares to submit their stock certificates to the Register in
Chancery for notation thereon of the pendency of the appraisal
proceedings; and if any i2 stockholder fails to comply with that
direction, the Chancery Court may dismiss the proceedings as to
that stockholder.
After determination of the i2 stockholders entitled to appraisal
of their shares of i2s stock, the Chancery Court will
appraise the shares, determining their fair value exclusive of
any element of value arising from the accomplishment or
expectation of the merger, together with a fair rate of
interest, if any. When the value is determined, the Chancery
Court will direct the payment of such value, with interest
thereon accrued during the pendency of the proceeding, if the
Chancery Court so determines, and to the i2 stockholders
entitled to receive the same, upon surrender by such holders of
the certificates representing those shares.
In determining fair value, the Chancery Court is required to
take into account all relevant factors. i2 stockholders should
be aware that the fair value of their shares as determined under
DGCL Section 262 could be more, the same, or less than the
value that they are entitled to receive under the terms of the
merger agreement.
Costs of the appraisal proceeding may be imposed upon the
surviving corporation and the i2 stockholders participating in
the appraisal proceeding by the Chancery Court as the Chancery
Court deems equitable in the circumstances. Upon the application
of an i2 stockholder, the Chancery Court may order all or a
portion of the expenses incurred by any i2 stockholder in
connection with the appraisal proceeding, including, without
limitation, reasonable attorneys fees and the fees and
expenses of experts, to be charged pro rata against the value of
all shares entitled to appraisal. Any i2 stockholder who had
demanded appraisal rights will not, after the effective time of
the merger, be entitled to vote shares subject to that demand
for any purpose or to receive payments of dividends or any
55
other distribution with respect to those shares, other than with
respect to payment as of a record date prior to the effective
time; however, if no petition for appraisal is filed within
120 days after the effective time of the merger, or if the
i2 stockholder delivers a written withdrawal of his or her
demand for appraisal and an acceptance of the terms of the
merger within 60 days after the effective time of the
merger, then the right of that i2 stockholder to appraisal will
cease and that i2 stockholder will be entitled to receive the
consideration payable in respect of such shares pursuant to the
merger agreement. Any withdrawal of a demand for appraisal made
more than 60 days after the effective time of the merger
may only be made with the written approval of the surviving
corporation.
Because i2s Series B Preferred Stock is being
converted in the merger into the cash amount required by
i2s certificate of incorporation in the event of such a
merger, i2 reserves the right to take the position that the
Series B holder is not entitled to exercise appraisal
rights
and/or
to
receive an award in excess of the cash amount required by
i2s the certificate of incorporation. The Series B
holder has also agreed to vote in favor of the merger, which
vote would constitute a waiver of appraisal rights.
In view of the complexity of DGCL Section 262, if you
are an i2 stockholder and wish to dissent from the merger and
pursue appraisal rights, then you should consult your legal
advisor.
Delisting
and Deregistration of i2 Common Stock
If the merger is completed, i2 common stock will be delisted
from Nasdaq and will be deregistered under the Exchange Act.
Accounting
Treatment
The merger will be accounted for using the acquisition method of
accounting with JDA identified as the acquirer. Under the
acquisition method, the merger consideration will be allocated
to the assets acquired and liabilities assumed at their
respective acquisition date fair values, including an amount for
goodwill representing the difference between the acquisition
price and the fair values of the assets acquired and liabilities
assumed.
All unaudited pro forma condensed combined financial statements
contained in this Proxy Statement were prepared using the
acquisition method of accounting. The final allocation of the
purchase price will be determined after the merger is completed
and after completion of an analysis to determine the acquisition
date fair values of the assets acquired and liabilities assumed.
Accordingly, the final purchase accounting adjustments may be
materially different from the unaudited pro forma adjustments.
Governmental
Regulatory Filings Required in Connection with the
Merger
United
States Antitrust Filings
Under the
Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, or the
Hart-Scott-Rodino
Act, and the rules promulgated under that act by the Federal
Trade Commission, or FTC, the merger may not be completed until
notifications have been given and information furnished to the
FTC and to the Antitrust Division of the Department of Justice
and the specified waiting period has been terminated or has
expired. JDA and i2 each filed notification and report forms
under the
Hart-Scott-Rodino
Act with the FTC and the Antitrust Division on November 17,
2009. On December 16, 2009, each of JDA and i2 were
informed that the waiting period under the Hart-Scott-Rodino Act
had been terminated. At any time before or after completion of
the merger, the FTC or the Antitrust Division could take any
action under the antitrust laws as it deems necessary or
desirable in the public interest, including seeking to enjoin
completion of the merger or seeking divestiture of substantial
assets of JDA or i2. The merger also is subject to review under
state antitrust laws and could be the subject of challenges by
states or private parties under the antitrust laws.
Foreign
Competition Filings
Under the laws of certain foreign countries, a merger may not be
completed until notifications have been given and information
furnished to the relevant governmental authority for purposes of
allowing such authorities to determine whether or not the merger
will have anti-competitive effects and obtaining clearance to
complete the merger. JDA and i2 do not believe any foreign
regulatory approvals will be required or advisable in connection
with the consummation of the merger.
56
Other
Other than those described above and (i) the requirement
that JDA and i2 file this Proxy Statement with the SEC
(ii) the requirement that the SEC declare the registration
statement of which this Proxy Statement is a part effective, and
(iii) certain other filings required to be made under the
Exchange Act, neither JDA nor i2 is aware of any federal or
state regulatory requirements or approvals that must be complied
with or obtained in connection with the merger.
Litigation
On November 6, 2009, two purported stockholder class action
lawsuits were filed in the County Court of Dallas County, Texas
against i2, its directors, and JDA. The two lawsuits, captioned
Kamlesh Puri v. i2 Technologies, Inc., et al.
(No. CC-09-08487-E)
and
Kenneth L. and Rita D. Stanley v. Jackson L.
Wilson, Jr., et al.
(No.CC-09-08476-B),
respectively, allege generally that the defendants breached
their fiduciary duties to i2s stockholders by failing to
conduct a fair process in connection with the proposed merger.
The
Puri
lawsuit also names Amalgamated Gadget, L.P., one
of i2s largest stockholders, as a defendant.
On November 10, 2009, a third purported stockholder class
action lawsuit was filed in the District Court of Dallas County,
Texas against i2, its directors, and JDA. The lawsuit, captioned
Greek Orthodox Archdiocese Foundation v.
i2 Technologies, Inc., et al.
(No. 09-15169),
alleges that i2s directors breached their fiduciary duties
to i2s stockholders by failing to maximize value to
i2s stockholders and by discouraging
and/or
inhibiting alternative offers to purchase i2.
On November 13, 2009, a fourth purported stockholder class
action lawsuit was filed in the County Court of Dallas County,
Texas against i2, its directors, Amalgamated Gadget, L.P., and
JDA. The lawsuit, captioned
Kenneth Gould v.
i2 Technologies, Inc., et al.
(No. CC-09-08652-E),
alleges generally that the companys directors breached
their fiduciary duties to i2s stockholders by failing to
maximize value to i2s stockholders and by discouraging
and/or
inhibiting alternative offers to purchase i2.
On November 13, 2009, a fifth purported stockholder class
action lawsuit was filed in the District Court of Dallas County,
Texas against i2, its directors, and JDA. The lawsuit, captioned
Jagannatha Ramaiah v. i2 Technologies, Inc., et
al.
,
(No. DC-09-15438)
alleges generally that the companys directors breached
their fiduciary duties to i2s stockholders by failing to
maximize value to i2s stockholders and by discouraging
and/or
inhibiting alternative offers to purchase i2.
On November 24, 2009, a sixth purported stockholder class
action lawsuit was filed in the County Court of Dallas County,
Texas against i2, its directors, and JDA. The lawsuit, captioned
Family Trust, Thomas Barry, Trustee, et al. v.
i2 Technologies, et al.
, (No.CC-09-08916-D) alleges
generally that the companys directors breached their
fiduciary duties to i2s stockholders by failing to
maximize value to i2s stockholders and by discouraging
and/or
inhibiting alternative offers to purchase i2.
All of the above cases have been transferred to the County Court
of Dallas County, Texas and consolidated into the
Kenneth L.
and Rita D. Stanley v. Jackson L. Wilson, Jr., et al.
(No.CC-09-08476-B) case. On December 14, 2009, the
plaintiffs in the above-referenced petitions filed a
consolidated petition in the County Court of Dallas County,
Texas (the Consolidated Petition). The Consolidated
Petition seeks certain declaratory and injunctive relief,
including, among other things: (1) a declaration that the
lawsuit is properly maintainable as a class action; (2) a
declaration and decree that the merger agreement was entered
into in breach of the defendants fiduciary duties, that
i2, JDA and other defendants aided and abetted the
i2 directors breaches of fiduciary duty, and that the
merger is therefore unlawful and unenforceable; (3) an
injunction prohibiting i2 and the other defendants from
proceeding with the merger unless and until i2 implements a
process or procedure to obtain a merger agreement that provides
the highest possible value to its stockholders; (4) an
order directing the individual defendants to exercise their
fiduciary duties to obtain a transaction that is in the best
interests of i2s stockholders until the process for the
sale or auction of i2 is completed and the best possible
consideration is obtained for i2s stockholders;
(5) rescission of the merger to the extent already
implemented; (6) an award of costs and disbursements,
including attorneys and experts fees; and
(7) such other equitable relief as the court may deem
appropriate.
57
The key facts alleged in each complaint that are claimed to
provide a basis for relief include, among other things:
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the i2 directors failed to take steps to maximize the value
of i2 to its public stockholders, and took steps to avoid
competitive bidding and to cap the price of i2s common
stock;
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the absence of a collar provision in the merger agreement that
would permit adjustment of the exchange ratio for changes in
i2s stock price;
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the inadequacy of the premium that i2 stockholders will receive
for their shares; the fact that the transaction must be financed
by JDA, which adds deal risk to i2s stockholders;
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i2s agreement to onerous deal protection
devices, including a no shop provision and a
termination fee;
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the claimed structuring of the transaction to provide the
defendants with a financial windfall and to ensure that only JDA
would benefit from i2s recent improved financial
performance;
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the possession by the individual defendants of non-public
information concerning i2s financial condition and
prospects;
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and the existence of clear and material conflicts of
interest on the part of the individual defendants.
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i2 and the director defendants filed an answer to the
above-referenced petitions on December 4, 2009. To date, no
motions have been filed by any of the parties other than a
motion to consolidate the lawsuits. The parties are engaged in
discovery. i2 and JDA believe that these lawsuits are without
merit and intend to defend against them vigorously.
In connection with the prior merger agreement, certain law firms
filed suit ostensibly on behalf of the stockholders of i2
seeking to enjoin consummation of the prior merger agreement,
and obtained a hearing on the evening of the day before the
stockholders meeting. The court denied their request for
injunctive relief, which allowed the stockholder meeting to
proceed. At the meeting, the prior merger agreement was approved
by the holders of more than 99% of the combined voting power of
the shares voted at the meeting, including the holders of more
than 76% of the outstanding shares of i2 common stock. Approval
of the merger agreement by i2 stockholders was a condition to
the parties obligation to close the merger, and if the
plaintiffs had prevailed in their efforts to prevent the i2
stockholders meeting, it is unlikely JDA would have paid the
$20 million termination fee to i2.
Other litigation.
On October 23, 2007, a
purported stockholder derivative lawsuit was filed in the
Delaware Chancery Court against certain of i2s current and
former officers and directors, naming the Company as a nominal
defendant. The complaint, entitled
John
McPadden, Sr. v. Sanjiv S. Sidhu, Stephen Bradley,
Harvey B. Cash, Richard L. Clemmer, Michael E. McGrath, Lloyd G.
Waterhouse, Jackson L. Wilson, Jr., Robert L. Crandall and
Anthony Dubreville and i2 Technologies, Inc.,
alleges
breach of fiduciary duty and unjust enrichment based upon
allegations that the Company sold its wholly-owned subsidiary,
Trade Services Corporation, for an inadequate price in 2005. The
complaint is derivative in nature and does not seek relief from
i2, but does seek damages and other relief from the defendant
officers and directors. Defendants moved to dismiss the
complaint on December 28, 2007. On August 29, 2008,
the Court granted the motion to dismiss as to all defendants but
former i2 officer Dubreville.
Under Delaware law, a stockholder bringing a derivative suit
must continuously own throughout the duration of the case the
stock of the company for which the derivative suit has been
brought. Upon the closing of the merger between JDA and i2, the
named plaintiff will cease to be a shareholder of i2 and, as a
result, will lose standing to proceed with the derivative claims
on behalf of i2, which would result in the dismissal of the
derivative case.
i2 and JDA are aware of the aforementioned derivative suit.
Since the derivative suit represents a potential gain
contingency for i2 and a current expenditure for i2 as a result
of the indemnity agreement between i2 and the individual
defendant sued in the derivative case, the value, if any, of the
derivative case has been considered by the parties in connection
with the proposed merger.
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MATERIAL
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE
MERGER
The following is a summary of the material United States federal
income tax consequences of the merger to stockholders of i2
whose shares of i2 common stock are converted into the right to
receive the merger consideration in the merger. The following
summary is based on United States federal income tax law in
effect on the date of this Proxy Statement, which is subject to
change at any time, possibly with retroactive effect. This
discussion assumes that each i2 stockholder holds such
stockholders shares of i2 common stock as a capital asset
(generally, for investment purposes). No state, local or foreign
tax considerations are addressed in the following discussion.
The summary does not address all of the United States federal
income tax consequences that may be relevant to particular i2
stockholders in light of their individual circumstances or to i2
stockholders who are subject to special rules, such as United
States expatriates, insurance companies, dealers or brokers in
securities or currencies, tax-exempt organizations, financial
institutions, mutual funds, cooperatives, pass-through entities
and investors in such entities, stockholders who have a
functional currency other than the United States dollar,
stockholders who hold their shares of i2 common stock as a hedge
or as part of a hedging, straddle, conversion, synthetic
security, integrated investment or other risk-reduction
transaction or who are subject to alternative minimum tax,
stockholders who acquired their shares of i2 common stock in a
deferred compensation, 401(k) or other retirement plan, upon the
exercise of employee stock options or in other compensatory
transactions. Further, this discussion does not address any
United States federal estate and gift or alternative minimum tax
consequences or any state, local or foreign tax consequences
relating to the merger.
Accordingly, we urge i2 stockholders
to consult their tax advisors as to the United States federal
income tax consequences of the merger, as well as the effects of
state, local and
non-United
States tax laws.
This discussion only applies to an i2 stockholder that is
(1) an individual citizen or resident of the
United States, (2) a corporation, or an entity treated
as a corporation for U.S. federal income tax purposes,
created or organized in or under the laws of the United States,
any state of the United States, or the District of Columbia,
(3) an estate the income of which is subject to
U.S. federal income taxation regardless of its source, or
(4) a trust if (x) a court within the United States
can exercise primary supervision over its administration, and
one or more United States persons have the authority to control
all of the substantial decisions of that trust, or (y) it
has a valid election in effect under applicable
U.S. Treasury regulations to be treated as a United States
person. If a partnership (or other entity treated as a
partnership for United States federal income tax purposes) is an
i2 stockholder, the tax treatment of a partner in the
partnership or any equity owner of such other entity will
generally depend upon the status of the partner and the
activities of the partnership or other entity treated as a
partnership for United States federal income tax purposes.
The receipt of merger consideration pursuant to the merger is
expected to be a fully taxable transaction for United States
federal income tax purposes. As a result, an i2 stockholder will
generally recognize capital gain or loss as a result of the
merger in an amount equal to the difference between the amount
of cash (including cash received instead of a fractional share)
plus the fair market value of the JDA common stock (determined
as of the closing date of the merger) received by such
stockholder and the stockholders adjusted tax basis in the
i2 common stock surrendered in the merger. Gain or loss and
holding period will be determined separately for each block of
i2 stock (that is, shares acquired at the same price per share
in a single transaction) surrendered for cash and JDA common
stock pursuant to the merger. Any capital gain or loss will be
long-term capital gain or loss if the stockholders holding
period is more than one year at the time of the merger. The
maximum federal income tax rate on net long-term capital gain
recognized by non-corporate taxpayers is currently 15%. If the
stockholders holding period for the i2 stock is one year
or less at the time of the merger, any capital gain or loss will
be short-term capital gain or loss.
The deductibility of capital losses may be subject to certain
limitations. Generally, capital losses are available to offset
capital gains recognized during a tax year. However, in the
event that a stockholder has capital losses for a tax year in
excess of capital gains for such year, that stockholders
ability to deduct the excess capital losses is limited. For
individuals, the excess of capital losses over capital gains may
be offset against ordinary income, subject to an annual
deduction limitation of $3,000; unused capital losses may be
carried forward indefinitely but may not be carried back. For
corporate taxpayers, capital losses may be offset only against
capital gains, but unused capital losses may be carried back
three years (subject to certain limitations) and carried forward
five years.
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The tax basis of the JDA common stock received by an i2
stockholder in the merger will equal the fair market value of
such stock at the effective time of the merger, and the
stockholders holding period for such stock will begin on
the day after the effective time of the merger. Gain or loss
realized upon a subsequent sale or other taxable disposition of
the JDA common stock received in the merger will be equal to the
difference between the stockholders adjusted tax basis in
the JDA common stock at the time of that subsequent disposition
and the amount realized on the disposition.
i2 stockholders are urged to consult their own tax advisors with
respect to the determination of gain or loss recognized on the
surrender of their shares of i2 common stock (as well as their
basis in the shares of JDA common stock received in the
transaction) taking into account their particular circumstances.
Payments made to an i2 stockholder pursuant to the merger are
subject to information reporting, and may be subject to backup
withholding at the applicable rate (currently 28%) if the i2
stockholder or other payee fails to provide a valid taxpayer
identification number and comply with certain certification
procedures or otherwise establish an exemption from backup
withholding. Backup withholding is not an additional United
States federal income tax. Rather, the United States federal
income tax liability of the person subject to backup withholding
will be reduced by the amount of tax withheld. If backup
withholding results in an overpayment of taxes, a refund may be
obtained provided that the required information is timely
furnished to the Internal Revenue Service.
THE SUMMARY OF UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
SET FORTH ABOVE IS FOR GENERAL INFORMATION ONLY AND IS BASED ON
THE LAW IN EFFECT ON THE DATE HEREOF. STOCKHOLDERS ARE STRONGLY
URGED TO CONSULT THEIR OWN TAX ADVISORS TO DETERMINE THE
PARTICULAR TAX CONSEQUENCES TO THEM (INCLUDING THE APPLICATION
AND EFFECT OF ANY STATE, LOCAL OR FOREIGN INCOME AND OTHER TAX
LAWS) OF THE MERGER.
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MERGER
AGREEMENT AND OTHER RELATED AGREEMENTS
This section of the Proxy Statement provides a summary of the
merger agreement, which is the definitive agreement governing
the merger, and certain other agreements relating to the merger.
This summary, however, may not contain all of the information
that is important to you. i2 urges you to carefully read the
merger agreement, which appears as
Annex A
to
this Proxy Statement.
Structure
Under the merger agreement, the parties agreed to two potential
transaction structures. Under the intended
structure, the parties agreed that if JDA raised
sufficient funds and satisfied certain other conditions, then
each outstanding share of i2 common stock (other than shares
held by i2, JDA, Merger Sub, and dissenting i2 stockholders)
would be converted into the right to receive 0.2562 of a share
of JDA common stock and $12.70 in cash. If JDA did not raise
sufficient funds or satisfy the conditions necessary to complete
the intended structure, however, then the parties
agreed that they would proceed with an alternative
structure, pursuant to which each outstanding share of i2
common stock (other than shares held by i2, JDA, Merger Sub, and
dissenting i2 stockholders) would be converted into the right to
receive 0.5797 of a share of JDA common stock and $6.00 in cash.
On December 10, 2009, JDA issued $275 million
aggregate principal amount of its 8.0% senior notes due
2014. The notes were issued pursuant to an indenture, dated as
of December 10, 2009, among JDA, certain of its
subsidiaries, and U.S. Bank National Association, as
trustee. The net proceeds from the issuance of the notes totaled
$266.7 million. On the date of the offering, the net
proceeds of the offering, together with an additional amount
funded by JDA, were deposited into an escrow account established
pursuant to an escrow and security agreement, dated
December 10, 2009, by and between JDA, U.S. Bank
National Association, as escrow agent and U.S. Bank
National Association, as trustee under the Indenture. The net
proceeds of the notes offering and the deposit of such proceeds
into escrow satisfied the conditions for JDA to complete the
merger pursuant to the intended structure, as described above.
Other than the composition of the merger consideration, the
provisions of the merger agreement summarized below are equally
applicable to either structure.
Merger
Consideration
Each issued and outstanding share of i2 common stock (other than
shares held by i2, JDA, Merger Sub and dissenting i2
stockholders) will be converted into the right to receive 0.2562
of a share of JDA common stock and $12.70 in cash.
Holders of i2 common stock will not receive any fractional JDA
shares in the merger. Instead, the total number of shares that
each holder of i2 common stock will receive in the merger as
part of the merger consideration will be rounded down to the
nearest whole number, and JDA will pay cash for any resulting
fractional share that an i2 stockholder otherwise would be
entitled to receive. The amount of cash payable for a fractional
share of i2 common stock will be determined by multiplying the
fraction by the average closing price of JDA common stock on
Nasdaq for the five consecutive trading days ending three days
prior to the effective time of the merger.
Example: If you currently own 100 shares of
i2 common stock, you would be entitled to receive
(i) $1,270.00 in cash (100 shares of i2 common stock
multiplied by $12.70 in cash per share) and
(ii) 25.62 shares of JDA common stock (100 shares
of i2 common stock multiplied by the exchange ratio of 0.2562).
Since fractional shares will not be issued, you will be entitled
to receive, in lieu of the 25.62 shares of JDA common stock
referenced above, 25 shares of JDA common stock and a check
for the market value of 0.62 of a share of JDA common stock,
calculated as provided above.
Each outstanding share of Series B Preferred Stock will be
converted into the right to receive $1,100.00 per share in cash,
which is equal to the stated change of control liquidation value
of each such share, plus all accrued and unpaid dividends
thereon through the effective time, without interest.
Subject to certain limited exceptions described in the paragraph
below, the exchange ratio is fixed, and will not be adjusted to
reflect stock price changes prior to the closing. Accordingly,
the value of the merger consideration to
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be received in exchange for each share of i2 common stock under
either structure will fluctuate with the market price of JDA
common stock.
The exchange ratio will be adjusted immediately prior to the
effective time if the exchange ratio would result in JDA issuing
in excess of 19.9% of its outstanding common stock as a result
of the merger. At the time of the execution of the merger
agreement, the number of shares of JDA common stock (and
securities convertible or exercisable for JDA common stock)
expected to be issued in the merger constituted less than 19.9%
of JDAs outstanding shares of common stock. To the extent
that JDAs stock price increases prior to the effective
time of the merger, then the spread between the exercise price
of outstanding, in the money i2 stock options and
the implied value of the merger consideration would also
increase, leading to an increase in the number of shares of JDA
stock payable in respect of such outstanding i2 stock options.
Also a greater number of outstanding stock options of i2 could
become in the money and entitled to receive merger
consideration, thereby further increasing the number of shares
of JDA common stock issuable in connection with the merger.
However, since JDAs stock price would need to exceed
approximately $80.00 per share in order to cause any such
adjustment to the exchange ratio, JDA and i2 currently do not
expect any such adjustment to the exchange ratio to occur. In
the unexpected event that the adjustment is required, the
exchange ratio will be reduced to the minimum extent necessary
so that the number of shares of JDA common stock issued or
issuable as a result of the merger will equal no more than 19.9%
of its outstanding common stock and the cash portion of the
merger consideration will be increased (up to a maximum of
$10 million in the aggregate) by an equivalent value (based
on the volume weighted average price of JDA common stock for the
five consecutive trading days ending two days prior to the
effective time of the merger, as such prices are reported on
Nasdaq). A vote by i2 stockholders for the adoption of the
merger agreement constitutes approval of the merger whether or
not the exchange ratio and cash portion are adjusted as
described above.
The exchange ratio will also be adjusted if between signing of
the merger agreement and the effective time of the merger the
outstanding JDA common stock or i2 common stock is changed into
a different number of shares or different class by reason of any
reclassification, recapitalization, stock split,
split-up,
combination or exchange of shares or the declaration of a stock
dividend or dividend payable in any other securities is declared
with a record date within such period, or any similar event
occurs, in which case the exchange ratio will be adjusted such
that the holders of i2 common stock will be provided with the
same economic effect as contemplated by the merger agreement.
Conversion
of Shares; Procedures for Surrender of Certificates
The right of i2s common stockholders to receive the merger
consideration will arise automatically upon completion of the
merger. Prior to the effective time of the merger, JDA will
designate a bank or trust company to act as the exchange agent
under the merger agreement. i2 will deposit up to
$160 million in cash and JDA will deposit additional cash
amounts and shares of common stock or security entitlements
representing shares of common stock with the exchange agent
sufficient to enable the exchange agent to pay the merger
consideration to the holders of shares of i2 common stock and
Series B Preferred Stock.
Promptly (but in any event within five business days) after the
effective time of the merger, the exchange agent will mail to
each record holder of shares, a letter of transmittal and
instructions for use in surrendering certificates in exchange
for the merger consideration. No stockholder should surrender
any certificates until the stockholder receives the letter of
transmittal and other materials for such surrender. Upon
surrender of a stock certificate for cancellation to the
exchange agent, together with a letter of transmittal, duly
executed, the holder of such certificate will be entitled to
receive the applicable merger consideration into which the
number of shares of common stock or Series B Preferred
Stock previously represented by such stock certificates will
have been converted pursuant to the merger agreement. The
certificates so surrendered will be canceled.
In the event of a transfer of ownership of shares of common
stock or Series B Preferred Stock that is not registered in
i2s transfer records, payment may be made with respect to
such shares to the transferee if the stock certificate
representing such shares is presented to the exchange agent,
accompanied by all documents reasonably required by the exchange
agent to evidence such transfer and to evidence that any
applicable stock transfer taxes relating to such transfer have
been paid.
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If your stock certificate has been lost, stolen, or destroyed,
the exchange agent will deliver to you the applicable merger
consideration for the shares represented by that certificate:
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if you make an affidavit claiming such certificate has been
lost, stolen, or destroyed; and
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if requested by JDA or the exchange agent, you post a bond in a
reasonable amount as indemnity against any claim that may be
made with respect to that certificate.
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Stockholders should not send their certificates now and
should send them only pursuant to instructions set forth in the
letter of transmittal to be mailed to stockholders promptly
after the effective time of the merger. In all cases, the
applicable merger consideration will be provided only in
accordance with the procedures set forth in this proxy statement
and such letter of transmittal.
Two hundred and seventy days after the effective time of the
merger, the exchange agent will deliver to the surviving
corporation on demand any funds made available to the exchange
agent which have not been disbursed to holders of i2 stock
certificates. Any holders of certificates who have not complied
with the above-described procedures to receive payment of the
merger consideration during such
270-day
period may thereafter look only to the surviving corporation for
payment of the merger consideration to which they are entitled.
The merger consideration paid to you upon conversion of your
shares of i2 common stock or Series B Preferred Stock will
be issued in full satisfaction of all rights relating to the
shares of i2 common stock or Series B Preferred Stock, as
applicable.
Effect on
i2 Stock Options, Restricted Stock Units, and Restricted
Stock
In the merger, each outstanding option to acquire i2 common
stock will be canceled and terminated at the effective time and
converted into the right to receive the merger consideration
with respect to the number of shares of i2 common stock that
would be issuable upon a net exercise of such option assuming
the market value of the i2 common stock at the time of such
exercise were equal to the value of the merger consideration as
of the close of trading on the trading day immediately prior to
the effective time. Any outstanding option with a per-share
exercise price that is greater than or equal to such amount will
be canceled and terminated as of the effective time, and no
payment will be made with respect thereto.
Example: If the value of the merger consideration as of the
close of trading on the trading day immediately prior to the
effective time is $18.00 per share of i2 common stock, then a
holder of an option to purchase 100 shares of i2 common
stock at an exercise price of $9.00 per share would receive
merger consideration in respect of 50 shares of i2 common
stock (calculated by multiplying the 100 shares subject to
such option by a fraction, the numerator of which is the
difference between the merger consideration value of
$18.00 per share and the exercise price of $9.00 per
share, and the denominator of which is equal to the merger
consideration value of $18.00 per share). Accordingly, such
option holder would be entitled to receive (i) $635.00 in
cash (50 shares of i2 common stock multiplied by $12.70 in
cash per share) and (ii) 12.81 shares of JDA common
stock (50 shares of i2 common stock multiplied by the
exchange ratio of 0.2562). Since fractional shares will not be
issued, such holder would be entitled to receive, in lieu of the
12.81 shares of JDA common stock referenced above,
12 shares of JDA common stock and a check for the market
value of 0.81 of a share of JDA common stock, calculated as
provided above. Alternatively, if the value of the merger
consideration as of the close of trading on the trading day
immediately prior to effective time is $20.00 per share of
i2 common stock, then a holder of an option to purchase
100 shares of i2 common stock with an exercise price of
$9.00 per share of i2 common stock would instead receive
merger consideration in respect of 55 shares of i2 common
stock (calculated by multiplying the 100 shares subject to
such option by a fraction, the numerator of which is the
difference between the merger consideration value of
$20.00 per share and the exercise price of $9.00 per
share, and the denominator of which is equal to the merger
consideration value of $20.00 per share.
Also, at the effective time of the merger, each i2 restricted
stock unit award outstanding immediately prior to the effective
time of the merger will become fully vested (except that with
respect to any restricted stock unit which by the terms of the
award agreement pursuant to which it was granted provides for a
lesser percentage of such restricted stock unit to become vested
upon the consummation of the merger, such restricted stock unit
shall only become vested as to such lesser percentage), and then
will be canceled and terminated at the effective time, and the
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holder of such vested restricted stock unit will be entitled to
receive the merger consideration for each share of i2 common
stock into which the vested portion of the restricted stock unit
would otherwise be convertible. Each restricted stock award will
become fully vested immediately prior to the effective time.
Effect on
i2 Warrants
At the effective time of the merger, each warrant to purchase
shares of i2s common stock that is outstanding and
unexercised immediately prior to the effective time of the
merger will cease to represent a right to acquire i2s
common stock and will be assumed by JDA and converted
automatically into a warrant of JDA under which the holder will
have the right to receive, upon exercise of the warrant, the
merger consideration which such holder would have received as a
holder of i2 common stock if such i2 warrant had been exercised
for i2 common stock immediately prior to the effective time of
the merger.
Effective
Time of the Merger
The merger will become effective upon the filing of the
certificate of merger with the Secretary of State of the State
of Delaware or at such later time as is agreed upon by JDA and
i2 and specified in the certificate of merger. The filing of the
certificate of merger will occur on the closing date. Subject to
the terms and conditions of the merger agreement and in
accordance with Delaware law, at the effective time of the
merger, Merger Sub will merge with and into i2. i2 will survive
the merger as a wholly-owned subsidiary of JDA. If the merger
agreement is approved by i2s stockholders, the merger will
be completed as soon as all of the other conditions to the
merger set forth in the merger agreement have been satisfied or
waived by JDA or i2, as applicable. These conditions are
described below under Merger Agreement and Other Related
Agreements Conditions to Closing.
Representations
and Warranties
The merger agreement contains representations and warranties of
each party to the agreement. These representations and
warranties will expire upon completion of the merger.
The merger agreement has been included to provide you with
information regarding its terms. The terms of, and other
information in, the merger agreement should not be relied upon
as disclosures about JDA and i2 without considering the entirety
of the information about JDA and i2 set forth in their
respective public reports filed with the SEC. Such information
can be found elsewhere in the Proxy Statement and in the other
public filings each company makes with the SEC, which are
available without charge at www.sec.gov.
The merger agreement contains representations and warranties
that i2 and JDA made to one another. The assertions embodied in
those representations and warranties are qualified by
information in confidential disclosure schedules that we have
exchanged in connection with signing the merger agreement. While
we do not believe that they contain information securities laws
require us to publicly disclose other than information already
disclosed, the disclosure schedules do contain information that
modifies, qualifies, and creates exceptions to the
representations and warranties set forth in the attached merger
agreement. Accordingly, you should not rely on the
representations and warranties as characterizations of the
actual state of facts, since they are modified in important part
by the underlying disclosure schedules. These disclosure
schedules contain information that has been included in
i2s general prior public disclosures, as well as potential
additional non-public information. Moreover, information
concerning the subject matter of the representations and
warranties may have changed since the date of the agreement,
which subsequent information may or may not be fully reflected
in the public disclosures of i2 or JDA.
The merger agreement contains customary representations and
warranties of i2 as to, among other things:
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i2s organization, good standing, and corporate power;
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i2s capitalization;
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authorization, non-contravention, and voting requirements;
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governmental approvals;
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i2s SEC documents;
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the absence of undisclosed liabilities;
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the absence of certain changes or events;
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legal proceedings;
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compliance with laws;
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permits;
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accuracy of information in this Proxy Statement provided by or
on behalf of i2;
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tax matters;
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employee benefits and labor matters;
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environmental matters;
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contracts;
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title to properties;
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intellectual property;
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insurance;
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opinion of financial advisor;
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brokers and other advisors;
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anti-takeover statutes;
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i2 rights agreement; and
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related party transactions;
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In addition, the merger agreement contains representations and
warranties by JDA and Merger Sub as to, among other things:
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JDAs organization, good standing, and corporate power;
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JDAs capitalization;
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authorization and non-contravention;
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governmental approvals;
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JDAs SEC documents;
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the absence of certain changes or events;
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legal proceedings;
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compliance with laws;
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permits;
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accuracy of information in this Proxy Statement provided by or
on behalf of JDA;
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tax matters;
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employee benefits and labor matters;
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environmental matters;
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contracts;
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title to properties;
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intellectual property;
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ownership and operations of Merger Sub;
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merger financing;
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ownership of i2 common stock;
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management arrangements; and
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brokers and other advisors.
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The representations and warranties in the merger agreement are
complicated and not easily summarized. You are urged to read
carefully and in their entirety the sections of the merger
agreement entitled Representations and Warranties of the
Company, Representations and Warranties of Parent
and Merger Sub and Financing Election in
Annex A
to this Proxy Statement.
Covenants
of the Parties
Proxy
Statement and Stockholder Meeting
JDA and i2 have agreed to cooperate in preparing and filing this
Proxy Statement and the registration statement of which it forms
a part. Each has agreed to respond to any SEC comments relating
to this Proxy Statement and to use its commercially reasonable
efforts to have the registration statement of which it forms a
part declared effective, and to cause this Proxy Statement to be
mailed to i2s stockholders as early as practicable after
it is declared effective. i2 has also agreed to hold a meeting
of its stockholders as soon as practicable after the
registration statement of which this Proxy Statement forms a
part is declared effective.
Conduct
of i2s Business
i2 agreed in the merger agreement that, subject to specified
exceptions or unless JDA otherwise consents in writing, i2 will
conduct its business in the ordinary course, consistent with
past practice and use commercially reasonable efforts, under the
circumstances, to maintain and preserve intact i2s
business organization and the goodwill of those having
significant business relationships with i2.
In addition, i2 has agreed that, subject to specified
exceptions, neither i2 nor any of its subsidiaries may, without
JDAs prior written consent (which consent shall not be
unreasonably withheld):
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authorize for issuance or issue, sell, grant, dispose of,
pledge, or otherwise encumber any shares of i2 capital stock,
voting securities or equity interests, or any securities or
rights convertible into, exchangeable or exercisable for, or
evidencing the right to subscribe for any shares of i2 capital
stock, voting securities, or equity interests, or any rights,
warrants, options, calls, commitments, or any other agreements
of any character to purchase or acquire any shares of its
capital stock, voting securities, or equity interests or any
securities or rights convertible into, exchangeable or
exercisable for, or evidencing the right to subscribe for, any
shares of i2 capital stock, voting securities, or equity
interests, subject to certain exceptions;
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incur or assume any indebtedness for borrowed money or guarantee
any indebtedness for borrowed money (or enter into a keep
well or similar agreement), issue or sell any debt
securities or options, warrants, calls, or other rights to
acquire any debt securities of i2 or its subsidiaries, or incur
any indebtedness precluded under the commitment letter with the
Wells Fargo Parties or, to the extent not more restrictive than
the commitment letter, precluded under any similar documents
relating to any other financing that JDA is permitted to pursue
and obtain under the merger agreement, other than borrowings
among i2 and one or more direct or indirect wholly-owned i2
subsidiary in the ordinary course of business consistent with
past practice;
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sell, transfer, lease, license, mortgage, encumber, abandon, or
otherwise dispose of or voluntarily permit to become subject to
any lien (including pursuant to a sale-leaseback transaction or
an asset securitization transaction) any of its material
properties or assets (including securities of i2 subsidiaries)
to any person, except (i) sales and non-exclusive licenses
of products and services to customers in the ordinary course of
business consistent with past practice, and
(ii) dispositions of excess equipment or obsolete or
worthless
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assets or sales of properties or assets (excluding securities of
i2 subsidiaries) in an amount not in excess of $100,000 in the
aggregate;
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make any acquisition (by purchase of securities or assets,
merger or consolidation, or otherwise) of any other person,
business, or division;
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make any investment (by contribution to capital, property
transfers, purchase of securities, or otherwise) in, or loan or
advance (other than travel and similar advances to its employees
in the ordinary course of business consistent with past
practice) to, any person other than a direct or indirect wholly
owned i2 subsidiary in the ordinary course of business
consistent with past practice;
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other than in the ordinary course of business consistent with
past practice, enter into, terminate, or amend (other than
immaterial amendments) any material contract;
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increase in any manner the compensation of any of i2s
directors, officers, or employees or enter into, establish,
amend, modify, or terminate any employment, consulting,
retention, change in control, collective bargaining, bonus or
other incentive compensation, profit sharing, health or other
welfare, stock option or other equity (or equity-based),
pension, retirement, vacation, severance, deferred compensation
or other compensation, or benefit plan, policy, agreement,
trust, fund, or arrangement with, for or in respect of, any
stockholder, director, officer, other employee, consultant or
affiliate, or enter into or make any loans or advances to
directors, officers, or employees (other than advances in the
ordinary course of business consistent with past practice) other
than (i) as required pursuant to applicable law or the
terms of any employment agreement or company plan existing as of
the date of the merger agreement; (ii) increases in
salaries, wages, and benefits of employees (but not officers)
made in the ordinary course of business consistent with past
practice and in amounts and in a manner consistent with past
practice; and (iii) taking any such actions in connection
with the hiring and termination of employees (other than
officers, as such term is used in
Rule 16a-1(f)
of the Exchange Act) in the ordinary course of business
consistent with past practice;
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make any changes (other than immaterial changes made in the
ordinary course of business consistent with past practice) in
financial or tax accounting methods, principles, policies, or
practices (or change an annual accounting period), except
insofar as may be required by GAAP, the SEC, the IRS, or
applicable law (including published tax guidance) or such
changes in practices as may be made in connection with i2s
efforts to enhance its internal controls over financial
reporting and those of its subsidiaries;
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amend the charter documents of i2 or any of its subsidiaries;
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adopt a plan or agreement of complete or partial liquidation,
dissolution, restructuring, recapitalization, merger,
consolidation, or other reorganization;
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waive, release, assign, settle, or compromise any action,
investigation, proceeding, or litigation instituted, commenced,
pending, or threatened against i2 or any of its subsidiaries,
other than waivers, releases, assignments, settlements, or
compromises in the ordinary course of business consistent with
past practice that involve only the payment of monetary damages
by i2 and its subsidiaries not in excess of $100,000 in the
aggregate and that do not impose equitable relief or any
restrictions on the business and operations of, on, or the
admission of any wrongdoing by, i2 or any of its subsidiaries;
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enter into any license with respect to i2 intellectual property
unless such license is non-exclusive and entered into in the
ordinary course of business consistent with past practices;
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permit any material item of i2 intellectual property to become
abandoned, cancelled, invalidated, or dedicated to the public;
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make capital expenditures in any fiscal quarter in excess of
$100,000; or
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agree, in writing or otherwise, to take any of the foregoing
actions or, subject to certain other conditions, take any action
or agree, in writing or otherwise, to take any action, which
would cause any of the conditions to the merger set forth in
merger agreement not to be satisfied.
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The covenants in the merger agreement relating to the conduct of
i2s business are complicated and not easily summarized.
You are urged to read carefully and in its entirety the section
of the merger agreement entitled Conduct of Business
in
Annex A
to this Proxy Statement.
Conduct
of JDAs Business
JDA agreed in the merger agreement that, subject to specified
exceptions or unless i2 otherwise consents in writing, JDA will
conduct its business in the ordinary course, consistent with
past practice and use commercially reasonable efforts, under the
circumstances, to maintain and preserve intact JDAs
business organization and the goodwill of those having
significant business relationships with JDA.
In addition, JDA has agreed that, subject to specified
exceptions, neither JDA nor any of its subsidiaries may, without
i2s prior written consent (which consent shall not be
unreasonably withheld):
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authorize for issuance or issue, sell, grant, dispose of,
pledge, or otherwise encumber any shares of JDA capital stock,
voting securities or equity interests, or any securities or
rights convertible into, exchangeable or exercisable for, or
evidencing the right to subscribe for any shares of JDA capital
stock, voting securities, or equity interests, or any rights,
warrants, options, calls, commitments, or any other agreements
of any character to purchase or acquire any shares of its
capital stock, voting securities, or equity interests, provided
that, in the ordinary course of its business, JDA may grant
options, warrants or other rights under certain of its equity
incentive plans or issues shares of JDA common stock upon the
exercise of options, warrants or other rights that are
outstanding on the date of the merger agreement to acquire JDA
common stock in accordance with the their terms;
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redeem, purchase or otherwise acquire any of its capital stock,
voting securities or equity interest, or any rights, warrants,
options, calls, commitments or any other agreements of any
character to acquire any shares of its capital stock, voting
securities or equity interests, other than any such redemption,
purchase or acquisition made both in the ordinary course of
business and pursuant to agreements or arrangements in effect on
the date of the merger agreement;
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declare, set aside for payment or pay any dividend on, or make
any other distribution in respect of, any shares of its capital
stock or otherwise make any payments to its stockholders in
their capacity as such;
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split, combine, subdivide or reclassify any shares of its
capital stock;
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acquire, or agree to acquire by merging or consolidating with,
any business or corporation, partnership or other business
organization or division thereof, other than in connection with
any internal restructurings involving only JDA and its
subsidiaries;
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adopt or propose to adopt any amendments to its charter
documents, other than the Charter Amendment; or
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agree, in writing or otherwise, to take any of the foregoing
actions or take any action, which would cause any of the
conditions to the merger set forth in the merger agreement not
to be satisfied.
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The covenants in the merger agreement relating to the conduct of
JDAs business are complicated and not easily summarized.
You are urged to read carefully and in its entirety the section
of the merger agreement entitled Conduct of Business
in
Annex A
to this Proxy Statement.
Employee
Benefits
JDA has agreed in the merger agreement to provide, or cause its
affiliates (including i2 as its wholly-owned subsidiary after
the merger) to provide, i2s employees who continue
employment with the surviving corporation in the merger, for a
period of at least one year following the closing of the merger,
with combined aggregate pay and benefits, other than stock
options and other equity awards, that provide at least a
comparable value in the aggregate to those provided to similarly
situated employees of JDA or its affiliates. i2s employees
will also be provided credit for prior service under applicable
employee benefit, severance, and vacation and sick leave plans.
68
Appointment
of Director
The JDA board of directors has agreed to consider adding one
mutually agreeable i2 director to its board. If an
additional director is appointed, then upon the consummation of
the merger, JDA will increase the size of its board of directors
by one member, to six directors, and appoint one person,
mutually acceptable to JDA and i2, as a member of the board of
directors of JDA.
Other
Covenants
The merger agreement contains a number of other covenants,
including covenants relating to:
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preparation of this Proxy Statement and holding of the special
meeting;
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subject to the exceptions provided in the merger agreement, the
recommendation by i2s board of directors that its
stockholders approve the merger agreement;
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use of reasonable best efforts to consummate the merger as
promptly as practicable, including reasonable best efforts to
obtain regulatory clearance and, in connection therewith, to
vigorously defend any challenge by regulatory authorities to the
completion of the merger;
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public announcements;
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access to information and confidentiality;
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notification of communications from governmental authorities,
claims relating to the merger or breaches of representations and
warranties, breaches of covenants, and certain other matters;
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indemnification and insurance; and
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security holder litigation.
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In addition, JDA will use its reasonable best efforts to cause
the JDA common stock to be issued in the merger to be approved
for listing upon the effective time of the merger on Nasdaq,
subject to official notice of issuance
Prior to the effective time of the merger, i2 has agreed:
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to provide reasonable assistance and cooperation in connection
with the arrangement by JDA of debt financing;
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to deliver to JDA, within 10 business days of the execution of
the merger agreement, a list of actions that are required to be
taken by i2 within 90 days after the execution date with
respect to i2 intellectual property that, if not taken, would
have a material adverse effect on any i2 intellectual property
or the prosecution related applications or registrations (which
list i2 has timely delivered).
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No-Shop
Provisions
i2 has agreed, prior to the merger becoming effective, to
certain limitations on i2s ability to take action with
respect to other potential acquisition transactions. i2 has
agreed to terminate any discussions or negotiations with any
person. In addition, except as set forth below, i2 has agreed to
not directly or indirectly:
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solicit, initiate, or knowingly facilitate or encourage
(including by way of furnishing information or providing
assistance) any inquiries or proposals that constitute, or may
reasonably be expected to lead to, any takeover proposal;
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participate in any discussions or negotiations with, or furnish
or disclose any non-public information relating to i2 or any of
its subsidiaries, to or otherwise cooperate with or assist, any
third party regarding any takeover proposal;
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approve, endorse, or recommend any takeover proposal; or
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enter into any letter of intent or agreement related to any
takeover proposal.
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69
Notwithstanding these limitations:
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if after the execution of the merger agreement, i2 receives an
unsolicited, bona fide written takeover proposal and the i2
board of directors (or a committee thereof) determines in good
faith after consultation with its financial adviser and outside
legal counsel (i) that such takeover proposal is, or is
reasonably likely to lead to, a superior proposal and
(ii) that the failure to take such action would be
inconsistent with its fiduciary duties to i2s stockholders
under applicable law, then i2 may, at any time prior to
obtaining i2s stockholder approval (but in no event after
obtaining the stockholders approval) and after entering
into a customary confidentiality agreement with the person
making such proposal:
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furnish information with respect to i2 and its subsidiaries to
the person making such takeover proposal;
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participate in discussions and negotiations with such person
regarding such takeover proposal (including solicitation of a
revised takeover proposal); and
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enter into the confidentiality agreement contemplated above.
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Under the merger agreement, takeover proposal means
any inquiry, proposal, or offer from anyone (other than JDA and
its subsidiaries) or any group relating to any:
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direct or indirect acquisition (whether in a single transaction
or a series of related transactions) of assets of i2 and its
subsidiaries (including securities of subsidiaries) equal to 20%
or more of i2s consolidated assets or to which 20% or more
of i2s consolidated revenues on a consolidated basis for
the then preceding four completed and publicly reported calendar
quarters are attributable;
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direct or indirect acquisition (whether in a single transaction
or a series of related transactions) of 20% or more of i2 common
stock;
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tender offer or exchange offer that if consummated would result
in anyone other than JDA and its subsidiaries beneficially
owning 20% or more of i2 common stock; or
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merger, consolidation, share exchange, business combination,
recapitalization, liquidation, dissolution, or similar
transaction involving i2 or any of its subsidiaries; in each
case, other than the transactions contemplated by the merger
agreement.
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Under the merger agreement, superior proposal means
an unsolicited, written takeover proposal made by a third party,
which is on terms and conditions that the i2 board of directors
(or committee of the i2 board of directors) determines in its
good faith judgment (after consultation with Thomas Weisel
Partners or another financial advisor of national reputation) to
be more favorable to i2s stockholders from a financial
point of view (taking into account all terms and conditions of
the takeover proposal, including any
break-up
fees, expense reimbursement provisions and financial terms, and
the ability of the person making such proposal to consummate the
transactions contemplated by such proposal, based upon, among
other things, the availability of financing and the expectation
of obtaining required approvals) than the merger, taking into
account at the time of determination any changes to the terms of
the merger agreement that as of that time had been proposed by
JDA in writing (and not withdrawn), except that the reference to
20% in the definition of takeover
proposal shall be deemed to be a reference to
50%.
Conditions
to Closing
The parties obligations to complete the merger are subject
to the following conditions:
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the approval of the Merger Proposal by the requisite vote of
i2s stockholders;
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no law, injunction, judgment, or ruling shall have been enacted
or shall be in effect that enjoins, restrains, prevents or
prohibits the consummation of the merger or makes the
consummation of the merger illegal;
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the waiting period applicable to the consummation of the merger
under
Hart-Scott-Rodino
Act or other foreign antitrust laws must have expired or been
terminated and all other approvals or consents required of any
other domestic or foreign governmental entity must have been
obtained;
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the effectiveness of the registration statement of which this
Proxy Statement is a part, and the registration statement not
being subject to any stop order or stop order threatened in
writing; and
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the shares of JDA common stock issuable in the merger must have
been approved for listing on Nasdaq, subject to official notice
of issuance.
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JDAs and Merger Subs obligations to complete the
merger are also subject to the following conditions:
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i2s representations and warranties (disregarding all
qualifications and exceptions contained therein relating to
materiality or material adverse effect, subject to certain
exceptions) must be true and correct as of the date of the
merger agreement and the date of the closing of the merger (or
if any representation or warranty expressly speaks as of a
specified date, as of such specified date), except if the
failure of which to be so true and correct would not have,
individually or in the aggregate, a material adverse effect on
i2;
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i2 must have performed in all material respects all of its
obligations under the merger agreement;
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JDA must have received a certificate signed by i2s CEO or
CFO certifying that i2s representations and warranties are
true and correct as of the date of closing of the merger and
that i2 has performed in all material respects its obligations
under the merger agreement;
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there must not be any action, investigation, proceeding or
litigation pending or threatened by or before any governmental
entity in which a governmental entity is a party, and there must
not be any law, injunction, judgment or ruling enacted,
promulgated, issued, entered, amended or enforced by any
governmental entity in effect, that would (i) restrain,
enjoin, prevent, prohibit or make illegal the acquisition of
some or all of i2s shares by JDA or Merger Sub or the
consummation of the merger; (ii) impose limitations on the
ability of JDA or its affiliates to effectively exercise full
rights of ownership of i2 in a manner that materially and
adversely affects the value of i2 and its subsidiaries, taken as
a whole; (iii) result in the imposition of a burdensome
condition (as defined in the merger agreement); or
(iv) result in a material adverse effect on i2;
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since the date of the merger agreement, there must not have been
any material adverse effect on i2; and
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the aggregate amount of unrestricted cash held by i2, plus the
liquidation value of immediately liquid cash equivalents held by
i2, must not be less than $160 million and i2 must have
made a cash deposit of up to such amount with the exchange
agent; and
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i2 must have paid in full an estimated $10 million of
certain accounts payable and accrued expenses.
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The merger agreement provides that a material adverse effect on
i2 means any change, event, occurrence or state of facts that
(i) has a material adverse effect on the business,
properties, assets, liabilities, results of operations, or
financial condition of i2 and its subsidiaries taken as a whole
or (ii) prevents, or materially hinders, i2 from
consummating the merger or any of the other transactions
contemplated by the merger agreement; provided, however, that
none of the following shall be deemed either alone or in
combination to constitute, and none of the following shall be
taken into account in determining whether there has been, or
could reasonably be expected to be, a material adverse effect:
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any change, event, occurrence, or state of facts relating to the
global, United States, or regional economy, financial markets,
political conditions in general, or the industry in which i2
operates, including such changes thereto as are caused by
terrorist activities, entry into or material worsening of war or
armed hostilities, or other national or international calamity,
except to the extent such changes or developments have a
disproportionate impact on i2 and its subsidiaries, taken as a
whole, relative to other industry participants;
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any change, event, occurrence, or state of facts that directly
arises out of or results from the announcement or pendency of
the merger agreement or any of the transactions contemplated by
the merger agreement, including shareholder litigation or
disruption or loss of customer business or supplier or employee
relationships that is directly related to or directly arises out
of or results from the announcement or pendency of the merger
agreement or any of the transactions contemplated by the merger
agreement;
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any changes or effects arising out of or resulting from actions
taken or the failure to take actions by i2 or its subsidiaries
with JDAs express written consent or in accordance with
express written instructions of JDA or as otherwise expressly
required to be taken by i2 or its subsidiaries pursuant to the
terms of the merger agreement;
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in and of itself, any change in i2s stock price or trading
volume or any failure to meet internal projections or forecasts
or published revenue or earnings projections of industry
analysts (provided that this clause shall not be construed as
providing that the change, event, occurrence or state of facts
giving rise to such change or failure does not constitute or
contribute to a material adverse effect);
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any legal proceeding made or brought by any of the current or
former stockholders of i2 (on their own behalf or on behalf of
i2) against i2 arising out of the merger or in connection with
any other transactions contemplated by the merger
agreement; and
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changes in GAAP or applicable accounting requirements or
principles which occur or become effective after the date of the
merger agreement.
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i2s obligation to complete the merger is also subject to
the following conditions:
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JDAs and Merger Subs representations and warranties
(disregarding all qualifications and exceptions contained
therein relating to materiality or material adverse effect) must
be true and correct as of the date of the merger agreement and
as of the closing date (or if any representation or warranty
expressly speaks as of a specified date, as of such specified
date), except as does not have, individually or in the
aggregate, a material adverse effect on JDAs ability to
consummate the merger;
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JDA and Merger Sub must have performed in all material respects
all of their respective obligations under the merger agreement;
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i2 must receive a certificate signed by a duly authorized JDA
representative certifying that JDAs and Merger Subs
representations and warranties are true and correct as of the
date of closing of the merger and that JDA and Merger Sub have
performed in all material respects of its obligations under the
merger agreement; and
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since the date of the merger agreement, there must not have been
any material adverse effect on JDA.
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The merger agreement provides that a material adverse effect on
JDA means any change, event, occurrence or state of facts that
(i) has a material adverse effect on the business,
properties, assets, liabilities, results of operations, or
financial condition of JDA and its subsidiaries taken as a whole
or (ii) prevents, or materially hinders, JDA from
consummating the merger or any of the other transactions
contemplated by the merger agreement; provided, however, that
none of the following shall be deemed either alone or in
combination to constitute, and none of the following shall be
taken into account in determining whether there has been, or
could reasonably be expected to be, a material adverse effect:
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any change, event, occurrence, or state of facts relating to the
global, United States, or regional economy, financial markets,
political conditions in general, or the industry in which JDA
operates, including such changes thereto as are caused by
terrorist activities, entry into or material worsening of war or
armed hostilities, or other national or international calamity,
except to the extent such changes or developments have a
disproportionate impact on JDA and its subsidiaries, taken as a
whole, relative to other industry participants;
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any change, event, occurrence, or state of facts that directly
arises out of or results from the announcement or pendency of
the merger agreement or any of the transactions contemplated by
the merger agreement, including shareholder litigation or
disruption or loss of customer business or supplier or employee
relationships that is directly related to or directly arises out
of or results from the announcement or pendency of the merger
agreement or any of the transactions contemplated by the merger
agreement;
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any changes or effects arising out of or resulting from actions
taken or the failure to take actions by JDA or its subsidiaries
with i2s express written consent or in accordance with
express written instructions of i2 or as otherwise expressly
required to be taken by JDA or its subsidiaries pursuant to the
terms of the merger agreement;
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in and of itself, any change in JDAs stock price or
trading volume or any failure to meet internal projections or
forecasts or published revenue or earnings projections of
industry analysts (provided that this clause shall not be
construed as providing that the change, event, occurrence or
state of facts giving rise to such change or failure does not
constitute or contribute to a material adverse effect);
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any legal proceeding made or brought by any of the current or
former stockholders of JDA (on their own behalf or on behalf of
JDA) against JDA arising out of the merger or in connection with
any other transactions contemplated by the merger
agreement; and
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changes in GAAP or applicable accounting requirements or
principles which occur or become effective after the date of the
merger agreement.
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Termination
Generally, the merger agreement may be terminated and the merger
may be abandoned at any time prior to the completion of the
merger (including after stockholder approval):
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by mutual written consent of i2 and JDA;
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by either i2 or JDA if:
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the merger is not consummated on or before March 31, 2010;
except that (i) the passage of such period will be tolled
for any part thereof during which any party to the merger
agreement is subject to a legal prohibition or injunction on the
consummation of the merger, or that makes the consummation of
the merger illegal, in each case that is non-final and
appealable, (ii) either party may extend the Outside Date
to May 4, 2010, and (iii) such right is not available
to any party if the failure of the merger to have been
consummated on or before such date was primarily due to such
partys breach or failure to perform any of its
representations, warranties, covenants, or agreements set forth
in the merger agreement;
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any legal prohibition or injunction that enjoins, restrains,
prevents, or prohibits the consummation of the merger or makes
the consummation of the merger illegal becomes final and
non-appealable, except that such right is not available to any
party if the restraint was primarily due to such partys
breach or failure to perform any of its representations,
warranties, covenants, or agreements set forth in the merger
agreement; or
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the applicable approval of i2s stockholders has not been
obtained at the i2 stockholders meeting or any adjournment or
postponement thereof, except that such right is not available to
any party if the failure to obtain the required vote was
primarily due to such partys breach or failure to perform
any of its representations, warranties, covenants, or agreements
set forth in the merger agreement.
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i2 breaches or fails to perform in any material respect any of
its material covenants or agreements set forth in the merger
agreement, or if any representation or warranty of i2 becomes
untrue, in either case subject to certain specified materiality
conditions and i2s inability to cure such breach;
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any injunction or other legal prohibition that is final and
non-appealable prevents the consummation of the merger, imposes
limitations on JDAs ability to effectively exercise full
rights of ownership of i2 in a manner that materially and
adversely affects the value of i2 and its subsidiaries, taken as
a whole, limits JDAs rights with respect to its ability to
operate i2, or results in a material adverse effect on i2;
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i2 enters into an acquisition agreement with another party or,
before i2s stockholders have approved the Merger Proposal,
the i2 board of directors or any committee of the i2 board of
directors either changes its recommendation that its
stockholders vote in favor of the Merger Proposal or does not
reject any bona fide publicly announced offer for a takeover
proposal within ten business days of the making of the offer;
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i2 violates any of its material obligations under the no-shop
provisions set forth in the merger agreement;
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a material adverse effect on i2 occurs and is continuing to
occur and is not cured by i2 within 20 business days of receipt
of written notice of such event from JDA and prior to
March 31, 2010 (or any extended date); or
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if the merger is not consummated as a result of a financing
failure and JDA pays the break fee described below to i2.
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JDA or Merger Sub breach or fail to perform in any material
respect any of their respective material covenants or agreements
set forth in the merger agreement, or if any representation or
warranty of JDA becomes untrue, in either case subject to
certain specified materiality conditions and JDAs
inability to cure such breach;
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before i2s stockholders have approved the Merger Proposal,
i2 concurrently enters into a definitive agreement in accordance
with the no-shop provisions of the merger agreement providing
for a superior proposal and i2 pays the termination fee
described below to JDA;
|
|
|
|
a material adverse effect on JDA occurs and is continuing to
occur and is not cured by JDA within 20 business days of
receipt of written notice of such event from i2 and prior to
March 31, 2010 (or any extended date); or
|
|
|
|
if the merger is not consummated as a result of a financing
failure.
|
The merger agreement provides that a financing failure will be
deemed to exist if JDA has complied with all of its obligations
to obtain financing in connection with the merger and such
financing is not available on the closing date on the terms and
conditions specified in the financing documents relating thereto
in an amount necessary to enable JDA to pay the cash portion of
the merger consideration and other amounts payable by JDA in
connection with the merger.
Fees and
Expenses
Under the terms of the merger agreement, whether or not the
merger is consummated, and except as described below, all fees
and expenses incurred in connection with the merger agreement,
the merger, or the transactions related thereto will be paid by
the party incurring such fees or expenses; provided, however,
that JDA and i2 shall share equally (i) the filing fee of
JDAs
Hart-Scott-Rodino
Act pre-merger notification report and (ii) all fees and
expenses, other than accountants and attorneys fees,
incurred with respect to this Proxy Statement.
i2 is required to pay JDA a termination fee in the amount of
$15,000,000 if the merger agreement is terminated:
|
|
|
|
|
by either JDA or i2 if either the outside date has passed prior
to approval by i2 stockholders or the required
i2 stockholder vote has not been obtained at the i2
stockholder meeting, and (i) prior to such termination,
there has been a publicly announced alternative takeover
proposal for i2 and (ii) within twelve months after such
termination, i2 consummates an alternative transaction or enters
into an acquisition agreement relating to an alternative
proposal, or there is otherwise consummated a takeover proposal
with respect to i2 in the form of a tender offer, exchange offer
or similar transaction (treating in the definition of takeover
proposal, as described on page 70, references to 20% as
references to 50%);
|
|
|
|
|
|
by JDA if i2 enters into an acquisition agreement with another
party or, before i2s stockholders have approved the Merger
Proposal, the i2 board of directors or any committee of the i2
board of directors changes its recommendation that its
stockholders vote in favor of the Merger Proposal or do not
reject any bona fide publicly announced offer for a takeover
proposal within ten business days of the making of the
offer; or
|
|
|
|
by i2 before the i2 stockholders meeting to accept a superior
proposal.
|
JDA is required to pay i2 a termination fee in the amount of
$30,000,000, if the agreement is terminated by either i2 or JDA
as a result of a financing failure.
74
Voting
Agreements
As of the record date, the directors and executive officers of
i2, and the Series B holder on an
as-converted-to-common
stock basis, beneficially owned and were entitled to vote
324,646 shares of i2 common stock and 110,658 shares
of Series B Preferred Stock, having 4,780,043 votes on an
as-converted-to-common stock basis. These shares are entitled to
5,104,684 votes representing approximately 18.4% of the
combined voting power of the i2 common stock and Series B
Preferred Stock, voting on an as-converted-to-common stock
basis, on that date. Concurrently with the execution and
delivery of the merger agreement, all of the i2 directors,
certain executive officers, and the Series B holder
executed voting agreements, the forms of which are attached to
this Proxy Statement as
Annex B
and
Annex C
, respectively, agreeing to vote or
cause to be voted all of their shares for the Merger Proposal.
Under the terms of these voting agreements, unless such voting
agreements are terminated by JDA (or, in the case of the voting
agreement with the Series B holder, as the result of
amending the merger agreement without the consent of the
Series B holder) or until the date on which the merger is
completed or the merger agreement is terminated in accordance
with its terms, each such person has agreed, among other things:
|
|
|
|
|
to appear at the i2 special meeting of stockholders or otherwise
cause their shares of i2 common stock or Series B Preferred
Stock, as applicable, to be counted as present at the i2
stockholders meeting for purposes of establishing a quorum;
|
|
|
|
to vote or cause to be voted their shares of i2 common stock or
Series B Preferred Stock, as applicable:
|
|
|
|
|
|
in favor of approval of the Merger Proposal;
|
|
|
|
against any action that is intended, or that could reasonably be
expected to otherwise impede, interfere with, delay, postpone,
discourage or adversely affect the consummation of the merger;
|
|
|
|
against the approval or adoption of any proposal made in
opposition to, or in competition with, the merger
agreement, and
|
|
|
|
against any of the following (to the extent unrelated to the
merger agreement): (i) any merger, consolidation or
business combination involving i2 or any of its subsidiaries
other than the merger agreement; (ii) any sale, lease or
transfer of all or substantially all of the assets of i2 or any
of its subsidiaries; (iii) any reorganization,
recapitalization, dissolution, liquidation or winding up of i2
or any of its subsidiaries; or (iv) any other action that
is intended, or could reasonably be expected, to otherwise
impede, interfere with, delay, postpone, discourage or adversely
affect the consummation of the merger agreement.
|
|
|
|
|
|
not to transfer or cause to be transferred such persons
shares of stock, except in certain circumstances.
|
75
FINANCING
Overview
On December 10, 2009, JDA issued $275 million
aggregate principal amount of 8.0% Senior Notes due 2014.
The notes were issued pursuant to an indenture, dated as of
December 10, 2009, among JDA, certain of its subsidiaries,
and U.S. Bank National Association, as trustee. The net
proceeds from the issuance of the notes totaled
$266.7 million. On the date of the offering, the net
proceeds of the offering, together with an additional amount
funded by JDA, were deposited into an escrow account established
pursuant to an escrow and security agreement, dated
December 10, 2009, by and between JDA, U.S. Bank
National Association, as escrow agent and U.S. Bank
National Association, as trustee under the Indenture. The
proceeds from the sale of the notes, together with cash on hand
at JDA and i2, will be used to pay the cash portion of the
merger consideration.
Terms of
Notes
Purchase price and interest.
The notes were
issued by JDA at an initial offering price of 98.988% of the
principal amount. The notes mature on December 15, 2014 and
bear interest at a rate of 8.0% per annum. Interest on the notes
is computed on the basis of a
360-day
year
composed of twelve
30-day
months and is payable semi-annually on June 15 and December 15
of each year, beginning on June 15, 2010.
Guarantees.
The obligations under the notes
are fully and unconditionally guaranteed, jointly and severally,
by certain of JDAs direct and indirect domestic
subsidiaries, including, following the closing of the merger, i2
and certain of its domestic subsidiaries, and will be so
guaranteed by any future domestic subsidiaries of JDA, subject
to certain exceptions.
Redemption and repurchase.
On or after
December 15, 2012, JDA may redeem all or a part of the
notes at the redemption prices set forth in the indenture, plus
accrued and unpaid interest and special interest, if any, to the
applicable redemption date. In addition, at any time prior to
December 15, 2012, JDA may, on one or more than one
occasions, redeem some or all of the notes at any time at a
redemption price equal to 100% of the principal amount of the
notes redeemed, plus a make-whole premium as of, and
accrued and unpaid interest and special interest, if any, to,
the applicable redemption date. At any time prior to
December 15, 2012, JDA may also redeem up to 35% of the
aggregate principal amount of notes, using the proceeds of
certain qualified equity offerings, at a redemption price of
108.0% of the principal amount thereof plus accrued and unpaid
interest and special interest, if any, to the applicable
redemption date.
If JDA experiences specified change of control events, JDA must
offer to repurchase the notes at a repurchase price equal to
101% of the principal amount of the notes repurchased, plus
accrued and unpaid interest and special interest, if any, to the
applicable repurchase date.
If JDA or its subsidiaries sell assets under specified
circumstances, JDA must offer to repurchase the notes at a
repurchase price equal to 100% of the principal amount of the
notes repurchased, plus accrued and unpaid interest and special
interest, if any, to the applicable repurchase date.
Covenants.
The indenture contains covenants
that, among other things, restrict the ability of JDA and its
restricted subsidiaries to:
|
|
|
|
|
pay dividends, make investments or make other restricted
payments;
|
|
|
|
|
|
incur additional indebtedness or issue disqualified stock or
preferred stock;
|
|
|
|
|
|
permit consensual encumbrances or restrictions on JDAs
restricted subsidiaries ability to pay dividends or make
certain other payments to JDA;
|
|
|
|
|
|
consolidate, merge, sell or otherwise dispose of all or
substantially all of JDAs or its restricted
subsidiarys assets;
|
76
|
|
|
|
|
enter into transactions with affiliates; and
|
|
|
|
|
|
designate subsidiaries as unrestricted.
|
These covenants are subject to a number of important limitations
and exceptions set forth in the indenture.
Events of default.
The indenture provides for
customary events of default, including, but not limited to,
cross defaults to specified other debt of JDA and its
subsidiaries. In the case of an event of default arising from
specified events of bankruptcy or insolvency, all outstanding
notes will become due and payable immediately without further
action or notice. If any other event of default under the
indenture occurs or is continuing, the trustee or holders of at
least 25% in aggregate principal amount of the then outstanding
notes may declare all the notes to be due and payable
immediately.
Escrow of proceeds.
The escrow and security
agreement provides for release of the proceeds of the notes to
JDA to fund the merger upon completion of the merger. If JDA
does not complete the merger on or prior to May 4, 2010,
the indenture requires the redemption of all of the notes then
outstanding, upon not less than three business days
notice, at a redemption price equal to 101% of the aggregate
gross proceeds of the notes, plus accrued and unpaid interest up
to, but not including, the redemption date. JDA also has the
right to redeem the notes at any time prior to May 4, 2010
on the same terms.
Registration of notes.
In connection with the
issuance of the notes, JDA and its subsidiary guarantors entered
into an exchange and registration rights agreement, dated
December 10, 2009, with the initial purchasers of the
notes. Under the terms of the registration rights agreement, JDA
and the subsidiary guarantors are required to file an exchange
offer registration statement within 180 days following the
issuance of the notes enabling holders to exchange the notes for
registered notes with terms substantially identical to the terms
of the notes; to use commercially reasonable efforts to have the
exchange offer registration statement declared effective by the
SEC on or prior to 270 days after the closing of the note
offering; and, unless the exchange offer would not be permitted
by applicable law or SEC policy, to complete the exchange offer
within 30 business days after the registration deadline. Under
specified circumstances, including if the exchange offer would
not be permitted by applicable law or SEC policy, the
registration rights agreement provides that JDA and the
subsidiary guarantors shall file a shelf registration statement
for the resale of the notes. If JDA and the subsidiary
guarantors default on their registration obligations under the
exchange and registration rights agreement, additional interest
(referred to as special interest), up to a maximum amount of
1.0% per annum, will be payable on the notes until all such
registration defaults are cured.
77
UNAUDITED
PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
The unaudited pro forma condensed combined balance sheet data
combines the historical balance sheets of JDA and i2 as of
September 30, 2009, and gives effect to the merger as if it
had occurred on September 30, 2009.
The pro forma condensed combined statement of income data for
the nine months ended September 30, 2009 combines the
historical JDA condensed consolidated statement of income for
the nine months ended September 30, 2009 with the
historical i2 condensed consolidated statement of operations for
the nine months ended September 30, 2009, giving effect to
the merger as if it had occurred on January 1, 2009. The
pro forma condensed combined statement of income data for the
year ended December 31, 2008 combines the historical JDA
consolidated statement of income for the year ended
December 31, 2008 with the historical i2 consolidated
statement of operations for the year ended December 31,
2008, as adjusted, giving effect to the merger as if it had
occurred on January 1, 2008.
The unaudited pro forma condensed combined financial data
reflects the estimated merger consideration that would be
transferred as of the date of the merger agreement; however, the
pro forma information does not purport to represent the actual
merger consideration that will be transferred at the effective
time of the closing. In accordance with ASC Topic 805, Business
Combinations, as amended (ASC Topic 805), the fair
value of equity securities issued as part of the consideration
transferred will be measured on the closing date of the merger
at the then-current market price. As a result, the actual value
of the final merger consideration will fluctuate based upon
changes in the price of JDAs common stock and the number
of i2 common shares, stock options and restricted stock unit
awards outstanding at the closing date.
The total estimated merger consideration assumed in the pro
forma information is approximately $555 million and
includes the following: (i) $433.2 million for holders
of i2 common stock, consisting of $305.5 million in cash
and $127.7 million to be paid through the issuance of
approximately 6.2 million shares of JDA common stock valued
at the November 4, 2009 closing share price of $20.70 per
share; and (ii) $121.7 million in cash for the
i2 Series B Preferred Stock. The estimated merger
consideration assumes no changes in the number of outstanding
options to purchase i2 common stock or restricted stock unit
awards through the closing date of the merger. Under ASC Topic
805, acquisition-related transaction costs (i.e., advisory,
legal, valuation and other professional fees) are not included
as a component of consideration transferred but are accounted
for as expenses in the periods in which the costs are incurred.
The unaudited pro forma condensed combined financial information
provided herein does not purport to represent the results of
operations or financial position of JDA that would have actually
resulted had the merger been completed as of the dates
indicated, nor should the information be taken as indicative of
the future results of operations or financial position of the
combined company. The unaudited pro forma condensed combined
financial statements do not reflect the impacts of any potential
operational efficiencies, cost savings or economies of scale
that JDA may achieve with respect to the combined operations of
JDA and i2.
The unaudited pro forma condensed combined financial statements
should be read in conjunction with the historical consolidated
financial statements and accompanying notes of JDA and i2
incorporated herein by reference. See Where You Can Find
More Information.
78
JDA
SOFTWARE GROUP, INC.
UNAUDITED
PRO FORMA CONDENSED COMBINED BALANCE SHEET
AS OF
SEPTEMBER 30, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Historical
|
|
|
|
|
|
Pro Forma
|
|
|
Pro Forma
|
|
|
|
JDA
|
|
|
i2
|
|
|
Reclassifications
|
|
|
Adjustments
|
|
|
Combined
|
|
|
|
(In thousands)
|
|
|
Current Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
85,477
|
|
|
$
|
185,513
|
|
|
|
|
|
|
$
|
(160,540
|
)(2),(3)
|
|
$
|
110,450
|
|
Restricted cash
|
|
|
|
|
|
|
6,737
|
|
|
|
|
|
|
|
|
|
|
|
6,737
|
|
Accounts receivable, net
|
|
|
60,236
|
|
|
|
21,127
|
|
|
|
|
|
|
|
|
|
|
|
81,363
|
|
Income tax receivable
|
|
|
2,298
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,298
|
|
Deferred tax asset
|
|
|
23,221
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,221
|
|
Prepaid expenses and other current assets
|
|
|
18,292
|
|
|
|
8,663
|
|
|
|
|
|
|
|
|
|
|
|
26,955
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
189,524
|
|
|
|
222,040
|
|
|
|
0
|
|
|
|
(160,540
|
)
|
|
|
251,024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Current Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
41,608
|
|
|
|
3,230
|
|
|
|
|
|
|
|
|
|
|
|
44,838
|
|
Goodwill
|
|
|
135,275
|
|
|
|
16,684
|
|
|
|
|
|
|
|
386,049
|
(3)
|
|
|
538,008
|
|
Other Intangibles, net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer lists
|
|
|
104,848
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
104,848
|
|
Acquired software technology
|
|
|
21,206
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,206
|
|
Trademarks
|
|
|
326
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
326
|
|
Deferred tax asset
|
|
|
35,996
|
|
|
|
5,624
|
|
|
|
|
|
|
|
|
|
|
|
41,620
|
|
Other non-current assets
|
|
|
7,272
|
|
|
|
3,842
|
|
|
|
|
|
|
|
5,500
|
(2)
|
|
|
16,614
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-current assets
|
|
|
346,531
|
|
|
|
29,380
|
|
|
|
0
|
|
|
|
391,549
|
|
|
|
767,460
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
536,055
|
|
|
$
|
251,420
|
|
|
$
|
0
|
|
|
$
|
231,009
|
|
|
$
|
1,018,484
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
8,574
|
|
|
$
|
3,502
|
|
|
|
|
|
|
|
|
|
|
$
|
12,076
|
|
Accrued expenses and other current liabilities
|
|
|
39,381
|
|
|
|
|
|
|
|
28,852
|
(1)
|
|
|
|
|
|
|
68,233
|
|
Accrued liabilities
|
|
|
|
|
|
|
13,042
|
|
|
|
(13,042
|
)(1)
|
|
|
|
|
|
|
0
|
|
Accrued compensation and related expenses
|
|
|
|
|
|
|
15,810
|
|
|
|
(15,810
|
)(1)
|
|
|
|
|
|
|
0
|
|
Deferred revenue
|
|
|
71,852
|
|
|
|
43,796
|
|
|
|
|
|
|
|
|
|
|
|
115,648
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
119,807
|
|
|
|
76,150
|
|
|
|
0
|
|
|
|
0
|
|
|
|
195,957
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Current Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued exit and disposal obligations
|
|
|
7,269
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,269
|
|
Liability for uncertain tax positions
|
|
|
7,447
|
|
|
|
|
|
|
|
6,419
|
(1)
|
|
|
|
|
|
|
13,866
|
|
Taxes payable
|
|
|
|
|
|
|
6,419
|
|
|
|
(6,419
|
)(1)
|
|
|
|
|
|
|
0
|
|
Long-term debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
272,217
|
(2)
|
|
|
272,217
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-current current liabilities
|
|
|
14,716
|
|
|
|
6,419
|
|
|
|
0
|
|
|
|
272,217
|
|
|
|
293,352
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
134,523
|
|
|
|
82,569
|
|
|
|
0
|
|
|
|
272,217
|
|
|
|
489,309
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series B convertible preferred stock
|
|
|
|
|
|
|
108,293
|
|
|
|
|
|
|
|
(108,293
|
)(3)
|
|
|
0
|
|
Common stock
|
|
|
363
|
|
|
|
6
|
|
|
|
|
|
|
|
56
|
(3)
|
|
|
425
|
|
Additional paid-in capital
|
|
|
361,740
|
|
|
|
10,492,082
|
|
|
|
|
|
|
|
(10,364,501
|
)(3)
|
|
|
489,321
|
|
Deferred compensation
|
|
|
(7,681
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7,681
|
)
|
Retained earnings (accumulated deficit)
|
|
|
65,517
|
|
|
|
(10,434,986
|
)
|
|
|
|
|
|
|
10,434,986
|
(3)
|
|
|
65,517
|
|
Accumulated other comprehensive income (loss)
|
|
|
3,589
|
|
|
|
3,456
|
|
|
|
|
|
|
|
(3,456
|
)(3)
|
|
|
3,589
|
|
Treasury stock
|
|
|
(21,996
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(21,996
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders equity
|
|
|
401,532
|
|
|
|
168,851
|
|
|
|
0
|
|
|
|
(41,208
|
)
|
|
|
529,175
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders equity
|
|
$
|
536,055
|
|
|
$
|
251,420
|
|
|
$
|
0
|
|
|
$
|
231,009
|
|
|
$
|
1,018,484
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompany notes to unaudited pro forma condensed combined
financial statements
79
JDA
SOFTWARE GROUP, INC.
UNAUDITED
PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
FOR THE
NINE MONTHS ENDED SEPTEMBER 30, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Historical
|
|
|
|
|
|
Pro Forma
|
|
|
|
|
|
|
JDA
|
|
|
i2
|
|
|
Reclassifications
|
|
|
Adjustments
|
|
|
Pro Forma
|
|
|
|
(In thousands, except per share data)
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Software licenses
|
|
$
|
60,160
|
|
|
|
|
|
|
$
|
40,689
|
(1)
|
|
|
|
|
|
$
|
100,849
|
|
Software solutions
|
|
|
|
|
|
|
40,689
|
|
|
|
(40,689
|
)(1)
|
|
|
|
|
|
|
0
|
|
Maintenance services
|
|
|
132,378
|
|
|
|
56,021
|
|
|
|
|
|
|
|
|
|
|
|
188,399
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product revenues
|
|
|
192,538
|
|
|
|
96,710
|
|
|
|
0
|
|
|
|
0
|
|
|
|
289,248
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consulting services
|
|
|
78,965
|
|
|
|
71,357
|
|
|
|
|
|
|
|
|
|
|
|
150,322
|
|
Reimbursed expenses
|
|
|
7,174
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,174
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service revenues
|
|
|
86,139
|
|
|
|
71,357
|
|
|
|
0
|
|
|
|
0
|
|
|
|
157,496
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
278,677
|
|
|
|
168,067
|
|
|
|
0
|
|
|
|
0
|
|
|
|
446,744
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of software licenses
|
|
|
2,417
|
|
|
|
|
|
|
|
7,214
|
(1)
|
|
|
|
|
|
|
9,631
|
|
Cost of software solutions
|
|
|
|
|
|
|
7,214
|
|
|
|
(7,214
|
)(1)
|
|
|
|
|
|
|
0
|
|
Amortization of acquired software technology
|
|
|
2,954
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
2,954
|
|
Cost of maintenance services
|
|
|
32,416
|
|
|
|
6,749
|
|
|
|
|
|
|
|
|
|
|
|
39,165
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of product revenues
|
|
|
37,787
|
|
|
|
13,963
|
|
|
|
0
|
|
|
|
0
|
|
|
|
51,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of consulting services
|
|
|
61,732
|
|
|
|
45,797
|
|
|
|
|
|
|
|
|
|
|
|
107,529
|
|
Reimbursed expenses
|
|
|
7,174
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,174
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of service revenues
|
|
|
68,906
|
|
|
|
45,797
|
|
|
|
0
|
|
|
|
0
|
|
|
|
114,703
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cost of revenues
|
|
|
106,693
|
|
|
|
59,760
|
|
|
|
0
|
|
|
|
0
|
|
|
|
166,453
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit
|
|
|
171,984
|
|
|
|
108,307
|
|
|
|
0
|
|
|
|
0
|
|
|
|
280,291
|
|
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product development
|
|
|
37,732
|
|
|
|
20,124
|
|
|
|
|
|
|
|
|
|
|
|
57,856
|
|
Sales and marketing
|
|
|
46,310
|
|
|
|
28,020
|
|
|
|
|
|
|
|
|
|
|
|
74,330
|
|
General and administrative
|
|
|
35,001
|
|
|
|
25,695
|
|
|
|
|
|
|
|
|
|
|
|
60,696
|
|
Amortization of intangibles
|
|
|
17,880
|
|
|
|
25
|
|
|
|
|
|
|
|
(25
|
)(3)
|
|
|
17,880
|
|
Restructuring charges and adjustments to reserves
|
|
|
6,705
|
|
|
|
2,975
|
|
|
|
|
|
|
|
|
|
|
|
9,680
|
|
Intellectual property settlement
|
|
|
|
|
|
|
562
|
|
|
|
|
|
|
|
|
|
|
|
562
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
143,628
|
|
|
|
77,401
|
|
|
|
0
|
|
|
|
(25
|
)
|
|
|
221,004
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income
|
|
|
28,356
|
|
|
|
30,906
|
|
|
|
|
|
|
|
25
|
|
|
|
59,287
|
|
Interest expense and amortization of loan fees
|
|
|
(971
|
)
|
|
|
(899
|
)
|
|
|
|
|
|
|
(19,842
|
)(2),(5),(6)
|
|
|
(21,712
|
)
|
Foreign currency hedge and transaction gain (loss), net
|
|
|
0
|
|
|
|
(928
|
)
|
|
|
609
|
(1)
|
|
|
|
|
|
|
(319
|
)
|
Loss on extinguishment of debt
|
|
|
0
|
|
|
|
(892
|
)
|
|
|
|
|
|
|
|
|
|
|
(892
|
)
|
Interest income
|
|
|
886
|
|
|
|
261
|
|
|
|
(724
|
)(1)
|
|
|
(423
|
)(4)
|
|
|
0
|
|
Other income (expense), net
|
|
|
0
|
|
|
|
(175
|
)
|
|
|
115
|
(1)
|
|
|
|
|
|
|
(60
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Before Income Taxes
|
|
|
28,271
|
|
|
|
28,273
|
|
|
|
0
|
|
|
|
(20,240
|
)
|
|
|
36,304
|
|
Income tax provision (benefit)
|
|
|
10,429
|
|
|
|
4,180
|
|
|
|
|
|
|
|
(7,084
|
)(8)
|
|
|
7,525
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
|
|
17,842
|
|
|
|
24,093
|
|
|
|
0
|
|
|
|
(13,156
|
)
|
|
|
28,779
|
|
Consideration paid in excess of carrying value on the repurchase
of redeemble preferred stock
|
|
|
(8,593
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(8,593
|
)
|
Preferred stock dividend and accretion of discount
|
|
|
|
|
|
|
(2,400
|
)
|
|
|
|
|
|
|
2,400
|
(7)
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Applicable to Common Shareholders
|
|
$
|
9,249
|
|
|
$
|
21,693
|
|
|
$
|
0
|
|
|
$
|
(10,756
|
)
|
|
$
|
20,186
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Per Share Applicable to Common Shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
|
$
|
0.26
|
|
|
$
|
0.80
|
|
|
|
|
|
|
|
|
|
|
$
|
0.49
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share
|
|
$
|
0.26
|
|
|
$
|
0.80
|
|
|
|
|
|
|
|
|
|
|
$
|
0.49
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares Used to Compute Earnings Per Share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
|
|
35,076
|
|
|
|
26,951
|
|
|
|
|
|
|
|
6,166
|
(9)
|
|
|
41,242
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share
|
|
|
35,329
|
|
|
|
27,158
|
|
|
|
|
|
|
|
6,166
|
|
|
|
41,495
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompany notes to unaudited pro forma condensed combined
financial statements
80
JDA
SOFTWARE GROUP, INC.
UNAUDITED
PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
FOR THE
YEAR ENDED DECEMBER 31, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Historical
|
|
|
|
|
|
Pro Forma
|
|
|
|
|
|
|
JDA
|
|
|
i2
|
|
|
Reclassifications
|
|
|
Adjustments
|
|
|
Pro Forma
|
|
|
|
(In thousands, except per share data)
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Software licenses
|
|
$
|
92,898
|
|
|
|
|
|
|
$
|
46,852
|
(1)
|
|
|
|
|
|
$
|
139,750
|
|
Software solutions
|
|
|
|
|
|
|
46,852
|
|
|
|
(46,852
|
)(1)
|
|
|
|
|
|
|
0
|
|
Maintenance services
|
|
|
182,844
|
|
|
|
85,397
|
|
|
|
|
|
|
|
|
|
|
|
268,241
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product revenues
|
|
|
275,742
|
|
|
|
132,249
|
|
|
|
0
|
|
|
|
0
|
|
|
|
407,991
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consulting services
|
|
|
104,072
|
|
|
|
123,564
|
|
|
|
|
|
|
|
|
|
|
|
227,636
|
|
Reimbursed expenses
|
|
|
10,518
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,518
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service revenues
|
|
|
114,590
|
|
|
|
123,564
|
|
|
|
0
|
|
|
|
0
|
|
|
|
238,154
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
390,332
|
|
|
|
255,813
|
|
|
|
0
|
|
|
|
0
|
|
|
|
646,145
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of software licenses
|
|
|
3,499
|
|
|
|
|
|
|
|
9,316
|
(1)
|
|
|
|
|
|
|
12,815
|
|
Cost of software solutions
|
|
|
|
|
|
|
9,316
|
|
|
|
(9,316
|
)(1)
|
|
|
|
|
|
|
0
|
|
Amortization of acquired software technology
|
|
|
5,277
|
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
5,281
|
|
Cost of maintenance services
|
|
|
45,734
|
|
|
|
10,139
|
|
|
|
|
|
|
|
|
|
|
|
55,873
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of product revenues
|
|
|
54,510
|
|
|
|
19,459
|
|
|
|
0
|
|
|
|
0
|
|
|
|
73,969
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of consulting services
|
|
|
81,954
|
|
|
|
89,928
|
|
|
|
|
|
|
|
|
|
|
|
171,882
|
|
Reimbursed expenses
|
|
|
10,518
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,518
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of service revenues
|
|
|
92,472
|
|
|
|
89,928
|
|
|
|
0
|
|
|
|
0
|
|
|
|
182,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cost of revenues
|
|
|
146,982
|
|
|
|
109,387
|
|
|
|
0
|
|
|
|
0
|
|
|
|
256,369
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit
|
|
|
243,350
|
|
|
|
146,426
|
|
|
|
0
|
|
|
|
0
|
|
|
|
389,776
|
|
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product development
|
|
|
53,866
|
|
|
|
29,241
|
|
|
|
|
|
|
|
|
|
|
|
83,107
|
|
Sales and marketing
|
|
|
66,468
|
|
|
|
45,135
|
|
|
|
|
|
|
|
|
|
|
|
111,603
|
|
General and administrative
|
|
|
44,963
|
|
|
|
42,062
|
|
|
|
|
|
|
|
|
|
|
|
87,025
|
|
Amortization of intangibles
|
|
|
24,303
|
|
|
|
100
|
|
|
|
|
|
|
|
(100
|
)(3)
|
|
|
24,303
|
|
Restructuring charges and adjustments to reserves
|
|
|
8,382
|
|
|
|
(95
|
)
|
|
|
|
|
|
|
|
|
|
|
8,287
|
|
Cost of terminated acquisition of i2 Technologies
|
|
|
25,060
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
25,060
|
|
Intellectual property settlement
|
|
|
0
|
|
|
|
(79,860
|
)
|
|
|
|
|
|
|
|
|
|
|
(79,860
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
223,042
|
|
|
|
36,583
|
|
|
|
0
|
|
|
|
(100
|
)
|
|
|
259,525
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income
|
|
|
20,308
|
|
|
|
109,843
|
|
|
|
0
|
|
|
|
100
|
|
|
|
130,251
|
|
Interest expense and amortization of loan fees
|
|
|
(10,349
|
)
|
|
|
(7,473
|
)
|
|
|
|
|
|
|
(25,757
|
)(2),(5),(6)
|
|
|
(43,579
|
)
|
Finance costs on terminated acquisition of i2 Technologies
|
|
|
(5,292
|
)
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
(5,292
|
)
|
Foreign currency hedge and transaction gain (loss), net
|
|
|
0
|
|
|
|
(1,700
|
)
|
|
|
483
|
(1)
|
|
|
|
|
|
|
(1,217
|
)
|
Interest income
|
|
|
2,791
|
|
|
|
3,876
|
|
|
|
(1,034
|
)(1)
|
|
|
(4,013
|
)(4)
|
|
|
1,620
|
|
Other income (expense), net
|
|
|
0
|
|
|
|
11,510
|
|
|
|
551
|
(1)
|
|
|
|
|
|
|
12,061
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Before Income Taxes
|
|
|
7,458
|
|
|
|
116,056
|
|
|
|
0
|
|
|
|
(29,670
|
)
|
|
|
93,844
|
|
Income tax provision (benefit)
|
|
|
4,334
|
|
|
|
8,382
|
|
|
|
|
|
|
|
(10,385
|
)(8)
|
|
|
2,331
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
|
|
3,124
|
|
|
|
107,674
|
|
|
|
0
|
|
|
|
(19,285
|
)
|
|
|
91,513
|
|
Preferred stock dividend and accretion of discount
|
|
|
|
|
|
|
(3,140
|
)
|
|
|
|
|
|
|
3,140
|
(7)
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Applicable to Common Shareholders
|
|
$
|
3,124
|
|
|
$
|
104,534
|
|
|
$
|
0
|
|
|
$
|
(16,145
|
)
|
|
$
|
91,513
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Per Share Applicable to Common Shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
|
$
|
0.09
|
|
|
$
|
3.97
|
|
|
|
|
|
|
|
|
|
|
$
|
2.26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share
|
|
$
|
0.09
|
|
|
$
|
3.91
|
|
|
|
|
|
|
|
|
|
|
$
|
2.21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares Used to Compute Earnings Per Share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
|
|
34,339
|
|
|
|
26,333
|
|
|
|
|
|
|
|
6,166
|
(9)
|
|
|
40,505
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share
|
|
|
35,185
|
|
|
|
26,711
|
|
|
|
|
|
|
|
6,166
|
|
|
|
41,351
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to unaudited pro forma condensed combined
financial statements
81
JDA
SOFTWARE GROUP, INC.
NOTES TO
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
(in
thousands, except per share data and as otherwise
noted)
Note 1. Estimated
Merger Consideration and Allocation Assumed in the Pro
Forma
The following table summarizes the components of the estimated
merger consideration assumed in the pro forma. The i2 common
shares shown in the table include actual common shares
outstanding,
in-the-money
stock options and restricted stock units as of the date of the
merger agreement.
|
|
|
|
|
Estimated cash consideration payable to i2 common equity holders
at closing:
|
|
|
|
|
24,065,366 i2 common shares at $12.70 per share
|
|
$
|
305,533
|
|
|
|
|
|
|
Estimated stock consideration payable to i2 common equity
holders at closing:
|
|
|
|
|
24,065,366 i2 common shares converts to 6,166,326
JDA common shares using the ratio of 0.2562 and valued at $20.70
per share
|
|
|
127,643
|
|
|
|
|
|
|
Total estimated merger consideration for i2 common equity holders
|
|
$
|
433,176
|
|
|
|
|
|
|
Estimated cash consideration payable to the Series B holder:
|
|
|
|
|
110,658 shares of i2 Series B Preferred
Stock at $1,100 per share
|
|
|
121,724
|
|
|
|
|
|
|
Total estimated merger consideration
|
|
$
|
554,900
|
|
|
|
|
|
|
JDA currently intends to use proceeds from the offering of
$275 million in five-year, 8.0% senior unsecured notes
(see Note 2), together with the companies combined
cash balances at closing, to fund the cash obligations of the
merger agreement, related transaction expenses, and to provide
cash for the combined companies ongoing working capital
and general corporate needs after the merger.
The table below illustrates the potential impact to the
estimated value of the merger consideration resulting from a 10%
increase or decrease in the November 4, 2009 closing price
of JDA common stock of $20.70 per share. For purposes of this
calculation, we have assumed the same total number of shares as
presented in the table above.
|
|
|
|
|
|
|
|
|
|
|
10% Decrease
|
|
|
10% Increase
|
|
|
|
in JDA
|
|
|
in JDA
|
|
|
|
Share Price
|
|
|
Share Price
|
|
|
|
|
$
|
(18.63
|
)
|
|
$
|
(22.77
|
)
|
Estimated cash consideration payable to i2 common equity holders
|
|
|
|
|
|
|
|
|
24,065,366 i2 common shares at $12.70 per share
|
|
$
|
305,533
|
|
|
$
|
305,533
|
|
|
|
|
|
|
|
|
|
|
Estimated stock consideration payable to i2 common equity holders
|
|
|
|
|
|
|
|
|
24,065,366 i2 common shares converts to 6,166,326
JDA common shares using the ratio of 0.2562 and valued at $18.63
and $22.77 per share, respectively
|
|
|
114,879
|
|
|
|
140,407
|
|
|
|
|
|
|
|
|
|
|
Total estimated merger consideration for i2 common equity holders
|
|
|
420,412
|
|
|
$
|
445,940
|
|
|
|
|
|
|
|
|
|
|
Estimated cash consideration payable to i2 Series B holder:
|
|
|
|
|
|
|
|
|
110,658 shares of i2 Series B Preferred
Stock at $1,100 per share
|
|
|
121,724
|
|
|
|
121,724
|
|
|
|
|
|
|
|
|
|
|
Total estimated merger consideration
|
|
$
|
542,136
|
|
|
$
|
567,664
|
|
|
|
|
|
|
|
|
|
|
JDA has not completed the valuation analysis and calculations in
sufficient detail necessary to arrive at the required estimates
of the fair market value of the i2 assets to be acquired and
liabilities to be assumed and the related allocations to such
items, including goodwill, of the merger consideration.
Accordingly, assets and liabilities are presented in the pro
forma financial information at their respective carrying amounts
and should be treated as preliminary values. The estimated
goodwill included in the pro forma adjustments is calculated as
the difference between the estimated merger consideration
expected to be transferred and the carrying values of the assets
82
JDA
SOFTWARE GROUP, INC.
NOTES TO
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL
STATEMENTS (Continued)
acquired and liabilities assumed. The following summarizes the
estimated goodwill calculation as of September 30, 2009:
|
|
|
|
|
Current assets
|
|
$
|
222,040
|
|
Non-current assets
|
|
|
12,696
|
|
|
|
|
|
|
Total assets acquired
|
|
|
234,736
|
|
Total liabilities assumed
|
|
|
(82,569
|
)
|
|
|
|
|
|
Net assets acquired
|
|
|
152,167
|
|
Less: Estimated merger consideration
|
|
|
(554,900
|
)
|
|
|
|
|
|
Estimated goodwill
|
|
$
|
402,733
|
|
|
|
|
|
|
The final allocation of the merger consideration may include
(i) changes in historical carrying values of property and
equipment, (ii) allocations to intangible assets such as
trademarks and trade names, in-process research and development,
developed technology and customer-related assets, and
(iii) other changes to assets and liabilities. As a result,
actual results will differ from this unaudited pro forma
condensed combined financial information once JDA has determined
the final merger consideration, completed the detailed valuation
analysis and calculations necessary to finalize the required
purchase price allocations. The final allocation of the merger
consideration, which will be determined subsequent to the
closing of the merger, may differ materially from the estimated
allocations and unaudited pro forma condensed combined amounts
included herein.
Note 2. Reclassifications
and Pro Forma Adjustments
Unaudited
Pro Forma Condensed Combined Balance Sheet
(1) Entry records certain reclassifications to conform to
the JDA presentation.
(2) Entry records the proceeds from the offering of
$275 million in five-year, 8.0% senior unsecured notes,
which closed on December 10, 2009.
|
|
|
|
|
Gross cash proceeds from issuance of senior unsecured notes
|
|
$
|
275,000
|
|
Less: Original issue discount (1.012% of the aggregate principal
amount of the notes)
|
|
|
(2,783
|
)
|
|
|
|
|
|
Initial offering price
|
|
|
272,217
|
|
Less: Placement fees (2.0% of the aggregate principal amount of
the notes)
|
|
|
(5,500
|
)
|
|
|
|
|
|
Net cash proceeds to the balance sheet
|
|
$
|
266,717
|
|
|
|
|
|
|
The placement fees and original issue discount (OID)
will be amortized on a straight-line basis over the term of the
notes. The placement fees are reflected in the pro forma
condensed combined balance sheet under the caption Other
non-current assets and the OID is reflected as a reduction
of long-term debt.
83
JDA
SOFTWARE GROUP, INC.
NOTES TO
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL
STATEMENTS (Continued)
(3) Entries to record the estimated cash and stock merger
consideration and the reversal of i2 historical goodwill and
equity balances.
|
|
|
|
|
Cash consideration paid to i2 common equity holders
|
|
$
|
305,533
|
|
Cash consideration paid to holders of i2 Series B Preferred
Stock
|
|
|
121,724
|
|
|
|
|
|
|
Total adjustment to cash and cash equivalents
|
|
$
|
427,257
|
|
|
|
|
|
|
Preliminary estimate of goodwill in Merger
|
|
$
|
402,733
|
|
Elimination of i2 historical goodwill
|
|
|
(16,684
|
)
|
|
|
|
|
|
Total adjustment to goodwill
|
|
$
|
386,049
|
|
|
|
|
|
|
Elimination of i2 historical Series B Preferred Stock
|
|
$
|
(108,293
|
)
|
|
|
|
|
|
|
|
|
|
|
JDA common stock issued as merger consideration ($0.01 par
value)
|
|
$
|
62
|
|
Elimination of i2 historical common stock
|
|
|
(6
|
)
|
|
|
|
|
|
Total adjustment to common stock
|
|
$
|
56
|
|
|
|
|
|
|
Additional JDA common stock merger consideration in excess of par
|
|
$
|
127,581
|
|
Elimination of i2 historical additional paid-in capital
|
|
|
(10,492,082
|
)
|
|
|
|
|
|
Total adjustment to additional paid-in capital
|
|
$
|
(10,364,501
|
)
|
|
|
|
|
|
Elimination of i2 historical accumulated deficit
|
|
$
|
10,434,986
|
|
|
|
|
|
|
Elimination of i2 historical accumulated other comprehensive
income
|
|
$
|
(3,456
|
)
|
|
|
|
|
|
Unaudited
Pro Forma Condensed Combined Statements of
Income
(1) Entry records certain reclassifications to conform the
JDA and i2 presentations.
(2) Entry records the increase in interest expense and
amortization of loan fees arising from the amortization of the
placement fees and the OID on the notes in order to finance the
transaction. The pro forma assumes straight-line amortization of
such fees and discount over the term of the notes.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months
|
|
|
|
|
Quarterly
|
|
Year Ended
|
|
Ended
|
|
|
|
|
Amortization
|
|
December 31, 2008
|
|
September 30, 2009
|
|
|
|
Amortization of placement fees
|
|
$
|
275
|
|
|
$
|
1,100
|
|
|
$
|
825
|
|
|
|
|
|
Amortization of OID
|
|
|
139
|
|
|
|
557
|
|
|
|
417
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
414
|
|
|
$
|
1,657
|
|
|
$
|
1,242
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) Entry eliminates i2 historical amortization of acquired
intangibles.
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months
|
|
|
Year Ended
|
|
Ended
|
|
|
December 31, 2008
|
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September 30, 2009
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Amortization of i2s acquired intangibles
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$
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100
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$
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25
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84
JDA
SOFTWARE GROUP, INC.
NOTES TO
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL
STATEMENTS (Continued)
(4) Entry records the decrease in interest income on
invested cash balances used to effect the merger as of
January 1, 2008 and 2009, respectively. For purposes of
this calculation, the invested cash balances used to fund merger
obligations is $160,540, which represents the estimated cash
merger consideration of $427,257 less the $266,717 of net
proceeds from the issuance of the notes.
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Nine Months
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Year Ended
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Ended
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December 31,2008
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September 30, 2009
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JDA historical interest income
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$
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1,757
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$
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162
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i2 historical interest income
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3,876
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261
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5,633
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423
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Less interest income on combined cash balances used to fund cash
obligations of the Merger
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(4,013
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)
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(423
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)
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$
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1,620
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$
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The pro forma adjustment for the year ended December 31,
2008 assumes an estimated weighted average interest rate of 2.5%
on the combined cash balance of $160,540 that would be used to
fund a portion of the estimated cash merger consideration. The
pro forma adjustment for the nine months ended
September 30, 2009 assumes that all interest income would
be eliminated as the remaining cash balances would be used for
operating purposes and would not be available for investment.
(5) Entry records interest expense on the notes used to
effect the merger as of January 1, 2008 and 2009:
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Nine Months
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|
Year Ended
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Ended
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December 31, 2008
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September 30, 2009
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Interest expense at 8.0%
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$
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22,000
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$
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16,500
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(6) Entry records the arrangement fee for the commitment
from the Wells Fargo Parties to provide a $140 million
senior secured credit facility (consisting of a
$120 million term loan and a $20 million revolving
credit facility) if JDA had been required to finance the merger
under an alternative structure. This non-refundable commitment
fee is equal to $2.1 million or 1.5% of the credit
facility. This commitment has been terminated and the related
fee has been fully expensed in both pro forma periods.
(7) Entry eliminates i2s historical preferred stock
dividend and related accretion of discount on the Series B
Preferred Stock.
(8) Entry records an incremental income tax provision on
the pro forma adjustments at the statutory rate of 35% for the
year ended December 31, 2008 and the nine months ended
September 30, 2009.
(9) Adjusts the shares used to compute earnings per share
applicable to common shareholders to include 6,166,326 JDA
common shares issued as stock consideration to i2 common equity
holders.
Note 4. Costs
Associated With Previous Terminated Acquisition
In August 2008, JDA entered into an agreement and plan of merger
to acquire all of the outstanding common and preferred equity of
i2. This transaction was subsequently terminated in December
2008 and JDA paid i2 a $20 million non-refundable reverse
termination fee.
The historical JDA condensed consolidated statement of income
for the year ended December 31, 2008 includes
$30.4 million in costs associated with the terminated
acquisition, including the $20 million non-refundable
reserve termination fee and $5.1 million of legal,
accounting and other acquisition-related fees that are included
in operating expenses under the caption Costs of
terminated acquisition of i2 Technologies and
$5.3 million in
85
JDA
SOFTWARE GROUP, INC.
NOTES TO
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL
STATEMENTS (Continued)
finance costs related to loan origination and ticking
fees on debt financing commitments that are included in
non-operating income (expense) under the caption Finance
Costs of Terminated Acquisition of i2 Technologies.
The historical i2 condensed consolidated statement of operations
for the year ended December 31, 2008 includes an
$11.5 million net gain related to the terminated
acquisition. The net gain, which includes the $20 million
non-refundable reverse termination fee received from JDA, net of
$8.5 million of costs related to the transaction, is
included in non-operating income (expense) under the caption
Other income (expense), net.
No adjustments have been made to the pro forma condensed
combined statement of income for the year ended
December 31, 2008 to eliminate the impact of the terminated
acquisition.
86
i2
SPECIAL MEETING OF STOCKHOLDERS
i2s board of directors is using this Proxy Statement to
solicit proxies from the stockholders of i2 at the special
meeting. This Proxy Statement is first being mailed to i2
stockholders on or
about ,
2009.
This Proxy Statement contains important information regarding
the special meeting, the proposal on which you are being asked
to vote, information you may find useful in determining how to
vote, and voting procedures.
Date,
Time, and Place
The special meeting will be held at the i2 corporate
headquarters at 11701 Luna Road, Dallas, Texas 75234 on , 2010
at 8:00 a.m. local time. On or
about ,
2010, i2 commenced mailing this Proxy Statement and the enclosed
form of proxy to its stockholders entitled to vote at the
meeting.
Purpose
of the i2 Special Meeting
i2 stockholders will be asked to consider and vote upon the
following proposals:
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to approve and adopt the Agreement and Plan of Merger, which we
refer to as the merger agreement, that we entered
into on November 4, 2009 with JDA, and Alpha Acquisition
Corp., a wholly-owned subsidiary of JDA (the Merger
Proposal); and
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to grant each of the persons named in the accompanying proxy
materials as proxies with discretionary authority to vote to
adjourn or postpone the special meeting, if necessary, to
satisfy the conditions to completing the merger as set forth in
the merger agreement, including for the purpose of soliciting
proxies to vote in favor of approving the merger agreement (the
Adjournment/Postponement Proposal).
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Who May
Vote at the Special Meeting
Only stockholders of record as of the close of business
on ,
2009, which we refer to as the record date, are
entitled to notice of and to vote at the special meeting and any
adjournments thereof. As of the close of business on the record
date, the outstanding stock of i2 entitled to vote consisted
of shares
of common stock, having one vote per share, and
110,658 shares of Series B Preferred Stock, having
4,780,043 votes on an as-converted-to-common stock basis, voting
as a single class with the common stock. The total votes of the
common stock and Series B Preferred Stock entitled to vote
at the special meeting
is .
A complete list of stockholders entitled to vote at the i2
special meeting will be available for examination by any i2
stockholder at the i2 corporate headquarters at 11701 Luna Road,
Dallas, Texas 75234 for purposes pertaining to the i2 special
meeting, during normal business hours for a period of ten days
before the i2 special meeting, and at the time and place of the
i2 special meeting.
Quorum
and Vote Required
The presence, in person or by properly executed proxy, of the
holders of at least a majority of the voting power of
outstanding shares of common stock and Series B Preferred
Stock, voting on an as-converted-to-common stock basis as a
single class with the common stock, entitled to vote at the
special meeting will constitute a quorum. None of the proposals
can be submitted for a stockholder vote unless a quorum is
present at the meeting. If a quorum is not present, it is
expected that the meeting will be adjourned or postponed to
enable i2 to solicit additional proxies. If a new record date is
set for the adjourned meeting, then a new quorum will have to be
established. Votes cast by proxy or in person at the special
meeting will be tabulated by the election inspectors appointed
for the meeting, who will also determine whether or not a quorum
is present.
The affirmative vote of at least a majority of the voting power
of i2s outstanding shares of common stock and
Series B Preferred Stock voting on an
as-converted-to-common stock basis as a single class with the i2
common stock, is required to approve the Merger Proposal. The
affirmative vote of at least a majority of the voting power,
present in person or represented by proxy at the i2 special
meeting, of i2s outstanding shares of common stock and
Series B Preferred Stock voting on an
as-converted-to-common stock basis as a single class with the i2
common stock, is required to approve the
Adjournment/Postponement Proposal.
87
The proposals to be considered at the special meeting are of
great importance to i2. Accordingly, you are urged to read and
carefully consider the information presented in this Proxy
Statement and to complete, date, sign, and promptly return the
enclosed proxy in the enclosed postage-paid envelope.
How to
Vote
Stockholders may vote in person or by proxy. Execution of a
proxy will not affect a stockholders right to attend the
meeting and vote in person. All shares represented by valid
proxies received by the secretary of i2 prior to the meeting
will be voted as specified in the proxy. If no specification is
made and if discretionary authority is conferred by the
stockholder, the shares will be voted
FOR
each of the
proposals. Shares of i2 common stock represented at the special
meeting but not voted, including shares of i2 common stock for
which proxies have been received but for which stockholders have
abstained, will be treated as present at the special meeting for
purposes of determining the presence or absence of a quorum for
the transaction of all business.
i2s stockholders are requested to complete, date, and sign
the enclosed proxy card and promptly return it in the
accompanying postage-paid envelope. Stockholders may also vote
proxies by telephone or the Internet by following the
instructions provided on the enclosed proxy card. i2s
stockholders may vote in person at the special meeting by
delivering the completed proxy card at the meeting or by using
written ballots that will be available to any
i2 stockholder who desires to vote in person at the special
meeting. i2 stockholders who are beneficial owners of shares
held in street name by a broker, trustee, bank, or
other nominee holder on behalf of such stockholder may vote in
person at the meeting by obtaining a proxy from the nominee
holding the i2 shares. In addition, such i2 stockholders
may vote by proxy by completing and signing a voting instruction
card provided to them by the nominee holding the i2 shares.
How to
Change Your Vote
A stockholder giving a proxy has the power to revoke it at any
time prior to its exercise by:
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delivering a written notice of revocation bearing a later date
than the proxy to the secretary of i2 at or before the taking of
the vote at the special meeting;
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delivering a duly executed proxy relating to the same shares and
bearing a later date to the secretary of i2 before the
taking of the vote at the special meeting; or
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attending the special meeting and voting such shares in person.
Stockholders should note, however, that merely attending the
special meeting in person without casting a vote at the meeting
will not alone constitute a revocation of a proxy.
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However, if an i2 stockholder has shares held through a
brokerage firm, bank, or other custodian, it may revoke its
instructions only by informing the custodian in accordance with
any procedures it has established.
Abstentions
and Broker Non-Votes
Only shares affirmatively voted for the approval of the Merger
Proposal, including properly executed proxies that do not
contain voting instructions, will be counted as voting for that
proposal. If you abstain from voting, it will have the same
effect as a vote against the approval of the Merger Proposal and
as a vote against the Adjournment/Postponement Proposal. Brokers
who hold shares in street name for customers have the authority
to vote upon routine proposals when they have not
received instructions from beneficial owners. However, brokers
are precluded from exercising their voting discretion with
respect to approval of non-routine matters, such as the approval
of the merger agreement. If shares held by a broker are deemed
present at a meeting, but are not voted on a specific proposal
because it is a non-routine matter and the broker has not
received voting instructions from the beneficial owner, such
shares are generally referred to as broker
non-votes. Broker non-votes will have the same effect as
votes against the approval of the Merger Proposal.
Broker non-votes will have no effect on the
Adjournment/Postponement Proposal.
Voting by
i2 Directors, Executive Officers, and Certain
Stockholders
As of the record date, the directors and executive officers of
i2, and the Series B holder on an as-converted-to-common
stock basis, beneficially owned and were entitled to vote
324,646 shares of i2 common stock and
88
110,658 shares of Series B Preferred Stock, having
4,780,043 votes on an as-converted-to-common stock basis. These
shares are entitled to 5,104,684 votes representing
approximately 18.4% of the combined voting power of the i2
common stock and Series B Preferred Stock, voting on an
as-converted-to-common stock basis, on that date. Concurrently
with the execution and delivery of the merger agreement, all of
the i2 executive officers and directors, and the Series B
holder, executed voting agreements, the forms of which are
attached to this Proxy Statement as
Annex B
and
Annex C
, respectively, agreeing
to vote or cause to be voted all of the respective shares for
the adoption of the merger agreement and approval of the merger.
See Merger Agreement and Other Related
Agreements Voting Agreements beginning on
page 75.
Other
Meeting Matters and Adjournment
i2 does not know of any matters other than those described in
the notice of the special meeting that are to come before the i2
special meeting. If any other matters are properly brought
before the special meeting, one or more persons named in the i2
form of proxy will vote the shares represented by such proxy
upon such matter as determined in their discretion.
Except as provided below, if it is necessary to adjourn the
special meeting, notice need not be given of the adjourned
meeting if the time and place thereof, if any, are announced at
the special meeting. If the adjournment is for more than thirty
days, or if after the adjournment a new record date is fixed for
the adjourned meeting, a notice of the adjourned meeting shall
be given to each stockholder of record entitled vote at the
meeting. At any subsequent reconvening of the special meeting,
all proxies will be voted in the same manner as such proxies
would have been voted at the original convening of the meeting
(except for any proxies which theretofore have been effectively
revoked or withdrawn). If a notice of the adjourned meeting is
required to be sent, proxies may need to be
re-solicited.
If a quorum is not present at the meeting, either the chairman
of the meeting or the stockholders entitled to vote at the
meeting, present in person or represented by proxy, will have
the power to adjourn the meeting.
Solicitation
of Proxies
The cost of solicitation of proxies will be paid jointly by i2
and JDA, except for related accounting and legal fees. In
addition to soliciting stockholders by mail, certain of
i2s directors, officers, and employees, without additional
remuneration, may solicit proxies in person or by telephone or
other means of electronic communication. i2 will not pay these
individuals for their solicitation activity but will reimburse
them for their reasonable
out-of-pocket
expenses. Brokers and other custodians, nominees, and
fiduciaries will be requested to forward proxy-soliciting
material to the owners of stock held in their names, and i2 will
reimburse such brokers and other custodians, nominees, and
fiduciaries for their reasonable
out-of-pocket
costs. Solicitation by directors, officers, and employees of i2
may also be made of some stockholders in person or by mail,
telephone, or other means of electronic communication following
the original solicitation. We have retained D.F.
King & Co., Inc. as our proxy solicitor to assist with
the solicitation of proxies. We will pay the total fees and
expenses of D.F. King & Co., Inc., which are not
expected to exceed $20,000 plus reasonable
out-of-pocket
expenses.
Appraisal
Rights
i2 has concluded that i2 stockholders are entitled under DGCL
Section 262 to appraisal rights in connection with the
merger. To exercise appraisal rights, i2 stockholders must:
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before the taking of the vote upon the Merger Proposal, deliver
to i2 written demand for appraisal;
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NOT vote in favor of the Merger Proposal;
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continue to hold your i2 stock through the effective date of the
merger; and
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comply with other procedures as is required by DGCL
Section 262.
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A copy of the relevant provisions of DGCL Section 262 is
attached to this proxy statement as
Annex E
.
See The Merger Appraisal Rights on
page 53 for a more detailed discussion.
89
DESCRIPTION
OF CAPITAL STOCK OF JDA AND COMPARISON OF RIGHTS OF STOCKHOLDERS
OF JDA AND i2
Both JDA and i2 are incorporated under the laws of the State of
Delaware and, accordingly, the rights of the stockholders of
each are currently governed by the DGCL. Upon completion of the
merger, all outstanding shares of i2 common stock and
Series B Preferred Stock (to the extent such shares remain
outstanding at the effective time of the merger) will be
converted into the right to receive the merger consideration,
which will include cash and shares of JDA common stock.
Therefore, upon completion of the merger, the rights of the
former i2 stockholders will be governed by Delaware law, the
certificate of incorporation of JDA, as amended and restated,
and the bylaws of JDA, as amended and restated.
The following discussion is a summary of the current rights of
JDA stockholders and the current rights of i2 stockholders.
While this summary includes the material differences between the
two, this summary may not contain all of the information that is
important to you. You are urged to carefully read this entire
Proxy Statement, the relevant provisions of the DGCL, and the
other governing documents referred in this Proxy Statement for a
more complete understanding of the differences between being a
stockholder of JDA and a stockholder of i2. JDA and i2 have
filed with the SEC their respective governing documents
referenced in this summary of stockholder rights and will send
copies of these documents to you, without charge, upon your
request. See Where You Can Find More Information
beginning on page 106.
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Rights of JDA Stockholders
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Rights of i2 Stockholders
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Authorized Capital Stock
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JDA is authorized under its certificate of incorporation to
issue 52,000,000 shares, consisting of
50,000,000 shares of common stock, par value $0.01 per
share, and 2,000,000 shares of preferred stock, par value
$1.00 per share.
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The authorized capital stock of i2 consists of
2,000,000,000 shares of common stock, $0.00025 par
value per share, and 5,000,000 shares of preferred stock,
$0.001 par value per share.
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Amendment of Certificate of Incorporation
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Under Section 242 of the DGCL, an amendment to a
corporations certificate of incorporation generally
requires approval of the majority of a corporations board
of director and approval by the holders of a majority of a
corporations common stock entitled to vote.
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JDAs certificate of incorporation requires approval by the
holders of at least two-thirds of the voting power of all
outstanding shares of JDAs capital stock generally
entitled to vote in the election of directors, voting together
as a single class, in order to amend the provisions of the
certificate of incorporation related to (i) amending the
certificate of incorporation, (ii) management of the business
and the conduct of the affairs of JDA, (iii) the number and
classification of directors, vacancies on the board and removal
of directors, (iv) amendment of JDAs bylaws, and (v)
personal liability of the directors.
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i2s certificate of incorporation requires approval by the
holders of at least two-thirds of the combined voting power of
all outstanding shares of i2 entitled to vote to alter, amend,
or repeal the provisions of the certificate of incorporation
related to (i) classification of directors and vacancies on the
board, (ii) voting in the election of directors, (iii)
prohibiting stockholders from taking action by written consent
in lieu of a meeting, and (iv) the foregoing supermajority
voting requirements, unless the amendment is approved by a
majority of the directors of i2 not affiliated or associated
with any person or entity holding 26% or more of the voting
power of i2s outstanding capital stock.
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90
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Rights of JDA Stockholders
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Rights of i2 Stockholders
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The certificate of designations governing the Series B Preferred
Stock provides that each holder of Series B Preferred Stock
shall be entitled to vote on all matters subject to a
stockholder vote and shall be entitled to a number of votes
equal to the number of shares of common stock the Series B
shareholder would have if it converted its Series B Preferred
Stock to common stock. Additionally, an affirmative vote of the
holders of a majority of the outstanding Series B Preferred
Stock is necessary to make certain amendments to the certificate
of incorporation of i2, including, among other things, to: (i)
alter or change the preferences, rights or powers of the Series
B Preferred Stock or (ii) create, authorize or issue any capital
stock of i2 that ranks prior, or, with certain exceptions,
create, equal to the Series B Preferred Stock.
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Amendment of Bylaws
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Under Section 109 of the DGCL, the power to adopt, amend, or
repeal bylaws is in the stockholders entitled to vote. In
addition, Section 109 of the DGCL provides that a corporation
may, in its certificate of incorporation, confer the power to
adopt, amend, or repeal bylaws upon the directors, but may not
divest the stockholders of that power.
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JDAs certificate of incorporation and bylaws provide that
its board of directors may adopt, amend, or repeal bylaws upon
the approval of two-thirds of the total number of authorized
directors, whether or not there exist any vacancies in
previously authorized directorships. Under JDAs
certificate of incorporation and bylaws, holders of two-thirds
of the voting power of all outstanding shares of JDAs
capital stock entitled to vote generally in the election of
directors, voting together as a single class, may also adopt,
amend, or repeal bylaws.
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i2s certificate of incorporation provides that its board
of directors may adopt, alter, amend, or repeal bylaws.
i2s bylaws require approval by the holders of at least
two-thirds of the combined voting power of all outstanding
shares of i2 entitled to vote to alter, amend or repeal the
provisions of the bylaws related to (i) stockholder voting, and
prohibiting stockholder action by written consent in lieu of a
meeting, and (ii) amending the bylaws, or to add or amend any
other bylaw in order to change or nullify the effect of such
provisions, unless the amendment is approved by a majority of
the directors of i2 not affiliated or associated with any person
or entity holding 26% or more of the voting power of i2s
outstanding capital stock.
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91
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Rights of JDA Stockholders
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Rights of i2 Stockholders
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Special Meetings of Stockholders
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JDAs bylaws provide that a special meeting of stockholders
may be called by the President or Chief Executive Officer or
either of them at the request in writing of at least one-third
(1/3) of the directors then in office.
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i2s bylaws provide that a special meeting of stockholders
may be called by the board of directors, the Chairman of the
board, the President, or the Chief Executive Officer.
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Stockholder Proposals
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JDAs bylaws allow for business to be properly brought
before an annual meeting of JDA by a stockholder if the
stockholder intending to propose the business gives timely
notice thereof in writing to the secretary of JDA.
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i2s bylaws allow for business to be properly brought
before an annual or special meeting of i2 by a stockholder
(other than the nomination of a person for election as a
director, which is discussed below), if the stockholder
intending to propose the business gives timely notice thereof to
the secretary of i2.
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To be timely, the stockholders notice must be received at
JDAs principal executive offices not less than
120 days in advance of the anniversary of the release of
the proxy statement to stockholders in connection with the
previous years annual meeting, except that if no annual
meeting was held in the previous year or the date of the annual
meeting has been changed by more than 30 days from the date
contemplated at the time of the previous years proxy
statement, notice by the stockholder must be received not later
than the close of business on the 10th day following the
day on which notice of the date of the meeting was mailed or
public disclosure of such date was made.
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To be timely, the stockholders notice must be delivered to
or mailed and received by the secretary of i2 not later than the
close of business on the 90th day prior to the first
anniversary of the date of the delivery of the proxy statement
to stockholders in connection with the previous years
annual meeting, except that if the date of the annual meeting is
advanced more than 30 days or delayed (other than as a
result of adjournment) more than 60 days from such
anniversary date, notice by the stockholder must be received not
later than the close of business on the later of the
60th day prior to the annual meeting or the close of
business on the 10th day following the day on which public
announcement of the date of the annual meeting is first made by
i2.
If the meeting is a special meeting, notice by the stockholder
must be received no later than the close of business on the
later of the 60th day prior to the meeting or the tenth day
following the day on which public announcement of the date of
such meeting is made by i2.
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Rights of JDA Stockholders
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Rights of i2 Stockholders
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The stockholders notice to the secretary of JDA must set
forth as to each matter the stockholder proposes to bring before
the annual meeting (i) a brief description of the business
desired to be brought before the annual meeting, (ii) the name
and address, as they appear on JDAs books, of the
stockholder proposing such business, (iii) the class and number
of shares of JDA that are beneficially owned by the stockholder,
and (iv) any material interest of the stockholder in such
business.
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The stockholders notice to the secretary of i2 must set
forth (i) the name and address of the stockholder who intends to
propose the business, a description of each item of business
proposed to be brought before the meeting, and the reasons for
conducting such business at the meeting, (ii) a representation
that the stockholder is a holder of record of stock of i2
entitled to vote at the annual meeting and intends to appear in
person or by proxy at the meeting to introduce the business
specified in the notice, (iii) any material interest in such
business of the stockholder and any person directly controlling,
controlled by, under common control with or acting in concert
with the stockholder (a
Stockholder Associated
Person
), including any anticipated benefit to the
stockholder or any Stockholder Associated Person, (iv) certain
specified information regarding the ownership interests of the
stockholder and any Stockholder Associated Person, which must be
supplemented by the stockholder in writing delivered to the
secretary of i2 not later than 10 days after the record
date for the meeting to disclose such interests as of the record
date, (v) if applicable, a description of all contracts,
arrangements, understandings, or relationships between the
stockholder and any Stockholder Associated Persons or between
the stockholder or any Stockholder Associated Persons and any
other person or persons (including their names) that relate to
the proposal of such business by the stockholder, and (vi) such
other information regarding each matter of business to be
proposed by the stockholder as would be required to be included
in a proxy statement filed pursuant to the proxy rules of the
SEC had the matter been proposed, or intended to be proposed by
i2s board of directors.
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93
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Rights of JDA Stockholders
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Rights of i2 Stockholders
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i2s bylaws also state that notwithstanding the above,
nothing will affect the rights of stockholders to request
inclusion of proposals in i2s proxy statement made
pursuant to Rule 14a-8 under the Exchange Act.
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Nominations of Candidates for Election to the Board of
Directors
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JDAs bylaws and certificate of incorporation do not
contain any provisions regarding the nomination of candidates
for election to JDAs board of directors.
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i2s bylaws allow for nominations of candidates for
election to its board of directors by a stockholder if the
stockholder gives timely notice thereof to the secretary of i2.
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However, JDAs board of directors has adopted a formal
policy regarding director nominations that provides that
nominations of candidates for election as directors may be made
by the board or by stockholders.
Under the policy, stockholders nominating candidates for
election as directors are required to submit their nominations
in writing and send via registered, certified, or express mail
to the secretary of JDA no later than 120 days prior to the
anniversary of the date proxy statements were mailed to
stockholders in connection with the prior years annual
meeting of stockholders.
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To be timely, the stockholders notice must be delivered to
or mailed and received by the secretary of i2 not later than the
close of business on the 90th day prior to the first
anniversary of the date of the delivery of the proxy statement
to stockholders in connection with the previous years
annual meeting, except that if the date of the annual meeting is
advanced more than 30 days or delayed (other than as a
result of adjournment) more than 60 days from such
anniversary date, notice by the stockholder must be received not
later than the close of business on the later of the
60th day prior to the annual meeting or the close of
business on the 10th day following the day on which public
announcement of the date of the annual meeting is first made by
i2.
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Rights of JDA Stockholders
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Rights of i2 Stockholders
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In addition, stockholders nominating candidates for election as
directors must provide the following information: (i) the
candidates name, age, contact information, and present
principal occupation or employment, (ii) a description of the
candidates qualifications, skills, background, and
business experience during, at a minimum, the last five years,
including his/her principal occupation and employment and the
name and principal business of any corporation or other
organization in which the candidate was employed or served as a
director, (iii) the name and address, as they appear on
JDAs books, of the stockholder making the nomination, and
(iv) the stockholders relationship or affiliation with the
candidate, if any.
Evaluation of any stockholder recommendation is the
responsibility of the governance committee of JDAs board
of directors under its charter.
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If the meeting is a special meeting, notice by the stockholder
must be received no later than the close of business on the
later of the 60th day prior to the meeting or the tenth day
following the day on which public announcement of the date of
such meeting is made by i2.
The stockholders notice to the secretary of i2 must set
forth substantially the same information as is required for a
stockholder proposal generally, and if applicable, the consent
of each nominee to serve as director of i2 if so elected.
In addition, under i2s bylaws, i2 may require any proposed
nominee to furnish such other information as may reasonably be
required by i2 to determine the eligibility of the proposed
nominee to serve as an independent director of i2 or that could
be material to a reasonable stockholders understanding of
the independence, or lack thereof, of the nominee.
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Notice of Stockholder Meetings
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The DGCL requires notice to stockholder of the place (if any),
date, and hour, and means of remote communication, if any, of
each annual and special stockholders meeting at least
10 days, but no more than 60 days, before the meeting
date unless other provisions of the DGCL require a different
notice. In the case of a special meeting, the notice must also
state the purpose or purposes for which the meeting is called.
Pursuant to the DGCL, notice of a stockholders meeting to
vote upon a merger or a sale of all or substantially all of the
corporations assets must be delivered at least
20 days before the meeting date.
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JDAs bylaws provide that written notice of the place,
date, and time of an annual meeting must be given to each
stockholder entitled to vote at the meeting not less than 10 nor
more than 60 days prior to the meeting.
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i2s bylaws provide that written notice of annual and
special meetings of stockholder, specifying the place, date, and
hour of the meeting, and, in the case of a special meeting, the
purpose or purposes for which the meeting is called, must be
sent not less than 10 nor more than 60 days before the date
of the meeting to each stockholder entitled to vote at the
meeting.
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95
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Rights of JDA Stockholders
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Rights of i2 Stockholders
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Stockholder Action by Written Consent
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JDAs certificate of incorporation and bylaws provide that
any action required or permitted to be taken by JDA stockholders
must be effected at a meeting of stockholders and may not be
effected by an consent in writing by stockholders.
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i2s certificate of incorporation and bylaws provide that
any action required or permitted to be taken by i2 stockholders
must be effected at a meeting of stockholders and may not be
effected by an consent in writing by stockholders.
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Number of Directors
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The DGCL provides that the board of directors of a Delaware
corporation must consist of one or more directors as fixed by
the corporations certificate of incorporation or bylaws.
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JDAs certificate of incorporation provides that its board
of directors will initially be set at four and, thereafter, will
be fixed from time to time exclusively by the board of directors
pursuant to a resolution adopted by a majority of the total
number of authorized directors (whether or not there exist any
vacancies in previously authorized directorships at the time any
such resolution is presented to the board for adoption).
JDAs bylaws provide that the maximum number of directors
will be seven.
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i2s bylaws provide that the number of directors must be
not less than one nor more than 10, as designated from time to
time by resolution of the board of directors.
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Classification of Board of Directors
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JDAs certificate of incorporation and bylaws provide that
its board of directors is divided into three staggered classes,
with each class as nearly equal in number as possible.
JDAs directors are elected for a term of three years, with
the term of each class staggered to expire in successive years.
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i2s certificate of incorporation and bylaws provide that
its board of directors is divided into three staggered classes,
with each class as nearly equal in number as possible. i2s
directors are elected for a term of three years, with the term
of each class staggered to expire in successive years.
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Election of Directors
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JDAs certificate of incorporation provides that a nominee
for director shall be elected to the board of directors if a
majority of votes cast vote in favor of the nominee. Each share
of JDA common stock is entitled to one vote with respect to each
director.
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The nominees receiving the greatest number of votes cast by the
holders of outstanding shares of i2s common stock and
Series B Preferred Stock, on an as-converted-to-common stock
basis, present in person or represented by proxy at i2s
annual meeting and entitled to vote on the election of
directors, voting together as a single class, are elected as
directors even if they receive less than a majority of such
votes.
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The holder of i2s Series B Preferred Stock, voting
separately as a single class to the exclusion of all other
classes of i2s capital stock, currently has the right to
elect two directors to the board of directors.
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96
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Rights of JDA Stockholders
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Rights of i2 Stockholders
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Removal of Directors
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Under the DGCL, directors may be removed from office, with or
without cause, by a majority stockholder vote.
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JDAs certificate of incorporation provides that, subject
to the rights of the holders of any series of preferred stock
then outstanding, any director, or the entire board, may be
removed from office at any time, with or without cause, by a
majority of the voting power of all then outstanding shares of
capital stock entitled to vote generally in the election of
directors, voting together as a single class.
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i2s bylaws provide that, unless otherwise restricted by
statute, i2s certificate of incorporation (including the
certificate of designations of the Series B Preferred Stock) or
its bylaws, any director or the entire board may be removed,
with or without cause, by the holders of a majority of the
shares then entitled to vote at an election of directors.
However, the DGCL provides that if a board of directors is
divided into staggered classes, as is true of i2s board,
directors can only be removed by the stockholders for cause
unless the certificate of incorporation provided otherwise. If
at any time a class or series of shares is entitled to elect one
or more directors, the provisions of the foregoing sentence
apply to the vote of that class or series and not to the vote of
the outstanding shares as a whole.
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Under the certificate of designations governing i2s Series
B Preferred Stock, the directors elected by the holder i2s
Series B Preferred Stock may be removed only by the holders of
Series B Preferred Stock.
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97
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Rights of JDA Stockholders
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Rights of i2 Stockholders
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Vacancies on the Board of Directors
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JDAs certificate of incorporation and bylaws provide that
newly created directorships resulting from any increase in the
number of directors or any vacancies in the board of directors
resulting from death, resignation, or other cause, other than
removal from office by a vote of stockholders, may be filled
only by a majority vote of the directors then in office, though
less than a quorum, and directors so chosen will hold office for
a term expiring at the next annual meeting of stockholders at
which the term of office of the class to which they have been
elected expires and their respective successors are elected,
except in the case of the death, resignation, or removal of any
director.
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i2s certificate of incorporation and bylaws provide that
vacancies occurring on the board of directors for any reason may
be filled by vote of a majority of the remaining members of the
board, although less than a quorum, or a plurality of the votes
cast at a meeting of stockholders, and a person so elected will
hold office until the next succeeding annual meeting of
stockholders and until his or her successor is duly elected and
qualified.
i2s bylaws provide that vacancies and newly created
directorships resulting from any increase in the authorized
number of directors elected by all of the stockholders having
the right to vote as a single class may be filled by a majority
of the directors then in office, although less than a quorum, or
by a sole remaining director, provided that if, at the time of
filling any vacancy or newly created directorship, the directors
then in office constitute less than a majority of the whole
board (as constituted immediately prior to any such increase),
then the Delaware Court of Chancery may, upon application of any
stockholder or stockholders holding at least 10% of the total
number of shares at the time outstanding having the right to
vote fur such directors summarily order an election to be held
to fill any such vacancies or newly created directorships.
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Under the certificate of designations governing i2s Series
B Preferred Stock, if the holders of i2s Series B
Preferred Stock for any reason fail to elect anyone to fill the
directorships that the holders of Series B Preferred Stock are
entitled to fill by election, such positions will remain vacant
until such time as the holders of Series B Preferred Stock elect
a director to fill such position.
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98
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Rights of JDA Stockholders
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Rights of i2 Stockholders
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Limitation on Liability of Directors
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JDAs certificate of incorporation provides that a director
of JDA shall not be personally liable to JDA or its stockholders
for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the directors
duty of loyalty to JDA or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section
174 of the DGCL, or (iv) for any transaction from which the
director derived an improper personal benefit.
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i2s certificate of incorporation provides that to the
fullest extent permitted by the DGCL as the same exists or as it
may be amended, no director of i2 will be personally liable to
i2 or its stockholders for monetary damages for breach of
fiduciary duty as a director.
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In addition, JDAs certificate of incorporation states that
if the DGCL is amended to authorize the further elimination or
limitation of the liability of a director, then the liability of
a director of JDA will be eliminated or limited to the fullest
extent permitted by the DGCL, as amended.
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99
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Rights of JDA Stockholders
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Rights of i2 Stockholders
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Indemnification and Advancement of Expenses of Directors and
Officers
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JDAs bylaws provide that JDA will indemnify and hold
harmless, to the fullest extent authorized by Delaware law, as
the same exists or may be amended, any person who was or is made
a party to or is involved in any legal proceeding by reason of
the fact that he or she or a person of whom he or she is the
legal representative, is or was a director, officer, or employee
of JDA or is or was serving at the request of JDA as a director,
officer, or employee of another entity against all expenses,
liability, and loss (including attorneys fees). JDA is
required to indemnify a person in connection with a proceeding
(or part thereof) initiated by such person only if (i) such
indemnification is expressly required to be made by law, (ii)
the legal proceeding (or part thereof) was authorized and
approved by JDAs board of directors, or (iii) the legal
proceeding (or part thereof) is brought to establish or enforce
a right to indemnification under an indemnity agreement or any
other statute or law or otherwise as required under
Section 145 of the DGCL.
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i2s bylaws provide that i2 will, to the maximum extent and
in the manner permitted by the DGCL, indemnify each of its
directors and officers against expenses (including
attorneys fees), judgments, fines, settlements, and other
amounts actually and reasonably incurred in connection with any
proceedings, arising by reason of the fact that such person is
or was an agent of i2, including any person (i) who is or was a
director or officer of i2, (ii) who is or was serving at the
request of i2 as a director or officer of another entity, or
(iii) who was a director or officer of a predecessor corporation
of i2 or of another entity at the request of such predecessor
corporation. Also, i2s bylaws state that i2 has the power,
to the extent and in the manner permitted by the DGCL, to
indemnify each of its employees and agents (other than directors
and officers) against expenses (including attorneys fees),
judgments, fines, settlements, and other amounts actually and
reasonably incurred in connection with any proceedings, arising
by reason of the fact that such person is or was an agent of i2,
including any person (i) who is or was an employee or agent of
i2, (ii) who is or was serving at the request of i2 as an
employee or agent of another entity, or (iii) who was an
employee or agent of a predecessor corporation of i2 or of
another entity at the request of such predecessor corporation.
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JDA will pay the expenses incurred by an officer or director in
defending any legal proceeding in advance of its final
disposition, provided, however, that the payment of such
expenses shall be made only upon receipt of an undertaking by
the director or officer to repay all amounts advanced if it is
ultimately determined that the director or officer is not
entitled to be indemnified.
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i2s bylaws and certificate of incorporation are silent
regarding advancement of expenses incurred by officers and
directors in defending any legal proceeding.
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100
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Rights of JDA Stockholders
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Rights of i2 Stockholders
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Commission Position on Indemnification for Securities Act
Liabilities
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Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or
persons controlling JDA or i2 pursuant to the foregoing
provisions, JDA and i2 have been informed that in the opinion of
the SEC such indemnification is against public policy as
expressed in the Securities Act and is therefore
unenforceable.
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Transactions with Related Parties
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The DGCL generally provides that no transaction between a
corporation and one or more of its directors or officers, or
between a corporation and any other corporation or other
organization in which one or more of its directors or officers,
are directors or officers, or have a financial interest, shall
be void or voidable solely for this reason, or solely because
the director or officer is present at or participates in the
meeting of the board or committee which authorizes the
transaction, or solely because any such directors or
officers votes are counted for such purpose, if: (i) the
material facts as to the directors or officers
interest and as to the transaction are known to the board of
directors or the committee, and the board or committee in good
faith authorizes the transaction by the affirmative votes of a
majority of the disinterested directors, even though the
disinterested directors be less than a quorum, (ii) the material
facts as to the directors or officers interest and
as to the transaction are disclosed or are known to the
stockholders entitled to vote thereon, and the transaction is
specifically approved in good faith by vote of the stockholders,
or (iii) the transaction is fair as to the corporation as of the
time it is authorized, approved or ratified, by the board of
directors, a committee or the stockholders.
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Certain Business Combination Restrictions
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Section 203 of the DGCL protects publicly traded Delaware
corporations, such as JDA and i2, from hostile takeovers, and
from actions following the takeover, by prohibiting some
transactions once an acquirer has gained a significant holding
in the corporation. A corporation may elect not to be governed
by Section 203 of the DGCL.
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JDAs certificate of incorporation and bylaws do not
contain an election not to be governed by Section 203 of the
DGCL. Therefore, JDA is governed by Section 203 of the DGCL.
This provision does not apply to the merger.
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i2s certificate of incorporation and bylaws do not contain
an election not to be governed by Section 203 of the DGCL.
Therefore, i2 is governed by Section 203 of the DGCL. However,
i2s board of directors approved the merger for purposes of
Section 203; therefore, this provision does not apply to JDA in
the merger.
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101
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Rights of JDA Stockholders
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Rights of i2 Stockholders
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Poison Pill
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JDA formerly had a rights agreement, but the rights granted
pursuant to the agreement expired on October 1, 2008.
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On January 17, 2002, i2s board of directors approved
adoption of a stockholder rights plan and declared a dividend of
one preferred share purchase right for each outstanding share of
common stock. After adjusting for the
1-for-25
reverse stock split i2 implemented on February 16, 2005, each
share of common stock has attached to it one right to purchase
25 units of one one-thousandth of a share of series A
junior participating preferred stock at a price of $75.00 per
unit. The rights, which expire on January 17, 2012, will only
become exercisable upon distribution. Distribution of the rights
will not occur until ten days after the earlier of (i) the
public announcement that a person or group has acquired
beneficial ownership of 15% or more of i2s outstanding
common stock or (ii) the commencement of, or announcement of an
intention to make, a tender offer or exchange offer that would
result in a person or group acquiring the beneficial ownership
of 15% or more of i2s outstanding common stock.
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102
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Rights of JDA Stockholders
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Rights of i2 Stockholders
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Shares of series A preferred stock purchasable upon exercise of
the rights are not redeemable. Each share of series A preferred
stock will be entitled to a dividend of 40 times the
dividend declared per share of common stock. In the event of
liquidation, each share of series A preferred stock will be
entitled to a payment of the greater of (i) 40 times the payment
made per share of common stock or (ii) $1,000. Each share of
series A preferred stock will have 40 votes, voting together
with the common stock. In the event of any merger,
consolidation, or other transaction in which shares of common
stock are exchanged, each share of series A preferred stock will
be entitled to receive 40 times the amount received per share of
common stock. Because of the nature of the dividend,
liquidation and voting rights, the value of the 25 units of
series A preferred stock purchasable upon exercise of each right
should approximate the value of one share of common stock.
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Rights of JDA Stockholders
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Rights of i2 Stockholders
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If, after the rights become exercisable, i2 is acquired in a
merger or other business combination transaction, or 50% or more
of its consolidated assets or earning power are sold, proper
provision will be made so that each holder of a right will
thereafter have the right to receive upon exercise that number
of shares of common stock of the acquiring company having a
market value of two times the exercise price of the right. If
any person or group becomes the beneficial owner of 15% or more
of the outstanding shares of common stock, proper provision will
be made so that each holder of a right, other than rights
beneficially owned by the acquiring person (which will
thereafter be void), will have the right to receive upon
exercise that number of shares of common stock or units of
series A preferred stock (or cash, other securities or property)
having a market value of two times the exercise price of the
right.
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The rights have significant anti-takeover effects by causing
substantial dilution to a person or group that attempts to
acquire i2 on terms not approved by i2s board of directors.
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The rights will not affect the merger because the rights
agreement was amended, prior to execution of the merger
agreement and voting agreements, to exclude the merger, JDA, and
the parties to the voting agreements from the effects of the
rights agreement and to provide that the rights and the rights
agreement will terminate immediately prior to the effective time
of the merger.
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104
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Rights of JDA Stockholders
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Rights of i2 Stockholders
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Dividends
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JDAs certificate of incorporation permits JDAs board
of directors to declare dividends out of legally available funds.
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The certificate of designations governing i2s Series B
Preferred Stock provides that dividends on the Series B
Preferred Stock, which may be paid in cash or in additional
shares of Series B Preferred Stock, at i2s option, are
payable semi-annually at the rate of 2.5% per year, and also
states that so long as any shares of Series B Preferred Stock
are outstanding and except as otherwise provided in the rights
agreement governing i2s series A preferred stock, no
dividends may be declared or paid on any shares of common stock
or series A preferred stock without the prior written consent of
the holders of a majority of the outstanding shares of Series B
Preferred Stock.
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FUTURE
STOCKHOLDER PROPOSALS
If the merger is completed, i2 will no longer be a publicly-held
company and there will be no public participation in any future
meetings of i2 stockholders. However, if the merger is not
completed, i2 stockholders will continue to be entitled to
attend and participate in i2 stockholders meetings.
If the merger is not completed, i2 will inform its stockholders,
by press release or other means determined reasonable, of the
date by which stockholder proposals must be received by i2 for
inclusion in the proxy materials relating to our 2010 annual
meeting. Pursuant to
Rule 14a-8
under the Exchange Act, any stockholder proposals to be
considered by i2 for inclusion in its proxy statement and form
of proxy card for its 2010 annual meeting of stockholders,
expected to be held in May 2010 if the merger is not completed,
must be received by i2 at its offices in Dallas, Texas,
addressed to its Secretary, not later than December 29,
2009 (120 days prior to the first anniversary of the proxy
statement relating to the 2009 annual meeting of stockholders).
The SEC rules set forth standards as to what stockholder
proposals are required to be included in a proxy statement. In
addition, the i2 amended and restated bylaws establish an
advance notice procedure with regard to stockholder proposals,
including stockholder proposals not included in the i2 proxy
statement, to be brought before an annual meeting of
stockholders. In general, notice must be received by the i2
corporate secretary not later than 90 days prior to the
first anniversary of the date of the proxy statement relating to
the 2009 annual meeting of stockholders and must contain
specified information concerning the matters to be brought
before the meeting and concerning the stockholder making the
proposal. Therefore, to be presented at the 2010 annual meeting,
if it occurs, stockholder proposals that are not submitted for
consideration for inclusion in the i2 proxy statement pursuant
to the processes of
Rule 14a-8
of the Exchange Act, must be received no later than
January 28, 2010. Stockholder proposals must comply with
applicable Delaware law, certain rules and regulations
promulgated by the SEC and the procedures set forth in the i2
amended and restated bylaws.
DELIVERY
OF DOCUMENTS TO STOCKHOLDERS SHARING AN ADDRESS
As permitted by the Exchange Act, i2 may deliver only one copy
of this Proxy Statement to its stockholders residing at the same
address, unless any such stockholder has notified i2 of such
stockholders desire to receive multiple copies of this
Proxy Statement. i2 stockholders residing at the same address
may request delivery of only one copy of this Proxy Statement by
delivering notice to i2s secretary at 11701 Luna Road,
Dallas, Texas 75234. i2 will promptly deliver, upon oral or
written request, a separate copy of this Proxy Statement to any
stockholder residing at an address to which only one copy was
mailed. Requests for additional copies should also be directed,
as applicable, to i2s secretary at the same address listed
above.
105
LEGAL
MATTERS
The validity of the JDA common stock issued in connection with
the merger will be passed upon for JDA by DLA Piper LLP (US).
EXPERTS
The financial statements incorporated in this Prospectus by
reference from JDAs Annual Report on
Form 10-K
for the year ended December 31, 2008, and the effectiveness
of JDAs internal control over financial reporting have
been audited by Deloitte & Touche LLP, an independent
registered public accounting firm, as stated in their reports
which are incorporated herein by reference, (which reports
1) express an unqualified opinion on the financial
statements and includes an explanatory paragraph referring to
the Companys adoption of the provisions of the Financial
Accounting Standards Board Interpretation No. 48,
Accounting for Uncertainty in Income Taxes
in 2007 and
2) express an unqualified opinion on the effectiveness of
internal control over financial reporting). Such financial
statements have been so incorporated in reliance upon the
reports of such firm given upon their authority as experts in
accounting and auditing.
The consolidated financial statements of i2 as of and for the
years ended December 31, 2008 and 2007 and
managements assessment of internal control over financial
reporting as of December 31, 2008, incorporated in this
Prospectus by reference to Form 8-K dated November 18,
2009, have been so incorporated in reliance on the reports of
Grant Thornton LLP, an independent registered public accounting
firm, given on the authority of said firm as experts in
accounting and auditing.
The 2006 financial statements of i2 (before the effects of the
retrospective adjustments to the financial statements)
incorporated by reference in this Registration Statement have
been audited by Deloitte & Touche LLP, an independent
registered public accounting firm, as stated in their report
which is incorporated herein by reference (which report
expresses an unqualified opinion on the 2006 financial
statements of i2 before the effects of the retrospective
adjustments to the financial statements and includes an
explanatory paragraph referring to not being engaged to audit
the retrospective adjustments). Such financial statements have
been so incorporated in reliance upon the reports of such firm
given upon their authority as experts in accounting and auditing.
The adjustments to the 2006 financial statements of i2
incorporated in this Prospectus by reference to
Form 8-K
dated November 18, 2009 to retrospectively apply the change
in accounting principle described in Note 1 have been
audited by Grant Thornton LLP, an independent registered public
accounting firm. The consolidated financial statements of i2 as
of and for the year ended December 31, 2006 incorporated by
reference in this Prospectus have been so incorporated in
reliance on the reports of (i) Deloitte & Touche
LLP solely with respect to those financial statements before the
effects of the adjustments to retrospectively apply the change
in accounting described in Note 1 and (ii) Grant
Thornton LLP solely with respect to the adjustments to those
financial statements to retrospectively apply the change in
accounting described in Note 1, given on the authority of
such firms as experts in auditing and accounting.
WHERE YOU
CAN FIND MORE INFORMATION
JDA and i2 file annual, quarterly, and current reports, proxy
statements, and other information with the SEC. You may read and
copy any of this information at the SECs public reference
room at 100 F Street, N.E., Washington, D.C.
20549. Please call the SEC at
1-800-SEC-0330
or
202-942-8090
for further information on the public reference room. The SEC
also maintains an internet website that contains reports, proxy
statements, and other information regarding issuers, including
JDA and i2, who file electronically with the SEC. The address of
that site is www.sec.gov. The information contained on the
SECs website is expressly not incorporated by reference
into this Proxy Statement.
JDA has filed with the SEC a registration statement of which
this Proxy Statement forms a part. The registration statement
registers the shares of JDA common stock to be issued to i2
stockholders in connection with the merger. The registration
statement, including the attached exhibits and annexes, contains
additional relevant
106
information about the common stock of JDA and i2, respectively.
The rules and regulations of the SEC allow JDA and i2 to omit
certain information included in the registration statement from
this Proxy Statement.
In addition, the SEC allows JDA and i2 to disclose important
information to you by referring you to other documents filed
separately with the SEC. This information is considered to be a
part of this Proxy Statement, except for any information that is
superseded by information included directly in this Proxy
Statement or incorporated by reference subsequent to the date of
this Proxy Statement as described below.
This Proxy Statement incorporates by reference the documents
listed below that JDA and i2 have previously filed with the SEC
(excluding any current reports on
Form 8-K,
or portions thereof, to the extent disclosure is furnished and
not filed). They contain important information about the
companies and their financial condition.
JDA SEC
Filings
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Annual report on
Form 10-K
for the fiscal year ended December 31, 2008;
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Quarterly reports on
Form 10-Q
for the quarters ended March 31, 2009, June 30, 2009,
and September 30, 2009; and
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Current reports on
Form 8-K,
or amendments thereto, filed on January 20, 2009,
January 26, 2009, April 15, 2009, April 20, 2009,
July 20, 2009, July 24, 2009, September 9, 2009,
October 19, 2009, November 5, 2009, and
December 11, 2009.
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The description of JDA common stock set forth in a registration
statement filed pursuant to Section 12 of the Exchange Act
and any amendment or report filed for the purpose of updating
those descriptions.
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i2 SEC
Filings
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Annual report on
Form 10-K
for the fiscal year ended December 31, 2008; and
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Quarterly reports on
Form 10-Q
for the quarters ended March 31, 2009, June 30, 2009,
and September 30, 2009; and
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Current reports on
Form 8-K,
or amendments thereto, filed on January 21, 2009,
January 27, 2009, January 30, 2009, February 5,
2009, February 6, 2009, February 20, 2009,
April 9, 2009, April 29, 2009, April 30, 2009,
May 7, 2009 (two filings), August 6, 2009,
November 5, 2009 (two filings), November 18, 2009, and
December 11, 2009.
|
In addition, JDA and i2 incorporate by reference any future
filings they make with the SEC under Sections 13(a), 13(c),
14, or 15(d) of the Exchange Act after the date of this Proxy
Statement and before the date of the i2 special meeting
(excluding any current reports on
Form 8-K
to the extent disclosure is furnished and not filed). Those
documents are considered to be a part of this Proxy Statement,
effective as of the date they are filed. In the event of
conflicting information in these documents, the information in
the latest filed document should be considered correct.
You can obtain any of the other documents listed above from the
SEC, through the SECs web site at the address described
above, or from JDA or i2, as applicable, by requesting them in
writing or by telephone from the appropriate company at the
following addresses:
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|
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JDA Software Group, Inc.
Attn: Mike Burnett
14400 North 87th Street
Scottsdale, Arizona 85260
(480)
308-3000
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i2 Technologies, Inc.
Attn: Tom Ward
11701 Luna Road
Dallas, Texas 75234
(469) 357-1000
|
In addition, you may obtain copies of this information by making
a request through JDAs or i2s investor relations
departments by sending an email to investor.relations@jda.com or
investor_relations@i2.com,
respectively.
This information is available from JDA or i2, as the case may
be, without charge, excluding any exhibits to them unless the
exhibit is specifically listed as an exhibit to the registration
statement of which this Proxy Statement
107
forms a part. You can also find information about JDA and i2 at
their internet websites at www.jda.com and www.i2.com,
respectively. Information contained on these websites does not
constitute part of this Proxy Statement.
You may also obtain documents incorporated by reference into
this Proxy Statement by requesting them in writing or by
telephone from D.F. King & Co., Inc., i2s proxy
solicitation agent, at the appropriate address and telephone
number below:
D.F King & Co., Inc.
48 Wall Street
New York, NY 10005
Bank and brokers call:
(212) 269-5550
All others call:
(800) 859-8511
To receive timely delivery of the documents in advance of the
meetings, you should make your request no later
than ,
2010.
If you request any documents from JDA or i2, JDA or i2
will mail them to you by first class mail, or another equally
prompt means, within one business day after JDA or i2, as the
case may be, receives your request.
This document is a proxy statement of i2 for its special meeting
of stockholders, and is a prospectus of JDA. Neither JDA nor i2
has authorized anyone to give any information or make any
representation about the merger or JDA or i2 that is different
from, or in addition to, that contained in this Proxy Statement
or in any of the materials that JDA or i2 has incorporated by
reference into this Proxy Statement. Therefore, if anyone does
give you information of this sort, you should not rely on it.
The information contained in this document speaks only as of the
date of this document unless the information specifically
indicates that another date applies.
108
Annex A
Execution
Copy
AGREEMENT AND PLAN OF MERGER
Dated as of November 4, 2009
Among
JDA SOFTWARE GROUP, INC.,
ALPHA ACQUISITION CORP.
And
I2 TECHNOLOGIES, INC.
TABLE OF
CONTENTS
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Page
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ARTICLE I. The Merger
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A-1
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Section
1.1
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The Merger
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A-1
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Section
1.2
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Closing
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A-1
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Section
1.3
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Effective Time
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A-1
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Section
1.4
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Effects of the Merger
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A-1
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Section
1.5
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Certificate of Incorporation and Bylaws of the Surviving
Corporation
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A-2
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Section
1.6
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Directors of the Surviving Corporation
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A-2
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Section
1.7
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Officers of the Surviving Corporation
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A-2
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ARTICLE II. Effect of the Merger on the Capital
Stock of the Constituent Corporations; Exchange of Certificates;
Company Stock Options
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A-2
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Section
2.1
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Effect on Capital Stock
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A-2
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Section
2.2
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Surrender of Certificates
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A-4
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Section
2.3
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Company Stock Plans
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A-6
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Section
2.4
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Treatment of Warrants
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A-7
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Section
2.5
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Withholding Taxes
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A-8
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Section
2.6
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Adjustments
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A-8
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ARTICLE III. Representations and Warranties of
the Company
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A-8
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Section
3.1
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Organization, Standing and Corporate Power
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A-8
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Section
3.2
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Capitalization
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A-9
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Section
3.3
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Authority; Noncontravention; Voting Requirements
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A-10
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Section
3.4
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Governmental Approvals
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A-11
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Section
3.5
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Company SEC Documents; Undisclosed Liabilities
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A-11
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Section
3.6
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Absence of Certain Changes or Events
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A-12
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Section
3.7
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Legal Proceedings
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A-13
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Section
3.8
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Compliance With Laws; Permits
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A-13
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Section
3.9
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Information Supplied
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A-13
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Section
3.10
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Tax Matters
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A-14
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Section
3.11
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Employee Benefits and Labor Matters
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A-15
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Section
3.12
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Environmental Matters
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A-17
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Section
3.13
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Contracts
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A-18
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Section
3.14
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Title to Properties
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A-20
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Section
3.15
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Intellectual Property
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A-21
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Section
3.16
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Insurance
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A-24
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Section
3.17
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Opinion of Financial Advisor
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A-24
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Section
3.18
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Brokers and Other Advisors
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A-24
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Section
3.19
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Anti-Takeover Statutes
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A-24
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Section
3.20
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Company Rights Agreement
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A-24
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Section
3.21
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Related Party Transactions
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A-25
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Section
3.22
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No Other Parent or Merger Sub Representations or Warranties
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A-25
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ARTICLE IV. Representations and Warranties of
Parent and Merger Sub
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A-25
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Section
4.1
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Organization, Standing and Corporate Power
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A-25
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Section
4.2
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Capitalization
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A-26
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Section
4.3
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Authority; Noncontravention
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A-26
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A-i
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Page
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Section
4.4
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Governmental Approvals
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A-27
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Section
4.5
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Parent SEC Documents; Undisclosed Liabilities
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A-27
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Section
4.6
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Absence of Certain Changes or Events
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A-29
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Section
4.7
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Legal Proceedings
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A-29
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Section
4.8
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Compliance With Laws; Permits
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A-29
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Section
4.9
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Information Supplied
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A-29
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Section
4.10
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Tax Matters
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A-30
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Section
4.11
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Employee Benefits and Labor Matters
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A-30
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Section
4.12
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Environmental Matters
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A-31
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Section
4.13
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Contracts
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A-31
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Section
4.14
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Title to Properties
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A-31
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Section
4.15
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Intellectual Property
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A-32
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Section
4.16
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Ownership and Operations of Merger Sub
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A-32
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Section
4.17
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Debt Financing
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A-32
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Section
4.18
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Ownership of Company Common Stock
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A-33
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Section
4.19
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Management Arrangements
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A-33
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Section
4.20
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Brokers and Other Advisors
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A-33
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Section
4.21
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No Other Company Representations or Warranties
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A-33
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ARTICLE V. Covenants and Agreements
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A-34
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Section
5.1
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Preparation of the Proxy Statement/Prospectus
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A-34
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Section
5.2
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Conduct of Business
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A-34
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Section
5.3
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No Solicitation by the Company; Etc
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A-37
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Section
5.4
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Further Action; Reasonable Best Efforts
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A-40
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Section
5.5
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Stockholders Meetings
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A-41
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Section
5.6
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Public Announcements
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A-42
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Section
5.7
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Access to Information; Confidentiality
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A-42
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Section
5.8
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Notification of Certain Matters
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A-43
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Section
5.9
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Indemnification and Insurance
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A-43
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Section
5.10
|
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Securityholder Litigation
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A-43
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Section
5.11
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Fees and Expenses
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A-44
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Section
5.12
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Employee Benefits
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A-44
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Section
5.13
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NASDAQ Listing
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A-45
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Section
5.14
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Debt Financing
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A-45
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Section
5.15
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Financing Election
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A-45
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Section
5.16
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Cooperation by the Company
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A-48
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Section
5.17
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Section 368(a) Reorganization
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A-49
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Section
5.18
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Actions With Respect to Intellectual Property
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A-49
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Section
5.19
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Appointment of Parent Director
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A-49
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Section
5.20
|
|
Upstream Merger
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A-49
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ARTICLE VI. Conditions Precedent
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A-49
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Section
6.1
|
|
Conditions to Each Partys Obligation to Effect the Merger
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A-49
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Section
6.2
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Conditions to Obligations of Parent and Merger Sub
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A-50
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Section
6.3
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Conditions to Obligation of the Company
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A-51
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Section
6.4
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Frustration of Closing Conditions
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A-51
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A-ii
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Page
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ARTICLE VII. Termination
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|
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A-51
|
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Section
7.1
|
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Termination
|
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A-51
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Section
7.2
|
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Effect of Termination
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A-54
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Section
7.3
|
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Termination Fees
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A-54
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ARTICLE VIII. Miscellaneous
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A-55
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Section
8.1
|
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Nonsurvival of Representations and Warranties
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A-55
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Section
8.2
|
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Amendment or Supplement
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A-55
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Section
8.3
|
|
Extension of Time, Waiver, Etc
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A-55
|
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Section
8.4
|
|
Assignment
|
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A-55
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Section
8.5
|
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Counterparts; Facsimile; Electronic Transmission
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A-56
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Section
8.6
|
|
Entire Agreement; No Third-Party Beneficiaries
|
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A-56
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Section
8.7
|
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Governing Law
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A-57
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Section
8.8
|
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Specific Enforcement
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A-57
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Section
8.9
|
|
Consent to Jurisdiction
|
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A-57
|
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Section
8.10
|
|
Notices
|
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A-58
|
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Section
8.11
|
|
Severability
|
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A-58
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Section
8.12
|
|
Remedies
|
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A-58
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Section
8.13
|
|
Definitions
|
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A-59
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Section
8.14
|
|
Waiver of Jury Trial
|
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A-65
|
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Section
8.15
|
|
Interpretation
|
|
|
A-65
|
|
Exhibit A Company Voting Agreements
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Exhibit B Parent Voting Agreements
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Exhibit C Certificate of Incorporation of the
Company
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Schedule A Signatories to Company Voting
Agreements
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Schedule B Signatories to Parent Voting
Agreements
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A-iii
AGREEMENT
AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER, dated as of November 4,
2009 (this
Agreement
), is among JDA Software
Group, Inc., a Delaware corporation (
Parent
),
Alpha Acquisition Corp., a Delaware corporation and a
wholly-owned Subsidiary of Parent (
Merger
Sub
), and i2 Technologies, Inc., a Delaware
corporation (the
Company
). Certain terms used
in this Agreement are used as defined in Section 8.13.
RECITALS:
Parent has approved, and the respective Boards of Directors of
the Company and Merger Sub have adopted, approved and declared
advisable, this Agreement and the merger of Merger Sub with and
into the Company (the
Merger
), on the terms
and subject to the conditions provided for in this Agreement.
The Board of Directors of the Company has approved, and
concurrently with the execution of this Agreement and as a
condition to and inducement of Parents willingness to
enter into this Agreement, the executive officers, directors and
stockholders of the Company set forth on
Schedule A
are entering into, voting undertakings in substantially the
forms attached as
Exhibit A
(each, a
Company Voting Agreement
), subject to the
terms and conditions thereof.
The Board of Directors of Parent has approved, and concurrently
with the execution of this Agreement and as a condition to and
inducement of the Companys willingness to enter into this
Agreement, the executive officers and directors of Parent set
forth on
Schedule A
are entering into, voting
undertakings in substantially the forms attached as
Exhibit B
(each, a
Parent Voting
Agreement
), subject to the terms and conditions
thereof.
Parent, Merger Sub and the Company desire to make certain
representations, warranties, covenants and agreements in
connection with the Merger and also to prescribe various
conditions to the Merger.
NOW, THEREFORE, in consideration of foregoing premises and the
representations, warranties, covenants and agreements contained
in this Agreement, and intending to be legally bound hereby,
Parent, Merger Sub and the Company hereby agree as follows:
ARTICLE I.
The Merger
Section 1.1
The
Merger
. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with
the General Corporation Law of the State of Delaware (the
DGCL
), at the Effective Time Merger Sub shall
be merged with and into the Company, and the separate corporate
existence of Merger Sub shall thereupon cease, and the Company
shall be the surviving corporation in the Merger (the
Surviving Corporation
).
Section 1.2
Closing
. The
closing of the Merger (the
Closing
) shall
take place at 10:00 a.m. (Central Time) on a date to be
specified by the parties, which date shall be no later than the
second business day after satisfaction or waiver of the
conditions set forth in Article VI (other than those
conditions that by their nature are to be satisfied at the
Closing, but subject to the satisfaction or waiver of such
conditions), unless another time or date, or both, are agreed to
in writing by the parties hereto. The date on which the Closing
is held is herein referred to as the
Closing
Date
. The Closing will be held at the offices of DLA
Piper
llp (us
),
2525 East Camelback Road, Suite 1000, Phoenix, Arizona
85016, unless another place is agreed to in writing by the
parties hereto.
Section 1.3
Effective
Time
. Subject to the provisions of this
Agreement, as soon as practicable on the Closing Date the
parties shall file a certificate of merger with the Secretary of
State of the State of Delaware, executed in accordance with the
relevant provisions of the DGCL (the
Certificate of
Merger
). The Merger shall become effective upon the
filing of the Certificate of Merger or at such later time as is
agreed to by the parties hereto and specified in the Certificate
of Merger (the time at which the Merger becomes effective is
herein referred to as the
Effective Time
).
Section 1.4
Effects
of the Merger
. The Merger shall have the effects
set forth in the DGCL. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time, all the
rights, privileges,
A-1
immunities, powers and franchises of the Company and Merger Sub
shall vest in the Surviving Corporation, and all debts,
liabilities and duties of the Company and Merger Sub shall
become the debts, liabilities and duties of the Surviving
Corporation.
Section 1.5
Certificate
of Incorporation and Bylaws of the Surviving Corporation
.
(a) At the Effective Time, the certificate of incorporation
of the Company shall be amended to read in its entirety as set
forth on
Exhibit C.
(b) The bylaws of Merger Sub, as in effect immediately
prior to the Effective Time, shall be the bylaws of the
Surviving Corporation until thereafter amended as provided
therein or by applicable Law.
Section 1.6
Directors
of the Surviving Corporation
. Parent and the
Company shall take all necessary actions to cause the directors
of Merger Sub immediately prior to the Effective Time to be the
directors of the Surviving Corporation immediately following the
Effective Time, until the earlier of their death, resignation or
removal or until their respective successors are duly elected
and qualified, as the case may be.
Section 1.7
Officers
of the Surviving Corporation
. The officers of
Merger Sub immediately prior to the Effective Time shall be the
officers of the Surviving Corporation until their respective
successors are duly appointed and qualified or their earlier
death, resignation or removal in accordance with the certificate
of incorporation and bylaws of the Surviving Corporation.
ARTICLE II.
Effect of
the Merger on the Capital Stock of the Constituent
Corporations;
Exchange of Certificates; Company Stock Options
Section 2.1
Effect
on Capital Stock
. At the Effective Time, by
virtue of the Merger and without any action on the part of the
holder of any shares of common stock, par value $0.00025 per
share, of the Company (
Company Common Stock
),
any shares of Series B 2.5% Convertible Preferred
Stock, par value $0.001 per share, of the Company
(
Series B Preferred Stock
) or any shares
of capital stock of Merger Sub:
(a)
Capital Stock of Merger Sub.
Each
issued and outstanding share of capital stock of Merger Sub
shall be converted into and become one validly issued, fully
paid and nonassessable share of common stock, par value $0.01
per share, of the Surviving Corporation.
(b)
Cancellation of Treasury Stock and Parent-Owned
Stock.
Any shares of Company Common Stock or
Series B Preferred Stock that are owned by the Company as
treasury stock, and any shares of Company Common Stock and
Series B Preferred Stock owned by Parent or Merger Sub (in
each case, other than shares held on behalf of third parties),
shall be automatically canceled and shall cease to exist and no
consideration shall be delivered in exchange therefor. Each
share of Company Common Stock and Series B Preferred Stock
owned by any Subsidiary of the Company shall be automatically
canceled and shall cease to exist and no consideration shall be
delivered in exchange therefor.
(c)
Conversion of Company Common Stock
.
(i) Subject to Section 2.1(c)(ii) and
Section 2.1(c)(iii) below, each share of Company Common
Stock issued and outstanding as of the Effective Time (other
than Dissenting Shares and shares to be canceled in accordance
with Section 2.1(b)), shall be converted into the right to
receive:
(A) that fraction of a validly issued, fully paid and
non-assessable share of Parent Common Stock equal to 0.5797 (the
Base Exchange Ratio
), which fraction of a
share has a value equal to $12.00 based on the closing price per
share of the Parent Common Stock on the NASDAQ Stock Market on
the date hereof; and
(B) $6.00 in cash, without interest (the
Base
Common Stock Cash Consideration
).
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The combined value of the Base Common Stock Cash Consideration
and such fraction of a share of Parent Common Stock at the Base
Exchange Ratio (based on the closing price per share of the
Parent Common Stock on the NASDAQ Stock Market on the date
hereof) is equal to $18.00.
(ii) Notwithstanding Section 2.1(c)(i) above, if the
Financing Election is duly made in accordance with
Section 5.15, then the Base Exchange Ratio shall be
decreased as provided in Section 5.15, and each share of
Company Common Stock issued and outstanding as of the Effective
Time (other than Dissenting Shares and shares to be canceled in
accordance with Section 2.1(b)), shall instead be converted
into the right to receive:
(A) that fraction of a validly issued, fully paid and
non-assessable share of Parent Common Stock equal to 0.2562 (the
Adjusted Exchange Ratio
), which fraction of a
share has a value equal to $5.30 based on the closing price per
share of the Parent Common Stock on the NASDAQ Stock Market on
the date hereof; and
(B) $12.70 in cash, without interest (the
Adjusted
Common Stock Cash Consideration
).
The parties acknowledge that, notwithstanding the foregoing
adjustments, the combined value of the Adjusted Common Stock
Cash Consideration and a fraction of a share of Parent Common
Stock at the Adjusted Exchange Ratio (based on the closing price
per share of the Parent Common Stock on the NASDAQ Stock Market
on the date hereof) will be equal to $18.00.
If the Financing Election is duly made in accordance with
Section 5.15 below, and thereafter, as a result of
increases in the market price of the Parent Common Stock or
exercises of Company Options following such election, the
aggregate number of shares of Parent Common Stock to be issued
in the Merger pursuant to this Section 2.1(c)(ii),
Section 2.3, and Section 2.4 (including the additional
shares, if any, of Parent Common Stock issuable in respect of
additional shares of Company Common Stock issued upon exercise
of Company Options and Company Warrants prior to the Effective
Time), would exceed 19.9% (as calculated under the rules of the
NASDAQ Stock Market) of Parents issued and outstanding
shares of Parent Common Stock immediately prior to the Effective
Time (19.9% of such issued and outstanding shares rounded down
to the nearest whole share, the
Maximum Share
Number
), then (1) the Adjusted Exchange Ratio
shall be further reduced (the amount of such reduction, the
Exchange Ratio Reduction Number
) to the
minimum extent necessary such that the aggregate number of
shares of Parent Common Stock issuable in the Merger pursuant to
this Section 2.1(c)(ii), Section 2.3, and
Section 2.4 (including the additional shares, if any, of
Parent Common Stock issuable in respect of additional shares of
Company Common Stock issued upon exercise of Company Options and
Company Warrants prior to the Effective Time), equals the
Maximum Share Number, and (2) the Adjusted Common Stock
Cash Consideration shall be further increased by an amount in
cash equal to the Exchange Ratio Reduction Number multiplied by
the Parent Common Stock Market Price; provided, that in no event
will the such cash adjustment exceed $10,000,000 in the
aggregate.
(iii) For purposes of this Agreement, (A) the Base
Exchange Ratio and the Adjusted Exchange Ratio are, as
applicable, referred to herein as the
Exchange
Ratio,
(B) the fraction of a validly issued,
fully paid and non-assessable share of Parent Common Stock equal
to the Exchange Ratio is referred to herein as the
Common Stock Share Consideration
;
(C) the Base Common Stock Cash Consideration and the
Adjusted Common Stock Cash Consideration are, as applicable,
referred to herein as the
Common Stock Cash
Consideration,
and (D) the Common Stock Cash
Consideration, together with the Common Stock Share
Consideration, are together referred to herein as the
Common Stock Merger Consideration.
(iv) As of the Effective Time, all such shares of Company
Common Stock shall no longer be outstanding and shall
automatically be canceled and shall cease to exist, and each
holder of a certificate (a
Common Stock
Certificate
) or non-certificated book-entry shares
(
Book-Entry Shares
) which immediately prior
to the Effective Time represented any such shares of Company
Common Stock shall cease to have any rights with respect to such
securities, except the right to receive the Common Stock Merger
Consideration to be issued in consideration therefor, any cash
payable in lieu of fractional shares and any dividends or
distributions to which holders of shares of Company Common Stock
become entitled in accordance with this Article II upon
surrender of such Common Stock Certificate in accordance with
Section 2.2(b), without interest.
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(d)
Conversion of Series B Preferred
Stock.
Each share of Series B Preferred
Stock issued and outstanding as of the Effective Time (other
than Dissenting Shares and shares to be canceled in accordance
with Section 2.1(b)) shall be converted into the right to
receive $1,100.00 plus all accrued and unpaid dividends thereon
through the Effective Time, in cash, without interest (the
Preferred Stock Merger Consideration,
and
together with the Common Stock Merger Consideration, the
Merger Consideration
). As of the Effective
Time, dividends shall cease to accrue on all such shares of
Series B Preferred Stock, all such shares of Series B
Preferred Stock shall no longer be outstanding and shall
automatically be canceled and shall cease to exist, and each
holder of a certificate which immediately prior to the Effective
Time represented any such shares of Series B Preferred
Stock (each, a
Series B Preferred Stock
Certificate
and, together with the Common Stock
Certificates, the
Certificates
) shall cease
to have any rights with respect to such securities, except the
right to receive the Preferred Stock Merger Consideration to be
paid in consideration therefor upon surrender of such
Series B Preferred Stock Certificate in accordance with
Section 2.2(b), without interest.
Section 2.2
Surrender
of Certificates.
(a)
Exchange Agent.
Prior to the filing
of the Certificate of Merger, Parent shall designate a bank or
trust company to act as agent for issuance of the Merger
Consideration (the
Exchange Agent
) upon
surrender of the Certificates and Book-Entry Shares. Prior to
the filing of the Certificate of Merger, the Company shall
deposit with the Exchange Agent (by wire transfer of immediately
available funds) cash in an amount that will be specified by
Parent in writing at least twenty-four (24) hours before
the filing of the Certificate of Merger, which amount shall not
be more than the amount of the Companys Unrestricted Cash
as provided in Section 6.2(e) below (such amount, the
Company Cash Deposit
and the notice given by
Parent with respect to the Company Cash Deposit, the
Deposit Notice
);
provided
, that, if
the Closing does not occur on such intended Closing Date, the
Exchange Agent will return, or cause to be returned, such
Company Cash Deposit, and any interest or other income thereon,
to the Company on the second business day after such deposit).
The Company Cash Deposit shall be made solely out of cash on
hand and shall be used solely for purposes of paying a portion
of the Merger Consideration in accordance with this
Article II and shall not be used to satisfy any other
obligation of the Company or any of its Subsidiaries. Prior to
the filing of the Certificate of Merger, Parent shall deposit or
cause to be deposited with the Exchange Agent (i) a number
of shares of Parent Common Stock sufficient to pay the aggregate
Common Stock Share Consideration pursuant to
Section 2.1(c), and (ii) cash in an amount sufficient
(together with the Company Cash Deposit) to pay (A) the
aggregate Common Stock Cash Consideration and any Preferred
Stock Merger Consideration payable pursuant to
Sections 2.1(c) and 2.1(d), and (B) the aggregate
amount of cash in lieu of fractional shares payable pursuant to
Section 2.2(i). Such cash and shares of Parent Common Stock
provided to the Exchange Agent, together with any dividends or
distributions with respect thereto, are referred to herein as
the
Exchange Fund.
(b)
Payment Procedures.
Promptly (but in
any event within five (5) business Days) after the
Effective Time, the Exchange Agent shall mail to each holder of
record of a Certificate (i) a letter of transmittal (which
shall specify that delivery shall be effected, and risk of loss
and title to the Certificates shall pass, only upon delivery of
the Certificates to the Exchange Agent, and which shall be in
such form and shall have such other provisions as Parent may
reasonably specify) and (ii) instructions for use in
effecting the surrender of the Certificates in exchange for the
Merger Consideration. Exchange of Book-Entry Shares shall be
effected in accordance with Parents customary procedures
with respect to certificates represented by book entry. Upon
surrender of a Certificate for cancellation to the Exchange
Agent, together with such letter of transmittal, duly completed
and validly executed in accordance with the instructions (and
such other customary documents as may reasonably be required by
the Exchange Agent), or compliance with Parents customary
procedures with respect to the exchange of Book-Entry Shares,
the holder of the shares of Company Common Stock or
Series B Preferred Stock represented thereby shall be
entitled to receive in exchange therefor (i) the amount of
cash to which such holder is entitled pursuant to
Section 2.1(c) or 2.1(d), (ii) the shares of Parent
Common Stock (which shall be in non-certificated book-entry form
unless a physical certificate is requested) representing the
number of whole shares, if any, of Parent Common Stock to which
such holder is entitled pursuant to Section 2.1(c),
(iii) cash in lieu of any fractional shares payable
pursuant to Section 2.2(i) and (iv) any dividends or
distributions payable pursuant to Section 2.2(j), and the
shares so surrendered shall forthwith be canceled. In the event
of a transfer of ownership of shares of Company Common Stock or
Series B Preferred Stock that is not registered in the
transfer records of the Company, the proper number of shares of
Parent Company Stock and amount of cash may be issued and paid,
as applicable, in exchange therefor to a Person other than the
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Person in whose name the Certificate so surrendered is
registered if such Certificate shall be properly endorsed or
shall otherwise be in proper form for transfer and the Person
requesting such payment shall pay any transfer and other Taxes
required by reason of the payment to a Person other than the
registered holder of such Certificate or establish to the
satisfaction of the Surviving Corporation that such Tax either
has been paid or is not applicable. Until surrendered as
contemplated by this Section 2.2(b), each Certificate shall
be deemed at any time after the Effective Time to represent only
the right to receive upon such surrender the applicable Merger
Consideration in respect thereof, cash in lieu of any fractional
shares payable pursuant to Section 2.2(i) and any dividends
or distributions payable pursuant to Section 2.2(j). No
interest will be paid or will accrue on the cash payable upon
surrender of any Certificate.
(c)
Transfer Books; No Further Ownership Rights in
Company Stock.
All Merger Consideration, any cash
in lieu of any fractional shares payable pursuant to
Section 2.2(i) and any dividends or distributions payable
pursuant to Section 2.2(j) paid
and/or
issued upon the surrender of Certificates or Book-Entry Shares
in accordance with the terms of this Article II shall be
deemed to have been paid in full satisfaction of all rights
pertaining to the shares of Company Common Stock or
Series B Preferred Stock previously represented by such
Certificates or Book-Entry Shares, as applicable. At the close
of business on the day on which the Effective Time occurs, the
stock transfer books of the Company shall be closed and there
shall be no further registration of transfers on the stock
transfer books of the Surviving Corporation of the shares of
Company Common Stock or Series B Preferred Stock that were
outstanding immediately prior to the Effective Time. Subject to
Section 2.2(e), if, at any time after the Effective Time,
Certificates are presented to the Surviving Corporation or the
Exchange Agent for any reason, they shall be canceled and
exchanged as provided in this Article II.
(d)
Lost, Stolen or Destroyed
Certificates.
If any Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of
that fact by the Person claiming such Certificate to be lost,
stolen or destroyed and, if required by Parent, the posting by
such Person of a bond, in such reasonable amount as Parent may
direct, as indemnity against any claim that may be made against
it with respect to such Certificate, the Exchange Agent will pay
the Merger Consideration, together with any cash in lieu of any
fractional shares payable pursuant to Section 2.2(i) and
dividends or distributions payable pursuant to
Section 2.2(j), to such Person in exchange for such lost,
stolen or destroyed Certificate.
(e)
Termination of Fund.
Any portion of
the Exchange Fund (including the proceeds of any investments
thereof) that remains undistributed to the holders of the
Certificates for 270 days after the Effective Time shall be
delivered by the Exchange Agent to the Surviving Corporation
upon demand. Any holders of Certificates who have not
theretofore complied with this Article II shall thereafter
look only to the Surviving Corporation for payment of the Merger
Consideration.
(f)
No Liability.
Notwithstanding any
provision of this Agreement to the contrary, none of Parent, the
Surviving Corporation or the Exchange Agent shall be liable to
any Person for any amount properly paid from the Exchange Fund
or delivered to a public official pursuant to any applicable
abandoned property, escheat or similar Law.
(g)
Investment of Exchange Fund.
After
the Effective Time, the Exchange Agent shall invest the Exchange
Fund in U.S. government or other investment grade
securities, in each case, maturing in not more than one year, or
other investments of comparable liquidity and credit-worthiness
as directed by Parent. Any interest and other income resulting
from such investment shall be the property of, and shall be paid
promptly to, Parent. If for any reason (including losses) the
cash in the Exchange Fund shall be insufficient to fully satisfy
all of the payment obligations to be made by the Exchange Agent
hereunder, Parent or the Surviving Corporation shall promptly
deposit into the Exchange Fund the additional cash required to
fully satisfy such payment obligations.
(h)
Dissenting Shares.
Notwithstanding
Section 2.1, any shares of Company Common Stock or, in the
event appraisal rights are available under the DGCL,
Series B Preferred Stock that are issued and outstanding
immediately prior to the Effective Time and held by any holder
who has not voted in favor of the Merger or consented thereto in
writing and who has properly demanded appraisal for such shares
pursuant to, and has complied in all respects with, the
provisions of Section 262 of the DGCL (the
Dissenting Shares
) shall not be converted
into the right to receive the applicable Merger Consideration,
unless such holder fails to perfect or withdraws or otherwise
loses its rights to appraisal or it is determined that such
holder does not have appraisal rights in accordance with the
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DGCL. If, after the Effective Time, such holder fails to perfect
or withdraws or loses its right to appraisal, or if it is
determined that such holder does not have appraisal rights, such
shares shall be treated as if they had been converted as of the
Effective Time into the right to receive the applicable Merger
Consideration, together with any cash in lieu of any fractional
shares payable pursuant to Section 2.2(i) and any dividends
or distributions payable pursuant to Section 2.2(j),
without interest thereon. The Company shall give Parent prompt
notice of any demands received by the Company for appraisal of
shares, and Parent shall have the right to participate in all
negotiations and proceedings with respect to such demands except
as required by applicable Law. The Company shall not, except
with the prior written consent of Parent, make any payment with
respect to, or settle or offer to settle, any such demands,
unless and to the extent required to do so under applicable Law.
(i)
No Fractional Shares.
No fractional
shares of Parent Common Stock shall be issued in connection with
the Merger, but in lieu thereof each holder otherwise entitled
to a fractional share of Parent Common Stock (after aggregating
all fractional shares of Parent Common Stock issuable to such
holder in respect of all shares of Company Common Stock owned by
such holder at the Effective Time) will be entitled to receive,
from the Exchange Agent in accordance with the provisions of
this Section 2.2(i), a cash payment in lieu of such
fractional share of Parent Common Stock in an amount determined
by multiplying the fractional share of Parent Common Stock to
which such holder would otherwise be entitled by the average
closing price of the Parent Common Stock on the Nasdaq Stock
Market for the five (5) trading day period ending three
(3) days prior to the Effective Date (
Parent
Common Stock Market Price
). No such holder shall be
entitled to dividends, voting rights or any other rights in
respect of any fractional share.
(j)
Dividends and Distributions;
Voting.
No dividends or other distributions
declared or made with respect to shares of Parent Common Stock
issued pursuant to the Merger and with a record date after the
Effective Time shall be paid to the holder of any unsurrendered
Certificates or Book-Entry Shares until such Certificates or
Book-Entry Shares are properly surrendered. Following such
surrender, there shall be paid, without interest, to the record
holder of the shares of Parent Common Stock issued in exchange
therefor (i) at the time of such surrender, all dividends
and other distributions payable in respect of such shares of
Parent Common Stock with a record date after the Effective Time
and a payment date on or prior to the date of such surrender and
not previously paid and (ii) at the appropriate payment
date, the dividends or other distributions payable with respect
to such shares of Parent Common Stock with a record date after
the Effective Time but with a payment date subsequent to such
surrender. For purposes of dividends or other distributions in
respect of shares of Parent Common Stock, all shares of Parent
Common Stock to be issued pursuant to the Merger shall be
entitled to dividends pursuant to the immediately preceding
sentence as if issued and outstanding as of the Effective Time.
Holders of unsurrendered Certificates or Book-Entry Shares shall
be entitled to vote after the Effective Time at any stockholders
meeting of Parent the number of whole shares of Parent Common
Stock issuable hereunder in respect of such Certificates or
Book-Entry Shares, regardless of whether such holders have
exchanged their Certificates or Book-Entry Shares, and Parent
agrees to treat holders of unsurrendered Certificates or
Book-Entry Shares as holders of record of Parent for purposes of
notice and voting.
Section 2.3
Company
Stock Plans
.
(a) At the Effective Time, by virtue of the Merger and
without any action on the part of the holder of any Company
Option, each Company Option that is outstanding immediately
prior to the Effective Time shall be canceled and terminated at
the Effective Time and converted into the right to receive the
Common Stock Merger Consideration with respect to the number of
shares of Company Common Stock that would be issuable upon a net
exercise of such Company Option assuming the market value of the
Company Common Stock at the time of such exercise were equal to
the value of the Common Stock Merger Consideration as of the
close of trading on the trading day immediately prior to the
Effective Time. For purposes of clarity, any Company Option with
a per-share exercise price that is greater than or equal to the
value of the Common Stock Merger Consideration as of the close
of trading on the trading day immediately prior to the Effective
Time shall be canceled and terminated as of the Effective Time,
and no payment shall be made with respect thereto or in respect
thereof. Any Common Stock Merger Consideration payable in
respect of Company Options pursuant to this Section 2.3(a)
shall be paid as soon after the Closing Date as shall be
practicable and in any event within fifteen (15) days
thereafter.
(b) At the Effective Time, by virtue of the Merger and
without any action on the part of the holder of any RSU, each
RSU outstanding immediately prior to the Effective Time shall
become fully vested (except that with respect to
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any RSU which by the terms of the award agreement pursuant to
which it was granted provides for a lesser percentage of such
RSU to become vested upon the consummation of the Merger, such
RSU shall only become vested as to such lesser percentage), and
then shall be canceled and terminated at the Effective Time, and
the holder of such vested RSU shall be entitled to receive the
Common Stock Merger Consideration for each share of Company
Common Stock into which the vested portion of the RSU would
otherwise be convertible. The Common Stock Merger Consideration
payable in respect of RSUs pursuant to this Section 2.3(b)
shall be paid as soon after the Closing Date as shall be
practicable and in any event within fifteen (15) days
thereafter.
(c) Prior to the Effective Time, the Company shall take all
actions necessary to (i) make any amendments to the terms
of, and give any notices required under, the Company Stock Plans
and obtain all consents (including all consents necessary to
provide that applicable RSUs and Options outstanding immediately
prior to the Effective Time shall be converted at the Effective
Time in the manner described above) that, in each case, are
necessary to give effect to the transactions contemplated by
this Section 2.3, (ii) terminate all Company Stock
Plans, such termination to be effective at or before the
Effective Time, and (iii) ensure that the Company will not
at the Effective Time be bound by any Options, stock
appreciation rights, or other agreements which would entitle any
Person, other than Parent and its Subsidiaries, to own any
capital stock of the Surviving Corporation or to receive any
payment in respect thereof (other than the payment of Common
Stock Merger Consideration as provided in Section 2.3(a)).
Notwithstanding anything to the contrary, payment may be
withheld in respect of any Company Option or RSU until any
necessary consents are obtained.
(d) No fractional shares of Parent Common Stock shall be
issued in connection with the Merger to holders of Company
Options or RSUs, but in lieu thereof each holder otherwise
entitled to a fractional share of Parent Common Stock pursuant
to Section 2.3(a)(ii) or Section 2.3(b) (after
aggregating all fractional shares of Parent Common Stock
issuable to such holder in respect of all Company Options or
shares of Company Common Stock issued upon conversion of any
vested RSU owned by such holder at the Effective Time) will be
entitled to receive a cash payment in lieu of such fractional
share of Parent Common Stock in an amount determined by
multiplying the fractional share of Parent Common Stock to which
such holder would otherwise be entitled by the Parent Common
Stock Market Price. No such holder shall be entitled to
dividends, voting rights or any other rights in respect of any
fractional share
(e) The Company shall take such steps as may be reasonably
requested by any party hereto to cause dispositions of Company
equity securities (including derivative securities) pursuant to
the Transactions by each individual who is a director or officer
of the Company to be exempt under
Rule 16b-3
promulgated under the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder
(the
Exchange Act
) in accordance with that
certain No-Action Letter dated January 12, 1999 issued by
the Securities and Exchange Commission (the SEC)
regarding such matters. Parent shall take such steps as may be
reasonably requested by any party hereto to cause the receipt of
Parent equity securities (including derivative securities)
pursuant to the Transactions by each individual who is a
director or officer of the Company to be exempt under
Rule 16b-3
promulgated under the Exchange Act in accordance with that
certain No-Action Letter dated January 12, 1999 issued by
the SEC regarding such matters
Section 2.4
Treatment
of Warrants.
(a) Parent acknowledges that the consummation of the Merger
will constitute a Change of Control, as such term is
defined in those certain outstanding warrants to purchase
Company Common Stock issued under the Purchase Agreement dated
as of November 21, 2005 (the
Company
Warrants
). Accordingly, at the Effective Time, each
Company Warrant that is outstanding and unexercised immediately
prior to the Effective Time shall cease to represent a right to
acquire shares of Company Common Stock and, in accordance with
Section 3 of such Warrants, shall be assumed by Parent and
converted automatically into a warrant of Parent (a
Converted Warrant
) pursuant to which each
holder thereof will have the right to receive, upon exercise of
such Converted Warrant at any time following the Effective Time
but prior to the expiration date thereof, the Common Stock
Merger Consideration which the holder thereof would have been
entitled to receive upon the Effective Time had such Company
Warrant been exercised for Company Common Stock immediately
prior to the Effective Time.
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(b) As soon as reasonably practicable after the Effective
Time, Parent or the Surviving Corporation shall deliver to each
holder of a Converted Warrant an appropriate notice evidencing
the foregoing assumption of the Company Warrant by Parent, and
Parent shall take all corporate action necessary to reserve for
issuance a sufficient number of shares of Parent Common Stock
for delivery upon the exercise of the Converted Warrants,
including the authorization for listing of such shares on the
applicable national securities exchange.
Section 2.5
Withholding
Taxes
. Parent, the Surviving Corporation and the
Exchange Agent shall be entitled to deduct and withhold from the
consideration otherwise payable pursuant to this Agreement such
amounts as shall be required to be deducted or withheld with
respect to the making of such payment under the Code, or under
any provision of state, local or foreign tax law. To the extent
that amounts are so deducted and withheld, such amounts shall be
treated for all purposes under this Agreement as having been
paid to the Person in respect of which such deduction and
withholding was made.
Section 2.6
Adjustments
. If
during the period between the date of this Agreement and the
Effective Time, any change in the outstanding shares of Company
Common Stock, Series B Preferred Stock or Parent Common
Stock shall occur by reason of any reclassification,
recapitalization, stock split or combination, exchange or
readjustment of shares, or any similar transaction, or any stock
dividend thereon with a record date during such period, the
Merger Consideration, including the Exchange Ratio and any other
similarly dependent items, as the case may be, shall be
appropriately adjusted to reflect such change to afford the
holders of shares of Company Common Stock and Series B
Preferred Stock the same economic effect as contemplated by this
Agreement prior to such event.
ARTICLE III.
Representations
and Warranties of the Company
Except (a) as set forth in the letter (each section of
which qualifies the correspondingly numbered representation and
warranty to the extent expressly specified therein and such
other representations and warranties to the extent a matter in
such section of the disclosure schedule is disclosed in such a
way as to make its relevance to the information called for by
such other representation and warranty readily apparent) dated
as of the date hereof and addressed to Parent from the Company
and delivered to Parent simultaneously with the execution of
this Agreement (the
Company Disclosure
Schedule
), and (b) as disclosed in any Filed
Company SEC Documents filed by the Company with the SEC on or
after December 31, 2008 (to the extent a particular
disclosure in a Filed Company SEC Document is disclosed in such
a way as to make its relevance to the information called for by
any representation and warranty contained herein readily
apparent, and excluding any exhibits thereto and any risk factor
disclosures or other cautionary, predictive or forward-looking
disclosures contained therein), the Company represents and
warrants to Parent and Merger Sub that:
Section 3.1
Organization,
Standing and Corporate Power
.
(a) The Company is a corporation duly organized, validly
existing and in good standing under the Laws of the State of
Delaware and has all requisite corporate power and authority
necessary to own or lease all of its properties and assets and
to carry on its business as it is now being conducted and as
currently proposed by its management to be conducted. Each of
the Companys Subsidiaries is duly organized, validly
existing and, to the extent applicable in such jurisdiction, in
good standing under the Laws of the jurisdiction in which it is
incorporated or otherwise organized and has all requisite
corporate power and authority necessary to own or lease all of
its properties and assets and to carry on its business as it is
now being conducted and as currently proposed by its management
to be conducted. Each of the Company and its Subsidiaries is
duly licensed or qualified to do business and, to the extent
applicable in such jurisdiction, is in good standing in each
jurisdiction in which the nature of the business conducted by it
or the character or location of the properties and assets owned
or leased by it makes such licensing or qualification necessary,
except where the failure to be so licensed, qualified or in good
standing, individually or in the aggregate, has not had and
would not reasonably be expected to have a Company Material
Adverse Effect.
(b) Section 3.1(b) of the Company Disclosure Schedule
lists all Subsidiaries of the Company together with the
jurisdiction of organization of each such Subsidiary. All of the
outstanding shares of capital stock of, or other equity
interests in, each Subsidiary of the Company have been duly
authorized and validly issued and are fully paid,
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nonassessable and were not issued in violation of any preemptive
rights, purchase option, call or right of first refusal or
similar rights. All of the outstanding shares of capital stock
of, or other equity interests in, each Subsidiary of the Company
are owned directly or indirectly by the Company and are free and
clear of all liens, pledges, charges, mortgages, encumbrances,
adverse rights or claims and security interests of any kind or
nature whatsoever (including any restriction on the right to
vote or transfer the same, except for such transfer restrictions
of general applicability as may be provided under the Securities
Act of 1933, as amended, and the rules and regulations
promulgated thereunder (the
Securities Act
),
and the blue sky laws of the various States of the
United States or any foreign equivalent of any thereof)
(collectively,
Liens
). The Company does not
own, directly or indirectly, any capital stock, voting
securities or equity securities or similar interests, or any
interest convertible for an equity security or similar interest,
in any Person that is not a Subsidiary of the Company.
(c) The Company has made available to Parent complete and
correct copies of its certificate of incorporation and bylaws
(the
Company Charter Documents
), in each case
as amended to the date of this Agreement, and all such Company
Charter Documents and the articles of incorporation and bylaws
(or comparable organizational documents) of each of the
Companys Subsidiaries (the
Subsidiary
Documents
). The Company Charter Documents and the
Subsidiary Documents are in full force and effect and neither
the Company nor any of its Subsidiaries is in violation of any
of their respective provisions. The Company has made available
to Parent and its representatives correct and complete copies of
the minutes (or, in the case of minutes that have not yet been
finalized, drafts thereof) of all meetings of stockholders, the
Board of Directors and each committee of the Board of Directors
of the Company and each of its Significant Subsidiaries held
since January 1, 2005.
Section 3.2
Capitalization
.
(a) The authorized capital stock of the Company consists of
(i) 5,000,000 shares of preferred stock, par value
$.0001 per share, of the Company (
Company Preferred
Stock
), of which (A) 2,000,000 shares have
been designated as Series A junior participating preferred
stock (
Series A Preferred Stock
), and
(B) 150,000 have been designated as Series B Preferred
Stock and (ii) 2,000,000,000 shares of Company Common
Stock. At the close of business on October 30, 2009 (the
Measurement Date
),
(i) 110,658 shares of Series B Preferred Stock
were issued and outstanding (no other shares of Company
Preferred Stock being outstanding),
(ii) 22,784,906 shares of Company Common Stock were
issued and outstanding (no shares of Company Common Stock were
held by the Company in its treasury),
(iii) 2,000,000 shares of Series A Preferred
Stock were reserved for issuance upon exercise of the rights to
purchase such shares (the
Company Rights
)
issued pursuant to the Rights Agreement dated as of
January 17, 2002, between the Company and Mellon Investor
Services, LLC (the
Company Rights Agreement
),
(iv) 7,483,448 shares of Company Common Stock were
reserved for issuance under the Company Stock Plans (of which
2,425,514 shares of Company Common Stock were subject to
outstanding Options and 1,115,478 shares of Company Common
Stock were subject to outstanding RSUs,
(v) 484,889 shares of Company Common Stock were
reserved for issuance under the Warrants, and
(vi) 4,780,043 shares of Company Common Stock were
reserved for issuance upon conversion of the Series B
Preferred Stock. Of the issued and outstanding shares of Company
Common Stock, 53,710 shares were, as of the Measurement
Date, restricted stock granted under the restricted stock
agreements listed on Section 3.2(a) of the Company
Disclosure Schedule. All outstanding shares of Company Common
Stock have been duly authorized and validly issued and are fully
paid, nonassessable and free of preemptive rights. No Company
Common Stock or Series B Preferred Stock is held by any of
the Subsidiaries of the Company. Included in Section 3.2(a)
of the Company Disclosure Schedule is a correct and complete
list, as of the Measurement Date, of (a) all Options
granted under the Company Stock Plans or otherwise, and, for
each such Option, (1) the number of shares of Company
Common Stock subject thereto and (2) the exercise price
thereof, (b) all RSUs granted under the Company Stock Plans
or otherwise, and, for each such RSU, the number of shares of
Company Common Stock subject thereto and (c) all Warrants
and, for each such Warrant, (1) the number of shares of
Company Common Stock subject thereto and (2) the exercise
price thereof. All Options, RSUs and restricted stock awards
have been issued pursuant to the standard forms of award
agreements made available to Parent. Since the Measurement Date,
the Company has not issued any shares of its capital stock,
voting securities or equity interests, or any securities
convertible into or exchangeable or exercisable for any shares
of its capital stock, voting securities or equity interests,
other than (x) pursuant to the exercise of outstanding
Options, (y) upon vesting of RSUs or restricted stock
referred to above in this Section 3.2(a), or
(z) dividends on the shares of Series B Preferred
Stock paid in shares of Series B Preferred Stock as
contemplated in Section 5.2(a)(i)(C). Except (A) as
set forth
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above in this Section 3.2(a) or (B) as otherwise
expressly permitted by Section 5.2(a) hereof, as of the
date of this Agreement there are not, and as of the Effective
Time there will not be, any shares of capital stock, voting
securities or equity interests of the Company issued and
outstanding or any subscriptions, options, warrants, calls,
convertible or exchangeable securities, rights, commitments or
agreements of any character providing for the issuance of any
shares of capital stock, voting securities or equity interests
of the Company, including any representing the right to purchase
or otherwise receive any Company Common Stock.
(b) Except as referred to in Section 3.2(a),
(i) none of the Company or any of its Subsidiaries has
issued or is bound by any outstanding subscriptions, options,
warrants, calls, convertible or exchangeable securities, rights,
commitments or agreements of any character providing for the
issuance or disposition of any shares of capital stock, voting
securities or equity interests of any Subsidiary of the Company
and (ii) there are no outstanding obligations, commitments
or arrangements, contingent or otherwise, of the Company or any
of its Subsidiaries to repurchase, redeem or otherwise acquire
any shares of capital stock, voting securities or equity
interests (or any options, warrants or other rights to acquire
any shares of capital stock, voting securities or equity
interests) of the Company or any of its Subsidiaries or to
provide funds to the Company or any Subsidiary of the Company or
to make any investment (in the form of a loan, capital
contribution or otherwise).
Section 3.3
Authority;
Noncontravention; Voting Requirements
.
(a) The Company has all necessary corporate power and
authority to execute and deliver this Agreement and, subject to
obtaining the Company Stockholder Approval, to perform its
obligations hereunder and to consummate the Transactions. The
execution, delivery and performance by the Company of this
Agreement, and the consummation by it of the Transactions, have
been duly authorized and approved by its Board of Directors, and
except for obtaining the Company Stockholder Approval, no other
corporate action on the part of the Company is necessary to
authorize the execution, delivery and performance by the Company
of this Agreement and the consummation by it of the
Transactions. This Agreement has been duly executed and
delivered by the Company and, assuming due authorization,
execution and delivery hereof by the other parties hereto,
constitutes a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its
terms, except that such enforceability (i) may be limited
by bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and other similar laws of general application
affecting or relating to the enforcement of creditors
rights generally and (ii) is subject to general principles
of equity, whether considered in a proceeding at law or in
equity (collectively, the
Bankruptcy and Equity
Exception
).
(b) The Companys Board of Directors, at a meeting
duly called and held, has (i) approved this Agreement and
adopted, approved and declared advisable the Transactions,
including this Agreement and the Merger, and (ii) resolved
to recommend that stockholders of the Company adopt this
Agreement (the
Company Board Recommendation
)
and directed that such matter be submitted for consideration of
the stockholders of the Company at the Company Stockholders
Meeting.
(c) Except as set forth on Schedule 3.3(c) of the
Company Disclosure Schedule, neither the execution and delivery
of this Agreement by the Company nor the consummation by the
Company of the Transactions, nor compliance by the Company with
any of the terms or provisions hereof, will (i) conflict
with or violate any provision of the Company Charter Documents
or any of the Subsidiary Documents, (ii) assuming that the
authorizations, consents and approvals referred to in
Section 3.4 and the Company Stockholder Approval are
obtained and the filings referred to in Section 3.4 are
made, violate any Law, judgment, writ or injunction of any
Governmental Authority applicable to the Company or any of its
Subsidiaries or any of their respective properties or assets,
(iii) require any consent, approval or other authorization
of, or filing with or notification to any person under,
materially violate or conflict with, result in the loss of any
material benefit under, constitute a material default (or an
event which, with notice or lapse of time, or both, would
constitute a material default) under, result in the termination
or revocation of or a right of termination or cancellation
under, or accelerate the performance required by, the Company or
any of its Subsidiaries under, any of the terms, conditions or
provisions of any loan or credit agreement, debenture, note,
bond, mortgage, indenture, deed of trust, license, lease,
contract or other agreement, instrument or obligation (each, a
Contract
) to which the Company or any of its
Subsidiaries is a party, or by which they or any of their
respective properties or assets may be bound or affected, that
is a Company Material Contract or any material Permit, or
(iv) result in the creation of any Lien upon any of the
respective properties or assets of the
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Company or any of its Subsidiaries under, any Contract to which
the Company or any of its Subsidiaries is a party, or by which
they or any of their respective properties or assets may be
bound or affected, or any Permit.
(d) The affirmative vote (in person or by proxy) of the
holders of a majority of the outstanding shares of Company
Common Stock and the Series B Preferred Stock (voting on an
as-converted basis), voting together as a single class, at the
Company Stockholders Meeting or any adjournment or postponement
thereof in favor of the adoption of this Agreement (the
Company Stockholder Approval
) is the only
vote or approval of the holders of any class or series of
capital stock of the Company or any of its Subsidiaries which is
necessary to adopt this Agreement and approve the Transactions.
(e) There are no voting trusts, proxies or similar
agreements, arrangements or commitments to which the Company or
any of its Subsidiaries is a party or of which the Company has
Knowledge with respect to the voting of any shares of capital
stock of the Company or any of its Subsidiaries, except for the
Company Voting Agreements. There are no bonds, debentures, notes
or other instruments of indebtedness of the Company or any of
its Subsidiaries that have the right to vote, or that are
convertible or exchangeable into or exercisable for securities
or other rights having the right to vote, on any matters on
which stockholders of the Company may vote.
Section 3.4
Governmental
Approvals
. Except for (a) the filing with
the SEC of the Registration Statement, the Proxy
Statement/Prospectus and other filings required under, and
compliance with other applicable requirements of, the Exchange
Act, and the rules of the NASDAQ Stock Market, (b) the
filing of the Certificate of Merger with the Secretary of State
of the State of Delaware pursuant to the DGCL, and
(c) filings required under, and compliance with other
applicable requirements of, the HSR Act, the Sherman Act, as
amended, the Clayton Act, as amended, the Federal Trade
Commission Act, as amended, and all other applicable
U.S. or
non-U.S. Laws
intended to prohibit, restrict or regulate actions or
transactions having the purpose or effect of monopolization,
restraint of trade, substantial lessening of, or harm to,
competition or effectuating foreign investment (collectively,
Competition Laws
), no consents or approvals
of, or filings, declarations or registrations with, any
Governmental Authority are necessary for the execution, delivery
and performance of this Agreement by the Company and the
consummation by the Company of the Transactions, other than such
other consents, approvals, filings, declarations or
registrations that, if not obtained, made or given, would not,
individually or in the aggregate, reasonably be expected to have
a Company Material Adverse Effect.
Section 3.5
Company
SEC Documents; Undisclosed Liabilities
.
(a) The Company has filed and furnished all required
reports, schedules, forms, prospectuses, and registration, proxy
and other statements with the SEC since January 1, 2005
(collectively, and in each case including all exhibits,
schedules and amendments thereto and documents incorporated by
reference therein, the
Company SEC
Documents
). None of the Companys Subsidiaries is
required to file periodic reports with the SEC pursuant to the
Exchange Act. Except to the extent that information contained in
any Company SEC Document has been revised or superseded by a
later-filed Company SEC Document (provided, in the case of
Company SEC Documents filed prior to the date of this Agreement,
the later-filed Company SEC Document was filed or furnished and
made publicly available prior to the date of this Agreement)
(i) as of their respective effective dates (in the case of
Company SEC Documents that are registration statements filed
pursuant to the requirements of the Securities Act),
(ii) as of their respective SEC filing dates (in the case
of all other Company SEC Documents), the Company SEC Documents
complied in all material respects with the requirements of the
Exchange Act and the Securities Act, as the case may be,
applicable to such Company SEC Documents, and (iii) none of
the Company SEC Documents as of such respective dates contained
any untrue statement of a material fact or omitted to state a
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. To the
Knowledge of the Company, no investigation by the SEC with
respect to the Company or any of its Subsidiaries is pending or
threatened.
(b) Except to the extent that financial statements
contained in any Company SEC Document has been revised or
superseded by a later-filed Company SEC Document (provided, in
the case of Company SEC Documents filed prior to the date of
this Agreement, the later-filed Company SEC Document was filed
or furnished and made publicly available prior to the date of
this Agreement), at the time they were filed with the SEC, the
consolidated financial statements of the Company included in the
Company SEC Documents complied as to form in all material
respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect
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thereto as then in effect, had been prepared in accordance with
GAAP (except, in the case of unaudited quarterly statements, as
indicated in the notes thereto) applied on a consistent basis
during the periods involved (except as may be indicated in the
notes thereto) and fairly presented the consolidated financial
position of the Company and its consolidated Subsidiaries as of
the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended (subject,
in the case of unaudited quarterly statements, to normal
adjustments, none of which has been or will be, individually or
in the aggregate, material to the Company and its Subsidiaries,
taken as a whole).
(c) The Company has established and maintains
(i) disclosure controls and procedures (as such term is
defined in
Rule 13a-15(e)
and
Rule 15d-15(e)
under the Exchange Act) that are reasonably designed to ensure
that all information (both financial and non-financial) required
to be disclosed by the Company in the reports that it files or
submits under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the
rules and forms of the SEC, and that all such information is
accumulated and communicated to the Companys management as
appropriate to allow timely decisions regarding required
disclosure and to make the certifications of the chief executive
officer and chief financial officer of the Company required
under the Exchange Act with respect to such reports and
(ii) internal controls over financial reporting (as such
term is defined in
Rule 13a-15(f)
and
Rule 15d-15(f)
under the Exchange Act) that are reasonably designed to provide
assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in
accordance with GAAP. The principal executive officer and the
principal financial officer of the Company have timely made all
certifications required by the Sarbanes-Oxley Act of 2002 and
any rules and regulations promulgated by the SEC thereunder
(
SOX
). All of the statements contained in
such certifications were complete and correct as of the dates
thereof. As of the date of the Companys most recent Annual
Report on
Form 10-K,
the Companys principal executive officer and its principal
financial officer have disclosed, based on their evaluation at
that time of internal control over financial reporting, to the
Companys auditors and the audit committee of the Board of
Directors of the Company (x) all significant deficiencies
and material weaknesses (as such terms are defined in PCAOB
Auditing Standard No. 2) in the design or operation of
internal control over financial reporting which are reasonably
likely to adversely affect the Companys ability to record,
process, summarize and report financial data and (y) 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. Except
as disclosed on Section 3.5(c) of the Company Disclosure
Schedule, the Company has not identified any significant
deficiencies or material weaknesses in internal controls which
have not been subsequently remediated. The Company is not aware
of any facts or circumstances that would prevent its chief
executive officer and chief financial officer from giving the
certifications and attestations required pursuant to the rules
and regulations adopted pursuant to Section 404 of SOX,
without qualification, when next due.
(d) Neither the Company nor any of its Subsidiaries has any
indebtedness, liabilities or obligations of any nature (whether
accrued, absolute, contingent or otherwise, and whether known or
unknown) required, if known, to be reflected or reserved against
on a consolidated balance sheet of the Company prepared in
accordance with GAAP or the notes thereto, except liabilities
(i) as and to the extent set forth on the unaudited balance
sheet of the Company and its Subsidiaries as of
September 30, 2009 (the
Balance Sheet
Date
) included in the Companys Quarterly Report
on
Form 10-Q
for the quarter ended as of such date (including the notes
thereto) or as otherwise set forth in the consolidated financial
statements of the Company included in the Company SEC Documents
filed by the Company and publicly available prior to the date of
this Agreement (the
Filed Company SEC
Documents
), (ii) incurred after the Balance Sheet
Date in the ordinary course of business consistent with past
practice, (iii) incurred after the Balance Sheet Date in
the ordinary course of business under, and in compliance with,
executory Contracts to which the Company or any of its
Subsidiaries is a party or otherwise bound, (iv) incurred
after the date of this Agreement and permitted under
Section 5.2 (a) or (v) with respect to Taxes,
which are the subject of Section 3.10.
Section 3.6
Absence
of Certain Changes or Events
. Between the Balance
Sheet Date and the date of this Agreement, there have not been
any events, changes, occurrences or state of facts that,
individually or in the aggregate, have had or would reasonably
be expected to have a Company Material Adverse Effect. Between
the Balance Sheet Date and the date of this Agreement,
(a) the Company and its Subsidiaries have carried on and
operated their respective businesses in all material respects in
the ordinary course of business consistent with past practice
and (b) neither the Company nor any of its Subsidiaries has
taken any action described in Section 5.2(a)
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hereof that if taken after the date of this Agreement and prior
to the Effective Time without the prior written consent of
Parent would violate such provision. Without limiting the
foregoing, between the Balance Sheet Date and the date of this
Agreement there has not occurred any damage, destruction or loss
(whether or not covered by insurance) of any material asset of
the Company or any of its Subsidiaries which materially affects
the use thereof.
Section 3.7
Legal
Proceedings
. Except with respect to Taxes, which
are the subject of Section 3.10, as of the date of this
Agreement, there is no pending or, to the Knowledge of the
Company, threatened, material legal, administrative, arbitral or
other proceeding, claim, suit or action against the Company or
any of its Subsidiaries, or, to the Knowledge of the Company,
Governmental Investigation, nor is there any injunction, order,
judgment, ruling or decree imposed (or, to the Knowledge of the
Company, threatened to be imposed) upon the Company, any of its
Subsidiaries or the assets of the Company or any of its
Subsidiaries, by or before any Governmental Authority that as of
the date of this Agreement, (a) has had or is reasonably
likely to result in the payment of money in an amount in excess
of $100,000 individually or $250,000 in the aggregate,
(b) has had or would reasonably be expected to have a
Company Material Adverse Effect, nor is there any judgment
outstanding against the Company or any of its Subsidiaries that,
as of the date hereof, (y) is reasonably likely to result
in the payment of money in excess of $100,000 individually or
$250,000 in the aggregate or (z) would reasonably be
expected to have a Company Material Adverse Effect.
Section 3.8
Compliance
With Laws; Permits
.
(a) Except with respect to Taxes, ERISA and Environmental
Laws, which are the subjects of Sections 3.10, 3.11 and
3.12, respectively, the Company and its Subsidiaries are in
compliance in all material respects with all laws (including
common law), statutes, rules, codes, executive orders,
ordinances, regulations, requirements, administrative rulings or
judgments of any Governmental Authority or any order, writ,
injunction or decree, whether preliminary or final, entered by
any court, arbitrator or other Governmental Authority
(collectively,
Laws
) applicable to the
Company or any of its Subsidiaries or any of their properties or
other assets or any of their businesses or operations, except
for failures to be in compliance that would not reasonably be
expected to have a Company Material Adverse Effect. Since
January 1, 2007, neither the Company nor any of its
Subsidiaries has received written notice to the effect that a
Governmental Authority claimed or alleged that the Company or
any of its Subsidiaries was not in compliance in a material
respect with any Law applicable to the Company and any of its
Subsidiaries, any of their material properties or other assets
or any of their business or operations. To the Knowledge of the
Company, neither the Company nor any of its Subsidiaries, nor
any officer, director or employee of the Company or any such
Subsidiary, is under investigation by any Governmental Authority
related to the conduct of the Companys or any such
Subsidiarys business, the results of which investigation
would or would reasonably be expected to result in a Company
Material Adverse Effect.
(b) The Company and each of its Subsidiaries hold all
material licenses, franchises, permits, certificates, approvals
and authorizations from Governmental Authorities, or required by
Governmental Authorities (collectively,
Permits
) to be obtained, necessary for the
conduct of their respective businesses, including the
manufacture, license and sale of their respective products and
services. The Company and its Subsidiaries are in compliance in
all material respects with the terms of all such Permits, and
all such Permits are in full force and effect, except where such
suspension or cancellation would not be reasonably expected to
constitute a Company Material Adverse Effect.
(c) No event or condition has occurred or exists which
would result in a violation of, breach, default or loss of a
benefit under, or acceleration of an obligation of the Company
or any of its Subsidiaries under, any Permit (in each case, with
or without notice or lapse of time or both), except for
violations, breaches, defaults, losses or accelerations that
would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect. No such
suspension, cancellation, violation, breach, default, loss of a
benefit, or acceleration of an obligation will result from the
Transactions, except for violations, breaches, defaults, losses
or accelerations that would not be reasonably be expected to
result in a Company Material Adverse Effect.
Section 3.9
Information
Supplied
. None of the information supplied or to
be supplied by or on behalf of the Company for inclusion or
incorporation by reference in (i) the Registration
Statement will, at the time the Registration Statement is filed
with the SEC, at any time it is amended or supplemented, and at
the time it becomes effective under the Securities Act, contain
any untrue statement of a material fact or omit to state any
material fact
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required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which
they are made, not misleading or (ii) the Proxy
Statement/Prospectus will, at the date it (and any amendment or
supplement thereto) is first mailed to the stockholders of the
Company and, subject to Section 5.15, the stockholders of
Parent and at the time of the Company Stockholders Meeting and,
subject to Section 5.15, the Parent Stockholders Meeting,
contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the
circumstances under which they are made, not misleading, except
that no representation or warranty is made by the Company with
respect to statements made or incorporated by reference therein
based on information supplied by or on behalf of Parent or
Merger Sub. The information contained in the Proxy
Statement/Prospectus relating to the Company and the Company
Stockholders Meeting will comply as to form in all material
respects with the requirements of the Exchange Act.
Section 3.10
Tax
Matters
.
(a) Each of the Company and its Subsidiaries has timely
filed, or has caused to be timely filed on its behalf (taking
into account an extension of time within which to file), all Tax
Returns required to be filed by it, and all such Tax Returns are
correct and complete in all material respects, except in each
case where such failures to so prepare or file Tax Returns, or
the failure of such filed Tax Returns to be complete and
accurate, individually or in the aggregate, would not reasonably
be expected to have a Company Material Adverse Effect. All Taxes
of the Company and its Subsidiaries due and owing have been
timely paid (whether or not shown to be due on such Tax
Returns), except (i) with respect to matters contested in
good faith by appropriate proceedings and for which reserves
have been established in accordance with GAAP and
(ii) where such failure to so pay or remit, individually or
in the aggregate, would not reasonably be expected to have a
Company Material Adverse Effect.
(b) The most recent financial statements contained in the
Filed Company SEC Documents reflect reserves in accordance with
GAAP for all Taxes payable by the Company and its Subsidiaries
for all taxable periods and portions thereof through the date of
such financial statements.
(c) Neither the Company nor any of its Subsidiaries has
constituted either a distributing corporation or a
controlled corporation (within the meaning of
Section 355(a)(1)(A) of the Code) in a distribution of
stock intended to qualify for tax-free treatment under
Section 355 of the Code during the preceding two taxable
years.
(d) As of the date of this Agreement, no audit or other
administrative or court proceedings are pending or, to the
Knowledge of the Company, threatened in writing by any
Governmental Authority with respect to Taxes of the Company or
any of its Subsidiaries.
(e) Neither the Company nor, to the Knowledge of the
Company, any of its Subsidiaries has ever been a member of an
affiliated group of corporations, within the meaning of
Section 1504 of the Code (or any similar provision of
state, local or foreign law), other than the affiliated group of
which the Company is the common parent.
(f) There are no outstanding agreements extending or
waiving the statutory period of limitations applicable to any
claim for, or the period for the collection, assessment or
reassessment of, Taxes due from the Company or any of its
Subsidiaries for any taxable period and no request for any such
waiver or extension is currently pending.
(g) Neither the Company nor any of its Subsidiaries is a
party to any Tax sharing or similar Tax agreement (other than an
agreement exclusively between or among the Company and its
Subsidiaries) pursuant to which it will have any obligation to
make any payments with respect to Taxes after the Closing Date.
(h) Neither the Company nor any of its Subsidiaries has
participated in any tax shelter within the meaning
of Section 6662(d)(2)(C)(iii) of the Code or any tax
shelter which is subject to registration pursuant to
Section 6111 of the Code.
(i) The Company and its Subsidiaries have withheld all
Taxes required to have been withheld in connection with amounts
paid or owing to any employee, independent contractor, creditor,
stockholder or other third party and, to the extent due and
payable, have paid such amounts to the appropriate taxing
authority, except for such Taxes as to which the failure to pay
or withhold would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect.
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(j) Neither the Company nor any of its Subsidiaries is
subject to a disallowance of deduction under section 162(m)
of the Code under any program, arrangement or understanding
currently in effect.
(k) No closing agreement pursuant to section 7121 of
the Code (or any similar provision of state, local or foreign
law) has been entered into by or with respect to Company or any
of its Subsidiaries.
(l) Neither the Company nor any of its Subsidiaries has
agreed to, or is required to make, any adjustment under
Section 481(a) of the Code and, to the Knowledge of the
Company, no taxing authority has proposed in writing any such
adjustment or change in accounting method.
(m) There are no liens for Taxes on any of the assets of
the Company or any of its Subsidiaries, other than liens for
Taxes not yet due and payable.
(n) As of the date hereof, none of the Company or any of
its Subsidiaries has taken any action or knows of any fact,
agreement, plan or other circumstance that would reasonably be
expected to prevent or preclude the Merger, if effected as
contemplated by Section 5.17, from qualifying as a
reorganization described in Section 368(a) of
the Code.
(o) For purposes of this Agreement:
(i)
Taxes
shall mean (a) all
federal, state, local or foreign taxes, charges, fees, imposts,
levies or other assessments, including all net income, gross
receipts, capital, sales, use, ad valorem, value added,
transfer, franchise, profits, inventory, capital stock, license,
withholding, payroll, employment, social security, unemployment,
excise, severance, stamp, occupation and property taxes, customs
duties and similar fees, assessments and charges, (b) all
interest, penalties, fines, additions to tax or additional
amounts imposed by any taxing authority in connection with any
item described in clauses (a) or (b), and (c) any
amounts in respect of any items described in clauses (a)
and/or (b) payable by reason of contract, assumption,
transferee liability, operation of Law, Treasury
Regulation Section 1.1502-6(a)
(or any predecessor or successor thereof of any analogous or
similar provision under Law) or otherwise, and
(ii)
Tax Returns
shall mean any return,
report, claim for refund, estimate, information return or
statement, election or other similar document, including any
schedule or attachment thereto, and including any amendment
thereof, required by Tax Law to be filed with any Governmental
Authority with respect to Taxes.
Section 3.11
Employee
Benefits and Labor Matters
.
(a) Section 3.11(a) of the Company Disclosure Schedule
sets forth a complete and correct list, separately with respect
to each country in which the Company or any of its Subsidiaries
has employees, of: (i) all employee benefit
plans (as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended
(
ERISA
), and without regard to whether ERISA
applies thereto), and (ii) all other employee benefit
plans, agreements, policies or arrangements, including
employment, consulting or other compensation agreements,
collective bargaining agreements and all plans, agreements,
policies or arrangements providing for bonus or other incentive
compensation, equity or equity-based compensation, retirement,
deferred compensation, retention or change in control rights or
benefits, termination or severance benefits, stock purchase,
sick leave, vacation pay, salary continuation, hospitalization,
medical insurance, life insurance, fringe benefits or other
compensation, or educational assistance, in each case to which
the Company or any of its Subsidiaries has any obligation or
liability (contingent or otherwise) thereunder for current or
former directors or employees of the Company or any of its
Subsidiaries (the
Employees
) or any current
or former consultants to the Company or any of its Subsidiaries
(collectively, the
Company Plans
).
Section 3.11(a) of the Company Disclosure Schedule
indicates each Company Plan that is maintained outside the
jurisdiction of the United States, or covers any employee
residing or working outside the United States (any such Company
Plan, a
Foreign Benefit Plan
, any Company
Plan that is not a Foreign Benefit Plan being called a
Domestic Benefit Plan
).
(b) True, current and complete copies of the following
documents, with respect to each of the Company Plans, have been
made available to Parent by the Company, to the extent
applicable: (i) any plans, all amendments thereto and
related trust documents, insurance contracts or other funding
arrangements, and amendments thereto; (ii) for the most
recent two years, Forms 5500 and all schedules thereto and
the most recent actuarial report, if any; (iii) the most
recent IRS determination letter; (iv) the most recent
summary plan descriptions (together with any summary or
summaries of modifications thereto); (v) written
descriptions of all non-written material agreements relating to
the
A-15
Company Plans and (vi) all material correspondence to or
from any governmental Authority within the last three years.
(c) The Domestic Benefit Plans have been maintained, in all
material respects, in accordance with their terms and with all
applicable provisions of ERISA, the Code and other applicable
Laws, and neither the Company nor any of its Subsidiaries nor,
to the Knowledge of the Company, any party in
interest or disqualified person with respect
to the Domestic Benefit Plans has engaged in a material
non-exempt prohibited transaction within the meaning
of Section 4975 of the Code or Section 406 of ERISA.
No fiduciary has any material liability for breach of fiduciary
duty or any other failure to act or comply in connection with
the administration or investment of the assets of any Domestic
Benefit Plan;
provided
that this sentence is subject to
the Knowledge of the Company to the extent that any Domestic
Benefit Plan refers to a Plan fiduciary other than (i) the
Company, (ii) any Subsidiary, or (iii) or any of their
respective officers, employees and directors.
(d) Each Domestic Benefit Plan that is intended to qualify
under Section 401 of the Code is so qualified and
(ii) any trusts intended to be exempt from federal income
taxation under Section 501 of the Code are so exempt.
Nothing has occurred with respect to the operation of such
Domestic Benefit Plans that could cause the loss of such tax
favored treatment, qualification or exemption, or the imposition
of any material liability, penalty or Tax under ERISA, the Code
or other applicable Law that, if corrected under the Employee
Plans Compliance Resolution System, could reasonably be expected
to give rise to a material liability.
(e) No plan currently or ever in the past maintained,
sponsored, contributed to or required to be contributed to by
the Company, any of its Subsidiaries or any of Companys
ERISA Affiliates is or ever in the past was (i) a
multiemployer plan, as defined in Section 3(37)
of ERISA, (ii) a plan subject to Title IV of ERISA or
(iii) a plan subject to Section 412 of the Code. The
term
ERISA Affiliate
means any Person that,
together with the Company, would be deemed a single
employer within the meaning of Section 414(b), (c),
(m) or (o) of the Code.
(f) Except as set forth in Schedule 3.11(f) of the
Company Disclosure Schedule, no Company Plan provides for the
payment of any severance or retention payment (or the settlement
of any award) on account of the severance of any service
provider (within the meaning of Section 409A of the
Code) such that the payment (or settlement) would be treated as
deferred compensation subject to Section 409A of the Code.
Neither the Company nor any of its Subsidiaries is a party to
any nonqualified deferred compensation plan subject to
Section 409A of the Code that would subject any Person to
tax pursuant to Section 409A of the Code based upon a good
faith interpretation of all applicable regulations, notices and
regulatory guidance. The exercise price of each Company Option
is not less than the fair market value (within the meaning of
Section 409A of the Code) of the underlying stock on the
date the Company Option was granted.
(g) Except as would not reasonably be expected to give rise
to a material liability, (i) all contributions (including
all employer contributions and employee salary reduction
contributions) required to have been made under any of the
Domestic Benefit Plans (including workers compensation) have
been made or reflected on the most recent financial statements
included in the Filed Company SEC Documents and (ii) no
accumulated funding deficiencies exist in any of the Domestic
Benefit Plans subject to Section 412 of the Code.
(h) With respect to any Foreign Benefit Plans, (A) all
Foreign Benefit Plans have been established, maintained and
administered in compliance in all material respects with their
terms and all applicable statutes, laws, ordinances, rules,
orders, decrees, judgments, writs, and regulations of any
controlling Governmental Authority, (B) all Foreign Benefit
Plans that are required to be funded are fully funded, and with
respect to all other Foreign Benefit Plans, the most recent
financial statements contained in the Filed Company SEC
Documents reflect reserves therefor in accordance with GAAP and
(C) no material liability or obligation of the Company or
its Subsidiaries exists with respect to such Foreign Benefit
Plans.
(i) There are no pending actions or lawsuits which have
been asserted or instituted against the Company Plans, the
assets of any of the trusts under such plans or the sponsor or
administrator of any of the Company Plans, or against any
fiduciary of the Company Plans (other than routine benefit
claims), nor to the Knowledge of the Company, has any such
action or lawsuit been threatened, nor does the Company have any
Knowledge of facts that could form the basis for any such action
or lawsuit.
A-16
(j) None of the Domestic Benefit Plans provide for
post-employment life or health insurance, or other welfare
benefits coverage for any participant or any beneficiary of a
participant, except (i) as may be required under the
Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended (
COBRA
) or other similar law,
(ii) deferred compensation benefits accrued as liabilities
on the Companys financial statements and (iii) at the
expense of the participant or the participants beneficiary.
(k) Except as set forth in Sections 2.1 and 2.3 or
under a Contract listed on Schedule 3.11(k) of the Company
Disclosure Schedule, neither the execution and delivery of this
Agreement nor the consummation of the Transactions will
(i) result in any payment becoming due to any Employee,
(ii) increase any benefits otherwise payable under any
Company Plan or (iii) result in the acceleration of the
time of payment or vesting of any such benefits under any such
plan.
(l) Neither the execution and delivery of this Agreement
nor the consummation of the Transactions will (either alone or
in combination with another event that occurs at or prior to the
Effective Time) result in the payment of any amount that would,
individually or in combination with any other such payment,
reasonably be expected to constitute an excess parachute
payment, as defined in Section 280G(b)(1) of the Code.
(m) None of the Employees is represented in his or her
capacity as an employee of the Company or any of its
Subsidiaries by any labor organization or works council or
similar representative. Neither the Company nor any of its
Subsidiaries has recognized any labor organization, nor has any
labor organization been elected as the collective bargaining
agent of any Employees, nor has the Company or any of its
Subsidiaries entered into any collective bargaining agreement or
union contract recognizing any labor organization as the
bargaining agent of any Employees. The Company and its
Subsidiaries are in compliance in all material respects with all
Laws relating to the employment of labor, including all such
Laws relating to wages, hours, the Worker Adjustment and
Retraining Notification Act and any similar state or local
mass layoff or plant closing law
(
WARN
), collective bargaining,
discrimination, civil rights, safety and health, workers
compensation and the collection and payment of withholding
and/or
social security taxes and any similar tax.
Section 3.12
Environmental
Matters
. Except for such matters that,
individually or in the aggregate, would not reasonably be
expected to have a Company Material Adverse Effect:
(a) (i) each of the Company and its Subsidiaries is,
and has been, in compliance with all applicable Environmental
Laws, (ii) to the Knowledge of the Company, there is no
investigation, suit, claim, action or proceeding relating to or
arising under Environmental Laws that is pending or threatened
against or affecting the Company or any of its Subsidiaries or
any real property currently or, to the Knowledge of the Company,
formerly owned, operated or leased by the Company or its
Subsidiaries; (iii) neither the Company nor any of its
Subsidiaries has received any notice of or entered into or
assumed by Contract or operation of Law or otherwise, any
obligation, liability, order, settlement, judgment, injunction
or decree relating to or arising under Environmental Laws; and
(iv) to the Knowledge of the Company, no facts,
circumstances or conditions exist with respect to the Company or
any of its Subsidiaries or any property currently or formerly
owned, operated or leased by the Company or any of its
Subsidiaries or any property to or at which the Company or any
of its Subsidiaries transported or arranged for the disposal or
treatment of Hazardous Materials that would reasonably be likely
to result in the Company and its Subsidiaries incurring
Environmental Liabilities individually in the excess of $50,000
or in the aggregate in excess of $250,000.
(b) (i) The Company has obtained and currently
maintains all Permits necessary under Environmental Laws for
their operations as conducted on the date of this Agreement
(
Environmental Permits
), (ii) there is
no investigation known to the Company, nor any action pending
or, to the Knowledge of the Company, threatened against or
affecting the Company or any real property owned, operated or
leased by the Company to revoke such Environmental Permits, and
(iii) the Company has not received any written notice from
any Governmental Authority to the effect that there is lacking
any Environmental Permit required under Environmental Law for
the current use or operation of any property owned, operated or
leased by the Company.
(c) For purposes of this Agreement:
(i)
Environmental Laws
means all Laws
relating in any way to the environment, preservation or
reclamation of natural resources, the presence, management or
Release of, or exposure to, Hazardous
A-17
Materials, or to human health and safety, including the
Comprehensive Environmental Response, Compensation and Liability
Act (42 U.S.C. § 9601
et seq.
), the
Hazardous Materials Transportation Act (49 U.S.C.
§ 5101
et seq.
), the Resource Conservation and
Recovery Act (42 U.S.C. § 6901
et seq.
),
the Clean Water Act (33 U.S.C. § 1251
et
seq.
), the Clean Air Act (42 U.S.C. § 7401
et seq.
), the Safe Drinking Water Act (42 U.S.C.
§ 300f
et seq.
), the Toxic Substances Control
Act (15 U.S.C. § 2601
et seq.
), the
Federal Insecticide, Fungicide and Rodenticide Act
(7 U.S.C. § 136
et seq.
), and the
Occupational Safety and Health Act (29 U.S.C.
§ 651
et seq.
), each of their state and local
counterparts or equivalents, each of their foreign and
international equivalents, and any transfer of ownership
notification or approval statute (including the Industrial Site
Recovery Act (N.J. Stat. Ann. § 13:1K-6
et
seq.
), as each has been amended and the regulations
promulgated pursuant thereto.
(ii)
Environmental Liabilities
means,
with respect to any Person, all liabilities, obligations,
responsibilities, remedial actions, losses, damages, punitive
damages, consequential damages, treble damages, costs and
expenses (including any amounts paid in settlement, all
reasonable fees, disbursements and expenses of counsel, experts
and consultants and costs of investigation and feasibility
studies), fines, penalties, sanctions and interest incurred as a
result of any claim or demand by any other Person or in response
to any violation of Environmental Law, whether known or unknown,
accrued or contingent, whether based in contract, tort, implied
or express warranty, strict liability, criminal or civil
statute, to the extent based upon, related to, or arising under
or pursuant to any Environmental Law, environmental permit,
order or agreement with any Governmental Authority or other
Person, which relates to any environmental, health or safety
condition, violation of Environmental Law or a Release or
threatened Release of Hazardous Materials.
(iii)
Hazardous Materials
means any
material, substance or waste that is regulated, classified, or
otherwise characterized under or pursuant to any Environmental
Law as hazardous, toxic, a
pollutant, a contaminant,
radioactive or words of similar meaning or effect,
including petroleum and its by-products, asbestos,
polychlorinated biphenyls, radon, mold, urea formaldehyde
insulation, chlorofluorocarbons and all other ozone-depleting
substances.
(iv)
Release
means any spilling,
leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, dumping, disposing of or
migrating into or through the environment.
Section 3.13
Contracts
.
(a) Set forth in Section 3.13(a) of the Company
Disclosure Schedule is a list of each Contract that would be
required to be filed as an exhibit to a Registration Statement
on
Form S-1
under the Securities Act or an Annual Report on
Form 10-K
under the Exchange Act if such registration statement or report
was filed by the Company with the SEC on the date of this
Agreement and which has not previously been filed as an exhibit
to the Filed Company SEC Documents. Also set forth in
Section 3.13(a) of the Company Disclosure Schedule is a
list of each of the following to which the Company or any of its
Subsidiaries is a party which has not previously been filed as
an exhibit to the Filed Company SEC Documents any:
(i) Contract that contains a provision capable of being
invoked that (A) is not terminable for convenience upon
reasonable notice at no charge that purports to materially
limit, curtail, restrict the ability of the Company or any of
its existing or future Subsidiaries or Affiliates to compete in
any geographic area or line of business or restrict the Persons
with whom it and existing or future Subsidiaries or Affiliates
can compete or to whom it or its existing or future Subsidiaries
or Affiliates can sell products or deliver services, (B) is
not terminable for convenience upon reasonable notice at no
charge that purports to grant any exclusivity, right of first
refusal, right of first negotiation, most favored nation status
or similar rights that materially restrict the Company or any of
its Subsidiaries, or (C) imposes any liquidated damages or
penalty clauses on the Company or any of its Subsidiaries,
offsets from, or credits to, any other Person (other than
service level credits provided pursuant to agreements with
customers entered into in the ordinary course of business
consistent with past practice);
(ii) Contract with any director, officer or other Affiliate
of the Company other than Contracts under which the Company and
its Subsidiaries have no further liabilities or obligations and
no continuing rights;
A-18
(iii) loan or credit agreement, mortgage, indenture, note
or other Contract or instrument evidencing indebtedness for
borrowed money by the Company or any of its Subsidiaries or any
Contract or instrument pursuant to which indebtedness for
borrowed money may be incurred or is guaranteed by the Company
or any of its Subsidiaries or by which they may be obligated for
the liabilities of another person;
(iv) financial derivatives master agreement or confirmation
or other agreement evidencing financial hedging or similar
trading activities, other than Contracts relating to currency
hedges or derivatives entered into in the ordinary course of
business consistent with past practice;
(v) voting agreement;
(vi) except for Contracts listed in clauses (iii) and
(iv) of Section 3.3(c) of the Company Disclosure
Schedule, mortgage, pledge, security agreement, deed of trust or
other Contract granting a Lien on any material property or
assets of the Company or any of its Subsidiaries;
(vii) Contract with a supplier or provider of products or
services that has required payments by the Company or any of its
Subsidiaries of consideration (whether or not measured in cash)
in the fiscal year 2008 or that is reasonably likely, based on
the Companys past experience, to require such payment of
consideration in fiscal year 2009 (whether or not measured in
cash) of greater than $500,000 but excluding any Contract that
requires payment by the Company or any of its Subsidiaries on a
time and materials basis;
(viii) Contract with a top thirty (30) customers of
the Company measured by operating revenue received by the
Company and its Subsidiaries during the eighteen (18) month
period prior to the date hereof, including Contracts with any
such customer involving software license, maintenance
and/or
services;
(ix) Contract which makes up the top ten (10) services
agreement (excluding any fixed price services agreement) of the
Company measured by operating revenue received by the Company
and its Subsidiaries during the nine (9) month period ended
as of the Balance Sheet Date;
(x) Contract which makes up the top ten (10) fixed
price services agreement (excluding any services agreement
required to be listed pursuant to Section 3.13(a)(ix)) of
the Company and its Subsidiaries) of the Company measured by
operating revenue received by the Company and its Subsidiaries
during the nine (9) month period ended as of the Balance
Sheet Date;
(xi) Contract which makes up the top eighty-five percent
(85%) of all active subscription agreements for the
Companys Freight Matrix products measured by revenue
received by the Company and its Subsidiaries during the
twenty-one (21) month period ended as of the Balance Sheet
Date;
(xii) standstill or similar agreement
restricting the Company;
(xiii) agreement containing a provision capable of being
invoked which relates to (A) the granting to the Company or
any of its Subsidiaries of any license in or to any Intellectual
Property owned by a third party that is used in any current
standard or other product of the Company made generally
available by the Company or is otherwise material to the
Company, or (B) the granting by the Company or any of its
Subsidiaries of any license to a third party in or to any
Intellectual Property that are material to the Company, (except,
in the case of each of clause (A) and clause (B), for any
(1) licenses for commercial off-the-shelf software,
(2) licenses with terms of use or service posted on a web
site, (3) licenses for third party software generally
available to the public, and (4) non-negotiated licenses of
third party Intellectual Property that is embedded in equipment
or fixtures and are used by the Company or any of its
Subsidiaries for internal purposes only; and, in the case of
clause (B), non-exclusive licenses to customers of the Company
and its Subsidiaries in the normal and ordinary course of the
day-to-day business of the Company and its Subsidiaries
consistent with past practice);
(xiv) any agreement granting by the Company or any of its
Subsidiaries any license to a third party to use any source code
that is part of the Company Intellectual Property (except source
code escrow arrangements for the benefit of customers and
related agreements with customers of the Company and its
Subsidiaries in the normal and ordinary course of the day-to-day
business of the Company and its Subsidiaries consistent with
past practice;
A-19
(xv) any reseller, distribution, alliance, collaboration,
joint marketing or similar agreements that are material to the
Company and its Subsidiaries;
(xvi) Contract (1) providing for (or imposing any
material ongoing indemnification or other obligations of the
Company or any of its Subsidiaries in connection with) the
disposition or acquisition by the Company or any of its
Subsidiaries of (A) any corporation, partnership or other
entity or business or (B) any material amount of assets or
rights outside the ordinary course of business consistent with
past practice or (2) pursuant to which the Company or any
of its Subsidiaries has any material ownership interest in any
other person or other business enterprise, other than contracts
or agreements under which the Company and its Subsidiaries have
no further liabilities or obligations and no continuing rights;
(xvii) settlement agreement, other than (A) releases
immaterial in nature or amount entered into with former
employees or independent contractors of the Company in the
ordinary course of business consistent with past practice in
connection with the routine cessation of such employees or
independent contractors employment with the Company,
(B) settlement agreements for cash only (which has been
paid) and does not exceed $100,000 as to such settlement or
(C) settlement agreements entered into more than three
years prior to the date of this Agreement under which none of
the Company or its Subsidiaries have any continuing obligations,
liabilities, or rights (excluding releases); or
(xviii) commitment or agreement to enter into any of the
foregoing (the Contracts and other documents required to be
listed on Section 3.13(a) of the Company Disclosure
Schedule, together with any and all other Contracts of such type
entered into in accordance with Section 5.2(a) and the
Contracts filed as exhibits to the Filed Company SEC Documents,
each a
Company Material Contract
). The
Company has heretofore made available to Parent complete and
correct copies of each Company Material Contract in existence as
of the date of this Agreement, together with any and all
amendments and supplements thereto and material side
letters and similar documentation relating thereto.
(b) Each of the Company Material Contracts is valid,
binding and in full force and effect and is enforceable in
accordance with its terms by the Company and its Subsidiaries
party thereto, subject to the Bankruptcy and Equity Exception.
Neither the Company nor any of its Subsidiaries is in material
default under any Company Material Contract, nor does any
condition exist that, with notice or lapse of time or both,
would constitute a material default thereunder by the Company or
its Subsidiaries party thereto. To the Knowledge of the Company,
no other party to any Company Material Contract is in material
default thereunder, nor does any condition exist that with
notice or lapse of time or both would constitute a material
default by any such other party thereunder. Neither the Company
nor any of its Subsidiaries has received any written notice of
termination or cancellation under any Company Material Contract
or received any notice of breach or default under any Company
Material Contract which breach has not been cured.
Section 3.14
Title
to Properties
.
(a) The Company and its Subsidiaries (i) have good,
valid and marketable title to all properties and other assets
which are reflected on the most recent consolidated balance
sheet of the Company included in the Filed Company SEC Documents
as being owned by the Company or one of its Subsidiaries (or
acquired after the date thereof) and which are, individually or
in the aggregate, material to the Companys business or
financial condition on a consolidated basis (except properties
sold or otherwise disposed of since the date thereof in the
ordinary course of business consistent with past practice and
not in violation of this Agreement), free and clear of all Liens
except (x) statutory liens securing payments not yet due,
(y) security interests, mortgages and pledges that are
disclosed in the Filed Company SEC Documents that secure
indebtedness that is reflected in the most recent consolidated
financial statements of the Company included in the Filed
Company SEC Documents and (z) such other imperfections or
irregularities of title or other Liens that, individually or in
the aggregate, do not and would not reasonably be expected to
materially affect the use of the properties or assets subject
thereto or otherwise materially impair business operations as
presently conducted or as currently proposed by the
Companys management to be conducted, and (ii) have
good and valid leasehold interests (subject to customary
subordination provisions) in all real property leased or
subleased by them which are, individually or in the aggregate,
material to the Companys business or financial condition
on a consolidated basis. Each parcel of real property leased or
subleased by the Company and its Subsidiaries is listed on
Section 3.14(a) of the Company Disclosure Schedule.
A-20
(b) The tangible assets which are reflected on the most
recent consolidated balance sheet of the Company included in the
Filed Company SEC Documents as being owned by the Company or one
of its Subsidiaries (or acquired after the date of this
Agreement) are in good operating condition and repair (except
for normal wear and tear and those defects that are not
material) and have been maintained in accordance with reasonable
commercial practices.
Section 3.15
Intellectual
Property
.
(a) The Company and its Subsidiaries own, or are validly
licensed or otherwise have the valid right to use, all
Intellectual Property and other intellectual property rights and
computer programs that are material to the conduct of the
business of the Company and its Subsidiaries taken as a whole
(collectively,
Company Intellectual
Property
). Section 3.15(a) of the Company
Disclosure Schedule sets forth as of the date of this Agreement
a list of all registered Company Intellectual Property that is
the subject of a registration or application with any
Governmental Authority owned by, or filed in, the name of the
Company or any of its Subsidiaries (
Registered Company
Intellectual Property
), which list identifies the
jurisdiction in which such Registered Company Intellectual
Property was issued
and/or
where
the application or registration was filed and the date of
issuance, registration or application.
(b) No claims are pending or, to the Knowledge of the
Company, threatened that the Company or any of its Subsidiaries
is infringing or otherwise adversely affecting the rights of any
Person with regard to any Intellectual Property, nor, to the
Knowledge of the Company, are there any facts which could give
rise to any claim of infringement, unauthorized use,
misappropriation or violation of any Intellectual Property used
or owned by any Person against the Company or its Subsidiaries.
The conduct of the business of the Company and its Subsidiaries,
as currently conducted, does not infringe, violate or
misappropriate any Intellectual Property of any Person, other
than the rights of any Person under any Patents, and, to the
knowledge of the Company, the operation of the Companys
business as now conducted does not infringe any Patents of any
Person. The Company and its Subsidiaries are the sole and
exclusive owners (except for co-ownership rights set forth in
Section 3.15(h) of the Company Disclosure Schedule in
certain software jointly developed with or for customers or
other third parties in the ordinary course of the Companys
business consistent with past practice) of, or have a valid
right to use, sell and license, as the case may be, in each case
free and clear of any Liens to which the Company or any of its
Subsidiaries are subject or by which their respective properties
are subject, all Company Intellectual Property used, sold or
licensed by the Company and its Subsidiaries (free and clear of
any Liens with respect to any Company Intellectual Property
owned by Company and to the Knowledge of the Company, free and
clear of any Liens with respect to any Company Intellectual
Property licensed to the Company by another Person), as
applicable, in the business of the Company and its Subsidiaries
as presently conducted and as currently contemplated to be
conducted. The Company has not received written notice of any
judgment, order, writ, stipulation or decree, by which its
assets are bound, that (i) restrict in any manner the use,
transfer or licensing of any Company Intellectual Property or
(ii) affect the validity, use or enforceability of any
Company Intellectual Property owned by Company or to the
knowledge of the Company, any Company Intellectual Property that
is licensed to the Company.
(c) To the Knowledge of the Company, no third party is
infringing, violating, misusing or misappropriating any Company
Intellectual Property, and no such claims have been made against
a third party by the Company or any of its Subsidiaries.
(d) [Intentionally omitted.]
(e) Section 3.15(e) of the Company Disclosure Schedule
lists all Software that is distributed by the Company and its
Subsidiaries on the date hereof and that, to the Knowledge of
the Company, uses, incorporates or has embedded in it any
source, object or other software code subject to an open
source, copyleft or other similar types of
license terms (each, an
Open Source License
)
(including, without limitation, any GNU General Public License,
Library General Public License, Lesser General Public License,
Mozilla License, Berkeley Software Distribution License, Open
Source Initiative License, MIT, Apache or public domain
licenses, and the like) (collectively,
Open Source
Software
), and the license applicable to such Open
Source Software. There is no use of any Open Source Software by
the Company or any of its Subsidiaries that requires or would
reasonably be expected to require, or conditions, or would
reasonably be expected to condition, the: (i) distribution
of any Software owned by the Company or its Subsidiaries under
any Open Source License; or (ii) disclosure, licensing or
distribution of
A-21
any source code of any Software owned by the Company or any of
its Subsidiaries. The Company and its Subsidiaries are in
compliance in all material respects with all license agreements
applicable to the Open Source Software listed in
Section 3.15(e) of the Company Disclosure Schedule.
(f) The policies and procedures of the Company and its
Subsidiaries provide that each employee or independent
contractor of the Company or any of its Subsidiaries enter into
a written agreement ensuring that all Intellectual Property
developed by such Persons is owned exclusively by the Company
and its Subsidiaries, and to the Knowledge of the Company,
except as set forth on Section 3.15(f) of the Company
Disclosure Schedule, each employee or independent contractor of
the Company or any of its Subsidiaries has entered into such a
written agreement in each case pursuant to the form of such
agreement made available to Parent or pursuant to a
substantially similar form of agreement. To the Knowledge of the
Company, no such consultant, independent contractor or employee
is in breach of his, her or its obligations pursuant to any such
agreement.
(g) The Company and its Subsidiaries have taken all
commercially reasonable steps to safeguard and maintain the
secrecy and confidentiality of all Trade Secrets used by them,
and no Trade Secrets of the Company or its Subsidiaries have
been disclosed without a written non-disclosure or
confidentiality agreement in effect with the recipient of the
Trade Secrets. Except as set forth in Section 3.15(g) of
the Company Disclosure Schedule, there have been no disclosures
of the source code to any Software owned by the Company or its
Subsidiaries other than pursuant to the terms of a
confidentiality agreement in effect with the recipient of the
Software source code. Section 3.15(g) of the Company
Disclosure Schedule also includes a list of all source code
escrow arrangements to which the Company or any of its
Subsidiaries is a party pursuant to which the source code of any
Software owned by the Company or its Subsidiaries was placed in
escrow for the benefit of another Person.
(h) Section 3.15(h) of the Company Disclosure Schedule
sets forth a complete list of those Contracts to which the
Company or any of its Subsidiaries (i) grants an explicit
covenant not to sue, explicit covenant not to assert or other
explicit immunity from suit under any current or future
Intellectual Property; (ii) is involved in any joint
development of any Company Intellectual Property resulting in
joint ownership of the Company Intellectual Property developed
pursuant thereto; (iii) by which the Company or its
Subsidiaries grants or transfers, or otherwise confers any
ownership right or title to any Company Intellectual Property
(including, but not limited to, any derivative works,
modifications or enhancements to the Company Intellectual
Property, whether created by the Company or any other Person);
(iv) by which the Company or a Subsidiary is assigned or
granted an ownership interest in any Intellectual Property other
than agreements with employees and contractors that assign or
grant to the Company ownership of any Intellectual Property
developed in the course of providing services by such employees
and contractors; and (v) under which the Company grants or
receives an option or right of first refusal relating to any
Intellectual Property.
(i) Except with respect to demonstration or trial copies,
no product, system, program or software module designed,
developed, distributed, licensed or otherwise made available by
the Company or its Subsidiaries to any Person, contains any
back door, time bomb, Trojan
horse, worm, drop dead device,
virus or other software routines or hardware
components designed to permit access or to disable or erase
software, hardware or data without the consent of the user.
(j) Except as set forth in Section 3.15(j) of the
Company Disclosure Schedule, (i) the Software made
designed, developed, sold, installed, licensed or otherwise made
available by the Company to any Person conforms and complies in
all material respects with the terms and requirements of any
applicable warranty and the agreement related to such Software;
(ii) no customer or other Person has asserted or threatened
in writing to assert any claim against the Company during the
period beginning three (3) years from the date hereof
(A) under or based upon any warranty provided by or on
behalf of the Company, or (B) under or based upon any other
warranty relating to any Software made available by the Company;
and (iii) each currently generally available Software
product made available by the Company was free of any material
design defect or other material defect or deficiency at the time
it was sold or otherwise made available. All installation
services, programming services, repair services, maintenance
services, support services, training services, upgrade services
and other services that have been performed by the Company were
performed properly and in full conformity with the terms and
requirements of all applicable warranties and the agreement
related to such services and with all applicable legal
requirements. Except for maintenance releases required by
Companys standard form warranty and maintenance
provisions, Schedule 3.15(j)
A-22
of the Company Disclosure Schedules lists all of the
Companys and its Subsidiaries fixed fee agreements
as of the Balance Sheet Date for which the Company has recorded
a loss reserve in accordance with GAAP, (2) to the
Companys Knowledge, all fixed fee agreements for the
period beginning after the Balance Sheet Date and ending on the
date hereof which would reasonably be likely to result in the
Company having to record a loss reserve in accordance with GAAP
for such period, (3) contractual or other obligations as of
the Balance Sheet Date to any third party that will require the
use of the Companys product development staff to develop
new Software or to provide modifications, upgrades, new versions
or enhancements to existing Software and (4) to the
Knowledge of the Company for the period beginning after the
Balance Sheet Date and ending on the date hereof, contractual or
other obligations to any third party that will require the use
of the Companys product development staff to develop new
Software or to provide modifications, upgrades, new versions or
enhancements to existing Software. The Company has not agreed to
provide vendor financing with respect to the sale or licensing
of any products or services made available by the Company. No
product liability claims have been threatened in writing or
filed against the Company related to any product or service made
available by the Company.
(k) The Company is not and has never been, and no previous
owner of any Company Intellectual Property now owned by the
Company was during the duration of their ownership, a member or
promoter of, or a contributor to or made any commitments or
agreements regarding any patent pool, industry standards body,
standard setting organization, industry or other trade
association or similar organization, in each case that could or
does require or obligate the Company or the previous owner to
grant or offer to any other Person any license or right to such
Company-owned Company Intellectual Property, including without
limitation any future Intellectual Property developed,
conceived, made or reduced to practice by the Company after the
date of this Agreement.
(l) No funding, facilities or personnel of any governmental
entity were used, directly or indirectly, to develop or create,
in whole or in part, any Company Intellectual Property owned by
the Company in such a way as to grant or give such governmental
entity any right or claim to such Company-owned Company
Intellectual Property.
(m) No college, university or other educational
institution, nor any students, professors, fellow, interns or
other Person affiliated with a college, university or other
education institution, were involved in the development of any
Company Intellectual Property owned by the Company in such a way
as to grant or give any of the foregoing any right or claim on
any such Company Intellectual Property.
(n) The execution, delivery or performance of this
Agreement or any ancillary agreement contemplated hereby, the
consummation of the transactions contemplated by this Agreement
or such ancillary agreements and the satisfaction of any closing
condition will not contravene, conflict with or result in any
limitation on Parents right, title or interest in or to
any Intellectual Property owned by or licensed to the Company.
The Company has no obligations to pay any additional royalties,
license fees or other amounts or provide or pay any other
consideration to any Person under any Contract respecting
Intellectual Property licensed to the Company by another Person
or otherwise by reason of this Agreement or the transactions
contemplated herein.
(o) The collection, use, transfer, import, export, storage,
disposal, and disclosure by the Company and its Subsidiaries of
personally identifiable information, or other information
relating to persons protected by Law, has not violated any
applicable U.S. or foreign Laws relating to data
collection, use, privacy, or protection (including, without
limitation, any requirement arising under any constitution,
statute, code, treaty, decree, rule, ordinance, or regulation)
(collectively,
Data Laws
) in a manner that,
individually or in the aggregate, would reasonably be expected
to have a Company Material Adverse Effect. Since January 1,
2007, the Company and its Subsidiaries have complied with, and
is presently in compliance with, its privacy policies, which
policies comply with all Data Laws, except where any
non-compliance would not, individually or in the aggregate, have
a Company Material Adverse Effect. There is no complaint, audit,
proceeding, investigation, or claim against or, to the Knowledge
of the Company threatened against, the Company or any of its
Subsidiaries by any Governmental Authority, or by any Person
respecting the collection, use, transfer, import, export,
storage, disposal, and disclosure of personal information by any
Person in connection with the Company, its Subsidiaries, or
their respective business. To the Knowledge of the Company,
since January 1, 2007 there have been no material security
breaches compromising the confidentiality or integrity of such
personal information.
(p) The Company has not received any written notice that
any current or prior director, officer, employee, independent
contractor or consultant of the Company or its Subsidiaries
claims or has a right to claim an ownership
A-23
interest in any Company Intellectual Property or any
remuneration or other payments aside from salary or other
compensation already paid by the Company as a result of having
been involved in the development or licensing of any such
Company Intellectual Property while employed by or consulting to
the Company or its Subsidiaries. In those jurisdictions that
require the payment of specific remuneration for the development
of Intellectual Property, the Company has made the required
remuneration payments or has a policy and procedure for making
such payments (which policy or procedure has been provided to
Parent in writing). In those jurisdictions that recognize Moral
Rights, the Company has obtained written waivers, consents or
agreements from each of the holders of such Moral Rights whereby
such holders will not, at any time, assert such Moral Rights
against the Company. For purposes of this Agreement,
Moral Rights
shall mean collectively, rights
to claim authorship of a work, to object to or prevent any
modification of a work, to withdraw from circulation or control
the publication or distribution of a work, and any similar
rights, whether existing under judicial or statutory law of any
country or jurisdiction worldwide, or under any treaty or
similar legal authority, regardless of whether such right is
called or generally referred to as a moral right.
Section 3.16
Insurance
. All
material insurance policies of the Company and its Subsidiaries
(the
Policies
) are in full force and effect
and are listed on Schedule 3.16 of the Company Disclosure
Schedule. Neither the Company nor any of its Subsidiaries is in
material breach or default, and neither the Company nor any of
its Subsidiaries has taken any action or failed to take any
action which, with notice or the lapse of time, would constitute
such a breach or default, or permit termination or modification
of any of the Policies. No notice of cancellation or termination
has been received by the Company with respect to any such
Policy. With respect to each of the legal proceedings set forth
in the Company SEC Documents, no carrier of any Policy has
asserted any denial of coverage other than the issuance of
customary reservation of rights letters issued by such carriers
in connection with the filing of any claims.
Section 3.17
Opinion
of Financial Advisor
. The Board of Directors of
the Company has received the written opinion of Thomas Weisel
Partners LLC (the
Financial Advisor
) dated as
of the date of this Agreement, to the effect that, as of such
date, and subject to the various assumptions and qualifications
set forth therein, the consideration to be received in the
Merger by the holders of Company Common Stock is fair from a
financial point of view to such stockholders (the
Fairness Opinion
). The Company has furnished
to Parent a correct and complete copy of the Fairness Opinion.
The Company has obtained the authorization of the Financial
Advisor to include a copy of its Fairness Opinion in the Proxy
Statement/Prospectus.
Section 3.18
Brokers
and Other Advisors
. Section 3.18 of the
Company Disclosure Schedule identifies each broker, investment
banker, financial advisor or other Person entitled to any
brokers, finders, financial advisors or other
similar fee or commission, or the reimbursement of expenses, in
connection with the Transactions based upon arrangements made by
or on behalf of the Company or any of its Subsidiaries, and the
fees and expenses of such Persons will be paid by the Company.
The Company has made available to Buyer a true, complete and
correct copy of the Companys engagement letter with any
Person identified in Section 3.18 of the Company Disclosure
Schedule.
Section 3.19
Anti-Takeover
Statutes
. Assuming the accuracy of the
representations and warranties of Parent and Merger Sub in
Section 4.18, the Company has taken all necessary action to
render Section 203 of the DGCL and any other potentially
applicable anti-takeover or similar statute or regulation or
provision of the certificate of incorporation or by-laws, or
other organizational or constitutive document or governing
instruments of the Company inapplicable to this Agreement and
the Transactions.
Section 3.20
Company
Rights Agreement
. The Company has taken all
actions necessary to (a) render the Company Rights
Agreement inapplicable to this Agreement and the Transactions,
(b) ensure that (i) none of Parent, Merger Sub or any
other Subsidiary of Parent is an Acquiring Person (as defined in
the Company Rights Agreement) pursuant to the Company Rights
Agreement as the result of this Agreement and the Transactions
and (ii) a Distribution Date, a Triggering Event or a Share
Acquisition Date (as such terms are defined in the Company
Rights Agreement) does not occur, in the case of
clauses (i) and (ii), solely by reason of the execution of
this Agreement or the consummation of the Transactions, and
(c) provide that the Final Expiration Date (as defined in
the Company Rights Agreement) shall occur immediately prior to
the Effective Time.
A-24
Section 3.21
Related
Party Transactions
. Except as set forth in
Schedule 3.21 of the Company Disclosure Schedule or the
Filed Company SEC Documents, there are no Company Material
Contracts between the Company or any of its Subsidiaries, on the
one hand, and (a) any officer or director of the Company,
(b) any record or beneficial owner of five percent (5%) or
more of the voting securities of the Company or (c) to the
Knowledge of the Company, any Affiliate of any such officer,
director or record or beneficial owner, on the other hand, in
each case, that would be required to be disclosed under
Item 404 of
Regulation S-K
promulgated under the Securities Act.
Section 3.22
No
Other Parent or Merger Sub Representations or
Warranties
. Except for the representations and
warranties set forth in Article IV (and set forth in
Section 5.15, if a Financing Election is made and becomes
effective in accordance with such Section), the Company hereby
acknowledges and agrees that none of Parent, Merger Sub or their
respective Representatives have made or are making any other
express or implied representation or warranty with respect to
Parent, Merger Sub or any of Parents other Subsidiaries or
their respective business or operations, including with respect
to any information provided or made available to the Company or
any of its Affiliates, stockholders, directors, officers,
employees, agents, representatives or advisors, or any other
Person. Notwithstanding the foregoing, nothing in this
Section 3.22 or this Agreement shall prevent the Company
from relying on the representations and warranties of the Parent
and Merger Sub set forth in Article IV of this Agreement.
ARTICLE IV.
Representations
and Warranties of Parent and Merger Sub
Except (a) as set forth in the letter (each section of
which qualifies the correspondingly numbered representation and
warranty to the extent expressly specified therein and such
other representations and warranties to the extent a matter in
such section of the disclosure schedule is disclosed in such a
way as to make its relevance to the information called for by
such other representation and warranty readily apparent) dated
as of the date hereof and addressed to the Company from Parent
and delivered to the Company simultaneously with the execution
of this Agreement (the
Parent Disclosure
Schedule
) and (b) as disclosed in any Filed
Parent SEC Documents filed by Parent with the SEC on or after
December 31, 2008 (to the extent a particular disclosure in
a Filed Parent SEC Document is disclosed in such a way as to
make its relevance to the information called for by any
representation and warranty contained herein readily apparent,
and excluding any exhibits thereto and any risk factor
disclosures or other cautionary, predictive or forward-looking
disclosures contained therein), Parent and Merger Sub jointly
and severally represent and warrant to the Company:
Section 4.1
Organization,
Standing and Corporate Power
.
(a) Each of Parent and Merger Sub is a corporation duly
organized, validly existing and in good standing under the Laws
of the jurisdiction in which it is incorporated and has all
requisite corporate power and authority necessary to own or
lease all of its properties and assets and to carry on its
business as it is now being conducted and as currently proposed
by its management to be conducted. Each of Parents
Subsidiaries is duly organized, validly existing and, to the
extent applicable in such jurisdiction, in good standing under
the Laws of the jurisdiction in which it is incorporated or
otherwise organized and has all requisite corporate power and
authority necessary to own or lease all of its properties and
assets and to carry on its business as it is now being conducted
and as currently proposed by its management to be conducted.
Each of Parent and its Subsidiaries is duly licensed or
qualified to do business and, to the extent applicable in such
jurisdiction, is in good standing in each jurisdiction in which
the nature of the business conducted by it or the character or
location of the properties and assets owned or leased by it
makes such licensing or qualification necessary, except where
the failure to be so licensed, qualified or in good standing,
individually or in the aggregate, has not had and would not
reasonably be expected to have a Parent Material Adverse Effect.
(b) All of the outstanding shares of capital stock of, or
other equity interests in, each Subsidiary of Parent have been
duly authorized and validly issued and are fully paid,
nonassessable and were not issued in violation of any preemptive
rights, purchase option, call or right of first refusal or
similar rights. All of the outstanding shares of capital stock
of, or other equity interests in, each Subsidiary of Parent are
owned directly or indirectly by Parent and are free and clear of
all Liens.
A-25
(c) Parent has made available to the Company complete and
correct copies of its certificate of incorporation and bylaws
(the
Parent Charter Documents
), in each case
as amended to the date of this Agreement, and the certificate of
incorporation and bylaws of Merger Sub (the
Merger Sub
Charter Documents
). The Company Charter Documents and
the Merger Sub Charter Documents are in full force and effect
and neither Parent nor Merger Sub is in violation of any of
their respective provisions. Parent has made available to the
Company and its representatives correct and complete copies of
the minutes (or, in the case of minutes that have not yet been
finalized, drafts thereof) of all meetings of stockholders, the
board of directors and each committee of the board of directors
of Parent and Merger Sub held since January 1, 2005.
Section 4.2
Capitalization
.
(a) The authorized capital stock of Parent consists of
(i) 2,000,000 shares of preferred stock, par value
$.01 per share, of Parent, of which (A) 500,000 shares
have been designated as Series A Preferred Stock and
(ii) 50,000,000 shares of Parent Common Stock. At the
close of business on the Measurement Date, (i) no shares of
Parent Preferred Stock were outstanding,
(iii) 34,517,707 shares of Parent Common Stock were
issued and outstanding and 1,777,910 shares of Parent
Common Stock were held by Parent in its treasury and
(iii) 3,242,640 shares of Parent Common Stock were
reserved for issuance under Parents 2005 Incentive Plan
and 1,500,000 shares were reserved for issuance under
Parents employee stock purchase plan (the
Parent
Stock Plans
) (of which 910,540 shares of Parent
Common Stock were subject to outstanding grants under the Parent
Stock Plans). All outstanding shares of Parent Common Stock have
been, and all shares of Parent Common Stock which may be issued
under Article II of this Agreement will be, duly authorized
and validly issued and are fully paid, nonassessable and free of
preemptive rights.
(b) Except as referred to in Section 4.2(a),
(i) none of Parent or any of its Subsidiaries has issued or
is bound by any outstanding subscriptions, options, warrants,
calls, convertible or exchangeable securities, rights,
commitments or agreements of any character providing for the
issuance or disposition of any shares of capital stock, voting
securities or equity interests of Parent or any of its
Subsidiaries and (ii) there are no outstanding obligations,
commitments or arrangements, contingent or otherwise, of Parent
or any of its Subsidiaries to repurchase, redeem or otherwise
acquire any shares of capital stock, voting securities or equity
interests (or any options, warrants or other rights to acquire
any shares of capital stock, voting securities or equity
interests) of Parent or any of its Subsidiaries or to provide
funds to Parent or any of its Subsidiaries or to make any
investment (in the form of a loan, capital contribution or
otherwise). Without limiting the foregoing, all preferred share
purchase rights issued under the Rights Agreement dated as of
October 2, 1998 between the Company and ChaseMellon
Shareholder Services have expired.
(c) The authorized capital stock of Merger Sub consists
solely of 1,000 shares of Merger Sub Common Stock, all of
which are issued and outstanding and held directly or indirectly
by Parent. All of the outstanding shares of Merger Sub Common
Stock have been duly authorized and validly issued and are fully
paid and nonassessable and free of preemptive rights. Merger Sub
does not hold, nor has it held, any material assets or incurred
any material liabilities, nor has Merger Sub carried on any
business activities other than in connection with the Merger and
the Transactions.
Section 4.3
Authority;
Noncontravention
.
(a) Each of Parent and Merger Sub has all necessary
corporate power and authority to execute and deliver this
Agreement and to perform their respective obligations hereunder
and to consummate the Transactions. Except for the requirements
(i) under applicable rules of the NASDAQ Stock Market, to
obtain the approval of the holders of a majority of the shares
of Parent Common Stock present (in person or by proxy) at the
Parent Stockholders Meeting for the issuance of Parent Common
Stock in the Merger at the Base Exchange Ratio, and
(ii) under Section 242 of the DGCL, in order to effect
the issuance of Parent Common Stock under clause (i), to obtain
the approval of the holders of a majority of the outstanding
shares of Parent Common Stock to amend Parents Certificate
of Incorporation to increase the number of authorized shares of
Parent Common Stock to a number to be reasonably determined by
Parent which shall be no less than the number sufficient to
consummate the Transactions (such approvals collectively, the
Parent Stockholder Approval
), the execution,
delivery and performance by Parent and Merger Sub of this
Agreement, and the consummation by Parent and Merger Sub of the
Transactions, have been duly authorized and approved by all
requisite corporate approvals and no other corporate action on
the part of Parent
A-26
and Merger Sub is necessary to authorize the execution, delivery
and performance by Parent and Merger Sub of this Agreement and
the consummation by them of the Transactions. This Agreement has
been duly executed and delivered by Parent and Merger Sub and,
assuming due authorization, execution and delivery hereof by the
Company, constitutes a legal, valid and binding obligation of
each of Parent and Merger Sub, enforceable against each of them
in accordance with its terms, subject to the Bankruptcy and
Equity Exception.
(b) Parents Board of Directors, at a meeting duly
called and held, has (i) approved this Agreement and
declared it advisable, and (ii) resolved to recommend that
stockholders of Parent approve the Issuance Proposal and the
Charter Amendment Proposal (the
Parent Board
Recommendation
) and directed that such proposals be
submitted for consideration of the stockholders of Parent at
Parent Stockholders Meeting.
(c) Neither the execution and delivery of this Agreement by
Parent and Merger Sub, nor the consummation by Parent or Merger
Sub of the Transactions, nor compliance by Parent or Merger Sub
with any of the terms or provisions hereof, will
(i) conflict with or violate any provision of the Parent
Charter Documents or Merger Sub Charter Documents or
(ii) assuming that the authorizations, consents and
approvals referred to in Section 4.4 are obtained and the
filings referred to in Section 4.4 are made, violate any
Law, judgment, writ or injunction of any Governmental Authority
applicable to Parent or Merger Sub or any of their respective
properties or assets, or (iii) require any consent,
approval or other authorization of, or filing with or
notification to any person under, materially violate, conflict
with, result in the loss of any material benefit under,
constitute a material default (or an event which, with notice or
lapse of time, or both, would constitute a material default)
under, result in the termination of or a right of termination or
cancellation under, or accelerate the performance required by,
or result in the creation of any Lien upon any of the respective
properties or assets of, Parent or Merger Sub or any of their
respective Subsidiaries under, any of the terms, conditions or
provisions of any Contract to which Parent, Merger Sub or any of
their respective Subsidiaries is a party, or by which they or
any of their respective properties or assets may be bound or
affected or (iv) result in the creation of any Lien upon
any of the respective properties or assets of, Parent or Merger
Sub or any of their respective Subsidiaries under, any Contract
to which the Company or any of its Subsidiaries is a party, or
by which they or any of their respective properties or assets
may be bound or affected except, in the case of clauses (ii),
(iii) or (iv), for such violations, conflicts, losses,
defaults, terminations, cancellations, accelerations or Liens
as, individually or in the aggregate, would not reasonably be
expected to have a Parent Material Adverse Effect.
Section 4.4
Governmental
Approvals
. Except for (a) the filing with
the SEC of the Registration Statement and the Proxy
Statement/Prospectus and other filings required under, and
compliance with applicable requirements of, the Exchange Act and
the rules of the NASDAQ Stock Market, (b) the filing of the
Certificate of Merger with the Secretary of State of the State
of Delaware pursuant to the DGCL, (c) filings required
under, and compliance with other applicable requirements of,
Competition Laws, and (d) any offering memorandum,
registration statement or proxy statement contemplated under
Section 5.15, no consents or approvals of, or filings,
declarations or registrations with, any Governmental Authority
are necessary for the execution, delivery and performance of
this Agreement by Parent and Merger Sub or the consummation by
Parent and Merger Sub of the Transactions, other than such other
consents, approvals, filings, declarations or registrations
that, if not obtained, made or given, would not, individually or
in the aggregate, reasonably be expected to have a Parent
Material Adverse Effect.
Section 4.5
Parent
SEC Documents; Undisclosed Liabilities
.
(a) Parent has filed and furnished all required reports,
schedules, forms, prospectuses, and registration, proxy and
other statements with the SEC since January 1, 2005
(collectively, and in each case including all exhibits,
schedules and amendments thereto and documents incorporated by
reference therein, the
Parent SEC Documents
).
None of Parents Subsidiaries is required to file periodic
reports with the SEC pursuant to the Exchange Act. Except to the
extent that information contained in any Parent SEC Document has
been revised or superseded by a later-filed Parent SEC Document
(provided, in the case of Parent SEC Documents filed prior to
the date of this Agreement, the later-filed Company SEC Document
was filed or furnished and made publicly available prior to the
date of this Agreement) (i) as of their respective
effective dates (in the case of Parent SEC Documents that are
registration statements filed pursuant to the requirements of
the Securities Act), (ii) as of their respective SEC filing
dates (in the case of all other Parent SEC Documents), the
Parent SEC Documents complied in all material respects with the
requirements of the Exchange Act and the Securities Act, as the
case may be, applicable to such Parent SEC
A-27
Documents, and (iii) none of the Parent SEC Documents as of
such respective dates contained any untrue statement of a
material fact or omitted to state a 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. To the Knowledge of Parent, no
investigation by the SEC with respect to Parent or any of its
Subsidiaries is pending or threatened.
(b) Except to the extent that financial statements
contained in any Parent SEC Document has been revised or
superseded by a later-filed Parent SEC Document (provided, in
the case of Parent SEC Documents filed prior to the date of this
Agreement, the later-filed Parent SEC Document was filed or
furnished and made publicly available prior to the date of this
Agreement), at the time they were filed with the SEC, the
consolidated financial statements of Parent included in the
Parent SEC Documents complied as to form in all material
respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto
as then in effect, had been prepared in accordance with GAAP
(except, in the case of unaudited quarterly statements, as
indicated in the notes thereto) applied on a consistent basis
during the periods involved (except as may be indicated in the
notes thereto) and fairly presented the consolidated financial
position of Parent and its consolidated Subsidiaries as of the
dates thereof and the consolidated results of their operations
and cash flows for the periods then ended (subject, in the case
of unaudited quarterly statements, to normal adjustments, none
of which has been or will be, individually or in the aggregate,
material to Parent and its Subsidiaries, taken as a whole).
(c) Parent has established and maintains
(i) disclosure controls and procedures (as such term is
defined in
Rule 13a-15(e)
and
Rule 15d-15(e)
under the Exchange Act) that are reasonably designed to ensure
that all information (both financial and non-financial) required
to be disclosed by Parent in the reports that it files or
submits under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the
rules and forms of the SEC, and that all such information is
accumulated and communicated to Parents management as
appropriate to allow timely decisions regarding required
disclosure and to make the certifications of the chief executive
officer and chief financial officer of Parent required under the
Exchange Act with respect to such reports and (ii) internal
controls over financial reporting (as such term is defined in
Rule 13a-15(f)
and
Rule 15d-15(f)
under the Exchange Act) that are reasonably designed to provide
assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in
accordance with GAAP. The principal executive officer and the
principal financial officer of Parent have timely made all
certifications required by SOX. All of the statements contained
in such certifications were complete and correct as of the dates
thereof. As of the date of the Companys most recent Annual
Report on
Form 10-K,
Parents principal executive officer and its principal
financial officer have disclosed, based on their evaluation at
that time of internal control over financial reporting, to
Parents auditors and the audit committee of the board of
directors of Parent (x) all significant deficiencies and
material weaknesses (as such terms are defined in PCAOB Auditing
Standard No. 2) in the design or operation of internal
control over financial reporting which are reasonably likely to
adversely affect Parents ability to record, process,
summarize and report financial data and (y) any fraud,
whether or not material, that involves management or other
employees who have a significant role in Parents internal
control over financial reporting. Parent has not identified any
significant deficiencies or material weaknesses in internal
controls which have not been subsequently remediated. Parent is
not aware of any facts or circumstances that would prevent its
chief executive officer and chief financial officer from giving
the certifications and attestations required pursuant to the
rules and regulations adopted pursuant to Section 404 of
SOX, without qualification, when next due.
(d) Neither Parent nor any of its Subsidiaries has any
indebtedness, liabilities or obligations of any nature (whether
accrued, absolute, contingent or otherwise, and whether known or
unknown) required, if known, to be reflected or reserved against
on a consolidated balance sheet of Parent prepared in accordance
with GAAP or the notes thereto, except liabilities (i) as
and to the extent set forth on the unaudited balance sheet of
Parent and its Subsidiaries as of the Balance Sheet Date
included in Parents Quarterly Report on
Form 10-Q
for the quarter ended as of the Balance Sheet Date (including
the notes thereto) or as otherwise set forth in the consolidated
financial statements of Parent included in the Parent SEC
Documents filed by Parent and publicly available prior to the
date of this Agreement (the
Filed Parent SEC
Documents
), (ii) incurred after the Balance Sheet
Date in the ordinary course of business consistent with past
practice, (iii) incurred after the Balance Sheet Date in
the ordinary course of business under, and in compliance with,
executory Contracts to which Parent or any of its Subsidiaries
is a party or otherwise bound, (iv) incurred after the date
of this Agreement and permitted under Section 5.2(b) or
(v) with respect to Taxes, which are the subject of
Section 4.10.
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Section 4.6
Absence
of Certain Changes or Events
. Between the Balance
Sheet Date and the date of this Agreement, there have not been
any events, changes, occurrences or state of facts that,
individually or in the aggregate, have had or would reasonably
be expected to have a Parent Material Adverse Effect. Between
the Balance Sheet Date and the date of this Agreement,
(a) Parent and its Subsidiaries have carried on and
operated their respective businesses in all material respects in
the ordinary course of business consistent with past practice
and (b) neither Parent nor any of its Subsidiaries has
taken any action described in Section 5.2(b) hereof that if
taken after the date of this Agreement and prior to the
Effective Time without the prior written consent of the Company
would violate such provision.
Section 4.7
Legal
Proceedings
. Except with respect to Taxes, which
are the subject of Section 4.10, as of the date of this
Agreement, there is no pending or, to the Knowledge of Parent,
threatened, material legal, administrative, arbitral or other
proceeding, claim, suit or action against Parent or any of its
Subsidiaries, or, to the Knowledge of Parent, Governmental
Investigation, nor is there any injunction, order, judgment,
ruling or decree imposed (or, to the Knowledge of the Company,
threatened to be imposed) upon Parent, any of its Subsidiaries
or the assets of Parent or any of its Subsidiaries, by or before
any Governmental Authority that as of the date of this
Agreement, individually or in the aggregate, has had or would
reasonably be expected to have a Parent Material Adverse Effect,
nor is there any judgment outstanding against the Company or any
of its Subsidiaries that, as of the date hereof, would
reasonably be expected to have a Parent Material Adverse Effect.
Section 4.8
Compliance
With Laws; Permits
.
(a) Except with respect to Taxes, ERISA and Environmental
Laws, which are the subjects of Sections 4.10, 4.11 and
4.12, respectively, Parent and its Subsidiaries are in
compliance in all material respects with all Laws applicable to
Parent or any of its Subsidiaries or any of their properties or
other assets or any of their businesses or operations, except
for failures to be in compliance that would not reasonably be
expected to have a Parent Material Adverse Effect. Since
January 1, 2007, neither Parent nor any of its Subsidiaries
has received written notice to the effect that a Governmental
Authority claimed or alleged that Parent or any of its
Subsidiaries was not in compliance in a material respect with
any Law applicable to Parent and any of its Subsidiaries, any of
their material properties or other assets or any of their
business or operations. To the Knowledge of Parent, neither the
Company nor any of its Subsidiaries, nor any officer, director
or employee of Parent or any such Subsidiary, is under
investigation by any Governmental Authority related to the
conduct of Parents or any such Subsidiarys business,
the results of which investigation would or would reasonably be
expected to result in a Parent Material Adverse Effect.
(b) Parent and each of its Subsidiaries hold all material
Permits to be obtained or necessary for the conduct of their
respective businesses, including the manufacture, license and
sale of their respective products and services. Parent and its
Subsidiaries are in compliance in all material respects with the
terms of all such Permits, and all such Permits are in full
force and effect, except where such suspension or cancellation
would not be reasonably expected to constitute a Parent Material
Adverse Effect.
(c) No event or condition has occurred or exists which
would result in a violation of, breach, default or loss of a
benefit under, or acceleration of an obligation of Parent or any
of its Subsidiaries under, any Permit (in each case, with or
without notice or lapse of time or both), except for violations,
breaches, defaults, losses or accelerations that would not,
individually or in the aggregate, reasonably be expected to have
a Parent Material Adverse Effect. No such suspension,
cancellation, violation, breach, default, loss of a benefit, or
acceleration of an obligation will result from the Transactions,
except for violations, breaches, defaults, losses or
accelerations that would not reasonably be expected to result in
a Parent Material Adverse Effect.
Section 4.9
Information
Supplied
. None of the information supplied or to
be supplied by or on behalf of Parent or Merger Sub for
inclusion or incorporation by reference in (i) the
Registration Statement will, at the time the Registration
Statement is filed with the SEC, at any time it is amended or
supplemented and at the time it becomes effective under the
Securities Act, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading, or
(ii) the Proxy Statement/Prospectus will, at the date it
(and any amendment or supplement thereto) is first mailed to the
stockholders of the Company and, subject to Section 5.15,
the stockholders of Parent and at the time of the Company
Stockholders Meeting and, subject to Section 5.15, the
Parent Stockholders Meeting, contain any untrue statement of a
material fact or omit to state any material fact
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required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which
they are made, not misleading, except that no representation or
warranty is made by Parent or Merger Sub with respect to
statements made or incorporated by reference therein based on
information supplied by or on behalf of the Company. The
information contained in the Registration Statement and the
Proxy Statement/Prospectus relating to Parent and Merger Sub and
the Parent Stockholders Meeting will comply as to form in all
material respects with the requirements of the Securities Act
and the Exchange Act, respectively.
Section 4.10
Tax
Matters
.
(a) Each of Parent and its Subsidiaries has timely filed,
or has caused to be timely filed on its behalf (taking into
account an extension of time within which to file), all Tax
Returns required to be filed by it, and all such Tax Returns are
correct and complete in all material respects, except in each
case where such failures to so prepare or file Tax Returns, or
the failure of such filed Tax Returns to be complete and
accurate, individually or in the aggregate, would not reasonably
be expected to have a Parent Material Adverse Effect. All Taxes
of Parent and its Subsidiaries due and owing have been timely
paid (whether or not shown to be due on such Tax Returns),
except (i) with respect to matters contested in good faith
by appropriate proceedings and for which reserves have been
established in accordance with GAAP and (ii) where such
failure to so pay or remit, individually or in the aggregate,
would not reasonably be expected to have a Parent Material
Adverse Effect.
(b) The most recent financial statements contained in the
Filed Parent SEC Documents reflect reserves in accordance with
GAAP for all Taxes payable by Parent and its Subsidiaries for
all taxable periods and portions thereof through the date of
such financial statements.
(c) Neither Parent nor any of its Subsidiaries has
constituted either a distributing corporation or a
controlled corporation (within the meaning of
Section 355(a)(1)(A) of the Code) in a distribution of
stock intended to qualify for tax-free treatment under
Section 355 of the Code during the preceding two taxable
years.
(d) As of the date of this Agreement, no audit or other
administrative or court proceedings are pending or, to the
Knowledge of Parent, threatened in writing by any Governmental
Authority with respect to Taxes of Parent or any of its
Subsidiaries.
(e) Parent and its Subsidiaries have withheld all Taxes
required to have been withheld in connection with amounts paid
or owing to any employee, independent contractor, creditor,
stockholder or other third party and, to the extent due and
payable, have paid such amounts to the appropriate taxing
authority, except for such Taxes as to which the failure to pay
or withhold would not, individually or in the aggregate,
reasonably be expected to have a Parent Material Adverse Effect.
(f) As of the date hereof, none of Parent or any of its
Subsidiaries has taken any action or knows of any fact,
agreement, plan or other circumstance that would reasonably be
expected to prevent or preclude the Merger, if effected as
contemplated by Section 5.17, from qualifying as a
reorganization described in Section 368(a) of
the Code.
Section 4.11
Employee
Benefits and Labor Matters
.
(a) For purposes of this Section 4.11
Parent
Benefit Plans
means all employee benefit
plans (as defined in Section 3(3) of ERISA, and
without regard to whether ERISA applies thereto), and
(ii) all other employee benefit plans, agreements, policies
or arrangements, including employment, consulting or other
compensation agreements, collective bargaining agreements and
all plans, agreements, policies or arrangements providing for
bonus or other incentive compensation, equity or equity-based
compensation, retirement, deferred compensation, retention or
change in control rights or benefits, termination or severance
benefits, stock purchase, sick leave, vacation pay, salary
continuation, hospitalization, medical insurance, life
insurance, fringe benefits or other compensation, or educational
assistance, in each case to which Parent or any of its
Subsidiaries has any obligation or liability (contingent or
otherwise) thereunder for current or former directors or
employees of Parent or any of its Subsidiaries or any current or
former consultants to Parent or any of its Subsidiaries.
(b) No event has occurred with respect to any Parent
Benefit Plan that constitutes or would reasonably be expected to
have a Parent Material Adverse Effect.
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Section 4.12
Environmental
Matters
. Except for such matters that,
individually or in the aggregate, would not reasonably be
expected to have a Parent Material Adverse Effect:
(a) (i) each of Parent and its Subsidiaries is, and
has been, in compliance with all applicable Environmental Laws,
(ii) to the Knowledge of Parent, there is no investigation,
suit, claim, action or proceeding relating to or arising under
Environmental Laws that is pending or threatened against or
affecting Parent or any of its Subsidiaries or any real property
currently or, to the Knowledge of Parent, formerly owned,
operated or leased by Parent or its Subsidiaries;
(iii) neither Parent nor any of its Subsidiaries has
received any notice of or entered into or assumed by Contract or
operation of Law or otherwise, any obligation, liability, order,
settlement, judgment, injunction or decree relating to or
arising under Environmental Laws; and (iv) to the Knowledge
of Parent, no facts, circumstances or conditions exist with
respect to Parent or any of its Subsidiaries or any property
currently or formerly owned, operated or leased by Parent or any
of its Subsidiaries or any property to or at which Parent or any
of its Subsidiaries transported or arranged for the disposal or
treatment of Hazardous Materials that would reasonably be likely
to result in Parent and its Subsidiaries incurring Environmental
Liabilities individually in the excess of $50,000 or in the
aggregate in excess of $250,000.
(b) (i) Parent has obtained and currently maintains
all Environmental Permits necessary under Environmental Laws for
their operations as conducted on the date of this Agreement,
(ii) there is no investigation known to Parent, nor any
action pending or, to the Knowledge of Parent, threatened
against or affecting Parent or any real property owned, operated
or leased by Parent to revoke such Environmental Permits, and
(iii) Parent has not received any written notice from any
Governmental Authority to the effect that there is lacking any
Environmental Permit required under Environmental Law for the
current use or operation of any property owned, operated or
leased by Parent.
Section 4.13
Contracts
.
(a) For purposes of this Agreement, a
Parent
Material Contract
shall mean any Contract required to
be filed as an exhibit to Parents Annual Report on
Form 10-K
pursuant to Item 601(b)(2), (4), (9) or (10) of
Regulation S-K
under the Securities Act. Except as set forth as an exhibit to
the Parent SEC Documents, as of the date hereof, neither Parent
nor any of its Subsidiaries is a party to or bound by any Parent
Material Contract.
(b) Each Parent Material Contract is valid and in full
force and effect and enforceable in accordance with its
respective terms, subject to the Bankruptcy and Equity
Exception, except to the extent that (i) it has previously
expired in accordance with its terms or (ii) the failure to
be in full force and effect, individually or in the aggregate,
has not had and would not reasonably be expected to have a
Parent Material Adverse Effect.
(c) Neither Parent nor any of its Subsidiaries is in
material default under any Parent Material Contract, nor does
any condition exist that, with notice or lapse of time or both,
would constitute a material default thereunder by Parent or its
Subsidiaries party thereto. To the Knowledge of Parent, no other
party to any Parent Material Contract is in material default
thereunder, nor does any condition exist that with notice or
lapse of time or both would constitute a material default by any
such other party thereunder. Neither Parent nor any of its
Subsidiaries has received any written notice of termination or
cancellation under any Parent Material Contract or received any
notice of breach or default under any Parent Material Contract
which breach has not been cured.
Section 4.14
Title
to Properties
. Except for those matters that
individually or in the aggregate have not had and would not
reasonably be expected to have a Parent Material Adverse Effect:
(a) Parent and its Subsidiaries (i) have good, valid
and marketable title to all properties and other assets which
are reflected on the most recent consolidated balance sheet of
Parent included in the Filed Parent SEC Documents as being owned
by Parent or one of its Subsidiaries (or acquired after the date
thereof) and which are, individually or in the aggregate,
material to Parents business or financial condition on a
consolidated basis (except properties sold or otherwise disposed
of since the date thereof in the ordinary course of business
consistent with past practice and not in violation of this
Agreement), free and clear of all Liens except
(x) statutory liens securing payments not yet due,
(y) security interests, mortgages and pledges that are
disclosed in the Filed Parent SEC Documents that secure
indebtedness that is reflected in the most recent consolidated
financial statements of Parent included in the Filed Parent SEC
Documents and (z) such other
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imperfections or irregularities of title or other Liens that,
individually or in the aggregate, do not and would not
reasonably be expected to materially affect the use of the
properties or assets subject thereto or otherwise materially
impair business operations as presently conducted or as
currently proposed by Parents management to be conducted,
and (ii) have good and valid leasehold interests (subject
to customary subordination provisions) in all real property
leased or subleased by them which are, individually or in the
aggregate, material to Parents business or financial
condition on a consolidated basis.
(b) The tangible assets which are reflected on the most
recent consolidated balance sheet of Parent included in the
Filed Parent SEC Documents as being owned by Parent or one of
its Subsidiaries (or acquired after the date of this Agreement)
are in good operating condition and repair (except for normal
wear and tear and those defects that are not material) and have
been maintained in accordance with reasonable commercial
practices
Section 4.15
Intellectual
Property
. Except for those matters that
individually or in the aggregate have not had and would not
reasonably be expected to have a Parent Material Adverse Effect:
(a) Parent and its Subsidiaries own, or are validly
licensed or otherwise have the valid right to use, all
Intellectual Property and other intellectual property rights and
computer programs that are material to the conduct of the
business of Parent and its Subsidiaries taken as a whole.
(b) No claims are pending or, to the Knowledge of Parent,
threatened that Parent or any of its Subsidiaries is infringing
or otherwise adversely affecting the rights of any Person with
regard to any Intellectual Property, nor, to the Knowledge of
Parent, are there any facts which could give rise to any claim
of infringement, unauthorized use, misappropriation or violation
of any Intellectual Property used or owned by any Person against
Parent or its Subsidiaries. The conduct of the business of
Parent and its Subsidiaries, as currently conducted, does not
infringe, violate or misappropriate any Intellectual Property of
any Person, other than the rights of any Person under any
Patents, and, to the knowledge of Parent, the operation of
Parents business as now conducted does not infringe any
Patents of any Person.
Section 4.16
Ownership
and Operations of Merger Sub
. Parent owns
beneficially and indirectly of record all of the outstanding
capital stock of Merger Sub. Merger Sub was formed solely for
the purpose of engaging in engaging in a merger transaction with
the Company, has engaged in no other business activities and has
conducted its operations only as contemplated hereby.
Section 4.17
Debt
Financing
.
(a) Parent has delivered to the Company a true and complete
copy of (i) an executed commitment letter (together with
all annexes thereto) and fee letter (with confidential fee terms
redacted), each dated the date hereof, from Wells Fargo
Foothill, LLC and Wells Fargo Securities, LLC (the
Lenders
), to Parent (collectively, the
Commitment Letter
) to provide, subject to the
terms and conditions therein, the amounts set forth therein (the
Debt Financing
).
(b) As of the date hereof:
(i) the Commitment Letter has not been amended or modified,
and the commitment contained in the Commitment Letter has not
been withdrawn or rescinded in any respect;
(ii) Parent has fully paid any and all commitment fees or
other fees required by the Commitment Letter to be paid as of
the date hereof;
(iii) the Commitment Letter, in the form so delivered to
the Company on the date hereof, is in full force and effect and
constitutes a legal, valid and binding obligation of Parent and,
to the knowledge of Parent, the Lenders for so long as it
remains in full force and effect;
(iv) other than as set forth in or contemplated by the
Commitment Letter, there are no (A) conditions precedent,
flex provisions, contingencies or other substantive
provisions (other than provisions related solely to fees)
related to the funding of the full amount of the Debt Financing,
or (B) agreements, side letters, arrangements or
understandings that might (1) impair the validity of the
Commitment Letter, (2) reduce the
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aggregate amount of the Debt Financing, (3) delay or
prevent the Closing or (4) modify the terms of the Debt
Financing in a manner adverse to Parent;
(v) no event has occurred which, with or without notice,
lapse of time or both, would constitute a default or breach on
the part of Parent or Merger Sub or, to the knowledge of Parent,
the Lender under any term or condition of the Commitment
Letter; and
(vi) assuming the accuracy of the Companys
representations and warranties contained herein, and the making
of the Company Cash Deposit as provided in Section 2.2(a),
neither Parent nor Merger Sub has any reason to believe that any
of the conditions to the Debt Financing will not be satisfied or
that the Debt Financing will not be available to Parent or
Merger Sub on the date of the Closing.
(c) Assuming a Financing Election is not duly made in
accordance with Section 5.15, the aggregate net proceeds of
the Debt Financing contemplated by the Commitment Letter, will,
when taken together with the Company Cash Deposit and
Parents other financial resources, including cash on hand
and the proceeds of loans under existing revolving credit
facilities of Parent, provide Parent on the Closing Date with
funds sufficient to enable Parent, Merger Sub
and/or
the
Surviving Corporation to consummate the Merger upon the terms
contemplated by this Agreement, to make all payments
contemplated by this Agreement in connection with the Merger
(including payment of all amounts payable under Article II
of this Agreement in connection with or as a result of the
Merger) and to pay all fees and expenses associated therewith.
Section 4.18
Ownership
of Company Common Stock
. None of Parent or any of
Parents Associates or Affiliates
directly or indirectly owns, and at all times during
the three-year period prior to the date of this Agreement, none
of Parent or any of Parents Associates or
Affiliates directly or indirectly has
owned beneficially or otherwise, any of the
outstanding Company Common Stock or Series B Preferred
Stock, as those terms are defined in Section 203 of the
DGCL, other than solely as the result of (a) those certain
Voting Agreements dated as of August 10, 2008 among Parent,
the Company and certain directors, officers, and stockholders of
the Company, and (b) the Company Voting Agreements.
Section 4.19
Management
Arrangements
. As of the date hereof, except as
previously disclosed to the Companys Board of Directors,
there are no material Contracts, formal or informal arrangements
or other understandings (whether or not binding) between Parent,
Merger Sub or any of their respective Affiliates, on the one
hand, and any director, officer or 5% or greater stockholder of
the Company, on the other hand, relating to this Agreement, the
Merger or any other transactions contemplated by this Agreement
(including as to any investments to be made in, or contributions
to be made to, Parent or Merger Sub), or to the Surviving
Corporation or any of its Subsidiaries, businesses or operations
(including as to continuing employment) from and after the
Closing.
Section 4.20
Brokers
and Other Advisors
. Parent is responsible for,
and shall pay, the fees of any broker, investment banker,
financial advisor or other Person entitled to any brokers,
finders, financial advisors or other similar fee or
commission in connection with the Transactions based upon
arrangements made by or on behalf of Parent or any of its
Subsidiaries.
Section 4.21
No
Other Company Representations or
Warranties
. Except for the representations and
warranties set forth in Article III, Parent hereby
acknowledges and agrees that the Company and its Representatives
have not made or are not making any other express or implied
representation or warranty with respect to the Company or any of
the Companys Subsidiaries or their respective business or
operations, including with respect to any information provided
or made available to Parent or any of its Affiliates,
stockholders, directors, officers, employees, agents,
representatives or advisors, or any other Person.
Notwithstanding the foregoing, nothing in this Section 4.21
or this Agreement shall prevent Parent from relying on the
representations and warranties of the Company set forth in
Article III of this Agreement.
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ARTICLE V.
Covenants
and Agreements
Section 5.1
Preparation
of the Proxy Statement/Prospectus
.
(a) As promptly as practicable following the date of this
Agreement, Parent and the Company shall jointly prepare and file
with the SEC the Proxy Statement/Prospectus and a registration
statement on
Form S-4
(as amended and supplemented from time to time the
Registration Statement
), in which the Proxy
Statement/Prospectus will be included as a prospectus, in
connection with the registration under the Securities Act of the
Parent Common Stock to be issued in the Merger. Parent and the
Company shall cooperate with one another in connection with the
preparation of the Proxy Statement/Prospectus and Registration
Statement and shall furnish all information concerning such
party as the other party may reasonably request in connection
with the preparation of the Proxy Statement/Prospectus and
Registration Statement. Prior to the effective date of the
Registration Statement, Parent will take all action reasonably
required (other than qualifying to do business in any
jurisdiction in which it is not now so qualified or filing a
general consent to service of process in any such jurisdiction)
to be taken under any state securities laws in connection with
the issuance of Parent Common Stock in the Merger, and the
Company shall furnish all information concerning the Company and
the holders of shares of Company Common Stock as Parent may
reasonably request in connection with any such action. Parent
and the Company shall each use its reasonable best efforts to
respond as promptly as practicable to any comments from the SEC
with respect to the Registration Statement
and/or
the
Proxy Statement/Prospectus, to cause the Registration Statement
to become effective as promptly as practicable and to remain
effective through the Effective Time and, following the
effectiveness of the Registration Statement, to cause the Proxy
Statement/Prospectus to be mailed to the stockholders of the
Company and (subject to Section 5.15) to the stockholders
of Parent, in each case as provided in Section 5.5(c). Each
of Parent and the Company will use all commercially reasonable
efforts to cause all documents that it is responsible for filing
with the SEC or other regulatory authorities under this
Section 5.1 to comply in all material respects with
applicable Law.
(b) All filings by the Company with the SEC in connection
with the transactions contemplated hereby and all mailings to
the Companys stockholders in connection with the Merger
and transactions contemplated by this Agreement shall be subject
to the prior review and comment by Parent. All filings by Parent
with the SEC in connection with the transactions contemplated
hereby, including the Registration Statement, and all mailings
to Parents stockholders in connection with the Merger and
transactions contemplated by this Agreement shall be subject to
the prior review and comment by the Company. Each of Parent and
the Company shall (i) as promptly as practicable notify the
other of (A) the receipt of any comments from the SEC and
all other written correspondence and oral communications with
the SEC relating to the Proxy Statement/Prospectus or the
Registration Statement (including the time when the Registration
Statement becomes effective and the issuance of any stop order
or suspension of qualifications of the Parent Common Stock
issuable in connection with the Merger for offering or sale in
any jurisdiction) and (B) any request by the SEC for any
amendment or supplements to the Proxy Statement/Prospectus or
the Registration Statement or for additional information with
respect thereto and (ii) supply each other with copies of
all correspondence between it or any of its Representatives, on
the one hand, and the SEC, on the other hand, with respect to
the Proxy Statement/Prospectus, the Registration Statement or
the Merger and of all orders of the SEC relating to the
Registration Statement. If at any time prior to the Effective
Time any information relating to the Company, Parent or Merger
Sub, or any of their respective Affiliates, directors or
officers, is discovered by the Company, Parent or Merger Sub,
which is required to be set forth in an amendment or supplement
to the Proxy Statement/Prospectus, the Registration Statement or
any financing materials contemplated by Section 5.15 or
Section 5.16, so that such documents would not include any
misstatement of a material fact or omit to state any material
fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading
(including any assumptions underlying forward-looking
information), then the party which discovers such information
shall promptly notify the other parties and prepare, disseminate
and file, as applicable, an appropriate amendment or supplement
describing such information.
Section 5.2
Conduct
of Business
.
(a) Except as expressly required by this Agreement, as set
forth on Section 5.2(a) of the Company Disclosure Schedule
or as required by applicable Law, during the period from the
date of this Agreement until the Effective
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Time, unless Parent otherwise agrees in writing (which agreement
will not be unreasonably withheld or delayed), the Company
shall, and shall cause each of its Subsidiaries to,
(i) conduct its business in the ordinary course consistent
with past practice, and (ii) use commercially reasonable
efforts, under the circumstances, to maintain and preserve
intact its business organization and the goodwill of those
having significant business relationships with it. Without
limiting the generality of the foregoing, except as expressly
required by this Agreement, as set forth on Section 5.2(a)
of the Company Disclosure Schedule or as required by applicable
Law, during the period from the date of this Agreement to the
Effective Time, the Company shall not, and shall not permit any
of its Subsidiaries to, without the prior consent of Parent
(which consent will not be unreasonably withheld or delayed):
(i) (A) authorize for issuance or issue, sell, grant,
dispose of, pledge or otherwise encumber any shares of its
capital stock, voting securities or equity interests, or any
securities or rights convertible into, exchangeable or
exercisable for, or evidencing the right to subscribe for any
shares of its capital stock, voting securities or equity
interests, or any rights, warrants, options, calls, commitments
or any other agreements of any character to purchase or acquire
any shares of its capital stock, voting securities or equity
interests or any securities or rights convertible into,
exchangeable or exercisable for, or evidencing the right to
subscribe for, any shares of its capital stock, voting
securities or equity interests,
provided
that the Company
may issue shares of Company Common Stock upon the exercise of
Options and the vesting of RSUs, in each case that are
outstanding on the date of this Agreement and in accordance with
the terms thereof on the date of this Agreement;
(B) redeem, purchase or otherwise acquire any of its
outstanding shares of capital stock, voting securities or equity
interests, or any rights, warrants, options, calls, commitments
or any other agreements of any character to acquire any shares
of its capital stock, voting securities or equity interests;
(C) declare, set aside for payment or pay any dividend on,
or make any other distribution in respect of, any shares of its
capital stock or otherwise make any payments to its stockholders
in their capacity as such (other than regular semi-annual
dividends in cash or in kind on the Series B Preferred
Stock at the rate of $25 per share per annum); (D) split,
combine, subdivide or reclassify any shares of its capital
stock; or (E) amend (including by reducing an exercise
price or extending a term) or waive any of its rights under any
provision of the Company Stock Plans or any agreement evidencing
any outstanding Option, RSU or other right to acquire capital
stock of the Company or any restricted stock purchase agreement
or any similar or related contract, except such vesting as
required pursuant to employment agreements in effect on the date
of this Agreement, and except that the Company shall take such
action as are necessary to comply with Section 2.3 hereof;
(ii) incur or assume any indebtedness for borrowed money or
guarantee any indebtedness for borrowed money (or enter into a
keep well or similar agreement), issue or sell any
debt securities or options, warrants, calls or other rights to
acquire any debt securities of the Company or any of its
Subsidiaries or incur any indebtedness precluded under and as
defined in the Commitment Letter, or, to the extent not more
restrictive than the Commitment Letter, precluded under and as
defined in any other similar document contemplated by
Section 5.15, other than borrowings among the Company and
one or more direct or indirect wholly-owned Subsidiaries of the
Company in the ordinary course of business consistent with past
practice;
(iii) sell, transfer, lease, license, mortgage, encumber,
abandon or otherwise dispose of or voluntarily permit to become
subject to any Lien (including pursuant to a sale-leaseback
transaction or an asset securitization transaction) any of its
material properties or assets (including securities of
Subsidiaries) to any Person, except (A) sales and
non-exclusive licenses of products and services to customers in
the ordinary course of business consistent with past practice,
(B) dispositions of excess equipment or obsolete or
worthless assets or sales of properties or assets (excluding
securities of Subsidiaries) in an amount not in excess of
$100,000 in the aggregate;
(iv) make any acquisition (by purchase of securities or
assets, merger or consolidation, or otherwise) of any other
Person, business or division;
(v) make any investment (by contribution to capital,
property transfers, purchase of securities or otherwise) in, or
loan or advance (other than travel and similar advances to its
employees in the ordinary course of business consistent with
past practice) to, any Person other than a direct or indirect
wholly owned Subsidiary of the Company in the ordinary course of
business consistent with past practice;
A-35
(vi) other than in the ordinary course of business
consistent with past practice, enter into, terminate or amend
(other than immaterial amendments) any Company Material Contract;
(vii) increase in any manner the compensation of any of its
directors, officers or employees or enter into, establish,
amend, modify or terminate any employment, consulting,
retention, change in control, collective bargaining, bonus or
other incentive compensation, profit sharing, health or other
welfare, stock option or other equity (or equity-based),
pension, retirement, vacation, severance, deferred compensation
or other compensation or benefit plan (including any plan that
would constitute a Company Plan), policy, agreement, trust, fund
or arrangement with, for or in respect of, any stockholder,
director, officer, other employee, consultant or Affiliate, or
enter into or make any loans or advances to directors, officers
or employees (other than advances in the ordinary course of
business consistent with past practice) other than (i) as
required pursuant to applicable Law or the terms of any
employment agreement or Company Plan existing as of the date of
this Agreement, (ii) increases in salaries, wages and
benefits of employees (but not officers) made in the ordinary
course of business consistent with past practice and in amounts
and in a manner consistent with past practice and
(iii) taking any such actions in connection with the hiring
and termination of employees (other than officers, as such term
is used in
Rule 16a-1(f)
of the Exchange Act) in the ordinary course of business
consistent with past practice;
(viii) make any changes (other than immaterial changes made
in the ordinary course of business consistent with past
practice) in financial or tax accounting methods, principles,
policies or practices (or change an annual accounting period),
except insofar as may be required by GAAP, the SEC, the Internal
Revenue Service or applicable Law (including published Tax
guidance) or such changes in practices as may be made in
connection with the Companys efforts to enhance its and
its Subsidiaries internal controls over financial
reporting;
(ix) amend the Company Charter Documents or the Subsidiary
Documents;
(x) adopt a plan or agreement of complete or partial
liquidation, dissolution, restructuring, recapitalization,
merger, consolidation or other reorganization;
(xi) waive, release, assign, settle or compromise any
action, investigation, proceeding or litigation instituted,
commenced, pending or threatened against the Company or any of
its Subsidiaries, other than waivers, releases, assignments,
settlements or compromises in the ordinary course of business
consistent with past practice that involve only the payment of
monetary damages by the Company and its Subsidiaries not in
excess of $100,000 in the aggregate and that do not impose
equitable relief or any restrictions on the business and
operations of, on, or the admission of any wrongdoing by, the
Company or any of its Subsidiaries; enter into any license with
respect to Company Intellectual Property unless such license is
non-exclusive and entered into in the ordinary course of
business consistent with past practices;
(xii) permit any material item of Company Intellectual
Property to become abandoned, cancelled, invalidated or
dedicated to the public;
(xiii) make capital expenditures in any fiscal quarter in
excess of $100,000; or
(xiv) agree, in writing or otherwise, to take any of the
foregoing actions or, subject to Section 5.3, take any
action or agree, in writing or otherwise, to take any action,
which would cause any of the conditions to the Merger set forth
in this Agreement not to be satisfied.
(b) Except as expressly required by this Agreement, as set
forth on Section 5.2(b) of the Parent Disclosure Schedule
or as required by applicable Law, during the period from the
date of this Agreement until the Effective Time, unless Company
otherwise agrees in writing (which agreement will not be
unreasonably withheld or delayed), Parent shall, and shall cause
each of its Subsidiaries to, (x) conduct its business in
the ordinary course consistent with past practice, and
(y) use commercially reasonable efforts, under the
circumstances, to maintain and preserve intact its business
organization and the goodwill of those having significant
business relationships with it. Without limiting the generality
of the foregoing, except as expressly required or contemplated
by this Agreement (including in Section 5.5,
Section 5.14 and Section 5.15 hereof), as set forth on
Section 5.2(b) of the Parent Disclosure Schedule, or as
required by applicable Law, during the period from the date of
this Agreement to the
A-36
Effective Time, Parent shall not, and shall not permit any of
its Subsidiaries to, without the prior consent of the Company
(which consent will not be unreasonably withheld or delayed):
(i) authorize for issuance or issue, sell, grant, dispose
of, pledge or otherwise encumber any shares of its capital
stock, voting securities or equity interests, or any securities
or rights convertible into, exchangeable or exercisable for, or
evidencing the right to subscribe for any shares of its capital
stock, voting securities or equity interests, or any rights,
warrants, options, calls, commitments or any other agreements of
any character to purchase or acquire any shares of its capital
stock, voting securities or equity interests or any securities
or rights convertible into, exchangeable or exercisable for, or
evidencing the right to subscribe for, any shares of its capital
stock, voting securities or equity interests,
provided
that, in the ordinary course of its business, Parent may
grant options, warrants or other rights under the Parent Stock
Plans or issue shares of Parent Common Stock upon the exercise
of options, warrants or other rights that are outstanding on the
date of this Agreement to acquire Parent Common Stock in
accordance with the terms thereof.
(ii) (A) redeem, purchase or otherwise acquire any of
its outstanding shares of capital stock, voting securities or
equity interests, or any rights, warrants, options, calls,
commitments or any other agreements of any character to acquire
any shares of its capital stock, voting securities or equity
interests, other than any such redemption, purchase or
acquisition made both in the ordinary course of business and
pursuant to agreements or arrangements in effect on the date of
this Agreement; (B) declare, set aside for payment or pay
any dividend on, or make any other distribution in respect of,
any shares of its capital stock or otherwise make any payments
to its stockholders in their capacity as such; (C) split,
combine, subdivide or reclassify any shares of its capital stock;
(iii) acquire, or agree to acquire by merging or
consolidating with, any business or corporation, partnership or
other business organization or division thereof, other than in
connection with any internal restructurings involving only
Parent and its Subsidiaries;
(iv) adopt or propose to adopt any amendments to its
charter documents; or
(v) agree, in writing or otherwise, to take any of the
foregoing actions or take any action, which would cause any of
the conditions to the Merger set forth in this Agreement not to
be satisfied.
(c) Any party seeking to obtain consent from the other
party to take action under Section 5.2(a) or
Section 5.2(b), as applicable, shall send a written notice
by electronic or facsimile transmission from its general counsel
to such other partys general counsel, with a copy to the
other partys chief financial officer, describing the
action for which the consent is sought, and the party receiving
such notice shall have three (3) business days following
its receipt of such notice in which to respond in writing to the
requesting party, either consenting or denying such request as
provided herein; provided however, that if the party receiving
such notice shall fail to so respond to such written request by
the close of business on such third (3rd) business day, then,
for purposes of this Section 5.2, proper consent to the
taking of such action shall be deemed to have been given and
such action may be taken in compliance with the terms hereof.
Section 5.3
No
Solicitation by the Company; Etc
.
(a) The Company and its Subsidiaries shall cease and
terminate, and shall instruct their respective Affiliates,
directors, officers, employees, consultants, agents,
representatives and advisors (collectively,
Representatives
) to cease and cause to be
terminated, any discussions or negotiations with any Person with
respect to a Takeover Proposal. Subject to the terms of
Section 5.3(b), the Company and its Subsidiaries shall not,
and the Company shall not knowingly authorize or permit its
Representatives to, directly or indirectly (i) solicit,
initiate or knowingly facilitate or encourage (including by way
of furnishing information or providing assistance) any inquiries
or proposals that constitute, or may reasonably be expected to
lead to, any Takeover Proposal, (ii) participate in any
discussions or negotiations with, or furnish or disclose any
non-public information relating to the Company or any of its
Subsidiaries to, or otherwise cooperate with or assist, any
third party regarding any Takeover Proposal, (iii) approve,
endorse or recommend any Takeover Proposal or (iv) enter
into any letter of intent or agreement related to any Takeover
Proposal. The Company shall use commercially reasonable efforts
to enforce, and shall not waive or amend, each confidentiality,
standstill or similar agreement to which the Company or any of
its Subsidiaries is a party or by which any of them is bound (in
each case, other than any such agreement with
A-37
Parent);
provided
,
however
, that the Company may
waive any standstill or similar agreement and permit a proposal
to be made if the Board of Directors (or a committee thereof)
determines in good faith, after consultation with outside
counsel, that failure to do so would be inconsistent with its
fiduciary duty under applicable Law. The Company shall provide
Parent with a correct and complete copy of any confidentiality
agreement entered into pursuant to this paragraph within
twenty-four (24) hours of the execution thereof.
(b) Notwithstanding anything to contrary set forth in this
Section 5.3 or elsewhere in this Agreement, at all times
during the period commencing as of the date hereof and
continuing until the Companys receipt of the Company
Stockholder Approval (but in no event after obtaining the
Company Stockholder Approval) and provided the Company first
enters into an Acceptable Confidentiality Agreement, the Board
of Directors (or a committee thereof) of the Company may,
directly or indirectly through one or more Representatives,
participate or engage in discussions or negotiations with,
furnish any non-public information relating to the Company or
any of its Subsidiaries to,
and/or
afford access to the business, properties, assets, books,
records or other non-public information, or to the personnel, of
the Company or any of its Subsidiaries pursuant to such
Acceptable Confidentiality Agreement to any Person (and/or such
Persons Affiliates, directors, officers, employees,
consultants, financing sources, agents, representatives and
advisors) that has made or delivered to the Company a bona fide
written Takeover Proposal after the date hereof that was not
initiated, solicited, facilitated or encouraged in breach of
Section 5.3(a) and may cause the Company to enter into an
Acceptable Confidentiality Agreement with such Person,
provided
that the Board of Directors (or a committee
thereof) of the Company shall have determined in good faith
(after consultation with its financial advisor and outside legal
counsel) that such Takeover Proposal either constitutes a
Superior Proposal or is reasonably likely to lead to a Superior
Proposal and that the failure to take such action would be
inconsistent with its fiduciary duties to its stockholders under
applicable Law.
(c) In addition to the other obligations of the Company set
forth in this Section 5.3, the Company shall promptly
advise Parent (i) no later than 24 hours after receipt
by an officer or director of the Company, if any proposal,
offer, inquiry or other contact is initially received by, any
information is initially requested from, or any discussions or
negotiations are sought to be initiated or continued with, the
Company in respect of any Takeover Proposal, and shall notify
Parent, indicate the identity of the Person making such
proposal, offer, inquiry or other contact and the material terms
and conditions of any proposals or offers or the nature of any
inquiries or contacts (and shall include with such notice copies
of any written materials received from or on behalf of such
Person relating to such proposal, offer, inquiry or request),
and thereafter shall promptly (within 24 hours) keep Parent
informed of all material developments affecting the status and
terms of any such proposals, offers, inquiries or requests and
of the status of any such discussions or negotiations, and
(ii) no later than the date hereof of each proposal, offer,
inquiry or other contact in respect of a Takeover Proposal
received by an officer or director of the Company (other than
from Parent) since September 30, 2009, indicating the
identity of the Person making such proposal, offer, inquiry or
other contact and the material terms and conditions of any such
proposal, offer, inquiry or other contact (and shall include
with such notice copies of any written materials received from
or on behalf of such Person relating to such proposal, offer,
inquiry or request).
(d) Except as expressly permitted by this
Section 5.3(d), neither the Board of Directors of the
Company nor any committee thereof shall
(i) (A) qualify, withdraw or modify, in a manner
adverse to Parent, or propose publicly to qualify, withdraw or
modify, in a manner adverse to Parent, the Company Board
Recommendation or (B) approve or recommend, or propose
publicly to approve or recommend, any Takeover Proposal (any
action described in this clause (i) being referred to as an
Adverse Recommendation Change
); or
(ii) approve or recommend, or propose publicly to approve
or recommend, or cause or authorize the Company or any of its
Subsidiaries to enter into, any letter of intent, agreement in
principle, memorandum of understanding, merger, acquisition,
purchase or joint venture agreement or other agreement related
to any Takeover Proposal (other than an Acceptable
Confidentiality Agreement in accordance with
Section 5.3(b)) (each, a
Company Acquisition
Agreement
).
Notwithstanding the foregoing or any other provision of this
Agreement, prior to the time that the Company Stockholder
Approval has been obtained (but in no event after obtaining the
Company Stockholder Approval) (x) the Board of Directors of
the Company (or committee thereof) may make an Adverse
Recommendation Change
A-38
if the Board of Directors (or committee thereof) determines in
good faith, after consultation with outside legal counsel, that
the failure to make such Adverse Recommendation Change would be
inconsistent with its fiduciary duties to the Companys
stockholders under the applicable Law, and, with respect to any
recommendation of a Takeover Proposal, the Board (or committee
thereof) determines in good faith that such Takeover Proposal
constitutes a Superior Proposal, and (y) if the Company
receives a Takeover Proposal that was not initiated, solicited,
facilitated or encouraged in violation of this Agreement and
that the Board of Directors (or committee thereof) determines in
good faith constitutes a Superior Proposal, the Board of
Directors (or committee thereof) may, in response to such
Superior Proposal after the expiration of the five business day
period described below, cause the Company to enter into a
definitive agreement with respect to such Superior Proposal but
only if the Company shall have concurrently with entering into
such definitive agreement terminated this Agreement pursuant to
Section 7.1(d)(ii) and prior thereto or concurrently
therewith paid the Company Termination Fee required pursuant to
Section 7.3, but in any event only after the fifth business
day following Parents receipt of written notice (the
Notice
) from the Company advising Parent that
the Board of Directors of the Company (or any committee thereof)
is prepared to enter into a definitive agreement with respect to
such Superior Proposal and terminate this Agreement (it being
understood that the Company shall be required to deliver a new
Notice in respect of any revised Superior Proposal (other than
immaterial revisions) from such third party or its Affiliates
that the Company proposes to accept, attaching the most current
version of such agreement to such Notice and including the other
information required by Section 5.3(c) (which information
shall be updated on a current basis)), and only if at the end of
such five business day period, after taking into account any
revised terms as may have been proposed by Parent in writing
(and not withdrawn) since its receipt of such Notice, the Board
of Directors of the Company (or committee thereof) has again in
good faith made the determination referred to above in this
clause (y).
(e)
For purposes of this Agreement:
Takeover Proposal
means any inquiry, proposal
or offer from any Person or group (as defined in
Section 13(d) of the Exchange Act), other than Parent and
its Subsidiaries, relating to any (A) direct or indirect
acquisition (whether in a single transaction or a series of
related transactions) of assets of the Company and its
Subsidiaries (including securities of Subsidiaries) equal to 20%
or more of the Companys consolidated assets or to which
20% or more of the Companys consolidated revenues on a
consolidated basis for the then preceding four completed and
publicly reported calendar quarters are attributable,
(B) direct or indirect acquisition (whether in a single
transaction or a series of related transactions) of 20% or more
of the Company Common Stock, (C) tender offer or exchange
offer that if consummated would result in any Person or
group (as defined in Section 13(d) of the
Exchange Act) beneficially owning 20% or more of the Company
Common Stock or (D) merger, consolidation, share exchange,
business combination, recapitalization, liquidation, dissolution
or similar transaction involving the Company or any of its
Subsidiaries; in each case, other than the Transactions.
Superior Proposal
means a written Takeover
Proposal made by a third party and not initiated, solicited,
facilitated or encouraged in violation of this Agreement, which
is on terms and conditions which the Board of Directors of the
Company (or committee thereof) determines in its good faith
judgment (after consultation with the Financial Advisor or
another financial advisor of national reputation) to be more
favorable to the Companys stockholders from a financial
point of view (taking into account all terms and conditions of
the Takeover Proposal, including any
break-up
fees, expense reimbursement provisions and financial terms, and
the ability of the Person making such proposal to consummate the
transactions contemplated by such proposal, based upon, among
other things, the availability of financing and the expectation
of obtaining required approvals) than the Merger and the other
Transactions, taking into account at the time of determination
any changes to the terms of this Agreement that as of that time
had been proposed by Parent in writing (and not withdrawn),
except that the reference to
20%
in the
definition of
Takeover Proposal
shall be
deemed to be a reference to
50%
.
(f) Nothing in this Section 5.3 shall prohibit the
Board of Directors of the Company from taking and disclosing to
the Companys stockholders a position contemplated by
Rule 14e-2(a),
Rule 14d-9
or Item 1012(a) of
Regulation M-A
promulgated under the Exchange Act if such Board of Directors
determines in good faith, after receiving the advice of outside
counsel, that failure to so disclose such position would be
inconsistent with applicable Law;
provided
,
however
, that if such disclosure has the effect of
withdrawing or modifying the Company
A-39
Board Recommendation in a manner adverse to Parent or the
approval of this Agreement by the Board of Directors of the
Company, Parent shall have the right to terminate this Agreement
to the extent set forth in Section 7.1(c)(iii) of this
Agreement.
Section 5.4
Further
Action; Reasonable Best Efforts
.
(a) Upon the terms and subject to the conditions set forth
in this Agreement, each of the parties hereto shall, and shall
cause their respective Affiliates to, use reasonable best
efforts to take, or cause to be taken, all actions necessary,
proper and advisable under applicable Laws to consummate the
Transactions as promptly as practicable. In furtherance and not
in limitation of the foregoing, each party shall: (i) make
an appropriate filing of a Notification and Report Form pursuant
to the HSR Act with respect to the Transactions as promptly as
practicable and supply as promptly as practicable any additional
information and documentary material that may be requested
pursuant to the HSR Act; (ii) make any additional filings
required by any applicable Competition Law and take all other
actions reasonably necessary, proper or advisable to cause the
expiration or termination of the applicable waiting periods
under the HSR Act or other Competition Laws as promptly as
practicable; and (iii) subject to applicable Laws relating
to access to and the exchange of information, use its reasonable
best efforts to (A) cooperate with each other in connection
with any filing or submission and in connection with any
investigation or other inquiry under or relating to any
Competition Law; (B) keep the other parties informed of any
communication received by such party from, or given by such
party to, the Federal Trade Commission (the
FTC
), the Antitrust Division of the
Department of Justice (the
DOJ
) or any other
Governmental Authority and of any communication received or
given in connection with any proceeding by a private party, in
each case regarding any of the Transactions; and (C) permit
the other parties hereto to review in advance any communication
intended to be given by it to, and consult with the other
parties in advance of any meeting or conference with, the FTC,
the DOJ or any such other Governmental Authority, and to the
extent permitted by the FTC, the DOJ or such other applicable
Governmental Authority, give the other parties the opportunity
to attend and participate in such meetings and conferences. To
the extent permitted by Law, Parent shall have the right to
direct all matters relating to compliance with Competition Laws
in connection with any Transaction.
(b) In furtherance and not in limitation of the covenants
of the parties contained in Section 5.4(a), but subject to
Section 5.4(c), in the event that any legal,
administrative, arbitral or other proceeding, claim, suit or
action is instituted (or threatened to be instituted) by a
Governmental Authority or private party under any Competition
Laws challenging any of the Transactions or in the event that
any Governmental Authority shall otherwise object to any of the
Transactions, each of Parent, Merger Sub and the Company shall
cooperate with each other and use its respective reasonable best
efforts: (A) to vigorously defend, contest and resist any
such proceeding, claim, suit, action or challenge; (B) to
have vacated, lifted, reversed or overturned any decree,
judgment, injunction or other order, whether temporary,
preliminary or permanent, that is in effect and that prohibits,
prevents or restricts consummation of the Transactions; and
(C) to resolve objections.
(c) Notwithstanding anything to the contrary contained in
this Agreement, in no event shall Parent or any of its
Subsidiaries or Affiliates be obligated to, and the Company
shall not, without Parents prior written consent, propose
or agree to accept any undertaking or condition, enter into any
consent decree, make any divestiture, accept any operational
restriction or take or commit to take any action that would
reasonably be expected to limit: (i) the freedom of action
of Parent or its Subsidiaries or Affiliates with respect to the
operation of, or Parents ability to retain, the Company or
any businesses, product lines or assets of the Company, or
(ii) Parents or its Subsidiaries or
Affiliates ability to retain, own or operate any portion
of the businesses, product lines or assets of Parent or any of
its Subsidiaries or Affiliates, or alter or restrict in any way
the business or commercial practices of Parent or its
Subsidiaries or Affiliates or the Company or its Subsidiaries
(any such event, a
Burdensome Condition
).
(d) Notwithstanding the foregoing or any other provision of
this Agreement, nothing in this Section 5.4 shall limit a
partys right to terminate this Agreement pursuant to
Section 7.1(b)(i) or (ii) so long as such party has up
to then complied in all material respects with its obligations
under this Section 5.4.
(e) Neither the Company, Parent or Merger Sub shall take
any action that would result in any state takeover statute or
similar Law becoming applicable to any of the Transactions. If
any state takeover statute or similar Law becomes applicable to
any of the Transactions, Parent, Merger Sub and the Company
shall use reasonable best
A-40
efforts to take all action necessary to ensure that the
Transactions may be consummated as promptly as practicable on
the terms contemplated by this Agreement and otherwise minimize
the effect of such Law on the Transactions.
Section 5.5
Stockholders
Meetings.
(a) Subject to Section 5.5(c), the Company shall
establish a record date for, duly call, give notice of, convene
and hold a special meeting of its stockholders (the
Company Stockholders Meeting
) solely for the
purpose of obtaining the Company Stockholder Approval. Subject
to Section 5.3(d), the Company shall, through its Board of
Directors, make the Company Board Recommendation and include
such recommendation in the Proxy Statement/Prospectus. The
Company will (i) use all reasonable efforts to solicit or
cause to be solicited from its stockholders proxies in favor of
adoption of this Agreement and (ii) subject to
Section 5.3(d), take all other reasonable action necessary
to secure the Company Stockholder Approval. Except to the extent
required by Law, the Company shall not (A) change the date
specified in the Proxy Statement/Prospectus for the Company
Stockholders Meeting, or (B) postpone, delay or adjourn the
Company Stockholders Meeting, except, in each case, after
consultation with Parent, to the extent necessary to ensure that
any amendment or supplement to the Proxy Statement/Prospectus
required by applicable Law (or contemplated by
Section 5.15) is provided to the stockholders of the
Company sufficiently in advance of the Company Stockholders
Meeting or if there are an insufficient number of shares of
Company Common Stock represented in person or by proxy at the
Company Stockholders Meeting to constitute a quorum or adopt
this Agreement or, if the Parent Stockholders Meeting is
adjourned in accordance with Section 5.5(b), in order to
comply with Section 5.5(c), in which case the Company may
adjourn the Company Stockholders Meeting and use its
commercially reasonable efforts to obtain a quorum
and/or
the
Company Stockholder Approval as promptly as practicable in the
prevailing circumstances.
(b) Subject to Section 5.5(c) and Section 5.15,
Parent shall establish a record date for, duly call, give notice
of, convene and hold a special meeting of its stockholders (the
Parent Stockholders Meeting
) solely for the
purposes of considering and voting upon (i) the issuance of
Parent Common Stock in the Merger (the
Issuance
Proposal
), (ii) the amendment of the
Parents Certificate of Incorporation to increase the
number of authorized shares of Parent Common Stock to a number
to be reasonably determined by Parent which shall be no less
than the number sufficient to consummate the Transactions (the
Charter Amendment Proposal
), and
(iii) at Parents discretion, to increase the number
of shares authorized for grant under the Parent Stock Plans (the
Plan Amendment Proposal
). The Board of
Directors of Parent shall recommend approval of the Issuance
Proposal and the Charter Amendment Proposal by the stockholders
of Parent and include such recommendation in the Proxy
Statement/Prospectus. Neither the Board of Directors of Parent
nor any committee thereof shall qualify, withdraw or modify, in
a manner adverse to the Company, or propose publicly to qualify,
withdraw or modify, in a manner adverse to Company, the Parent
Board Recommendation other than a withdrawal of the Parent Board
Recommendation in connection with the cancellation of the Parent
Stockholders Meeting as contemplated by Section 5.15 or as
otherwise required by Law. Subject to the foregoing, Parent will
use all reasonable efforts to solicit or cause to be solicited
from its stockholders proxies in favor of, and take all other
reasonable action necessary to secure, the Parent Stockholder
Approval. Except to the extent required by Law, Parent shall not
(A) change the date specified in the Proxy
Statement/Prospectus for the Parent Stockholders Meeting, or
(B) postpone, delay or adjourn the Parent Stockholders
Meeting, except, in each case, after consultation with the
Company, to the extent necessary to ensure that any amendment or
supplement to the Proxy Statement/Prospectus required by
applicable Law is provided to the stockholders of Parent
sufficiently in advance of the Parent Stockholders Meeting or if
there are an insufficient number of shares of Parent Common
Stock represented in person or by proxy at the Parent
Stockholders Meeting to constitute a quorum or adopt this
Agreement or, if the Company Stockholders Meeting is adjourned
in accordance with Section 5.5(a), in order to comply with
Section 5.5(c), in which case the Company may adjourn the
Parent Stockholders Meeting and use its commercially reasonable
efforts to obtain a quorum
and/or
the
Parent Stockholder Approval as promptly as practicable in the
prevailing circumstances. Notwithstanding the foregoing, if
Parent has duly made a Financing Election pursuant to
Section 5.15, Parent may nevertheless establish a record
date for, duly call, and give notice to its stockholders of a
Parent Stockholders Meeting solely for the purposes of
considering and voting upon the Charter Amendment Proposal and
the Plan Amendment Proposal.
(c) The parties will consult with one another to coordinate
record, mailing and meeting dates for the Company Stockholders
Meeting and (subject to Section 5.15) the Parent
Stockholders Meeting, and will use their reasonable best efforts
to cause the Company Stockholders Meeting and (subject to
Section 5.15) the Parent Stockholders
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Meeting to be held, as soon as practicable following the date
upon which the Registration Statement becomes effective. Unless
the Company and Parent mutually agree, (i) neither the
Company nor Parent shall distribute the Proxy
Statement/Prospectus to its stockholders until the net proceeds
of the Debt Financing or the Financing are deposited in escrow
or released to Parent as required by Section 5.14 or 5.15,
as the case may be, (ii) the parties shall not establish
record, mailing or meeting dates prior to the Financing Election
Deadline, and (iii) the Parent Stockholders Meeting and the
Company Stockholders Meeting shall be held on the same date.
Notwithstanding clauses (ii) and (iii) of this
Section 5.5(c), if (A) the Company has received a
proposal, offer, inquiry or other contact, or any information is
requested from the Company, or any discussions or negotiations
are sought to be initiated or continued with the Company, in
each case in respect of any Takeover Proposal, and
(B) Parent notifies the Company pursuant to the last two
sentences of Section 5.15(a) that it has either completed
or terminated its efforts to secure the Financing, the parties
shall promptly and within three (3) business days thereof,
establish record, mailing and meeting dates, which dates should
be as soon as reasonably feasible thereafter.
Section 5.6
Public
Announcements
. The initial press release with
respect to the execution of this Agreement shall be a joint
press release to be reasonably agreed upon by Parent and the
Company. Thereafter and prior to the Effective Time, neither the
Company nor Parent shall issue or cause the publication of any
press release or other public announcement (to the extent not
previously issued or made in accordance with this Agreement)
with respect to the Merger, this Agreement or the other
Transactions without the prior consent of the other party (which
consent shall not be unreasonably withheld or delayed), except
(i) as may be required by Law (including, without
limitation, as permitted by Section 5.3(f)) or by any
applicable listing agreement with a national securities exchange
as determined in the good faith judgment of the party proposing
to make such release (in which case such party shall not issue
or cause the publication of such press release or other public
announcement without prior consultation with the other party) or
(ii) for press releases or announcements to be issued with
respect to actions taken by the Company or its Board of
Directors as permitted by and in accordance with
Section 5.3.
Section 5.7
Access
to Information; Confidentiality
.
(a) Subject to applicable Laws relating to the exchange of
information (including applicable Competition Laws) and the
Confidentiality Agreement, each party shall, and shall cause
each of its Subsidiaries to, afford to the other party and its
Representatives reasonable access after providing reasonable
prior written notice, during normal business hours to all of
such partys and its Subsidiaries properties, assets,
books, Contracts, commitments, electronic and physical records,
correspondence (including electronic correspondence), officers,
employees, accountants, counsel, financial advisors and other
Representatives and shall furnish (or otherwise make available,
including through the SEC EDGAR system) promptly to the other
party (i) a copy of each report, schedule and other
document (A) filed, furnished or received by it or any of
its Subsidiaries pursuant to the requirements of Federal or
state securities Laws or (B) filed or furnished by it or
any of its Subsidiaries with any Governmental Authority with
respect to compliance with applicable Laws and (ii) all
other information concerning its and its Subsidiaries
business, properties and personnel as such other party may
reasonably request;
provided
,
however
, that
nothing in this Agreement shall require any party or any of its
Subsidiaries to provide access to any item that contains
confidential information that such party is obligated to any
third party to maintain the confidentiality of.
(b) Except for disclosures permitted by the terms of the
Confidentiality Agreement dated as of September 17, 2009
between Parent and the Company (as it may be amended from time
to time, the
Confidentiality Agreement
), each
party and its Representatives shall hold information received
from the other party and its Subsidiaries pursuant to this
Section 5.7 in confidence in accordance with the terms of
the Confidentiality Agreement. The terms of the Confidentiality
Agreement shall continue in full force and effect following
execution (or termination) of this Agreement, provided that,
solely with respect to communications relating to the Merger,
this Agreement and the Transactions made in compliance
therewith, this Section 5.7 hereof shall supersede any
conflicting provision of the Confidentiality Agreement.
(c) No investigation by the Company or Parent or their
respective representatives or advisors prior to or after the
date of this Agreement shall diminish, obviate or cure any
breach of any representation, warranty, covenant or agreement
contained in this Agreement or otherwise affect such
Persons rights under Articles I, VI and VII of this
Agreement.
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Section 5.8
Notification
of Certain Matters
. The Company shall give prompt
notice to Parent, and Parent shall give prompt notice to the
Company, of (i) any notice or other communication received
by such party from any Governmental Authority in connection with
the Transactions or from any Person alleging that the consent of
such Person is or may be required in connection with the
Transactions, if the subject matter of such communication or the
failure of such party to obtain such consent could be material
to the Company, the Surviving Corporation or Parent,
(ii) any actions, suits, claims, investigations or
proceedings commenced or, to such partys Knowledge,
threatened against, relating to or involving or otherwise
affecting such party or any of its Subsidiaries which relate to
the Transactions, (iii) the discovery of any fact or
circumstance that, or the occurrence or non-occurrence of any
event the occurrence or non-occurrence of which, would cause any
representation or warranty made by such party contained in this
Agreement to be untrue such that the conditions set forth in
Section 6.2(a) or 6.3(a) would not be satisfied and
(iv) any failure of such party to comply with or satisfy
any covenant or agreement to be complied with or satisfied by it
hereunder such that the conditions set forth in
Section 6.2(b) or 6.3(b) would not be satisfied;
provided
,
however
, that the delivery of any notice
pursuant to this Section 5.8 shall not (x) be
considered an admission that any representation or warranty is
untrue for purposes of Article VI or Article VII,
(y) cure any breach or non-compliance with any other
provision of this Agreement or (z) limit the remedies
available to the party receiving such notice;
provided
,
further
, that the failure to deliver any notice pursuant
to this Section 5.8 shall not be considered in determining
whether the condition set forth in Section 6.2(b) or 6.3(b)
has been satisfied or the related termination right in
Article VII is available except to the extent that a party
hereto is actually prejudiced by such failure to give notice.
Section 5.9
Indemnification
and Insurance
.
(a) From and after the Effective Time, the Surviving
Corporation shall (and Parent shall cause the Surviving
Corporation) indemnify the individuals who at or prior to the
Effective Time were directors or officers of the Company
(collectively, the
Indemnitees
) with respect
to all acts or omissions by them in their capacities as such at
any time prior to the Effective Time, to the fullest extent
permitted by (A) the Company Charter Documents as in effect
on the date of this Agreement, (B) any applicable contract
as in effect on the date of this Agreement and
(C) applicable Law;
provided
,
however
, that
the Surviving Corporation shall not be required to indemnify any
Indemnitee for such Indemnitees criminal conduct or fraud.
(b) Parent will provide, or cause the Surviving Corporation
to provide, for a period of not less than six years after the
Effective Time, the Indemnitees (as defined to mean those
persons currently insured under the Companys
directors and officers insurance and indemnification
policy) with an insurance and indemnification policy that
provides coverage for events occurring at or prior to the
Effective Time (the
D&O Insurance
) that
is no less favorable than the existing policy or, if
substantially equivalent insurance coverage is unavailable, the
best available coverage;
provided
,
however
, that
Parent and the Surviving Corporation shall not be required to
pay an annual premium for the D&O Insurance in excess of
300% of the annual premium currently paid by the Company for
such insurance,
provided
,
further
, that if the
annual premiums of such insurance coverage exceed such amount,
Parent or the Surviving Corporation shall be obligated to obtain
a policy with the greatest coverage available for a cost not
exceeding such amount. Notwithstanding the foregoing, the
Surviving Corporation may fulfill its obligation to provide
insurance under this Section 5.9(b) by obtaining a prepaid
tail policy of at least the same coverage and
amounts containing terms and condition which are, in the
aggregate, no less favorable to the insured than the existing
policy, and maintaining such tail policy in full
force and effect for a period of at least six (6) years.
(c) The Indemnitees to whom this Section 5.9 applies
shall be third party beneficiaries of this Section 5.9. The
provisions of this Section 5.9 are intended to be for the
benefit of each Indemnitee, his or her heirs and his or her
representatives.
(d) In the event that Parent or the Surviving Corporation
or any of their respective successors or assigns
(i) consolidates with or merges into any other Person and
shall not be the continuing or surviving corporation or entity
of such consolidation or merger or (ii) transfers or
conveys all or a majority of its properties and assets to any
Person, then, and in each such case, proper provision shall be
made so that the successors and assigns of Parent or the
Surviving Corporation shall succeed to the obligations set forth
in this Section 5.9.
Section 5.10
Securityholder
Litigation
. The Company shall give Parent prompt
written notice of, and the opportunity to participate in, the
defense or settlement of any securityholder litigation against
the Company
and/or
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its directors relating to the Transactions, and no such
settlement shall be agreed to without Parents prior
written consent (which consent shall not be unreasonably
withheld or delayed).
Section 5.11
Fees
and Expenses
. Whether or not the Merger is
consummated, and except as otherwise contemplated under
Section 7.3 of the Agreement, all fees and expenses
incurred in connection with this Agreement, the Merger and the
Transactions shall be paid by the party incurring such fees or
expenses;
provided
,
however
, that the Company and
Parent shall share equally (a) the filing fee of
Parents pre-merger notification report under the HSR Act
and all fees and expenses incurred by Parent or the Company in
seeking approvals under all other applicable Competition Laws,
and (b) all fees and expenses, other than accountants
and attorneys fees, incurred with respect to the printing,
filing and mailing of the
Form S-4
Registration Statement and the Proxy Statement/Prospectus,
including any amendments or supplements thereto.
Section 5.12
Employee
Benefits
.
(a) Without limiting the provisions of Section 5.12(d)
hereof, for a period of time of at least one year following the
Closing Date, Parent shall, or shall cause its Affiliates to,
provide each employee who continues employment with the
Surviving Corporation (a
Continuing Employee
)
with combined aggregate pay (which shall include rates of base
salary or wages and annual bonus opportunities) and employee
benefits comparable to the pay and benefits provided to
similarly situated employees of Parent or its Affiliates,
provided that for such purposes of this covenant, stock options
and other equity awards shall be disregarded.
(b) Continuing Employees shall also be provided credit for
all service with the Company and its Subsidiaries, to the same
extent as such service was credited for such purpose by the
Company and its Subsidiaries for such Continuing Employees,
under (i) all employee benefit plans, programs, policies
and fringe benefits (other than stock option and other equity
award programs) arrangements to be provided to such employees
for purposes of eligibility and vesting, (ii) severance
plans, programs and policies to be provided to such employees
for purposes of calculating the amount of each such
employees severance benefits and (iii) vacation and
sick leave plans, programs and policies for purposes of
calculating the amount of each such employees vacation and
sick leave, except, in each case, as would result in a
duplication of benefits. With respect to each employee benefit
plan, program or policy of Parent or its Subsidiaries that is a
welfare benefit plan (as defined in
Section 3(1) of ERISA, and without regard to whether ERISA
applies thereto) in which Continuing Employees participate
following the Effective Time, Parent or its Subsidiaries shall
cause there to be waived any pre-existing condition limitations.
In addition, to the extent permissible under the terms of such
plan, if the effective time at which a Continuing Employee
participates in any such plan falls within an annual period of
coverage under such plan, each Continuing Employee shall be
given credit for covered expenses paid by that Continuing
Employee and his or her dependents under comparable Company
plans during the applicable coverage period through such
effective time toward satisfaction of any annual deductible
limitation and out-of-pocket maximum that may apply under that
plan of the Surviving Corporation and its Subsidiaries.
(c) Parent shall, or shall cause the Surviving Corporation
to, assume and either shall, or shall cause the Surviving
Corporation to, discharge the obligations under each employment,
severance or retention agreement (including the establishment
and funding of any related rabbi trust) listed in
Section 3.11(a) of the Company Disclosure Schedule.
(d) Notwithstanding anything in this Agreement to the
contrary, nothing in this Section 5.12 shall impede or
limit Parent, Merger Sub, the Company, the Surviving Corporation
or any of their Affiliates from terminating any of their
employees at any time for any reason or no reason, subject to
the provisions of applicable Law.
(e) The Company and its ERISA Affiliates, as applicable,
shall not terminate any plan intended to include a Code
Section 401(k) arrangement (collectively, the
401(k) Plans
) unless Parent provides written
notice to the Company that one or more of the 401(k) Plans
should be terminated effective no later than the last day of the
payroll period immediately preceding the Closing Date. If Parent
provides such written notice to the Company, no later than seven
(7) business days prior to the Closing Date, the Company
shall provide to Parent (i) copies of duly adopted
resolutions by the Companys Board of Directors authorizing
the termination of such 401(k) Plans and (ii) with respect
to each 401(k) Plan, an executed amendment to the 401(k) Plan
sufficient to assure compliance with all applicable requirements
of the Code and regulations thereunder so that the tax-qualified
status of the 401(k) Plan
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shall be maintained at the time of termination. The form and
substance of such resolutions and amendment shall be subject to
the prior review and approval of Parent.
(f) The provisions of this Section 5.12 are solely for
the benefit of the parties to this Agreement, and no current or
former employee, director or independent contractor or any other
individual associated therewith shall be regarded for any
purpose as a third party beneficiary of this Section 5.12
and nothing herein shall be construed as an amendment to any
Company Plan for any purpose.
Section 5.13
NASDAQ
Listing
. Parent shall use its reasonable best
efforts to cause the Parent Common Stock to be issued pursuant
to Article II to be approved for listing upon the Effective
Time on Nasdaq, subject to official notice of issuance.
Section 5.14
Debt
Financing
.
(a) Until such time as Parent duly makes a Financing
Election in accordance with Section 5.15, Parent shall use
its reasonable best efforts to take, or cause to be taken, all
actions and to do, or cause to be done, all things commercially
necessary, proper or advisable to maintain in effect the
Commitment Letter.
(b) From and after the earlier of (i) the date Parent
delivers notice to the Company pursuant to the last two
sentences of Section 5.15(a), or (ii) the Financing
Election Deadline if Parent does not deliver such a notice and
does not duly make a Financing Election under Section 5.15
below, Parent shall use its reasonable best efforts to take, or
cause to be taken, all actions and to do, or cause to be done,
all things commercially necessary, proper or advisable to
arrange and obtain the Debt Financing on the terms and
conditions described in the Commitment Letter, including
commercially reasonable efforts to (A) satisfy on a timely
basis all conditions applicable to Parent and Merger Sub to
obtaining the Debt Financing, (B) enter into definitive
agreements with respect to the Debt Financing on terms and
conditions (including the flex provisions) contained
in, or consistent in all material respects with, the Commitment
Letter, and (C) consummate the Debt Financing at or prior
to the Closing. In addition, Parent shall ensure that the net
proceeds of the Debt Financing have been deposited into escrow,
or otherwise released to Parent, in accordance with the terms of
the definitive agreements relating to the Debt Financing, or
will be deposited into escrow, or otherwise released to Parent,
in accordance with the terms of the definitive agreements
relating to the Debt Financing, by no later than the earlier of
January 8, 2010 or the date upon which the Proxy
Statement/Prospectus is first mailed to the stockholders of the
Company and, if deposited into escrow, the terms of the
definitive agreements with respect to the Debt Financing do not
impose any material conditions on the release of such net
proceeds from escrow other than the consummation of the Merger
as provided in this Agreement and the conditions set forth in
the Commitment Letter. Parent shall (1) keep the Company
informed on a reasonably current basis and in reasonable detail
of the status of its efforts to arrange the Debt Financing,
(2) give the Company prompt notice (x) of any material
breach by any Lender under the Commitment Letter or any
definitive agreements relating thereto of which Parent or Merger
Sub becomes aware, (y) if and when Parent or Merger Sub
becomes aware that any portion of the Debt Financing
contemplated by the Commitment Letter is not available to
consummate the Transactions, and (z) of any termination of
the Commitment Letter, and (3) provide to the Company
copies of executed copies of the definitive agreements relating
thereto (with confidential fee terms redacted). In the event
that all conditions to the Debt Financing have been or, upon
funding will be, satisfied, Parent shall use its commercially
reasonable efforts (which may include, in Parents
discretion after consultation with the Company, the pursuit of
any claim or action for specific performance of the terms of the
Debt Financing) to cause the Lenders and any other lenders
involved therein to fund on the Closing Date the Debt Financing
required to consummate the Merger and related Transactions.
Section 5.15
Financing
Election
. Anything in this Agreement to the
contrary notwithstanding:
(a) Until December 18, 2009 or such later date as may
be mutually agreed to in writing by Parent and the Company (the
Financing Election Deadline
), Parent may
engage in efforts to arrange and obtain alternative debt
(including high yield debt) financing or (subject to
Section 5.2(b)(i) above) equity financing for purposes of
enabling Parent to elect to make the Financing Election as
provided below in this Section 5.15 and adjust the Common
Stock Merger Consideration as provided in
Section 2.1(c)(ii), in each case in such amounts as Parent
may determine (subject to Section 5.15(c)). In the event
Parent determines to attempt to arrange alternative financing in
accordance with the preceding sentence, Parent shall promptly
disclose to the Company its
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intention to obtain such alternative financing, shall keep the
Company informed on a reasonably current basis in reasonable
detail of the status of its efforts to obtain the alternative
financing and of the terms thereof and shall deliver to the
Company final drafts of any commitment or engagement letter with
respect to such alternative financing. At any time prior to
making the Financing Election, Parent may, and, upon
Parents determination made at any time prior to the
Financing Election Deadline that it will not make a Financing
Election, Parent will, give the Company written notice of its
determination to proceed with the Debt Financing and to
discontinue its efforts to arrange for alternative financing
and, pursuant to Section 5.6, Parent and the Company shall
make appropriate public disclosure of such determination. If
Parent gives the Company written notice as provided in the
previous sentence, the remaining provisions of Section 5.15
shall no longer apply.
(b) On or prior to the Financing Election Deadline, Parent
may elect to reduce the Base Exchange Ratio (the
Financing Election
) by delivering to the
Company a notice (the
Election Notice
) of
such election and otherwise complying with the provisions of
this Section 5.15. Parent may make the Financing Election
and deliver an Election Notice on only one occasion. The
Election Notice shall be in writing and shall:
(i) State that Parent irrevocably and unconditionally
elects to reduce the Base Exchange Ratio as provided in
Section 2.1(c)(ii);
(ii) Confirm that the representations set forth in
Section 5.15(e) are true and correct in all respects as of
the date of such Election Notice;
(iii) Set forth (A) the amount of net proceeds to be
provided by the Financing, (B) the Adjusted Exchange Ratio
and the Adjusted Common Stock Cash Consideration, and
(C) the total number of shares of Parent Common Stock to be
issued and the total amount of cash to be paid in respect of the
Company Common Stock and Series B Preferred Stock in the
Merger;
(iv) Be accompanied by copies of fully executed definitive
agreements (with confidential fee terms redacted) (the
Financing Agreements
) pursuant to which the
investors, purchasers, lenders party or escrow agents thereto
agree to provide or have provided to Parent, subject to the
terms and conditions thereof, the amounts set forth therein (the
Financing
), and either agree to deposit or
have deposited such amounts into escrow for release upon the
consummation of such Financing or agree to pay or have paid such
amounts directly to Parent upon the consummation of such
Financing; and
(v) Confirm that the net proceeds of such Financing,
assuming satisfaction of the condition set forth in
Section 6.2(e), will, when taken together with the
available cash of the Company and Parents other financial
resources, including cash on hand and the proceeds of loans
under existing revolving credit facilities of Parent, provide
Parent on the Closing Date with funds sufficient to enable
Parent, Merger Sub
and/or
the
Surviving Corporation to consummate the Merger upon the terms
contemplated by this Agreement, to make all payments
contemplated by this Agreement in connection with the Merger
(including payment of all amounts payable under Article II
of this Agreement in connection with or as a result of the
Merger) and to pay all fees and expenses associated therewith.
(c) Notwithstanding Section 5.15(b), Parent shall not
be permitted to make the Financing Election (i) if the
Financing Election and the Financing would reasonably be
expected to result in a Parent Material Adverse Effect, or
(ii) if, after giving effect to the Adjusted Exchange Ratio
and including any equity securities required to be issued in
connection with the Financing, the approval of Parents
stockholders would be required under the rules of the NASDAQ
Stock Market in order to permit Parent to consummate the Merger
and the Financing.
(d) Upon Parents delivery of the Election Notice:
(i) the Common Stock Merger Consideration shall
automatically be adjusted as provided in Section 2.1(c)(ii);
(ii) Parent shall take all necessary steps to eliminate the
Issuance Proposal as a proposal to be voted on at, or otherwise
cancel, the Parent Stockholders Meeting;
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(iii) the Company shall take all necessary steps, including
by issuing a press release
and/or
filing a Current Report on
Form 8-K
with the SEC, to publicly disclose to its stockholders the
Financing Election and the adjustments to the Common Stock
Merger Consideration resulting therefrom;
(iv) Parent shall take all necessary steps, including by
issuing a press release
and/or
filing a Current Report on
Form 8-K
with the SEC, to publicly disclose to its stockholders the
Financing Election and the adjustments to the Common Stock
Merger Consideration resulting therefrom and the elimination of
the Issuance Proposal as a proposal to be voted on at, or the
cancellation of, the Parent Stockholders Meeting; and
(v) Parent and the Company begin to prepare, and shall seek
to file with the SEC within ten (10) days following the
delivery of the Election Notice, a revised Proxy
Statement/Prospectus, which shall include such information with
respect to the Financing and the adjusted Common Stock Merger
Consideration, including if appropriate pro forma financial
information, as shall be necessary to comply with the
requirements of the Securities Act and Exchange Act.
(e) Upon the making of the Financing Election, Parent shall
be deemed to represent and warrant to the Company (which
representations and warranties shall be representations and
warranties of Parent for all purposes hereof as if included in
Article IV hereof) that, as of such date:
(i) The Financing Election complies with the conditions of
this Section 5.15;
(ii) The Financing Agreements have not been amended or
modified, in any respect;
(iii) Parent has fully paid any and all commitment fees or
other fees for which Parent is responsible under the Financing
Agreements;
(iv) The Financing Agreements, in the form so delivered to
the Company pursuant to Section 5.15(b), are in full force
and effect and constitute legal, valid and binding obligations
of Parent and, to the knowledge of Parent, the lenders,
purchasers, investors or escrow agents party thereto for so long
as they remain in full force and effect;
(v) The terms of the Financing will not
(i) disproportionately adversely affect the stockholders of
the Company as compared to the stockholders of Parent,
(ii) delay the Closing beyond the Outside Date or otherwise
prevent the Closing, or (iii) result in a Parent Material
Adverse Effect (after giving effect to the Merger and other
Transactions);
(vi) Other than as set forth in or contemplated by the
Financing Agreements, there are no (i) conditions
precedent, flex provisions, contingencies or other
substantive provisions (other than provisions related solely to
fees) related to the funding of the full amount of the
Financing, or (ii) agreements, side letters, arrangements
or understandings that might (A) materially impair the
validity of the Financing Agreements, (B) reduce the
aggregate amount of the Financing, (C) delay or prevent the
Closing or (D) modify the terms of the Financing in a
manner materially adverse to Parent;
(vii) All or a portion of the net proceeds of such
Financing, in an amount sufficient to satisfy the requirement of
Section 5.15(e)(viii) below, (A) have been deposited
into escrow, or otherwise released to Parent, in accordance with
the terms of the Financing Agreements, or (B) will be
deposited into escrow, or otherwise released to Parent, in
accordance with the terms of the Financing Agreements, by no
later than the earlier of January 8, 2010 or the date upon
which the Proxy Statement/Prospectus is first mailed to the
stockholders of the Company, and, if deposited into escrow, the
terms of such Financing Agreements do not impose any material
conditions on the release of such net proceeds from escrow other
than the consummation of the Merger as provided pursuant to this
Agreement;
(viii) Parent will, upon the deposit of the net proceeds of
such Financing into escrow, or the release of the net proceeds
of such Financing to Parent, in accordance with the terms of the
Financing Agreements, terminate the Commitment Letter;
(ix) Assuming satisfaction of the condition set forth in
Section 6.2(e), the aggregate net proceeds of the Financing
contemplated by the Financing Agreements will, in the aggregate,
when taken together
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with the available cash of the Company and Parents other
financial resources, including cash on hand and the proceeds of
loans under existing revolving credit facilities of Parent,
provide Parent on the Closing Date with funds sufficient to
enable Parent, Merger Sub
and/or
the
Surviving Corporation to consummate the Merger upon the terms
contemplated by this Agreement, to make all payments
contemplated by this Agreement in connection with the Merger
(including payment of all amounts payable under Article II
of this Agreement in connection with or as a result of the
Merger) and to pay all fees and expenses associated therewith;
(x) No event has occurred which, with or without notice,
lapse of time or both, would constitute a default or breach on
the part of Parent or Merger Sub under any term or condition of
the Financing Agreements; and
(xi) Assuming the accuracy of the Companys
representations and warranties contained herein, and the making
of the Company Cash Deposit as provided in Section 2.2(a),
neither Parent nor Merger Sub has any reason to believe that any
of the conditions to the Financing will not be satisfied or that
the Financing will not be available to Parent or Merger Sub on
the date of the Closing.
(f) If the Financing Election shall become effective:
(i) Parent shall use its reasonable best efforts to take,
or cause to be taken, all actions and to do, or cause to be
done, all things necessary, proper or advisable to arrange and
obtain the Financing contemplated by the Financing Agreements,
including commercially reasonable efforts to (A) maintain
in effect the Financing Agreements, (B) satisfy on a timely
basis all conditions applicable to Parent and Merger Sub, if
applicable, to releasing the net proceeds from the Financing
from escrow, and (C) consummate the Financing at or prior
to the Closing;
(ii) Neither Parent nor Merger Sub shall amend, alter, or
waive, or agree to amend, alter or waive (in any case whether by
action or inaction), any term of the Financing Agreements
without the prior written consent of the Company; provided,
however, that Parent and Merger Sub may replace
and/or
amend
the Financing Agreements without the consent of the Company so
long as the provisions of this Section 5.15 (other than
provisions relating to the Financing Election Deadline, but
including the conditions of Sections 5.15(b) and 5.15(d))
continue to be satisfied after giving effect to such amendment,
alteration, waiver or agreement; and
(iii) Parent shall give the Company prompt notice
(A) of any material breach by any party of the Financing
Agreements of which Parent or Merger Sub becomes aware,
(B) if and when Parent or Merger Sub becomes aware that any
portion of the Financing contemplated by the Financing
Agreements is not available to consummate the Transactions, and
(C) of any termination of the Financing Agreements.
Section 5.16
Cooperation
by the Company
. The Company shall provide, and
shall cause its Subsidiaries and use its reasonable best efforts
to cause its and their respective Representatives to provide on
a timely basis, such reasonable assistance and cooperation in
connection with the closing of the Debt Financing contemplated
by the Commitment Letter (including all items described in the
Commitment Letter relating to the Company and to be provided by
or on behalf of the Company) or the Financing contemplated by
Section 5.15, as applicable, as may be reasonably requested
by Parent,
provided
,
however
, that no such
requested cooperation may unreasonably interfere with the
ongoing operations of the Company and its Subsidiaries. Such
cooperation shall include (a) making senior management of
the Company reasonably available for customary lender, purchaser
or investor meetings and roadshow presentations and
cooperating with potential financing sources in performing their
due diligence, (b) providing due diligence materials to
potential financing sources in connection with any such
financing, (c) furnishing all financial statements and
financial and other information that are reasonably required in
connection with any such financing, (d) assisting Parent
and its financing sources in the preparation of, and executing,
if applicable, an offering document and definitive transaction
documents for any such financing, and materials for rating
agency presentations, (e) cooperating with the marketing
efforts of Parent and its financing sources in connection with
any such financing, (f) providing such other documents as
may be reasonably requested by Parent in connection therewith or
as required or contemplated by such financing documents,
including any (i) comfort letters of the Companys
public accountants (and consents to include their reports in any
registration statement or
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information or offering memoranda), (ii) solvency
certificates, (iii) projections or budgets reasonably
required in connection with such financing, or
(iv) confirmation as to the public or non-public nature of
information so provided, (g) facilitating the pledge of
collateral (including the release of any Liens on the assets of
the Company and its Subsidiaries) to secure any such financing
at and after the Closing, (h) cooperating in the
syndication of the Debt Financing and assisting the Lenders in
forming a syndicate acceptable to them, and (i) providing
such other cooperation of the Company and its Subsidiaries as is
specified in the Commitment Letter; provided, that no obligation
of the Company or any of its Subsidiaries under any certificate,
document or instrument shall be effective until the Effective
Time and none of the Company or any Subsidiary shall be required
to pay any commitment or other similar fee or incur any other
liability in connection with any such financing prior to the
Closing.
Section 5.17
Section 368(a)
Reorganization
. If the Financing Election is not
duly made in accordance with Section 5.15 above, each of
Parent and the Company shall use its commercially reasonable
efforts to cause the Merger to be treated as a
reorganization
within the meaning of
Section 368(a) of the Code, including, in the case of
Parent, by taking the actions provided in Section 5.20
below.
Section 5.18
Actions
With Respect to Intellectual Property
. Within ten
(10) business days after the date hereof, the Company will
deliver to Parent a list of actions that are required to be
taken by the Company or any of its Subsidiaries within ninety
(90) days after the date hereof with respect to registered
Company Intellectual Property that, if not taken will have a
material adverse effect on any registered Company Intellectual
Property or the prosecution of applications or registrations
relating thereto, provided that any failure to provide such list
pursuant to this Section 5.17 shall not be deemed to
constitute a failure of the condition to the Merger set forth in
Section 6.2(b).
Section 5.19
Appointment
of Parent Director
. If (a) the Financing
Election is not duly made in accordance with Section 5.15
above, then, effective as of the Effective Time, Parent shall
increase the size of its Board of Directors by one member, and
cause to be appointed to its Board of Directors a current
director of the Company designated by the Company and acceptable
to Parent and (b) the Financing Election is duly made in
accordance with Section 5.15 above, then, effective as of
the Effective Time, Parent may, in its discretion, increase the
size of its Board of Directors by one member, and cause to be
appointed to its Board of Directors a current director of the
Company designated by the Company and acceptable to Parent.
Section 5.20
Upstream
Merger
. If the Financing Election is not duly
made in accordance with Section 5.15 above, Parent shall
form a single member Delaware limited liability company
(
Merger LLC
) and immediately after the
Effective Time, shall cause the Surviving Corporation to merge
with and into Merger LLC (the
Upstream
Merger
). From and after the effectiveness of the
Upstream Merger, the separate corporate existence of the
Surviving Corporation shall cease and Merger LLC shall continue
as the surviving entity in the Upstream Merger (the
Surviving Company
) and all of the rights and
obligations of the Surviving Corporation (including its rights
and obligations under this Agreement) shall be deemed the rights
and obligations of the Surviving Company. The Upstream Merger
shall have the effects set forth in
Sections 259-261
of the DGCL and
Section 18-209(g)
of the Delaware Limited Liability Company Act. Parent and Merger
LLC shall take all reasonable steps and actions as shall be
required to cause the Surviving Corporation and Merger LLC to
consummate the Upstream Merger as set forth in this
Section 5.20.
ARTICLE VI.
Conditions
Precedent
Section 6.1
Conditions
to Each Partys Obligation to Effect the
Merger
. The respective obligations of each party
hereto to effect the Merger shall be subject to the satisfaction
(or waiver, if permissible under applicable Law) on or prior to
the Closing Date of the following conditions:
(a)
Company Stockholder Approval.
The
Company Stockholder Approval shall have been obtained in
accordance with applicable Law and the Company Charter Documents;
(b)
Parent Stockholder Approval.
Unless
the Financing Election is duly made in accordance with
Section 5.15, the Parent Stockholder Approval shall have
been obtained in accordance with applicable Law and the Parent
Charter Documents;
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(c)
No Injunctions or Restraints.
No Law,
injunction, judgment or ruling enacted, promulgated, issued,
entered, amended or enforced by any Governmental Authority of
competent jurisdiction located in the United States or in
another jurisdiction outside the United States in which the
Company or any of its Subsidiaries, or Parent or any of its
Subsidiaries, engage in material business activities
(collectively,
Restraints
) shall be in effect
enjoining, restraining, preventing or prohibiting consummation
of the Merger or making the consummation of the Merger illegal;
(d)
Regulatory Approvals.
The waiting
period applicable to the consummation of the Merger under any
applicable Competition Laws shall have expired or been
terminated and all other approvals or consents required of any
other Governmental Authority for the consummation of the Merger
shall have been obtained;
(e)
Registration Statement; Proxy
Statement/Prospectus.
The Registration Statement
shall have become effective under the Securities Act and no stop
order suspending the effectiveness of the Registration Statement
shall have been issued and no proceeding for that purpose, and
no similar proceeding with respect to the Proxy
Statement/Prospectus, shall have been initiated or threatened in
writing by the SEC or its staff and not concluded or
withdrawn; and
(f)
NASDAQ Listing.
The shares of Parent
Common Stock issuable pursuant to Article II shall have
been approved for listing on Nasdaq, subject to official notice
of issuance.
Section 6.2
Conditions
to Obligations of Parent and Merger Sub
. The
obligations of Parent and Merger Sub to effect the Merger are
further subject to the satisfaction (or waiver, if permissible
under applicable Law) on or prior to the Closing Date of the
following conditions:
(a)
Representations and
Warranties.
(i) The representations and
warranties of the Company contained in Sections 3.2,
3.3(a), 3.3(b) and 3.3(d) shall be true and correct in all
respects (except, in the case of Section 3.2 for such
inaccuracies as are de minimis in the aggregate), in each case
both when made and at and as of the Closing Date, as if made at
and as of such time (except to the extent expressly made as of
an earlier date, in which case as of such date), (ii) the
representations and warranties of the Company herein that are
qualified as to Company Material Adverse Effect
shall be true and correct in all respects both when made and at
and as of the Closing Date as if made at and as of such time
(except to the extent expressly made as of an earlier date, in
which case as of such date), and (iii) all other
representations and warranties of the Company set forth herein
shall be true and correct in all respects both when made and at
and as of the Closing Date as if made at and as of such time
(except to the extent expressly made as of an earlier date, in
which case as of such date), except, in the case of this
clause (iii) only, where the failure of such
representations and warranties to be so true and correct would
not have a Company 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)
Officers Certificate.
Parent
shall have received a certificate, signed by the chief executive
officer or chief financial officer of the Company, certifying as
to the matters set forth in Sections 6.2(a) and 6.2(b).
(d)
No Litigation.
There shall not be any
action, investigation, proceeding or litigation instituted,
commenced, pending or threatened by or before any Governmental
Authority in which a Governmental Authority is a party, nor
shall there be any Restraint in effect, that would
(i) restrain, enjoin, prevent, prohibit or make illegal the
acquisition of some or all of the shares of Company Common Stock
by Parent or Merger Sub or the consummation of the Merger or the
other Transactions, (ii) impose limitations on the ability
of Parent or its Affiliates effectively to exercise full rights
of ownership of all shares of the Surviving Corporation in a
manner that materially and adversely affects the value of the
Company and its Subsidiaries taken as a whole, (iii) result
in the imposition of a Burdensome Condition, or (iv) result
in a Company Material Adverse Effect.
(e)
Minimum Unrestricted Cash; Company Cash
Deposit.
The sum of the aggregate amount of
unrestricted cash held by the Company (including the Company
Cash Deposit), plus the liquidation value of the immediately
liquid cash equivalents held by the Company shall not be less
than $160,000,000, and the Company shall have made the Company
Cash Deposit as provided in Section 2.2(a).
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(f)
Certain Payables.
The Company shall
have paid in full the accounts payable and accrued expenses set
forth on Schedule 6.2(f) of the Company Disclosure Schedule
in the amounts set forth thereon (totaling $10,000,000 in the
aggregate), and shall have provided to Parent reasonable
evidence of the same.
(g)
Company Material Adverse
Effect.
Since the date of this Agreement, there
shall not have been any Company Material Adverse Effect.
Section 6.3
Conditions
to Obligation of the Company
. The obligation of
the Company to effect the Merger is further subject to the
satisfaction (or waiver, if permissible under applicable Law) on
or prior to the Closing Date of the following conditions:
(a)
Representations and
Warranties.
(i) The representations and
warranties of Parent and Merger Sub contained in
Sections 4.2 and 4.3(a) shall be true and correct in all
respects (except, in the case of Section 4.2 for such
inaccuracies as are de minimis in the aggregate), in each case
both when made and at and as of the Closing Date, as if made at
and as of such time (except to the extent expressly made as of
an earlier date, in which case as of such date), (ii) the
representations and warranties of Parent and Merger Sub herein
that are qualified as to Parent Material Adverse
Effect shall be true and correct in all respects both when
made and at and as of the Closing Date as if made at and as of
such time (except to the extent expressly made as of an earlier
date, in which case as of such date) and (iii) all other
representations and warranties of Parent and Merger Sub set
forth herein shall be true and correct in all respects both when
made and at and as of the Closing Date as if made at and as of
such time (except to the extent expressly made as of an earlier
date, in which case as of such date), except, in the case of
this clause (iii) only, where the failure of such
representations and warranties to be so true and correct would
not have a Parent Material Adverse Effect.
(b)
Performance of Obligations of Parent and Merger
Sub.
Parent and Merger Sub shall have performed
in all material respects all obligations required to be
performed by them under this Agreement at or prior to the
Closing Date; and
(c)
Officers Certificate.
The
Company shall have received a certificate, signed by a duly
authorized representative of Parent, certifying as to the
matters set forth in Sections 6.3(a) and 6.3(b); and
(d)
Parent Material Adverse Effect.
Since
the date of this Agreement, there shall not have been any Parent
Material Adverse Effect.
Section 6.4
Frustration
of Closing Conditions
. None of the Company,
Parent or Merger Sub may rely on the failure of any condition
set forth in Section 6.1, 6.2 or 6.3, as the case may be,
to be satisfied if such failure was caused by such partys
failure to use its reasonable best efforts to consummate the
Merger and the other Transactions, as required by and subject to
Section 5.4.
ARTICLE VII.
Termination
Section 7.1
Termination
. This
Agreement may be terminated and the Transactions abandoned at
any time prior to the Effective Time:
(a) by the mutual written consent of the Company and Parent
duly authorized by each of their respective Boards of
Directors; or
(b) by either of the Company or Parent:
(i) if the Merger shall not have been consummated on or
before March 31, 2010 (as may be extended, the
Outside Date
),
provided
,
however
, that (A) the passage of such period shall
be tolled for any part thereof during which any party shall be
subject to a non-final Restraint, (B) either party may
extend the Outside Date to the six-month anniversary of the date
hereof, and (C) the right to terminate this Agreement under
this Section 7.1(b)(i) shall not be available to a party if
the failure of the Merger to have been consummated on or before
the Outside Date was primarily due to such partys breach
or failure to perform any of its representations, warranties,
covenants or agreements set forth in this Agreement;
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(ii) if any Restraint having the effect set forth in
Section 6.1(b) shall be in effect and shall have become
final and nonappealable;
provided
,
however
, that
the right to terminate this Agreement under this
Section 7.1(b)(ii) shall not be available to a party if
such Restraint was primarily due to such partys breach or
failure to perform any of its representations, warranties,
covenants or agreements set forth in this Agreement; or
(iii) if the Company Stockholder Approval shall not have
been obtained at the Company Stockholders Meeting duly convened
therefor (including any adjournment or postponement thereof)
upon a vote taken on this Agreement;
provided, however
,
that the right to terminate this Agreement under this
Section 7.1(b)(iii) shall not be available to a party if
the failure to obtain the Company Stockholder Approval was
primarily due to such partys breach or failure to perform
any of its representations, warranties, covenants or agreements
set forth in this Agreement; or
(iv) if the Parent Stockholder Approval shall not have been
obtained at the Parent Stockholders Meeting duly convened
therefor (including any adjournment or postponement thereof)
upon votes taken on the Issuance Proposal and the Charter
Amendment Proposal;
provided, however
, that the right to
terminate this Agreement under this Section 7.1(b)(iv)
shall not be available to a party if the failure to obtain the
Parent Stockholder Approval was primarily due to such
partys breach or failure to perform any of its
representations, warranties, covenants or agreements set forth
in this Agreement;
provided, further
, that this
Section 7.1(b)(iv) shall not be applicable if Parent duly
makes the Financing Election in accordance with
Section 5.15.
(c) by Parent:
(i) if the Company shall have breached or failed to perform
in any material respect any of its material covenants or
agreements set forth in this Agreement, or if any representation
or warranty of the Company shall have become untrue, in either
case such that the conditions set forth in Section 6.2(a)
or (b) would not be satisfied (a
Terminating
Company Breach
);
provided
,
however
, that
if such Terminating Company Breach is curable by the Company
through the exercise of reasonable best efforts prior to the
Outside Date and within twenty (20) business days, then
Parent shall not be permitted to terminate this Agreement
pursuant to this Section 7.1(c)(i) until the earlier to
occur of the Outside Date or the expiration of a twenty
(20) business day period after delivery of written notice
from Parent to the Company of such breach or inaccuracy,
provided
that the Company continues to exercise
reasonable best efforts to cure such breach or inaccuracy (it
being understood that Parent may not terminate this Agreement
pursuant to this Section 7.1(c)(i) if such breach or
inaccuracy by the Company is cured within such period);
(ii) if any Restraint having the effect of granting or
implementing any relief referred to Section 6.2(d) shall be
in effect and shall have become final and nonappealable;
(iii) if (x) the Company enters into a Company
Acquisition Agreement or (y) the Board of Directors of the
Company or any committee thereof prior to the receipt of the
Company Stockholder Approval (A) shall have made an Adverse
Recommendation Change or (B) shall not have rejected any
bona fide publicly announced offer for a Takeover Proposal
within ten (10) business days of the making thereof
(including, for these purposes, by taking no position with
respect to the acceptance of a tender offer or exchange offer by
its stockholders, which shall constitute a failure to reject
such offer for a Takeover Proposal);
(iv) if the Company breaches any material obligations under
Section 5.3, or the Board of Directors of the Company or
any committee thereof shall resolve to do so;
(v) if a Company Material Adverse Effect shall occur and be
continuing, provided that if such Company Material Adverse
Effect is curable by the Company through the exercise of
reasonable best efforts prior to the Outside Date and within
twenty (20) business days, then Parent shall not be
permitted to terminate this Agreement pursuant to this
Section 7.1(c)(v) until the earlier of the Outside Date or
the expiration of a twenty (20) business day period after
delivery of written notice from Parent to the Company of such
Company Material Adverse Effect,
provided
that the
Company continues to exercise reasonable best efforts to cure
such Company Material Adverse Effect (it being understood that
Parent
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may not terminate this Agreement pursuant to this
Section 7.1(c)(v) if such Company Material Adverse Effect
is cured within such period); or
(vi) if all of the conditions set forth in Section 6.1
and Section 6.3 shall have been satisfied or waived or
shall then be capable of being satisfied, but the Closing shall
not have occurred on the Closing Date due to the existence of a
Financing Failure,
provided
that prior thereto or
concurrently therewith Parent shall have paid or caused to be
paid the Parent Break Fee to the Company in accordance with
Section 7.3 (and such termination of this Agreement by
Parent shall not take effect unless and until the Parent Break
Fee shall have been paid to the Company).
(d) by the Company:
(i) if Parent or Merger Sub shall have breached or failed
to perform any of its representations, warranties, covenants or
agreements 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 the conditions set forth in
Section 6.3(a) or (b) would not be satisfied (a
Terminating Parent Breach
);
provided
,
however
, that, other than with respect to a breach of the
provisions of Section 5.15(e)(vii) above, if such
Terminating Parent Breach is curable by Parent or Merger Sub
through the exercise of reasonable best efforts prior to the
Outside Date and within twenty (20) business days, then the
Company shall not be permitted to terminate this Agreement
pursuant to this Section 7.1(d)(i) until the earlier of the
Outside Date or the expiration of a twenty (20) business
day period after delivery of written notice from the Company to
Parent of such breach or inaccuracy,
provided
that Parent
continues to exercise reasonable best efforts to cure such
breach or inaccuracy (it being understood that the Company may
not terminate this Agreement pursuant to this
Section 7.1(d)(i) if such breach or inaccuracy by Parent is
cured within such period); or
(ii) at any time prior to the Company Stockholder Approval,
if concurrently with such termination the Company enters into a
definitive Company Acquisition Agreement providing for a
Superior Proposal in accordance with Section 5.3(d);
provided
that prior thereto or concurrently therewith the
Company shall have paid or caused to be paid the Company
Termination Fee to Parent in accordance with Section 7.3
(and such termination of this Agreement by the Company shall not
take effect unless and until the Company Termination Fee shall
have been paid to Parent):
(iii) if a Parent Material Adverse Effect shall occur and
be continuing, provided that if such Parent Material Adverse
Effect is curable by Parent through the exercise of reasonable
best efforts prior to the Outside Date and within twenty
(20) business days, then the Company shall not be permitted
to terminate this Agreement pursuant to this
Section 7.1(d)(iii) until the earlier of the Outside Date
or the expiration of a twenty (20) business day period
after delivery of written notice from the Company to Parent of
such Parent Material Adverse Effect,
provided
that Parent
continues to exercise reasonable best efforts to cure such
Parent Material Adverse Effect (it being understood that the
Company may not terminate this Agreement pursuant to this
Section 7.1(d)(iii) if such Parent Material Adverse Effect
is cured within such period); or
(iv) if all of the conditions set forth in Section 6.1
and Section 6.2 shall have been satisfied or waived or
shall then be capable of being satisfied, but the Closing shall
not have occurred on the Closing Date due to the existence of a
Financing Failure.
(e) For purposes of this Agreement, a
Financing
Failure
shall be deemed to exist if either:
(i) a Financing Election has not been duly made in
accordance with Section 5.15 above, and (A) Parent has
complied with all of its obligations under Section 5.14,
and (B) the Debt Financing is not available on the Closing
Date on the terms and conditions contemplated in the Commitment
Letter in an amount necessary to satisfy Parents
obligations under Article II; or
(ii) a Financing Election has been duly made in accordance
with Section 5.15 above, and (A) Parent has complied
with all of its obligations under Section 5.15,
(B) the Financing is not available on the Closing Date on
the terms and conditions contemplated in the Financing
Agreements in an amount necessary to satisfy Parents
obligations under Article II.
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Section 7.2
Effect
of Termination
. In the event of the termination
of this Agreement as provided in Section 7.1, written
notice thereof shall be given to the other party or parties,
specifying the provision hereof pursuant to which such
termination is made, and this Agreement shall forthwith become
void and of no effect (other than the provisions of
Sections 3.18, 5.7(b), 5.11, 7.2 and 7.3, and
Article VIII, all of which shall survive termination of
this Agreement), and there shall be no liability (whether in
contract, tort or otherwise) on the part of Parent, Merger Sub
or the Company or their respective directors, officers and
Affiliates, except (i) as provided in Section 7.3, and
(ii) subject to Section 7.3(d), nothing in this
Agreement shall relieve any party from liability for material
breach of this Agreement.
Section 7.3
Termination
Fees
.
(a) In the event that (A) (x) this Agreement is
terminated by the Company or Parent pursuant to
Section 7.1(b)(i) (and at the time of such termination a
vote to obtain the Company Stockholder Approval has not been
held) or Section 7.1(b)(iii), (y) prior to such
termination, any Person or group (as defined in
Section 13(d) of the Exchange Act), other than Parent and
its Subsidiaries, Affiliates and Representatives (on behalf of
Parent), shall have publicly announced (and shall not have
withdrawn or abandoned) an intention (whether or not
conditional) to make a Takeover Proposal (provided, that for
purposes of this clause (a), any reference in the definition of
Takeover Proposal to 20% shall be deemed a reference to 50%) or
such Takeover Proposal has otherwise become publicly known, and
(z) the Company enters into a definitive agreement with
respect to, or consummates, a transaction contemplated by any
Takeover Proposal within twelve (12) months of the date
this Agreement is terminated, or there is otherwise consummated
a Takeover Proposal in the form of a tender offer, exchange
offer or similar transaction, (B) this Agreement is
terminated by Parent pursuant to Section 7.1(c)(iii), or
(C) this Agreement is terminated by the Company pursuant to
Section 7.1(d)(ii), then in any such event under clause
(A), (B) or (C) of this Section 7.3(a), the
Company shall pay to Parent the Company Termination Fee in cash.
Any payment required to be made pursuant to clause (A) of
this Section 7.3(a) shall be made to Parent promptly
following the earlier of the execution of a definitive agreement
with respect to, or the consummation of, any transaction
contemplated by the Takeover Proposal; any payment required to
be made pursuant to clause (B) of this Section 7.3(a)
shall be made to Parent promptly following (and in any event not
later than two business days after) termination of this
Agreement by Parent pursuant to such section; and any payment
required to be made pursuant to clause (C) of this
Section 7.3(a) shall be made to Parent prior to or
simultaneously with (and as a condition to the effectiveness of)
termination of this Agreement by the Company pursuant to
Section 7.1(d)(ii). All such payments shall be made by wire
transfer of immediately available funds to an account to be
designated by Parent.
(b) In the event that this Agreement is terminated by:
(i) Parent pursuant to Section 7.1(c)(vi) or by the
Company pursuant to Section 7.1(d)(iv), in each case as a
result of a Financing Failure, then Parent shall pay to the
Company the Parent Break Fee in cash, it being understood that
in no event shall Parent to be required to pay the Parent Break
Fee on more than one (1) occasion. If the Parent Break Fee
becomes payable pursuant to this Section 7.3(b), it shall
be paid no later than three (3) Business Days after the
termination of this Agreement pursuant to
Section 7.1(c)(vi) or Section 7.1(d)(iv), as the case
may be, as provided herein;
(ii) Parent or the Company pursuant to
Section 7.1(b)(iv), then, provided that the Company
Stockholder Approval shall have occurred, Parent shall pay to
the Company the Parent Vote Down Fee in cash, it being
understood that in no event shall Parent to be required to pay
the Parent Vote Down Fee on more than one (1) occasion. If
the Parent Vote Down Fee becomes payable pursuant to this
Section 7.3(b), it shall be paid no later than three
(3) Business Days after the termination of this Agreement
pursuant to Section 7.1(b)(iv).
(c) In the event that the Company shall fail to pay the
Company Termination Fee when due, or Parent shall fail to pay
the Parent Break Fee or Parent Vote Down Fee when due, as the
case may be, such payment amount shall accrue interest for the
period commencing on the date such payment amount became past
due, at a rate equal to the prime lending rate from time to time
during such period as published in the
Wall Street
Journal
. In addition, if either party shall fail to pay such
payment amount when due, such party shall also pay to such other
party all of such other partys costs and expenses
(including attorneys fees) in connection with efforts to
collect such payment amount. Each of the Company and Parent
acknowledges that the payment amounts and the other provisions
of this
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Section 7.3 are an integral part of the Transactions and
that, without these agreements, neither the Company nor Parent
would enter into this Agreement.
(d) Notwithstanding anything to the contrary in this
Agreement, including Section 8.6, in circumstances where
payment of the Company Termination Fee, the Parent Break Fee or
the Parent Vote Down Fee, as the case may be, is required
hereunder, a partys right to receive payment of such fee
(and any interest and costs payable thereon) under this
Section 7.3 shall be the sole and exclusive remedy of such
party and its Affiliates against the other party or any of their
respective former, current or future stockholders, directors,
officers, employees, representatives or Affiliates for any loss
suffered as a result of the failure of the Merger to be
consummated or for a breach or failure to perform hereunder or
otherwise, and upon payment of such amount the party making such
payment and its related persons shall have no further liability
or obligation relating to or arising out of this Agreement or
the transactions contemplated hereby.
ARTICLE VIII.
Miscellaneous
Section 8.1
Nonsurvival
of Representations and Warranties
. Except as
otherwise provided in this Agreement, the representations,
warranties and agreements of each party hereto shall remain
operative and in full force and effect regardless of any
investigation made by or on behalf of any other party hereto,
any Person controlling any such party or any of their officers,
directors or Representatives, whether prior to or after the
execution of this Agreement, and no information provided or made
available shall be deemed to be disclosed in this Agreement or
in the Company Disclosure Schedule or the Parent Disclosure
Schedule, except to the extent actually set forth herein or
therein. The representations, warranties and agreements in this
Agreement shall terminate at the Effective Time or, except as
otherwise provided in Section 7.2, upon the termination of
this Agreement pursuant to Section 7.1, as the case may be,
except that the agreements set forth in Article II and
Sections 5.9, 5.10, 5.11, 5.12, 5.19, 5.20, and any other
agreement in this Agreement which contemplates performance after
the Effective Time shall survive the Effective Time indefinitely
and those set forth in Sections 3.18, 5.7(b), 5.11, 7.2 and
7.3 and this Article VIII shall survive termination
indefinitely. The Confidentiality Agreement shall
(i) survive termination of this Agreement in accordance
with its terms and (ii) terminate as of the Effective Time.
Section 8.2
Amendment
or Supplement
. At any time prior to the Effective
Time, this Agreement may be amended or supplemented in any and
all respects, whether before or after receipt of the Company
Stockholder Approval, by written agreement of the parties
hereto, by action taken by their respective Boards of Directors;
provided
,
however
, that following receipt of the
Company Stockholder Approval, there shall be no amendment or
change to the provisions hereof which by Law would require
further approval by the stockholders of the Company without such
approval.
Section 8.3
Extension
of Time, Waiver, Etc
. At any time prior to the
Effective Time, any party may, subject to applicable Law,
(a) waive any inaccuracies in the representations and
warranties of any other party hereto, (b) extend the time
for the performance of any of the obligations or acts of any
other party hereto or (c) waive compliance by the other
party with any of the agreements contained herein or, except as
otherwise provided herein, waive any of such partys
conditions. Notwithstanding the foregoing, no failure or delay
by the Company, Parent or Merger Sub in exercising any right
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 hereunder.
Any agreement on the part of a party hereto to any such
extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party.
Section 8.4
Assignment
. Neither
this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned, in whole or in part, by operation
of Law or otherwise, by any of the parties without the prior
written consent of the other parties, except that Parent
and/or
Merger Sub may assign, in their sole discretion, any or all of
their respective rights, interests and obligations under this
Agreement to any Affiliate of Parent or to one or more financing
sources for collateral purposes without the written consent of
the Company, but no such assignment shall relieve Merger Sub of
any of its obligations hereunder. Subject to the preceding
sentence, this Agreement shall
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be binding upon, inure to the benefit of, and be enforceable by,
the parties hereto and their respective successors and permitted
assigns. Any purported assignment not permitted under this
Section shall be null and void.
Section 8.5
Counterparts;
Facsimile; Electronic Transmission
. This
Agreement may be executed in counterparts (each of which shall
be deemed to be an original but all of which taken together
shall constitute one and the same agreement) and shall become
effective when one or more counterparts have been signed by each
of the parties and delivered to the other parties. The exchange
of copies of this Agreement and of signature pages by facsimile
or electronic transmission shall constitute effective execution
and delivery of this Agreement as to the parties and may be used
in lieu of the original Agreement for all purposes. Signatures
of the parties transmitted by facsimile or electronic
transmission shall be deemed to be their original signatures for
all purposes.
Section 8.6
Entire
Agreement; No Third-Party Beneficiaries
.
(a) This Agreement, the Company Disclosure Schedule, the
Parent Disclosure Schedule and the Confidentiality Agreement
(a) constitute the entire agreement, and supersede all
other prior agreements and understandings, both written and
oral, among the parties, or any of them, with respect to the
subject matter hereof and thereof.
(b) This Agreement, the Company Disclosure Schedule, the
Parent Disclosure Schedule, and the Confidentiality Agreement
are not intended to and shall not confer upon any Person other
than the parties hereto any rights or remedies hereunder, except
(i) as set forth in or contemplated by the terms and
provisions of Section 5.9 and Section 8.6(c),
(ii) the holders of shares of the Company Common Stock,
Series B Preferred Stock, Company Options and RSUs shall be
third party beneficiaries of this Agreement for the purpose of
pursuing claims for damages (including damages based on loss of
the economic benefits of the transaction to the Companys
stockholders) in the event of a failure by Parent or Merger Sub
to effect the Merger as required by this Agreement or a material
breach by Parent or Merger Sub that contributed to a failure of
any of the conditions to Closing from being satisfied, whether
or not this Agreement has been validly terminated pursuant to
Article VII, which right is hereby expressly acknowledged
and agreed by the parties hereto, and (iii) from and after
the Effective Time, the rights of holders of shares of the
Company Common Stock and Series B Preferred Stock and the
holders of Company Options and RSUs to receive the consideration
set forth in Article II. The rights granted pursuant to
clause (ii) of this Section 8.6(b), including the
power to settle, waive or abandon any such rights or related
claims for damages, shall be subject to the limitations of
Section 7.3, and shall only be enforceable on behalf of
Companys stockholders by the Company, in its sole and
absolute discretion, as agent for its stockholders, it being
understood and agreed that any and all interests in such claims
shall attach to such shares of the Company Common Stock and
Series B Preferred Stock and subsequently transfer
therewith and, consequently, any damages, settlements or other
amounts recovered or received by the Company with respect to
such claims (net of expenses incurred by the Company in
connection therewith) may, in the sole and absolute discretion
of the Company, be retained by the Company for the use and
benefit of the Company on behalf of its stockholders in any
manner the Company deems fit.
(c) This Agreement, the Company Disclosure Schedule, the
Parent Disclosure Schedule, and the Confidentiality Agreement
are not intended to and shall not confer upon any Person other
than the parties hereto any rights or remedies hereunder, except
(i) as set forth in or contemplated by the terms and
provisions of Section 5.9 or Section 8.6(b),
(ii) the holders of shares of the Parent Common Stock shall
be third party beneficiaries of this Agreement for the purpose
of pursuing claims for damages (including damages based on loss
of the economic benefits of the transaction to the Parents
stockholders) in the event of a failure by the Company to effect
the Merger as required by this Agreement or a material breach by
the Company that contributed to a failure of any of the
conditions to Closing from being satisfied, whether or not this
Agreement has been validly terminated pursuant to
Article VII, which right is hereby expressly acknowledged
and agreed by the parties hereto. The rights granted pursuant to
clause (ii) of this Section 8.6(c), including the
power to settle, waive or abandon any such rights or related
claims for damages, shall be subject to the limitations of
Section 7.3, and shall only be enforceable on behalf of
Parents stockholders by Parent, in its sole and absolute
discretion, as agent for its stockholders, it being understood
and agreed that any and all interests in such claims shall
attach to such shares of Parent Common Stock and subsequently
transfer therewith and, consequently, any damages, settlements
or other amounts recovered or received by Parent with respect to
such claims (net of expenses incurred by Parent in connection
therewith) may, in
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the sole and absolute discretion of Parent, be retained by
Parent for the use and benefit of Parent on behalf of its
stockholders in any manner Parent deems fit.
Section 8.7
Governing
Law
. This Agreement, and all disputes, claims or
controversies (whether in contract, tort or otherwise) arising
out of or relating to this Agreement, the negotiation, validity
or performance of this Agreement or the Transactions shall be
governed by, and construed in accordance with, the laws of the
State of Delaware, without regard to its rules of conflicts of
laws.
Section 8.8
Specific
Enforcement
. Except as specifically provided in
Section 7.3 above, the parties agree that irreparable
damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their
specific terms or were otherwise breached and that money damages
or other legal remedies would not be an adequate remedy for such
damages. Accordingly, except as otherwise provided in
Section 7.3, the parties hereto acknowledge and hereby
agree that in the event of any breach or threatened breach by
the Company, on the one hand, or Parent and Merger Sub, on the
other hand, of any of their respective covenants or obligations
set forth in this Agreement, the Company, on the one hand, and
Parent and Merger Sub, on the other hand, shall be entitled to
an injunction or injunctions to prevent or restrain breaches or
threatened breaches of this Agreement by the other (as
applicable), and to specifically enforce the terms and
provisions of this Agreement to prevent breaches or threatened
breaches of, or to enforce compliance with, the covenants and
obligations of the other under this Agreement. The Company,
Parent and Merger Sub hereby agree not to raise any objections
to (and irrevocably waives any defenses based on adequacy of any
other remedy, at law or in equity, that might be asserted as a
bar to) the availability of the equitable remedy of specific
performance to prevent or restrain breaches or threatened
breaches of this Agreement, and to specifically enforce the
terms and provisions of this Agreement to prevent breaches or
threatened breaches of, or to enforce compliance with, the
covenants and obligations of the parties under this Agreement.
The parties hereto further agree that (a) by seeking the
remedies provided for in this Section 8.8, a party shall
not in any respect waive its right to seek any other form of
relief that may be available to a party under this Agreement
(including monetary damages) in the event that this Agreement
has been terminated or in the event that the remedies provided
for in this Section 8.8 are not available or otherwise are
not granted and (b) nothing set forth in this
Section 8.8 shall require any party hereto to institute any
proceeding for (or limit any partys right to institute any
proceeding for) specific performance under this Section 8.8
prior or as a condition to exercising any termination right
under Article VII (and pursuing damages after such
termination), nor shall the commencement of any legal proceeding
pursuant to this Section 8.8 or anything set forth in this
Section 8.8 restrict or limit any partys right to
terminate this Agreement in accordance with the terms of
Article VII or pursue any other remedies under this
Agreement that may be available then or thereafter. Each party
further agrees that no other party or any other Person shall be
required to obtain, furnish or post any bond or similar
instrument in connection with or as a condition to obtaining any
remedy referred to in this Section 8.8, and each party
irrevocably waives any right it may have to require the
obtaining, furnishing or posting of any such bond or similar
instrument.
Section 8.9
Consent
to Jurisdiction
. All actions and proceedings
arising out of or relating to this Agreement, the negotiation,
validity or performance of this Agreement or any of the
Transactions shall be heard and determined in the Delaware Court
of Chancery or, if subject matter jurisdiction in the such court
is not available, in the United States District Court for the
District of Delaware, and the parties hereto hereby irrevocably
submit to the exclusive jurisdiction of such courts (and, in the
case of appeals, appropriate appellate courts therefrom) in any
such action or proceeding and irrevocably waive the defense of
an inconvenient forum to the maintenance of any such action or
proceeding. The consent to jurisdiction set forth in this
paragraph shall not constitute general consent to service of
process in the State of Delaware and shall have no effect for
any purpose except as provided in this paragraph and shall not
be deemed to confer rights on any Person other than the parties
hereto. The parties hereto agree that a final judgment in any
such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in
any other manner provided by applicable law.
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Section 8.10
Notices
. All
notices, requests and other communications to any party
hereunder shall be in writing and shall be deemed given if
delivered personally, facsimiled (which is confirmed) or sent by
overnight courier (providing proof of delivery) to the parties
at the following addresses:
If to Parent or Merger Sub, to:
JDA Software Group, Inc.
14400 N. 87th Street
Scottsdale, AZ
85260-3649
Attention: G. Michael Bridge
Facsimile: 480.308.3001
with copies (which shall not constitute notice) to:
DLA Piper LLP (US)
2525 East Camelback Road, Suite 1000
Phoenix, AZ 85016
Attn: Steven D. Pidgeon
Facsimile: 480.606.5524
If to the Company, to:
i2 Technologies, Inc.
11701 Luna Road
Dallas, TX 75234
Attn: John Harvey
Facsimile: 469.357.6893
with copies (which shall not constitute notice) to:
Munsch Hardt Kopf & Harr, P.C.
500 N. Akard Street, Suite 3800
Dallas, TX
75201-6659
Attn: A. Michael Hainsfurther
Facsimile: 214.978.4356
or such other address or facsimile number as such party may
hereafter specify by like notice to the other parties hereto.
All such notices, requests and other communications shall be
deemed received on the date of receipt by the recipient thereof
if received prior to 5:00 P.M. in the place of receipt and
such day is a business day in the place of receipt. Otherwise,
any such notice, request or communication shall be deemed not to
have been received until the next succeeding business day in the
place of receipt.
Section 8.11
Severability
. If
any term or other provision of this Agreement is determined by a
court of competent jurisdiction to be invalid, illegal or
incapable of being enforced by any rule of law or public policy,
all other terms, provisions and conditions of this Agreement
shall nevertheless remain in full force and effect. Upon such
determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible to the
fullest extent permitted by applicable law in an acceptable
manner to the end that the Transactions are fulfilled to the
extent possible.
Section 8.12
Remedies
. Except
as otherwise provided in this Agreement, any and all remedies
expressly conferred upon a party to this Agreement will be
cumulative with, and not exclusive of, any other remedy
contained in this Agreement, at law or in equity. The exercise
by a party to this Agreement of any one remedy will not preclude
the exercise by it of any other remedy.
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Section 8.13
Definitions
.
(a) As used in this Agreement, the following terms have the
meanings ascribed thereto below:
Acceptable Confidentiality Agreement
shall
mean an agreement that is executed, delivered and effective
after the execution, delivery and effectiveness of this
Agreement and that (i) contains provisions that
(A) require any counter-party thereto (and any of its
representatives named therein) that receives material non-public
information of or with respect to the Company to keep such
information confidential, (B) are no less favorable in any
material respect to the Company, and no less restrictive with
respect to the conduct of such counter-party (and any of its
representatives named therein) than the terms of the
Confidentiality Agreement (including with respect to standstill
provisions), and (C) expressly permit the Company to
provide to Parent the information required to be so provided
pursuant to Section 5.3 on the terms set forth in
Section 5.3, and (ii) does not include any provision
calling for an exclusive right to negotiate with the Company.
Affiliate
means, as to any Person, any other
Person that, directly or indirectly, controls, or is controlled
by, or is under common control with, such Person. For this
purpose,
control
(including, with its
correlative meanings,
controlled by
and
under common control with
) shall mean the
possession, directly or indirectly, of the power to direct or
cause the direction of management or policies of a Person,
whether through the ownership of securities or partnership or
other ownership interests, by contract or otherwise.
business day
means a day except a Saturday, a
Sunday or other day on which the SEC or banks in the City of New
York or the State of Texas are authorized or required by Law to
be closed.
Code
means the Internal Revenue Code of 1986,
as amended, and the rules and regulations promulgated thereunder.
Company Material Adverse Effect
means any
change, event, occurrence or state of facts that (i) has a
material adverse effect on the business, properties, assets,
liabilities, results of operations or financial condition of the
Company and its Subsidiaries taken as a whole or
(ii) prevents, or materially hinders the Company from
consummating the Merger or any of the other transactions
contemplated by this Agreement;
provided
,
however
,
that none of the following shall be deemed either alone or in
combination to constitute, and none of the following shall be
taken into account in determining whether there has been, or
could reasonably be expected to be, a Company Material Adverse
Effect:
(1) any change, event, occurrence or state of facts
relating to the global, U.S. or regional economy; financial,
credit or capital markets (including changes in interest or
currency exchange rates and any suspension in trading in
securities generally); political conditions in general; or the
industry in which the Company operates, including changes
thereto as are caused by terrorist activities, entry into or
material worsening of war or armed hostilities, or other
national or international calamity, except to the extent such
changes or developments have a disproportionate impact on the
Company and its Subsidiaries, taken as a whole, relative to
other industry participants;
(2) any change, event, occurrence or state of facts that
directly arises out of or results from the announcement or
pendency of this Agreement or any of the Transactions, including
shareholder litigation or disruption or loss of customer
business or supplier or employee relationships that is directly
related to or directly arises out of or results from the
announcement or pendency of this Agreement or any of the
Transactions;
(3) any changes or effects arising out of or resulting from
actions taken or the failure to take actions by the Company or
its Subsidiaries with Parents express written consent or
in accordance with express written request or instructions of
Parent or as otherwise expressly required to be taken by the
Company or its Subsidiaries pursuant to the terms of this
Agreement;
(4) in and of itself, any change in the Companys
stock price or trading volume or any failure to meet internal
projections or forecasts or published revenue or earnings
projections of industry analysts (provided that this
clause(4) shall not be construed as providing that the
change, event, occurrence or state of facts giving rise to such
change or failure does not constitute or contribute to a Company
Material Adverse Effect);
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(5) any legal proceedings made or brought by any of the
current or former stockholders of the Company (on their own
behalf or on behalf of the Company) against the Company arising
out of the Merger or in connection with any other transactions
contemplated by this Agreement;
(6) changes in GAAP or applicable accounting requirements
or principles (or the interpretation thereof) which occur or
become effective after the date of this Agreement; and
(7) any matters expressly set forth in the Company
Disclosure and identified as potentially creating a Material
Adverse Effect
Company Option
means any Option issued under
a Company Stock Plan.
Company Stock Plans
means the following plans
of the Company, as amended: (i) the 1995 Stock Option/Stock
Issuance Plan, (ii) the 2001 Non-Officer Stock Option/Stock
Issuance Plan and (iii) Aspect Development, Inc. 1992 Stock
Option Plan.
Company Termination Fee
shall mean an amount
in cash equal to $15,000,000.
Data Room
means the secure on-line data room
(or workspace) maintained by the Financial Advisor on behalf of
the Company, and to which designated personnel of Parent have
been given access, at Intralinks and designated as the workspace
for Omega.
GAAP
shall mean generally accepted accounting
principles as applied in the United States.
Governmental Authority
means any United
States,
non-United
States or multi-national government entity, body or authority,
including (i) any United States federal, state or local
government (including any town, village, municipality, district
or other similar governmental or administrative jurisdiction or
subdivision thereof, whether incorporated or unincorporated),
(ii) any
non-United
States or multi-national government or governmental authority or
any political subdivision thereof, (iii) any United States,
non-United
States or multi-national regulatory or administrative entity,
authority, instrumentality, jurisdiction, agency, body or
commission, exercising, or entitled or purporting to exercise,
any administrative, executive, judicial, legislative, police,
regulatory, or taxing authority or power, including any court,
tribunal, commission or arbitrator, (iv) any
self-regulatory organization or (v) any official of any of
the foregoing.
Governmental Investigation
means an
investigation by a Governmental Authority for the purpose of
imposing criminal sanctions.
HSR Act
means the
Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended.
Intellectual Property
of any Person means all
intellectual property rights arising from or in respect of the
following, whether protected, created or arising under any Law,
including: (i) all patents and applications therefor,
including continuations, divisionals,
continuations-in-part,
or reissues of patent applications and patents issuing thereon
(collectively,
Patents
); (ii) all
trademarks, service marks, trade names, service names, brand
names, trade dress rights, logos, Internet domain names and
corporate names, together with the goodwill associated with any
of the foregoing, and all applications, registrations and
renewals thereof, (collectively,
Marks
);
(iii) copyrights and registrations and applications
therefor, works of authorship and mask work rights
(collectively,
Copyrights
);
(iv) discoveries, concepts, ideas, research and
development, know-how, formulae, inventions, compositions,
manufacturing and production processes and techniques, technical
data, procedures, designs, drawings, specifications, databases
and other proprietary and confidential information, including
customer lists, supplier lists, pricing and cost information,
and business and marketing plans and proposals, in each case
excluding any rights in respect of any of the foregoing that
comprise or are protected by Copyrights or Patents
(collectively,
Trade Secrets
); and
(v) all Software.
Knowledge
shall mean, (i) in the case of
the Company or its Subsidiaries, the actual knowledge, after
reasonable inquiry within the scope of their respective business
responsibilities (which shall not require inquiry of persons
other than the persons hereinafter named in this definition), of
Michael J. Berry, John Harvey, Aditya Srivastava, Mark E.
Trivette, Hiten D. Varia and Jackson L. Wilson, (ii) in the
case of Parent or its Subsidiaries, the actual knowledge, after
reasonable inquiry within the scope of their respective business
responsibilities (which shall not require inquiry of persons
other than the persons hereinafter named in this
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definition), of Hamish Brewer, Pete Hathaway, Michael Bridge,
and David Alberty, and (iii) in the case of any other
Person that is not an individual, with respect to any matter in
question, the actual knowledge after due inquiry of such
Persons executive officers and all other officers and
managers having responsibility relating to the applicable matter.
Options
means options, warrants and other
rights to acquire shares of Company Common Stock.
Parent Break Fee
shall mean an amount in cash
equal to $30,000,000.
Parent Common Stock
means the common stock,
par value $0.01 per share, of Parent.
Parent Common Stock Market Price
means the
volume weighted average of the per share prices of Parent Common
Stock on the NASDAQ Stock Market for the five
(5) consecutive trading days ending two (2) days prior
to the Effective Time.
Parent Material Adverse Effect
means any
change, event, occurrence or state of facts that (i) has a
material adverse effect on the business, properties, assets,
liabilities, results of operations or financial condition of
Parent and its Subsidiaries taken as a whole or
(ii) prevents or materially hinders the consummation of the
Transactions or the ability of Parent or Merger Sub to fully
perform their respective covenants and obligations hereunder;
provided, however, that none of the following shall be deemed
either alone or in combination to constitute, and none of the
following shall be taken into account in determining whether
there has been, or could reasonably be expected to be, a Parent
Material Adverse Effect:
(1) any change, event, occurrence or state of facts
relating to the global, U.S. or regional economy,
financial, credit or capital markets (including changed in
interest or currency exchange rates and any suspension in
trading in securities generally), political conditions in
general, or the industry in which the Parent operates, including
changes thereto as are caused by terrorist activities, entry
into or material worsening of war or armed hostilities, or other
national or international calamity, except to the extent such
changes or developments have a disproportionate impact on the
Parent and its Subsidiaries, taken as a whole, relative to other
industry participants;
(2) any change, event, occurrence or state of facts that
directly arises out of or results from the announcement or
pendency of this Agreement or any of the Transactions, including
shareholder litigation or disruption or loss of customer
business or supplier or employee relationships that is related
to or directly arises out of or results from the announcement or
pendency of this Agreement or any of the Transactions;
(3) any changes or effects arising out of or resulting from
actions taken or the failure to take actions by Parent or its
Subsidiaries with the Companys express written consent or
in accordance with express written request or instructions of
the Company or as otherwise expressly required to be taken by
Parent or its Subsidiaries pursuant to the terms of this
Agreement;
(4) in and of itself, any change in Parents stock
price or trading volume or any failure to meet internal
projections or forecasts or published revenue or earnings
projections of industry analysts (provided that this
clause (4) shall not be construed as providing that the
change, event, occurrence or state of facts giving rise to such
change or failure does not constitute or contribute to a Parent
Material Adverse Effect);
(5) any legal proceedings made or brought by any of the
current or former stockholders of Parent (on their own behalf or
on behalf of Parent) against Parent arising out of the Merger or
in connection with any other transactions contemplated by this
Agreement; and
(6) changes in GAAP or applicable accounting requirements
or principles (or the interpretation thereof) which occur or
become effective after the date of this Agreement
Parent Vote Down Fee
shall mean an amount in
cash equal to $7,000,000.
Person
means an individual, a corporation, a
limited liability company, a partnership, an association, a
trust or any other entity, including a Governmental Authority.
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Proxy Statement/Prospectus
shall mean the
proxy statement/prospectus to be sent to the Companys
stockholders in connection with the Company Stockholders
Meeting and, subject to Section 5.15, to Parents
stockholders in connection with the Parent Stockholders
Meeting.
RSU
means any award, or portion thereof, of
restricted stock or restricted stock units, whether vested or
unvested, made under a Company Stock Plan with respect to which
the shares of Company Common Stock subject thereto have not been
issued (and are not outstanding) prior to the Effective Date.
Software
means any and all (i) computer
programs, including any and all software implementations of
algorithms, models and methodologies, whether in source code or
object code, (ii) databases and compilations, including any
and all data and collections of data, whether machine readable
or otherwise, (iii) descriptions, flow-charts and other
work product used to design, plan, organize and develop any of
the foregoing, screens, user interfaces, report formats,
firmware, development tools, templates, menus, buttons and
icons, and (iv) documentation including user manuals and
other training documentation related to any of the foregoing.
Subsidiary
when used with respect to any
party, means any corporation, limited liability company,
partnership, association, trust or other entity the accounts of
which would be consolidated with those of such party in such
partys consolidated financial statements if such financial
statements were prepared in accordance with GAAP, as well as any
other corporation, limited liability company, partnership,
association, trust or other entity of which securities or other
ownership interests representing more than 50% of the equity or
more than 50% of the ordinary voting power (or, in the case of a
partnership, more than 50% of the general partnership interests)
are, as of such date, owned by such party or one or more
Subsidiaries of such party or by such party and one or more
Subsidiaries of such party.
Transactions
refers collectively to this
Agreement and the transactions contemplated hereby, including
the Merger.
The following terms are defined on the page of this Agreement
set forth after such term below:
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5.12(e)
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Adjusted Common Stock Cash Consideration
|
|
2.1(c)(ii)
|
Adjusted Exchange Ratio
|
|
2.1(c)(ii)
|
Adverse Recommendation Change
|
|
5.3(d)
|
Agreement
|
|
Preamble
|
Balance Sheet Date
|
|
3.5(d)
|
Bankruptcy and Equity Exception
|
|
3.3(a)
|
Book-Entry Shares
|
|
2.2(b)
|
Certificates
|
|
2.1(d)
|
Certificate of Merger
|
|
1.3
|
Charter Amendment Proposal
|
|
5.5(b)
|
Closing
|
|
1.2
|
Closing Date
|
|
1.2
|
COBRA
|
|
3.11(j)
|
COI Test
|
|
6.2(g)
|
Common Stock Certificate
|
|
2.1(c)
|
Common Stock Cash Consideration
|
|
2.1(c)
|
Common Stock Merger Consideration
|
|
2.1(c)
|
Common Stock Cash Consideration
|
|
2.1(c)
|
Company
|
|
Preamble
|
Company Acquisition Agreement
|
|
5.3(d)
|
Company Board Recommendation
|
|
3.3(b)
|
A-62
|
|
|
|
|
Section
|
|
Company Cash Deposit
|
|
2.2(a)
|
Company Charter Documents
|
|
3.1(c)
|
Company Common Stock
|
|
2.1
|
Company Disclosure Schedule
|
|
Article III
|
Company Intellectual Property
|
|
3.15(a)
|
Company Material Contract
|
|
3.13(a)
|
Company Plans
|
|
3.11(a)
|
Company Preferred Stock
|
|
3.2(a)
|
Company Rights
|
|
3.2(a)
|
Company Rights Agreement
|
|
3.2(a)
|
Company SEC Documents
|
|
3.5(a)
|
Company Stockholder Approval
|
|
3.3(d)
|
Company Stockholders Meeting
|
|
5.5(a)
|
Company Voting Agreements
|
|
Preamble
|
Competition Laws
|
|
3.4
|
Confidentiality Agreement
|
|
5.7(b)
|
Contract
|
|
3.3(c)
|
Continuing Employee
|
|
5.12(a)
|
D&O Insurance
|
|
5.9(b)
|
Data Laws
|
|
3.15(n)
|
Debt Financing
|
|
4.17(a)
|
Deposit Notice
|
|
2.2(a)
|
DGCL
|
|
1.1
|
Dissenting Shares
|
|
2.2(h)
|
DOJ
|
|
5.4(a)
|
Domestic Benefit Plan
|
|
3.11(a)
|
Effective Time
|
|
1.3
|
Election Notice
|
|
5.15(b)
|
Employees
|
|
3.11(a)
|
Environmental Laws
|
|
3.12(c)(i)
|
Environmental Liabilities
|
|
3.12(c)(ii)
|
Environmental Permits
|
|
3.12(b)
|
ERISA
|
|
3.11(a)
|
ERISA Affiliates
|
|
3.11(e)
|
Exchange Act
|
|
3.4
|
Exchange Agent
|
|
2.2(a)
|
Exchange Fund
|
|
2.2(a)
|
Exchange Ratio Reduction Number
|
|
2.1(c)(ii)
|
Fairness Opinion
|
|
3.17
|
Filed Company SEC Documents
|
|
3.5(d)
|
Filed Parent SEC Documents
|
|
4.5(d)
|
Financial Advisor
|
|
3.17
|
Financing
|
|
5.15(b)(iv)
|
Financing Agreements
|
|
5.15(b)(v)
|
A-63
|
|
|
|
|
Section
|
|
Financing Election
|
|
5.15(b)
|
Financing Election Deadline
|
|
5.15(b)
|
Foreign Antitrust Laws
|
|
3.4
|
Foreign Benefit Plan
|
|
3.11(a)
|
FTC
|
|
5.4(a)
|
Hazardous Materials
|
|
3.12(c)(iii)
|
Indemnitees
|
|
5.9(a)
|
Investor
|
|
4.6(a)
|
Issuance Proposal
|
|
5.5(b)
|
Laws
|
|
3.8(a)
|
Lenders
|
|
4.17
|
Liens
|
|
3.1(b)
|
Maximum Share Number
|
|
2.1(c)(ii)
|
Measurement Date
|
|
3.2(a)
|
Merger
|
|
Preamble
|
Merger Consideration
|
|
2.1(d)
|
Merger LLC
|
|
5.20
|
Merger Sub
|
|
Preamble
|
Merger Sub Charter Documents
|
|
4.1(c)
|
Moral Rights
|
|
3.15(o)
|
Notice
|
|
5.3(d)
|
Open Source License
|
|
3.15(d)
|
Open Source Software
|
|
3.15(d)
|
Outside Date
|
|
7.1(b)(i)
|
Parent
|
|
Preamble
|
Parent Benefit Plans
|
|
4.11(a)
|
Parent Board Recommendation
|
|
4.3(b)
|
Parent Charter Documents
|
|
4.1(c)
|
Parent Common Stock
|
|
2.1(c)
|
Parent Common Stock Market Price
|
|
2.2(i)
|
Parent Disclosure Schedule
|
|
Article IV
|
Parent Material Contract
|
|
4.13(a)
|
Parent SEC Documents
|
|
4.5(a)
|
Parent Stock Plans
|
|
4.2
|
Parent Stockholder Approval
|
|
4.3(a)
|
Parent Stockholders Meeting
|
|
5.5(b)
|
Parent Voting Agreement
|
|
Preamble
|
Permits
|
|
3.8(b)
|
Plan Amendment Proposal
|
|
5.5(b)
|
Policies
|
|
3.16
|
Preferred Stock Merger Consideration
|
|
2.1(d)
|
Proceeding
|
|
8.14
|
Registered Company Intellectual Property
|
|
3.15(a)
|
Registration Statement
|
|
5.1(a)
|
A-64
|
|
|
|
|
Section
|
|
Release
|
|
3.12(c)(iv)
|
Representatives
|
|
5.3(a)
|
Restraints
|
|
6.1(b)
|
SEC
|
|
2.3(d)
|
Securities Act
|
|
3.1(b)
|
Series A Preferred Stock
|
|
3.2(a)
|
Series B Preferred Stock
|
|
2.1
|
Series B Preferred Stock Certificate
|
|
2.1(d)
|
SOX
|
|
3.5(c)
|
Subsidiary Documents
|
|
3.1(c)
|
Superior Proposal
|
|
5.3(e)
|
Surviving Corporation
|
|
1.1
|
Surviving Company
|
|
5.20
|
Takeover Proposal
|
|
5.3(e)
|
Taxes
|
|
3.10(n)
|
Tax Returns
|
|
3.10(n)
|
Terminating Company Breach
|
|
7.1(c)(i)
|
Terminating Parent Breach
|
|
7.1(d)(i)
|
Upstream Merger
|
|
5.20
|
WARN
|
|
3.11(m)
|
Warrants
|
|
2.4(a)
|
Section 8.14
Waiver
of Jury Trial
. Each party acknowledges and agrees
that any controversy which may arise under this Agreement is
likely to involve complicated and difficult issues and,
therefore, each such party irrevocably and unconditionally
waives any right it may have to a trial by jury in respect of
any legal action, suit or proceeding arising out of or relating
to this Agreement or the Transactions (each, a
Proceeding
). Each party to this Agreement
certifies and acknowledges that (a) no Representative of
any other party has represented, expressly or otherwise, that
such other party would not seek to enforce the foregoing waiver
in the event of a Proceeding, (b) such party has considered
the implications of this waiver, (c) such party makes this
waiver voluntarily, and (d) such party has been induced to
enter into this Agreement by, among other things, the mutual
waivers and certifications in this Section 8.14.
Section 8.15
Interpretation
.
(a) When a reference is made in this Agreement to an
Article, a Section, Exhibit or Schedule, such reference shall be
to an Article of, a Section of, or an Exhibit or Schedule to,
this Agreement unless otherwise indicated. The table of contents
and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words
include, includes or
including are used in this Agreement, they shall be
deemed to be followed by the words without
limitation. The words hereof,
herein and hereunder and words of
similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement. All terms defined in this Agreement shall have the
defined meanings when used in any certificate or other document
made or delivered pursuant hereto unless otherwise defined
therein. The definitions contained in this Agreement are
applicable to the singular as well as the plural forms of such
terms and to the masculine as well as to the feminine and neuter
genders of such term. Any agreement, instrument or statute
defined or referred to herein or in any agreement or instrument
that is referred to herein means such agreement, instrument or
statute as from time to time amended, modified or supplemented,
including (in the case of agreements or instruments) by waiver
or consent and (in the case of statutes) by succession of
comparable successor statutes and references to all attachments
thereto and instruments incorporated therein. References to a
Person are also to its permitted successors and assigns.
A-65
(b) The parties hereto have participated jointly in the
negotiation and drafting of this Agreement and, in the event an
ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as jointly drafted by the parties
hereto 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.
(c) For purposes of this Agreement, the Company shall be
deemed to have delivered, made available
or furnished any document or information if such document or
information shall have been posted to the Data Room with notice
delivered to Parent no less than one (1) Business Days
prior to the execution of this Agreement and not subsequently
removed.
[Signature
page follows]
A-66
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered as of the date first
above written.
i2 TECHNOLOGIES, INC.
|
|
|
|
By:
|
/s/
Jackson
L. Wilson, Jr.
|
Jackson L. Wilson, Jr.
Chief Executive Officer and President
JDA SOFTWARE GROUP, INC.
Hamish N. Brewer
President and Chief Executive Officer
ALPHA ACQUISITION CORP.
Hamish N. Brewer
President and Chief Executive Officer
A-67
Schedule A
Signatories
to Company Voting Agreements
Jackson L. Wilson, Jr.
Stephen P. Bradley
Richard L. Clemmer
Lloyd G. Waterhouse
Michael J. Simmons
J. Coley Clark
Richard Hunter
Michael J. Berry
Hiten D. Varia
Aditya Srivastava
John Harvey
R2 Top Hat, Ltd.
A-68
Schedule B
Signatories
to Parent Voting Agreements
Hamish N. Brewer
James D. Armstrong
G. Michael Gullard
Douglas G. Marlin
Jock Patton
Peter S. Hathaway
G. Michael Bridge
David Alberty
A-69
Annex B
Voting
Agreement
This Stockholder
Voting Agreement
(this
Agreement
) is made and entered into as
of November 4, 2009, by and among
JDA Software Group,
Inc.
, a Delaware corporation
(
Parent
),
i2 Technologies,
Inc.
,
a
Delaware corporation (the
Company
)
(only with respect to
Section 2(b)
hereof), and the
undersigned stockholder (
Stockholder
)
of the Company.
Recitals
A.
Concurrently with the execution and delivery
hereof, Parent, Alpha Acquisition Corp., a Delaware corporation
and an indirect wholly owned subsidiary of Parent
(
Merger Sub
), and the Company are
entering into an Agreement and Plan of Merger of even date
herewith (as it may be amended or supplemented from time to time
pursuant to the terms thereof, the
Merger
Agreement
), which provides for the merger (the
Merger
) of Merger Sub with and into
the Company in accordance with its terms ( the Merger, Merger
Agreement and the transactions contemplated thereby referred to
collectively as the
Proposed
Transaction
).
B.
Stockholder has sole voting power over such
number of shares of each class of capital stock of the Company
beneficially owned (as defined in
Rule 13d-3
under the Securities Exchange Act of 1934, as amended (the
Exchange Act
)) by Stockholder as is
indicated on the signature page of this Agreement.
C.
In consideration of the execution and delivery of
the Merger Agreement by Parent and Merger Sub, Stockholder
desires to agree to vote the Shares (as defined herein) over
which Stockholder has sole voting power so as to facilitate the
consummation of the Merger and to consent to the treatment in
the Merger of Company Options (as defined in the Merger
Agreement) held by Stockholder pursuant to the terms of the
Merger Agreement.
Now,
Therefore
, intending to be legally bound, the parties
hereto hereby agree as follows:
1.
Certain Definitions
.
(a) Capitalized terms used but not otherwise defined herein
shall have the meanings ascribed thereto in the Merger
Agreement. For all purposes of and under this Agreement, the
following terms shall have the following respective meanings:
Consent
shall mean any approval,
consent, ratification, permission, waiver or authorization
(including any: (i) permit, license, certificate,
franchise, permission, variance, clearance, registration,
qualification or authorization issued, granted, given or
otherwise made available by or under the authority of any
Governmental Authority or pursuant to any Legal Requirement; or
(ii) right under any Contract with any Governmental
Authority).
Constructive Sale
means with respect
to any security, a short sale with respect to such security,
entering into or acquiring an offsetting derivative contract
with respect to such security, entering into or acquiring a
futures or forward contract to deliver such security or entering
into any other hedging or other derivative transaction that has
the effect of either directly or indirectly materially reducing
the economic benefits or risks of ownership.
Legal Requirement
shall mean any
federal, state, local, municipal, foreign or other law, statute,
constitution, principle of common law, resolution, ordinance,
code, edict, decree, rule, regulation, ruling or requirement
issued, enacted, adopted, promulgated, implemented or otherwise
put into effect by or under the authority of any Governmental
Authority (or under the authority of The NASDAQ Stock Market).
Shares
means (i) all outstanding
shares of capital stock of the Company owned, beneficially or of
record, by Stockholder as of the date hereof, and (ii) all
additional outstanding shares of capital stock of the Company
acquired by Stockholder, beneficially or of record, during the
period commencing with the execution and delivery of this
Agreement and expiring on the Expiration Date (as such term is
defined in
B-1
Section 8
below), in the case of each of
clauses (i) and (ii) as to which (and only as to
which) Stockholder has sole voting power; but in each case
excluding shares of capital stock of the Company that, by virtue
of Stockholders ownership of options or other convertible
securities, are deemed to be beneficially owned by Stockholder
pursuant to
Rules 13d-3(d)(1)(i)(A)
or (B) prior to the time at which Stockholder exercises
such options or other convertible securities and receives the
underlying capital stock of the Company.
Transfer
means, with respect to any
security, the direct or indirect assignment, sale, transfer,
tender, exchange, pledge, hypothecation, or the gift, placement
in trust, or the Constructive Sale or other disposition of such
security (excluding transfers: (i) by testamentary or
intestate succession, (ii) otherwise by operation of law,
or (iii) under any written trading plan adopted prior to
the date of this Agreement under
Rule 10b5-1
of the Exchange Act) or any right, title or interest therein
(including, but not limited to, any right or power to vote to
which the holder thereof may be entitled, whether such right or
power is granted by proxy or otherwise), or the record or
beneficial ownership thereof, and each agreement, arrangement or
understanding, whether or not in writing, to effect any of the
foregoing.
2.
Transfer and Voting Restrictions
.
(a) At all times during the period commencing with the
execution and delivery of this Agreement and expiring on the
Expiration Date, Stockholder shall not, except in connection
with the Merger, Transfer any of the Shares, or enter into an
agreement, commitment or other arrangement with respect thereto.
Notwithstanding the foregoing or anything to the contrary set
forth in this Agreement, Stockholder may Transfer any or all of
the Shares (i) by will, or by operation of law, in which
case this Agreement shall bind the transferee, or (ii) in
connection with estate and charitable planning purposes,
including Transfers to relatives, trusts and charitable
organizations, so long as the transferee, prior to such Transfer
executes a counterpart of this Agreement (with such
modifications as Parent may reasonably request solely to reflect
such transfer).
(b) Stockholder understands and agrees that if Stockholder
attempts to Transfer, vote or provide any other person with the
authority to vote any of the Shares other than in compliance
with this Agreement, the Company shall not, and Stockholder
hereby unconditionally and irrevocably instructs the Company to
not, (i) permit any such Transfer on its books and records,
(ii) issue a new certificate representing any of the Shares
or (iii) record such vote, in each case, unless and until
Stockholder shall have complied with the terms of this
Agreement. Each stock certificate evidencing Shares that is
issued in the name of Stockholder on or after the date of this
Agreement shall bear a legend indicating that such Shares are
subject to the terms of this Agreement and any transferee of the
Shares evidenced by the stock certificate takes the Shares
subject to the terms of this Agreement.
(c) Except as otherwise permitted by this Agreement or by
order of a court of competent jurisdiction, Stockholder will not
commit any act that could restrict or affect Stockholders
legal power, authority and right to vote all of the Shares then
owned of record or beneficially by Stockholder or otherwise
prevent or disable Stockholder from performing any of his
obligations under this Agreement. Without limiting the
generality of the foregoing, except for this Agreement and as
otherwise permitted by this Agreement, Stockholder will not
enter into any voting agreement with any Person with respect to
any of the Shares, grant any Person any proxy (revocable or
irrevocable) or power of attorney with respect to any of the
Shares, deposit any of the Shares in a voting trust or otherwise
enter into any agreement or arrangement with any Person limiting
or affecting Stockholders legal power, authority or right
to vote the Shares in favor of the approval of the Proposed
Transaction.
3.
Agreement to Vote Shares
.
(a) Prior to the Expiration Date, at every meeting of the
stockholders of the Company called, and at every adjournment or
postponement thereof, and on every action or approval by written
consent of the stockholders of the Company, Stockholder (in
Stockholders capacity as such) shall appear at the meeting
or otherwise cause the Shares to be present thereat for purposes
of establishing a quorum and, to the extent not voted by the
Persons appointed as proxies pursuant to this Agreement, vote
(i) in favor of (A) approval of the Proposed
Transaction, and (B) any adjournment or postponement
recommended by the Company with respect to any
B-2
stockholder meeting in connection with the Proposed Transaction,
and (ii) against the approval or adoption of any proposal
made in opposition to, or in competition with, the Proposed
Transaction, and (iii) against any of the following (to the
extent unrelated to the Proposed Transaction): (A) any
merger, consolidation or business combination involving the
Company or any of its subsidiaries other than the Proposed
Transaction; (B) any sale, lease or transfer of all or
substantially all of the assets of the Company or any of its
subsidiaries; (C) any reorganization, recapitalization,
dissolution, liquidation or winding up of the Company or any of
its subsidiaries; or (D) any other action that is intended,
or could reasonably be expected, to otherwise impede, interfere
with, delay, postpone, discourage or adversely affect the
consummation of the Proposed Transaction.
(b) If Stockholder is the beneficial owner, but not the
record holder, of the Shares, Stockholder agrees to take all
actions necessary to cause the record holder and any nominees to
vote all of the Shares in accordance with
Section 3(a)
.
4.
Grant of Irrevocable Proxy
.
(a) Stockholder hereby irrevocably (to the fullest extent
permitted by law) grants to, and appoints, Parent and each of
its executive officers and any of them, in their capacities as
officers of Parent (the
Grantees
), as
Stockholders proxy and attorney-in-fact (with full power
of substitution and re-substitution), for and in the name, place
and stead of Stockholder, to vote the Shares, to instruct
nominees or record holders to vote the Shares, or grant a
consent or approval or dissent or disapproval in respect of such
Shares in accordance with
Section 3
hereof and, in
the discretion of the Grantees, with respect to any proposed
adjournments or postponements of any meeting of stockholders of
the Company at which any of the matters described in
Section 3
hereof is to be considered.
(b) Stockholder represents that any proxies heretofore
given in respect of the Shares that may still be in effect are
not irrevocable, and such proxies are hereby revoked.
(c) Stockholder hereby affirms that the irrevocable proxy
set forth in this
Section 4
is given in connection
with the execution of the Merger Agreement, and that such
irrevocable proxy is given to secure the performance of the
duties of Stockholder under this Agreement. Stockholder hereby
further affirms that the irrevocable proxy is coupled with an
interest and may under no circumstances be revoked. Stockholder
hereby ratifies and confirms all that such irrevocable proxy may
lawfully do or cause to be done by virtue hereof. Such
irrevocable proxy is executed and intended to be irrevocable in
accordance with the provisions of Section 212 of the
Delaware General Corporation Law. Notwithstanding this
Section 4(c)
, the proxy granted by Stockholder shall
be revoked upon termination of this Agreement in accordance with
its terms.
(d) The Grantees may not exercise this irrevocable proxy on
any other matter except as provided above. Stockholder shall
retain at all times the right to vote the Shares in
Stockholders sole discretion and without any other
limitation on all matters other than those set forth in
Section 3
that are at any time or from time to time
presented for consideration to the Companys stockholders
generally.
(e) Parent may terminate this proxy with respect to
Stockholder at any time at its sole election by written notice
provided to Stockholder.
5.
Consent to Treatment of Company Options in the
Merger
. Stockholder hereby consents to the
treatment in the Merger of Company Options held by Stockholder
pursuant to Section 2.3(a)(ii) of the Merger Agreement.
Specifically, Stockholder acknowledges and agrees that each
Company Option held by Stockholder that is outstanding
immediately prior to the Effective Time shall become fully
vested and shall be canceled and terminated at the Effective
Time and converted into the right to receive the Common Stock
Merger Consideration, as provided in, and subject to the other
terms of, the Merger Agreement.
6.
Action in Stockholder Capacity
Only
. Stockholder makes no agreement or
understanding herein as a director or officer of the Company.
Stockholder signs solely in Stockholders capacity as a
record holder and beneficial owner, as applicable, of Shares and
Company Options, and nothing in this Agreement shall (or shall
require any Stockholder to attempt to) limit or restrict any
Stockholder who is a director or officer of the Company from
acting in such capacity (it being understood that this Agreement
shall apply to Stockholder solely in Stockholders capacity
as a holder of Shares and Company Options).
B-3
7.
Representations and Warranties of Stockholder
.
(a) Stockholder hereby represents and warrants to Parent as
follows: (i) Stockholder is the beneficial or record owner
of the shares of capital stock of the Company and Company
Options indicated on the signature page of this Agreement free
and clear of any and all pledges, liens, security interests,
mortgage, claims, charges, restrictions, options, title defects
or encumbrances, in each case that would impair or adversely
affect Stockholders ability to perform its obligations
under this Agreement, other than those encumbrances which are in
favor of the Company (provided Parent shall have been provided
with copies of the relevant documentation related thereto) ;
(ii) Stockholder does not beneficially own any securities
of the Company other than the shares of capital stock and rights
to purchase shares of capital stock of the Company set forth on
the signature page of this Agreement; (iii) Stockholder has
full power and authority to make, enter into and carry out the
terms of this Agreement and to grant the irrevocable proxy as
set forth in
Section 4
; and (iv) this Agreement
has been duly and validly executed and delivered by Stockholder
and constitutes a valid and binding agreement of Stockholder
enforceable against Stockholder in accordance with its terms,
subject to the effect of (x) applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to rights of creditors generally
and (y) rules of law and equity governing specific
performance, injunctive relief and other equitable remedies.
Stockholder agrees to notify Parent promptly of any additional
shares of capital stock of the Company of which Stockholder
becomes the beneficial owner after the date of this Agreement.
(b) As of the date hereof and for so long as this Agreement
remains in effect (including as of the date of the Company
Stockholders Meeting, which, for purposes of this
Agreement, includes any adjournment or postponement thereof),
except for this Agreement or as otherwise permitted by this
Agreement, Stockholder has full legal power, authority and right
to vote all of the Shares then owned of record or beneficially
by Stockholder, in favor of the approval and authorization of
the Proposed Transaction without the consent or approval of, or
any other action on the part of, any other Person (including,
without limitation, any governmental entity). Without limiting
the generality of the foregoing, Stockholder has not entered
into any voting agreement (other than this Agreement) with any
Person with respect to any of the Shares, granted any Person any
proxy (revocable or irrevocable) or power of attorney with
respect to any of the Shares, deposited any of the Shares in a
voting trust or entered into any arrangement or agreement with
any Person limiting or affecting Stockholders legal power,
authority or right to vote the Shares on any matter.
(c) The execution and delivery of this Agreement and the
performance by Stockholder of Stockholders agreements and
obligations hereunder will not result in any breach or violation
of or be in conflict with or constitute a default under any term
of any agreement, judgment, injunction, order, decree, law,
regulation or arrangement to which Stockholder is a party or by
which Stockholder (or any of Stockholders assets) is
bound, except for any such breach, violation, conflict or
default which, individually or in the aggregate, would not
impair or adversely affect Stockholders ability to perform
Stockholders obligations under this Agreement or render
inaccurate any of the representations made by Stockholder herein.
(d) Stockholder understands and acknowledges that Parent,
Merger Sub and the Company are entering into the Merger
Agreement in reliance upon Stockholders execution and
delivery of this Agreement and the representations and
warranties of Stockholder contained herein.
8.
Termination
. This Agreement shall
terminate (a) upon the earlier of (i) the Effective
Time and (ii) the termination of the Merger Agreement, or
(b) at any time upon notice by Parent to Stockholder (such
date under (a) or (b) hereof constituting the
Expiration Date
). No party hereto
shall be relieved from any liability for breach of this
Agreement by reason of any termination of this Agreement.
9.
Confidentiality
. Stockholder
recognizes that successful consummation of the transactions
contemplated by the Merger Agreement may be dependent upon
confidentiality with respect to the matters referred to herein.
In this connection, pending public disclosure thereof, and so
that Parent and the Company may rely on the safe harbor
provisions of Rule 100(b)(2)(ii) of Regulation FD,
Stockholder hereby agrees not to disclose or discuss such
matters with anyone not a party to this Agreement (other than
its counsel and advisors, if any) without the prior written
consent of Parent and the Company, except for disclosures
Stockholders counsel advises are necessary to fulfill any
Legal Requirement, in which case Stockholder shall give notice
of such
B-4
disclosure to Parent and the Company as promptly as practicable
so as to enable Parent and the Company to seek a protective
order from a court of competent jurisdiction with respect
thereto. Stockholders obligations pursuant to this
Section 9
shall terminate at the time of the first
public announcement by Parent or the Company of the existence of
this Agreement.
10.
Miscellaneous Provisions
.
(a)
Amendments, Modifications and
Waivers
. No amendment, modification or waiver in
respect of this Agreement shall be effective against any party
unless it shall be in writing and signed by Parent, the Company
and Stockholder.
(b)
Entire Agreement
. This Agreement
constitutes the entire agreement among the parties to this
Agreement and supersedes all other prior agreements and
understandings, both written and oral, among or between any of
the parties with respect to the subject matter hereof and
thereof.
(c)
Governing Law
. This Agreement shall
be governed by and construed in accordance with the laws of the
State of Delaware, regardless of the laws that might otherwise
govern under applicable principles of conflicts of law thereof.
(d)
Consent to Jurisdiction; Venue
. In
any action or proceeding between any of the parties arising out
of or relating to this Agreement or any of the transactions
contemplated by this Agreement, each of the parties:
(i) irrevocably and unconditionally consents and submits to
the exclusive jurisdiction and venue of the state courts of the
State of Delaware, and (ii) agrees that all claims in
respect of such action or proceeding may be heard and determined
exclusively in the state courts of the State of Delaware.
(e)
WAIVER OF JURY TRIAL
. EACH OF THE
PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY AND ALL
RIGHTS TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BETWEEN THE
PARTIES ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
(f)
Assignment and Successors
. This
Agreement shall be binding upon, and shall be enforceable by and
inure solely to the benefit of, the parties hereto and their
respective successors and assigns, including, without
limitation, Stockholders estate and heirs upon the death
of Stockholder;
provided
,
however
, that neither
this Agreement nor any of the rights, interests or obligations
of the parties hereto may be assigned by any of the parties
hereto without prior written consent of the other parties hereto
except that Parent, without obtaining the consent of any other
party hereto, shall be entitled to assign this Agreement or all
or any of its rights or obligations hereunder to any one or more
of its Affiliates. No assignment by Parent under this
Section 10(f)
shall relieve Parent of its
obligations under this Agreement. Any attempted assignment of
this Agreement in violation of the foregoing shall be void and
of no effect.
(g)
No Third Party Rights
. Nothing in
this Agreement, express or implied, is intended to or shall
confer upon any Person (other than the parties hereto) any
right, benefit or remedy of any nature whatsoever under or by
reason of this Agreement.
(h)
Cooperation
. Stockholder agrees to
cooperate fully with Parent and to execute and deliver such
further documents, certificates, agreements and instruments and
to take such other actions as may be reasonably requested by
Parent to evidence or reflect the transactions contemplated by
this Agreement and to carry out the intent and purpose of this
Agreement. Stockholder hereby agrees that Parent and the Company
may publish and disclose in the Proxy Statement (including all
documents and schedules filed with the SEC), Stockholders
identity and ownership of Shares and the nature of
Stockholders commitments, arrangements and understandings
under this Agreement and may further file this Agreement as an
exhibit in any filing made by Parent or the Company with the SEC
relating to the Proposed Transaction.
(i)
Severability
. If any provision of
this Agreement is held invalid or unenforceable by any court of
competent jurisdiction, the other provisions of this Agreement
will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree
will remain in full force and effect to the extent not held
invalid or unenforceable.
B-5
(j)
Specific Performance; Injunctive
Relief
. The parties hereto acknowledge that
Parent and the Company will be irreparably damaged if any of the
provisions of this Agreement are not performed in accordance
with their specific terms and that any breach of this Agreement
by Stockholder could not be adequately compensated in all cases
by monetary damages alone. Accordingly, in addition to any other
right or remedy to which Parent or the Company may be entitled,
at law or in equity, it shall be entitled to seek to enforce any
provision of this Agreement by a decree of specific performance
and temporary, preliminary and permanent injunctive relief to
prevent breaches or threatened breaches of any of the provisions
of this Agreement, without posting any bond or other undertaking.
(k)
Notices
. All notices, Consents,
waivers and other communications required or permitted by this
Agreement shall be in writing and shall be deemed given to a
party when (i) delivered to the appropriate address by hand
or overnight courier service (cost prepaid); or (ii) sent
by facsimile with confirmation of transmission by the
transmitting equipment confirmed with a copy delivered as
provided in clause (i), in each case to the parties at the
following address or facsimile (or to such other address or
facsimile as a party may designate by notice to the other
parties): (i) if to Parent or the Company, to the address
or facsimile provided in the Merger Agreement, including to the
persons designated therein to receive copies; and (ii) if
to Stockholder, to Stockholders address or facsimile shown
below Stockholders signature on the last page hereof.
(l)
Counterparts
. This Agreement may be
executed in several counterparts, each of which shall be deemed
an original and all of which shall constitute one and the same
instrument, and shall become effective when counterparts have
been signed by each of the parties and delivered to the other
parties; it being understood that all parties need not sign the
same counterpart. The exchange of copies of this Agreement and
of signatures pages by facsimile or electronic transmission
shall constitute effective execution and delivery of this
Agreement as to the parties and may be used in lieu of the
original Agreement for all purposes. Signatures of the parties
transmitted by facsimile or electronic transmission shall be
deemed to be their original signatures for all purposes.
(m)
Headings
. The headings contained in
this Agreement are for convenience of reference only, shall not
be deemed to be a part of this Agreement and shall not be
referred to in connection with the construction or
interpretation of this Agreement.
(n)
Legal Representation
. This Agreement
was negotiated by the parties with the benefit of legal
representation and any rule of construction or interpretation
otherwise requiring this Agreement to be construed or
interpreted against any party shall not apply to any
construction or interpretation thereof.
[Signature
page follows.]
B-6
IN WITNESS WHEREOF, the undersigned have caused this Agreement
to be duly executed as of the date first above written.
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PARENT:
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STOCKHOLDER:
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JDA SOFTWARE GROUP, INC
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By:
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By:
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Its:
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Its:
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Address:
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Shares Beneficially Owned by Stockholder:
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shares
of Company Common Stock
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shares
of Company Preferred Stock
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shares
subject to Company Options
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shares
subject to Company RSUs
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COMPANY:
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I2 TECHNOLOGIES, INC.
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By:
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Its:
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[SIGNATURE
PAGE TO VOTING AGREEMENT]
B-7
Annex C
Voting
Agreement
This Stockholder
Voting Agreement
(this
Agreement
) is made and entered into as
of November 4, 2009, by and among
JDA Software Group,
Inc.
, a Delaware corporation
(
Parent
),
i2 Technologies,
Inc.,
a Delaware corporation (the
Company
) (only with respect to
Section 2(b)
and
3(c)
hereof), and the
undersigned stockholder (
Stockholder
)
of the Company.
Recitals
A.
Concurrently with the execution and delivery
hereof, Parent, Alpha Acquisition Corp., a Delaware corporation
and an indirect wholly owned subsidiary of Parent
(
Merger Sub
), and the Company are
entering into an Agreement and Plan of Merger of even date
herewith (as it may be amended or supplemented from time to time
pursuant to the terms thereof, the
Merger
Agreement
), which provides for the merger (the
Merger
) of Merger Sub with and into
the Company in accordance with its terms ( the Merger, Merger
Agreement and the transactions contemplated thereby referred to
collectively as the
Proposed
Transaction
).
B.
Stockholder has sole voting power over such
number of shares of each class of capital stock of the Company
beneficially owned (as defined in
Rule 13d-3
under the Securities Exchange Act of 1934, as amended (the
Exchange Act
)) by Stockholder as is
indicated on the signature page of this Agreement.
C.
In consideration of the execution and delivery of
the Merger Agreement by Parent and Merger Sub, Stockholder
desires to agree to vote the Shares (as defined herein) over
which Stockholder has sole voting power so as to facilitate the
consummation of the Merger.
Now,
Therefore
, intending to be legally bound, the parties
hereto hereby agree as follows:
1.
Certain Definitions
.
(a) Capitalized terms used but not otherwise defined herein
shall have the meanings ascribed thereto in the Merger
Agreement. For all purposes of and under this Agreement, the
following terms shall have the following respective meanings:
Consent
shall mean any approval,
consent, ratification, permission, waiver or authorization
(including any: (i) permit, license, certificate,
franchise, permission, variance, clearance, registration,
qualification or authorization issued, granted, given or
otherwise made available by or under the authority of any
Governmental Authority or pursuant to any Legal Requirement; or
(ii) right under any Contract with any Governmental
Authority).
Legal Requirement
shall mean any
federal, state, local, municipal, foreign or other law, statute,
constitution, principle of common law, resolution, ordinance,
code, edict, decree, rule, regulation, ruling or requirement
issued, enacted, adopted, promulgated, implemented or otherwise
put into effect by or under the authority of any Governmental
Authority (or under the authority of The NASDAQ Stock Market).
Person
means any individual,
corporation, limited or general partnership, limited liability
company, limited liability partnership, trust, association,
joint venture, governmental entity and other entity and group
(which term will include a group as such term is
defined in Section 13(d)(3) of the Exchange Act).
Shares
means (i) all outstanding
shares of capital stock of the Company owned, beneficially or of
record, by Stockholder as of the date hereof, and (ii) all
additional outstanding shares of capital stock of the Company
acquired by Stockholder, beneficially or of record, during the
period commencing with the execution and delivery of this
Agreement and expiring on the Expiration Date (as such term is
defined in
Section 7
below), in the case of each of
clauses (i) and (ii) as to which (and only as to
which) Stockholder has sole voting power; but in each case
excluding shares of capital stock of the Company that, by virtue
of Stockholders ownership of options or other convertible
securities, are deemed to be beneficially owned
C-1
by Stockholder pursuant to
Rules 13d-3(d)(1)(i)(A)
or (B) prior to the time at which Stockholder exercises
such options or other convertible securities and receives the
underlying capital stock of the Company.
Transfer
means, with respect to any
security, the direct or indirect assignment, sale, transfer,
tender, exchange, pledge, hypothecation, or the gift, placement
in trust, or other disposition of such security (excluding
transfers: (i) by testamentary or intestate succession,
(ii) otherwise by operation of law, or (iii) under any
written trading plan adopted prior to the date of this Agreement
under
Rule 10b5-1
of the Exchange Act) or any right, title or interest therein
(including, but not limited to, any right or power to vote to
which the holder thereof may be entitled, whether such right or
power is granted by proxy or otherwise), or the record or
beneficial ownership thereof, and each agreement, arrangement or
understanding, whether or not in writing, to effect any of the
foregoing.
2.
Transfer and Voting Restrictions
.
(a) At all times during the period commencing with the
execution and delivery of this Agreement and expiring on the
Expiration Date, Stockholder shall not, except in connection
with the Merger, Transfer any of the Shares, or enter into an
agreement, commitment or other arrangement with respect thereto.
Notwithstanding the foregoing or anything to the contrary set
forth in this Agreement, Stockholder may Transfer any or all of
the Shares (i) by will, or by operation of law, in which
case this Agreement shall bind the transferee, (ii) in
connection with estate and charitable planning purposes,
including Transfers to relatives, trusts and charitable
organizations, or (iii) to any other Person, so long as, in
the case of the foregoing clauses (ii) and (iii), the
transferee, prior to such Transfer executes a counterpart of
this Agreement (with such modifications as Parent may reasonably
request solely to reflect such transfer).
(b) Stockholder understands and agrees that if Stockholder
attempts to Transfer, vote or provide any other person with the
authority to vote any of the Shares other than in compliance
with this Agreement, the Company shall not, and Stockholder
hereby unconditionally and irrevocably instructs the Company to
not, (i) permit any such Transfer on its books and records,
(ii) issue a new certificate representing any of the Shares
or (iii) record such vote, in each case, unless and until
Stockholder shall have complied with the terms of this
Agreement. Each stock certificate evidencing Shares that is
issued in the name of Stockholder on or after the date of this
Agreement shall bear a legend indicating that such Shares are
subject to the terms of this Agreement and any transferee of the
Shares evidenced by the stock certificate takes the Shares
subject to the terms of this Agreement.
(c) Except as otherwise permitted by this Agreement or by
order of a court of competent jurisdiction, Stockholder will not
commit any act that could restrict or affect Stockholders
legal power, authority and right to vote all of the Shares then
owned of record or beneficially by Stockholder or otherwise
prevent or disable Stockholder from performing any of his
obligations under this Agreement. Without limiting the
generality of the foregoing, except for this Agreement and as
otherwise permitted by this Agreement, Stockholder will not
enter into any voting agreement with any Person with respect to
any of the Shares, grant any Person any proxy (revocable or
irrevocable) or power of attorney with respect to any of the
Shares, deposit any of the Shares in a voting trust or otherwise
enter into any agreement or arrangement with any Person limiting
or affecting Stockholders legal power, authority or right
to vote the Shares in favor of the approval of the Proposed
Transaction.
3.
Agreement to Vote Shares. No Redemption
(a) Prior to the Expiration Date, at every meeting of the
stockholders of the Company called, and at every adjournment or
postponement thereof, and on every action or approval by written
consent of the stockholders of the Company, Stockholder (in
Stockholders capacity as such) shall appear at the meeting
or otherwise cause the Shares to be present thereat for purposes
of establishing a quorum and, to the extent not voted by the
Persons appointed as proxies pursuant to this Agreement, vote
(i) in favor of (A) approval of the Proposed
Transaction, and (B) any adjournment or postponement
recommended by the Company with respect to any stockholder
meeting in connection with the Proposed Transaction,
(ii) against the approval or adoption of any proposal made
in opposition to, or in competition with, the Proposed
Transaction, and (iii) against any of the
C-2
following (to the extent unrelated to the Proposed Transaction):
(A) any merger, consolidation or business combination
involving the Company or any of its subsidiaries other than the
Proposed Transaction; (B) any sale, lease or transfer of
all or substantially all of the assets of the Company or any of
its subsidiaries; (C) any reorganization, recapitalization,
dissolution, liquidation or winding up of the Company or any of
its subsidiaries; or (D) any other action that is intended,
or could reasonably be expected, to otherwise impede, interfere
with, delay, postpone, discourage or adversely affect the
consummation of the Proposed Transaction.
(b) If Stockholder is the beneficial owner, but not the
record holder, of the Shares, Stockholder agrees to take all
actions necessary to cause the record holder and any nominees to
vote all of the Shares in accordance with
Section 3(a)
.
(c) The Company agrees that it shall not redeem, or call
for redemption (and it hereby waives its right to do so under
the Certificate of Designation relating to the Shares), any of
the Shares until after the termination of the merger Agreement.
4.
Grant of Irrevocable Proxy
.
(a) Stockholder hereby irrevocably (to the fullest extent
permitted by law) grants to, and appoints, Parent and each of
its executive officers and any of them, in their capacities as
officers of Parent (the
Grantees
), as
Stockholders proxy and attorney-in-fact (with full power
of substitution and re-substitution), for and in the name, place
and stead of Stockholder, to vote the Shares, to instruct
nominees or record holders to vote the Shares, or grant a
consent or approval or dissent or disapproval in respect of such
Shares in accordance with
Section 3
hereof and, in
the discretion of the Grantees, with respect to any proposed
adjournments or postponements of any meeting of stockholders of
the Company at which any of the matters described in
Section 3
hereof is to be considered.
(b) Stockholder represents that any proxies heretofore
given in respect of the Shares that may still be in effect are
not irrevocable, and such proxies are hereby revoked.
(c) Stockholder hereby affirms that the irrevocable proxy
set forth in this
Section 4
is given in connection
with the execution of the Merger Agreement, and that such
irrevocable proxy is given to secure the performance of the
duties of Stockholder under this Agreement. Stockholder hereby
further affirms that the irrevocable proxy is coupled with an
interest and may under no circumstances be revoked. Stockholder
hereby ratifies and confirms all that such irrevocable proxy may
lawfully do or cause to be done by virtue hereof. Such
irrevocable proxy is executed and intended to be irrevocable in
accordance with the provisions of Section 212 of the
Delaware General Corporation Law. Notwithstanding this
Section 4(c)
, the proxy granted by Stockholder shall
be revoked upon termination of this Agreement in accordance with
its terms.
(d) The Grantees may not exercise this irrevocable proxy on
any other matter except as provided above. Stockholder shall
retain at all times the right to vote the Shares in
Stockholders sole discretion and without any other
limitation on all matters other than those set forth in
Section 3
that are at any time or from time to time
presented for consideration to the Companys stockholders
generally.
(e) Parent may terminate this proxy with respect to
Stockholder at any time at its sole election by written notice
provided to Stockholder.
5.
Action in Stockholder Capacity
Only
. Stockholder makes no agreement or
understanding herein as a director or officer of the Company.
Stockholder signs solely in Stockholders capacity as a
record holder and beneficial owner, as applicable, of Shares,
and nothing in this Agreement shall (or shall require any
Stockholder to attempt to) limit or restrict any Stockholder who
is a director or officer of the Company from acting in such
capacity (it being understood that this Agreement shall apply to
Stockholder solely in Stockholders capacity as a holder of
the Shares).
6.
Representations and Warranties of Stockholder
.
(a) Stockholder hereby represents and warrants to Parent as
follows: (i) Stockholder is the beneficial or record owner
of the shares of capital stock of the Company indicated on the
signature page of this Agreement free and clear of any and all
pledges, liens, security interests, mortgage, claims, charges,
restrictions, options,
C-3
title defects or encumbrances, in each case that would impair or
adversely affect Stockholders ability to perform its
obligations under this Agreement, other than those encumbrances
which are in favor of the Company (provided Parent shall have
been provided with copies of the relevant documentation related
thereto); (ii) Stockholder does not beneficially own any
securities of the Company other than the shares of capital stock
and rights to purchase shares of capital stock of the Company
set forth on the signature page of this Agreement;
(iii) Stockholder has full power and authority to make,
enter into and carry out the terms of this Agreement and to
grant the irrevocable proxy as set forth in
Section 4
; and (iv) this Agreement has been
duly and validly executed and delivered by Stockholder and
constitutes a valid and binding agreement of Stockholder
enforceable against Stockholder in accordance with its terms,
subject to the effect of (x) applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to rights of creditors generally
and (y) rules of law and equity governing specific
performance, injunctive relief and other equitable remedies.
Stockholder agrees to notify Parent promptly of any additional
shares of capital stock of the Company of which Stockholder
becomes the beneficial owner after the date of this Agreement.
(b) As of the date hereof and for so long as this Agreement
remains in effect (including as of the date of the Company
Stockholders Meeting, which, for purposes of this
Agreement, includes any adjournment or postponement thereof),
except for this Agreement or as otherwise permitted by this
Agreement, Stockholder has full legal power, authority and right
to vote all of the Shares then owned of record or beneficially
by Stockholder, in favor of the approval and authorization of
the Proposed Transaction without the consent or approval of, or
any other action on the part of, any other Person (including,
without limitation, any governmental entity). Without limiting
the generality of the foregoing, Stockholder has not entered
into any voting agreement (other than this Agreement) with any
Person with respect to any of the Shares, granted any Person any
proxy (revocable or irrevocable) or power of attorney with
respect to any of the Shares, deposited any of the Shares in a
voting trust or entered into any arrangement or agreement with
any Person limiting or affecting Stockholders legal power,
authority or right to vote the Shares on any matter.
(c) The execution and delivery of this Agreement and the
performance by Stockholder of Stockholders agreements and
obligations hereunder will not result in any breach or violation
of or be in conflict with or constitute a default under any term
of any agreement, judgment, injunction, order, decree, law,
regulation or arrangement to which Stockholder is a party or by
which Stockholder (or any of Stockholders assets) is
bound, except for any such breach, violation, conflict or
default which, individually or in the aggregate, would not
impair or adversely affect Stockholders ability to perform
Stockholders obligations under this Agreement or render
inaccurate any of the representations made by Stockholder herein.
(d) Stockholder understands and acknowledges that Parent,
Merger Sub and the Company are entering into the Merger
Agreement in reliance upon Stockholders execution and
delivery of this Agreement and the representations and
warranties of Stockholder contained herein.
7.
Termination
. This Agreement shall
terminate (a) upon the earlier of (i) the Effective
Time and (ii) the termination of the Merger Agreement, or
(b) at any time upon notice by Parent to Stockholder, or
(c) upon any amendment of the Merger Agreement, other than
any amendment that does not directly or indirectly adversely
affect the consideration to be received by the holders of
Series B Preferred Stock, without Stockholders prior
written consent (such date under (a), (b) or
(c) hereof constituting the
Expiration
Date
.); provided, however, that Section 3(c)
shall survive any such termination. No party hereto shall be
relieved from any liability for breach of this Agreement by
reason of any termination of this Agreement.
8.
Confidentiality
. Stockholder
recognizes that successful consummation of the transactions
contemplated by the Merger Agreement may be dependent upon
confidentiality with respect to the matters referred to herein.
In this connection, pending public disclosure thereof, and so
that Parent and the Company may rely on the safe harbor
provisions of Rule 100(b)(2)(ii) of Regulation FD,
Stockholder hereby agrees not to disclose or discuss such
matters with anyone not a party to this Agreement (other than
its counsel and advisors, if any) without the prior written
consent of Parent and the Company, except for disclosures
Stockholders counsel advises are necessary to fulfill any
Legal Requirement, in which case Stockholder shall give notice
of such disclosure to Parent and the Company as promptly as
practicable so as to enable Parent and the Company to seek a
protective order from a court of competent jurisdiction with
respect thereto. Stockholders obligations
C-4
pursuant to this
Section 8
shall terminate at the
time of the first public announcement by Parent or the Company
of the existence of this Agreement.
9.
Miscellaneous Provisions
.
(a)
Amendments, Modifications and
Waivers
. No amendment, modification or waiver in
respect of this Agreement shall be effective against any party
unless it shall be in writing and signed by Parent, the Company
and Stockholder.
(b)
Entire Agreement
. This Agreement
constitutes the entire agreement among the parties to this
Agreement and supersedes all other prior agreements and
understandings, both written and oral, among or between any of
the parties with respect to the subject matter hereof and
thereof.
(c)
Governing Law
. This Agreement shall
be governed by and construed in accordance with the laws of the
State of Delaware, regardless of the laws that might otherwise
govern under applicable principles of conflicts of law thereof.
(d)
Consent to Jurisdiction; Venue
. In
any action or proceeding between any of the parties arising out
of or relating to this Agreement or any of the transactions
contemplated by this Agreement, each of the parties:
(i) irrevocably and unconditionally consents and submits to
the exclusive jurisdiction and venue of the state courts of the
State of Delaware, and (ii) agrees that all claims in
respect of such action or proceeding may be heard and determined
exclusively in the state courts of the State of Delaware.
(e)
WAIVER OF JURY TRIAL
. EACH OF THE
PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY AND ALL
RIGHTS TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BETWEEN THE
PARTIES ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
(f)
Assignment and Successors
. This
Agreement shall be binding upon, and shall be enforceable by and
inure solely to the benefit of, the parties hereto and their
respective successors and assigns, including, without
limitation, Stockholders estate and heirs upon the death
of Stockholder;
provided
,
however
, that neither
this Agreement nor any of the rights, interests or obligations
of the parties hereto may be assigned by any of the parties
hereto without prior written consent of the other parties hereto
except that Parent, without obtaining the consent of any other
party hereto, shall be entitled to assign this Agreement or all
or any of its rights or obligations hereunder to any one or more
of its Affiliates. No assignment by Parent under this
Section 9(f)
shall relieve Parent of its obligations
under this Agreement. Any attempted assignment of this Agreement
in violation of the foregoing shall be void and of no effect.
(g)
No Third Party Rights
. Nothing in
this Agreement, express or implied, is intended to or shall
confer upon any Person (other than the parties hereto) any
right, benefit or remedy of any nature whatsoever under or by
reason of this Agreement.
(h)
Cooperation
. Stockholder agrees to
cooperate fully with Parent and to execute and deliver such
further documents, certificates, agreements and instruments and
to take such other actions as may be reasonably requested by
Parent to evidence or reflect the transactions contemplated by
this Agreement and to carry out the intent and purpose of this
Agreement. Stockholder hereby agrees that Parent and the Company
may publish and disclose in the Proxy Statement (including all
documents and schedules filed with the SEC), Stockholders
identity and ownership of Shares and the nature of
Stockholders commitments, arrangements and understandings
under this Agreement and may further file this Agreement as an
exhibit to any filing made by Parent or the Company with the SEC
relating to the Proposed Transaction.
(i)
Severability.
If any provision of this Agreement is
held invalid or unenforceable by any court of competent
jurisdiction, the other provisions of this Agreement will remain
in full force and effect. Any provision of this Agreement held
invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or
unenforceable.
(j)
Specific Performance; Injunctive
Relief
. The parties hereto acknowledge that
Parent and the Company will be irreparably damaged if any of the
provisions of this Agreement are not performed in
C-5
accordance with their specific terms and that any breach of this
Agreement by Stockholder could not be adequately compensated in
all cases by monetary damages alone. Accordingly, in addition to
any other right or remedy to which Parent or the Company may be
entitled, at law or in equity, it shall be entitled to seek to
enforce any provision of this Agreement by a decree of specific
performance and temporary, preliminary and permanent injunctive
relief to prevent breaches or threatened breaches of any of the
provisions of this Agreement, without posting any bond or other
undertaking.
(k)
Notices
. All notices, Consents,
waivers and other communications required or permitted by this
Agreement shall be in writing and shall be deemed given to a
party when (i) delivered to the appropriate address by hand
or overnight courier service (cost prepaid); or (ii) sent
by facsimile with confirmation of transmission by the
transmitting equipment confirmed with a copy delivered as
provided in clause (i), in each case to the parties at the
following address or facsimile (or to such other address or
facsimile as a party may designate by notice to the other
parties): (i) if to Parent or the Company, to the address
or facsimile provided in the Merger Agreement, including to the
persons designated therein to receive copies; and (ii) if
to Stockholder, to Stockholders address or facsimile shown
below Stockholders signature on the last page hereof.
(l)
Counterparts
. This Agreement may be
executed in several counterparts, each of which shall be deemed
an original and all of which shall constitute one and the same
instrument, and shall become effective when counterparts have
been signed by each of the parties and delivered to the other
parties; it being understood that all parties need not sign the
same counterpart. The exchange of copies of this Agreement and
of signatures pages by facsimile or electronic transmission
shall constitute effective execution and delivery of this
Agreement as to the parties and may be used in lieu of the
original Agreement for all purposes. Signatures of the parties
transmitted by facsimile or electronic transmission shall be
deemed to be their original signatures for all purposes.
(m)
Headings
. The headings contained in
this Agreement are for convenience of reference only, shall not
be deemed to be a part of this Agreement and shall not be
referred to in connection with the construction or
interpretation of this Agreement.
(n)
Legal Representation
. This Agreement
was negotiated by the parties with the benefit of legal
representation and any rule of construction or interpretation
otherwise requiring this Agreement to be construed or
interpreted against any party shall not apply to any
construction or interpretation thereof.
(o)
Pledge on Shares
. Notwithstanding
anything to the contrary set forth in this Agreement, Parent and
the Company agree and acknowledge that the Shares are subject to
a security interest for the benefit of certain lenders of the
Stockholder which, among other things restricts the
Stockholders ability to create, grant or permit to exist
(i) any security interest over, or (ii) any
restriction on the ability to transfer or realize, all or any
part of the Shares.
[Signature
page follows.]
C-6
IN WITNESS WHEREOF, the undersigned have caused this Agreement
to be duly executed as of the date first above written.
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PARENT:
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STOCKHOLDER:
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JDA SOFTWARE GROUP, INC.
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By:
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By:
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Its:
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Its:
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Address:
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Shares Beneficially Owned by Stockholder:
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shares
of Company Common Stock
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shares
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shares
subject to Company Options
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COMPANY:
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I2 TECHNOLOGIES, INC.
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[SIGNATURE
PAGE TO VOTING AGREEMENT]
C-7
Annex D
THOMAS
WEISEL PARTNERS LLC
Board of Directors
i2 Technologies, Inc.
11701 Luna Road
Dallas, TX 75234
November 4, 2009
Gentlemen:
We understand that i2 Technologies, Inc., a Delaware
corporation (Company), JDA Software Group, Inc., an
Delaware corporation (Parent) and Alpha Acquisition
Corp., a Delaware corporation and wholly owned subsidiary of
Parent (Merger Sub), intend to enter into an
Agreement and Plan of Merger, to be dated on or about
November 4, 2009 (the Merger Agreement),
pursuant to which Merger Sub will be merged with and into
Company, which will be the surviving entity (the
Merger). Pursuant to the Merger, as more fully
described in the Merger Agreement and as further described to us
by management of Company, we understand that each outstanding
share of the common stock of Company (Company Common
Stock), other than Dissenting Shares (as defined in the
Merger Agreement) and shares of Company Common Stock owned by
Company as treasury stock or by Parent or Merger Sub, will be
converted into the right to receive either
(i) 0.5797 shares of the common stock of Parent
(Parent Common Stock) and $6.00 cash, or
(ii) if a Financing Election is made by Parent pursuant to
(and as defined in) the Merger Agreement, 0.2562 shares of
Parent Common Stock and $12.70 cash, subject to certain
adjustments (in either case, the Consideration). The
terms and conditions of the Merger are set forth in more detail
in the Merger Agreement.
You have asked for our opinion as investment bankers as to
whether the Consideration to be received by the holders of
Company Common Stock (other than Parent, holders of
Series B Preferred Stock, and their respective affiliates,
and holders of Dissenting Shares) pursuant to the Merger is fair
to such stockholders from a financial point of view, as of the
date hereof. As you are aware, we were not retained to nor did
we advise Company with respect to alternatives to the Merger or
Companys underlying decision to proceed with or effect the
Merger
In connection with our opinion, we have, among other things:
(i) reviewed certain publicly available financial and other
data with respect to Company and Parent, including the
consolidated financial statements for recent years and interim
periods to September 30, 2009 and certain other relevant
financial and operating data relating to Company and Parent made
available to us from published sources and from the internal
records of Company and Parent; (ii) reviewed the financial
terms and conditions of the draft of the Merger Agreement dated
November 4, 2009; (iii) reviewed certain publicly
available information concerning the trading of, and the trading
market for, Company Common Stock and Parent Common Stock;
(iv) compared Company and Parent from a financial point of
view with certain other companies in the technology industry
which we deemed to be relevant; (v) considered the
financial terms, to the extent publicly available, of certain
recent business combinations of companies in the technology
industry which we deemed to be relevant; (vi) reviewed and
discussed with representatives of the management of Company and
Parent certain information of a business and financial nature
regarding Company and Parent, furnished to us by them, including
financial forecasts and related assumptions for Company and
Parent; (vii) made inquiries regarding and discussed the
Merger and the Merger Agreement and other matters related
thereto with Companys counsel; and (viii) performed
such other analyses and examinations as we have deemed
appropriate.
In connection with our review, we have not assumed any
obligation independently to verify, and have not independently
verified, the foregoing information or any other information
made available to or reviewed by us and
D-1
have relied on all such information being accurate and complete
in all material respects. With respect to the financial
forecasts for Company and Parent provided to us by their
managements, upon their advice and with your consent we have
assumed for purposes of our opinion that the forecasts have been
reasonably prepared on bases reflecting the best available
estimates and judgments of their respective managements (or, in
the case of financial forecasts for Parent provided to us by
Company, management of Company) at the time of preparation as to
the future financial performance of Company and Parent and that
they provide a reasonable basis upon which we can form our
opinion. We express no view as to any such forecasts or the
assumptions on which they are based. We have also assumed that
there have been no material changes in Companys or
Parents assets, financial condition, results of
operations, business or prospects since the respective dates of
their last financial statements made available to us. We are not
legal, regulatory, accounting or tax experts, and our opinion
does not address any such matters. We have relied on advice of
counsel and independent accountants to Company as to all legal
and financial reporting matters with respect to Company, the
Merger and the Merger Agreement. With your consent, we have not
made or obtained any analysis of any pending or threatened
litigation to which Company or Parent is a party or may become
subject, and did not consider the possible outcomes of any such
matters. We have assumed that the Merger will be consummated in
a manner that complies in all respects with the applicable
provisions of the Securities Act of 1933, as amended (the
Securities Act), the Securities Exchange Act of 1934
and all other applicable federal and state statutes, rules and
regulations. In addition, we have not assumed responsibility for
obtaining or making an independent evaluation, appraisal or
physical inspection of any of the assets or liabilities
(contingent or otherwise) of Company or Parent, nor have we been
furnished with any such materials. We have not evaluated or
received any evaluations of the solvency or fair value of
Company, Parent, or Merger Sub under any laws relating to
bankruptcy, insolvency or similar matters. Our opinion is based
on economic, monetary, market and other conditions in effect on,
and the information made available to us as of, the date hereof.
Accordingly, although subsequent developments may affect this
opinion, we have not assumed any obligation to update, revise or
reaffirm this opinion.
We have assumed, with your consent, that the Merger will be
consummated in accordance with the terms described in the draft
of the Merger Agreement dated November 4, 2009, without any
further amendments thereto, and without waiver by Company,
Parent or Merger Sub of any of the conditions to their
obligations thereunder. We have further assumed, with your
consent, that in the course of obtaining regulatory or third
party approvals, consents and releases for the Merger, no delay,
limitation, restriction or condition will be imposed that would
have an adverse effect on Company, Parent or the contemplated
benefits of the Merger.
We have acted as financial advisor to Company in connection with
the Merger and will receive a fee for our services, including
rendering this opinion, a significant portion of which is
contingent upon the consummation of the Merger, and Company has
agreed to reimburse our expenses and indemnify us against
certain liabilities arising out of our engagement. In the
ordinary course of our business, we actively trade the equity
securities of Company and Parent for our own account and for the
accounts of customers and, accordingly, may at any time hold a
long or short position in such securities. We have previously
performed various investment banking services for Company,
including acting as Companys financial advisor in
connection with its repurchase of convertible notes and have
received compensation in connection with such relationship.
Based upon the foregoing and in reliance thereon, it is our
opinion as investment bankers that the Consideration to be
received by the holders of Company Common Stock (other than
Parent, holders of Series B Preferred Stock and their
respective affiliates, and holders of Dissenting Shares)
pursuant to the Merger is fair to such stockholders from a
financial point of view, as of the date hereof.
We are not expressing any opinion regarding what the value of
Parent Common Stock will be when issued in connection with the
Merger or the price at which Company Common Stock or Parent
Common Stock may trade at any time. The Consideration is based
upon a fixed exchange ratio and, accordingly, the market value
of the Consideration may vary significantly.
This opinion has been approved by an authorized committee of
Thomas Weisel Partners LLC. It is directed to the Board of
Directors of Company in its consideration of the Merger. It is
not a recommendation to the Board of Directors or any
stockholder or any other person as to how to vote or otherwise
act with respect to the Merger. Further, this opinion addresses
only the fairness, from a financial point of view, of the
Consideration to the holders of Company Common Stock (other than
Parent, the holders of Series B Preferred Stock, and their
respective
D-2
affiliates, and holders of Dissenting Shares) and does not
address the relative merits of the Merger and any alternatives
to the Merger, Companys underlying decision to proceed
with or effect the Merger, or any other aspect of the
transactions contemplated by the Merger Agreement, including,
without limitation, any decision to make or allow the Financing
Election. In addition, this opinion does not address the
fairness of the Merger to, or any consideration received in
connection therewith by, the holders of any other class of
securities, including Series B Preferred Shares, creditors
or other constituencies of Company; nor does it address the
fairness of the amount or nature of any consideration or
compensation to be paid or payable to any of such persons or to
the officers, directors or employees of Parent or Company, or
any class of such persons, in connection with the Merger,
whether relative to the Consideration or otherwise.
This opinion may not be used or referred to by Company or quoted
or disclosed to any person in any manner, without our prior
written consent, which consent is hereby given to the inclusion
of this opinion in any proxy statement filed with the
Securities and Exchange Commission in connection with the
Merger. In furnishing this opinion and consent, we do not admit
that we are experts within the meaning of the term
experts as used in the Securities Act and the rules
and regulations promulgated thereunder, nor do we admit that
this opinion constitutes a report or valuation within the
meaning of Section 11 of the Securities Act.
Very truly yours,
THOMAS WEISEL PARTNERS LLC
D-3
Annex E
SECTION 262
OF THE GENERAL CORPORATION LAW OF THE STATE OF
DELAWARE
(a) Any stockholder of a corporation of this State who
holds shares of stock on the date of the making of a demand
pursuant to subsection (d) of this section with respect to
such shares, who continuously holds such shares through the
effective date of the merger or consolidation, who has otherwise
complied with subsection (d) of this section and who has
neither voted in favor of the merger or consolidation nor
consented thereto in writing pursuant to § 228 of this
title shall be entitled to an appraisal by the Court of Chancery
of the fair value of the stockholders shares of stock
under the circumstances described in subsections (b) and
(c) of this section. As used in this section, the word
stockholder means a holder of record of stock in a
stock corporation and also a member of record of a nonstock
corporation; the words stock and share
mean and include what is ordinarily meant by those words and
also membership or membership interest of a member of a nonstock
corporation; and the words depository receipt mean a
receipt or other instrument issued by a depository representing
an interest in one or more shares, or fractions thereof, solely
of stock of a corporation, which stock is deposited with the
depository.
(b) Appraisal rights shall be available for the shares of
any class or series of stock of a constituent corporation in a
merger or consolidation to be effected pursuant to
§ 251 (other than a merger effected pursuant to
§ 251(g) of this title), § 252,
§ 254, § 257, § 258,
§ 263 or § 264 of this title:
(1) Provided, however, that no appraisal rights under this
section shall be available for the shares of any class or series
of stock, which stock, or depository receipts in respect
thereof, at the record date fixed to determine the stockholders
entitled to receive notice of the meeting of stockholders to act
upon the agreement of merger or consolidation, were either
(i) listed on a national securities exchange or
(ii) held of record by more than 2,000 holders; and further
provided that no appraisal rights shall be available for any
shares of stock of the constituent corporation surviving a
merger if the merger did not require for its approval the vote
of the stockholders of the surviving corporation as provided in
subsection (f) of § 251 of this title.
(2) Notwithstanding paragraph (1) of this subsection,
appraisal rights under this section shall be available for the
shares of any class or series of stock of a constituent
corporation if the holders thereof are required by the terms of
an agreement of merger or consolidation pursuant to
$§ 251, 252, 254, 257, 258, 263 and 264 of this title
to accept for such stock anything except:
a. Shares of stock of the corporation surviving or
resulting from such merger or consolidation, or depository
receipts in respect thereof;
b. Shares of stock of any other corporation, or depository
receipts in respect thereof, which shares of stock (or
depository receipts in respect thereof) or depository receipts
at the effective date of the merger or consolidation will be
either listed on a national securities exchange or held of
record by more than 2,000 holders;
c. Cash in lieu of fractional shares or fractional
depository receipts described in the foregoing subparagraphs a.
and b. of this paragraph; or
d. Any combination of the shares of stock, depository
receipts and cash in lieu of fractional shares or fractional
depository receipts described in the foregoing subparagraphs a.,
b. and c. of this paragraph.
(3) In the event all of the stock of a subsidiary Delaware
corporation party to a merger effected under § 253 of
this title is not owned by the parent corporation immediately
prior to the merger, appraisal rights shall be available for the
shares of the subsidiary Delaware corporation.
(c) Any corporation may provide in its certificate of
incorporation that appraisal rights under this section shall be
available for the shares of any class or series of its stock as
a result of an amendment to its certificate of incorporation,
any merger or consolidation in which the corporation is a
constituent corporation or the sale of all or substantially all
of the assets of the corporation. If the certificate of
incorporation contains such a provision, the procedures of this
section, including those set forth in subsections (d) and
(e) of this section, shall apply as nearly as is
practicable.
E-1
(d) Appraisal rights shall be perfected as follows:
(1) If a proposed merger or consolidation for which
appraisal rights are provided under this section is to be
submitted for approval at a meeting of stockholders, the
corporation, not less than 20 days prior to the meeting,
shall notify each of its stockholders who was such on the record
date for notice of such meeting with respect to shares for which
appraisal rights are available pursuant to subsection (b)
or (c) hereof that appraisal rights are available for any
or all of the shares of the constituent corporations, and shall
include in such notice a copy of this section. Each stockholder
electing to demand the appraisal of such stockholders
shares shall deliver to the corporation, before the taking of
the vote on the merger or consolidation, a written demand for
appraisal of such stockholders shares. Such demand will be
sufficient if it reasonably informs the corporation of the
identity of the stockholder and that the stockholder intends
thereby to demand the appraisal of such stockholders
shares. A proxy or vote against the merger or consolidation
shall not constitute such a demand. A stockholder electing to
take such action must do so by a separate written demand as
herein provided. Within 10 days after the effective date of
such merger or consolidation, the surviving or resulting
corporation shall notify each stockholder of each constituent
corporation who has complied with this subsection and has not
voted in favor of or consented to the merger or consolidation of
the date that the merger or consolidation has become
effective; or
(2) If the merger or consolidation was approved pursuant to
§ 228 or § 253 of this title, then either a
constituent corporation before the effective date of the merger
or consolidation or the surviving or resulting corporation
within 10 days thereafter shall notify each of the holders
of any class or series of stock of such constituent corporation
who are entitled to appraisal rights of the approval of the
merger or consolidation and that appraisal rights are available
for any or all shares of such class or series of stock of such
constituent corporation, and shall include in such notice a copy
of this section. Such notice may, and, if given on or after the
effective date of the merger or consolidation, shall, also
notify such stockholders of the effective date of the merger or
consolidation. Any stockholder entitled to appraisal rights may,
within 20 days after the date of mailing of such notice,
demand in writing from the surviving or resulting corporation
the appraisal of such holders shares. Such demand will be
sufficient if it reasonably informs the corporation of the
identity of the stockholder and that the stockholder intends
thereby to demand the appraisal of such holders shares. If
such notice did not notify stockholders of the effective date of
the merger or consolidation, either (i) each such
constituent corporation shall send a second notice before the
effective date of the merger or consolidation notifying each of
the holders of any class or series of stock of such constituent
corporation that are entitled to appraisal rights of the
effective date of the merger or consolidation or (ii) the
surviving or resulting corporation shall send such a second
notice to all such holders on or within 10 days after such
effective date; provided, however, that if such second notice is
sent more than 20 days following the sending of the first
notice, such second notice need only be sent to each stockholder
who is entitled to appraisal rights and who has demanded
appraisal of such holders shares in accordance with this
subsection. An affidavit of the secretary or assistant secretary
or of the transfer agent of the corporation that is required to
give either notice that such notice has been given shall, in the
absence of fraud, be prima facie evidence of the facts stated
therein. For purposes of determining the stockholders entitled
to receive either notice, each constituent corporation may fix,
in advance, a record date that shall be not more than
10 days prior to the date the notice is given, provided,
that if the notice is given on or after the effective date of
the merger or consolidation, the record date shall be such
effective date. If no record date is fixed and the notice is
given prior to the effective date, the record date shall be the
close of business on the day next preceding the day on which the
notice is given.
(e) Within 120 days after the effective date of the
merger or consolidation, the surviving or resulting corporation
or any stockholder who has complied with subsections (a)
and (d) of this section hereof and who is otherwise
entitled to appraisal rights, may commence an appraisal
proceeding by filing a petition in the Court of Chancery
demanding a determination of the value of the stock of all such
stockholders. Notwithstanding the foregoing, at any time within
60 days after the effective date of the merger or
consolidation, any stockholder who has not commenced an
appraisal proceeding or joined that proceeding as a named party
shall have the right to withdraw such stockholders demand
for appraisal and to accept the terms offered upon the merger or
consolidation. Within 120 days after the effective date of
the merger or consolidation, any stockholder who has complied
with the requirements of subsections (a) and (d) of
this section hereof, upon written request, shall be entitled to
receive from
E-2
the corporation surviving the merger or resulting from the
consolidation a statement setting forth the aggregate number of
shares not voted in favor of the merger or consolidation and
with respect to which demands for appraisal have been received
and the aggregate number of holders of such shares. Such written
statement shall be mailed to the stockholder within 10 days
after such stockholders written request for such a
statement is received by the surviving or resulting corporation
or within 10 days after expiration of the period for
delivery of demands for appraisal under subsection (d) of
this section hereof, whichever is later. Notwithstanding
subsection (a) of this section, a person who is the
beneficial owner of shares of such stock held either in a voting
trust or by a nominee on behalf of such person may, in such
persons own name, file a petition or request from the
corporation the statement described in this subsection.
(f) Upon the filing of any such petition by a stockholder,
service of a copy thereof shall be made upon the surviving or
resulting corporation, which shall within 20 days after
such service file in the office of the Register in Chancery in
which the petition was filed a duly verified list containing the
names and addresses of all stockholders who have demanded
payment for their shares and with whom agreements as to the
value of their shares have not been reached by the surviving or
resulting corporation. If the petition shall be filed by the
surviving or resulting corporation, the petition shall be
accompanied by such a duly verified list. The Register in
Chancery, if so ordered by the Court, shall give notice of the
time and place fixed for the hearing of such petition by
registered or certified mail to the surviving or resulting
corporation and to the stockholders shown on the list at the
addresses therein stated. Such notice shall also be given by 1
or more publications at least 1 week before the day of the
hearing, in a newspaper of general circulation published in the
City of Wilmington, Delaware or such publication as the Court
deems advisable. The forms of the notices by mail and by
publication shall be approved by the Court, and the costs
thereof shall be borne by the surviving or resulting corporation.
(g) At the hearing on such petition, the Court shall
determine the stockholders who have complied with this section
and who have become entitled to appraisal rights. The Court may
require the stockholders who have demanded an appraisal for
their shares and who hold stock represented by certificates to
submit their certificates of stock to the Register in Chancery
for notation thereon of the pendency of the appraisal
proceedings; and if any stockholder fails to comply with such
direction, the Court may dismiss the proceedings as to such
stockholder.
(h) After the Court determines the stockholders entitled to
an appraisal, the appraisal proceeding shall be conducted in
accordance with the rules of the Court of Chancery, including
any rules specifically governing appraisal proceedings. Through
such proceeding the Court shall determine the fair value of the
shares exclusive of any element of value arising from the
accomplishment or expectation of the merger or consolidation,
together with interest, if any, to be paid upon the amount
determined to be the fair value. In determining such fair value,
the Court shall take into account all relevant factors. Unless
the Court in its discretion determines otherwise for good cause
shown, interest from the effective date of the merger through
the date of payment of the judgment shall be compounded
quarterly and shall accrue at 5% over the Federal Reserve
discount rate (including any surcharge) as established from time
to time during the period between the effective date of the
merger and the date of payment of the judgment. Upon application
by the surviving or resulting corporation or by any stockholder
entitled to participate in the appraisal proceeding, the Court
may, in its discretion, proceed to trial upon the appraisal
prior to the final determination of the stockholders entitled to
an appraisal. Any stockholder whose name appears on the list
filed by the surviving or resulting corporation pursuant to
subsection (f) of this section and who has submitted such
stockholders certificates of stock to the Register in
Chancery, if such is required, may participate fully in all
proceedings until it is finally determined that such stockholder
is not entitled to appraisal rights under this section.
(i) The Court shall direct the payment of the fair value of
the shares, together with interest, if any, by the surviving or
resulting corporation to the stockholders entitled thereto.
Payment shall be so made to each such stockholder, in the case
of holders of uncertificated stock forthwith, and the case of
holders of shares represented by certificates upon the surrender
to the corporation of the certificates representing such stock.
The Courts decree may be enforced as other decrees in the
Court of Chancery may be enforced, whether such surviving or
resulting corporation be a corporation of this State or of any
state.
(j) The costs of the proceeding may be determined by the
Court and taxed upon the parties as the Court deems equitable in
the circumstances. Upon application of a stockholder, the Court
may order all or a portion of the expenses incurred by any
stockholder in connection with the appraisal proceeding,
including, without limitation,
E-3
reasonable attorneys fees and the fees and expenses of
experts, to be charged pro rata against the value of all the
shares entitled to an appraisal.
(k) From and after the effective date of the merger or
consolidation, no stockholder who has demanded appraisal rights
as provided in subsection (d) of this section shall be
entitled to vote such stock for any purpose or to receive
payment of dividends or other distributions on the stock (except
dividends or other distributions payable to stockholders of
record at a date which is prior to the effective date of the
merger or consolidation); provided, however, that if no petition
for an appraisal shall be filed within the time provided in
subsection (e) of this section, or if such stockholder
shall deliver to the surviving or resulting corporation a
written withdrawal of such stockholders demand for an
appraisal and an acceptance of the merger or consolidation,
either within 60 days after the effective date of the
merger or consolidation as provided in subsection (e) of
this section or thereafter with the written approval of the
corporation, then the right of such stockholder to an appraisal
shall cease. Notwithstanding the foregoing, no appraisal
proceeding in the Court of Chancery shall be dismissed as to any
stockholder without the approval of the Court, and such approval
may be conditioned upon such terms as the Court deems just;
provided, however that this provision shall not affect the right
of any stockholder who has not commenced an appraisal proceeding
or joined that proceeding as a named party to withdraw such
stockholders demand for appraisal and to accept the terms
offered upon the merger or consolidation within 60 days
after the effective date of the merger or consolidation, as set
forth in subsection (e) of this section.
(l) The shares of the surviving or resulting corporation to
which the shares of such objecting stockholders would have been
converted had they assented to the merger or consolidation shall
have the status of authorized and unissued shares of the
surviving or resulting corporation.
E-4
PART II
INFORMATION
NOT REQUIRED IN PROSPECTUS
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Item 20.
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Indemnification
of Directors and Officers.
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Section 102(b) of the DGCL authorizes a corporation to
provide in its certificate of incorporation that a director of
the corporation shall not be personally liable to a corporation
or its stockholders for monetary damages for breach or alleged
breach of the directors duty of care. While
this statute does not change directors duty of care, it
enables corporations to limit available relief to equitable
remedies such as injunction or rescission. The statute has no
effect on a directors duty of loyalty or liability for
acts or omissions not in good faith or involving intentional
misconduct or knowing violations of law, illegal payment of
dividends or stock redemptions or repurchases, or for any
transaction from which the director derives an improper personal
benefit. As permitted by the statute, JDA has adopted provisions
in its amended and restated certificate of incorporation that
eliminate, to the fullest extent permissible under Delaware law,
the personal liability of its directors to JDA and its
stockholders for monetary damages for breach or alleged breach
of their duty of care.
Section 145 of the DGCL provides for the indemnification of
officers, directors, employees and agents of a corporation.
JDAs amended and restated bylaws provide for
indemnification of its directors, officers, employees and agents
to the full extent permitted by Delaware law, including those
circumstances in which indemnification would otherwise be
discretionary under Delaware law. JDAs amended and
restated bylaws also empower it to enter into indemnification
agreements with its directors and officers and to purchase
insurance on behalf of any person whom it is required or
permitted to indemnify. JDA has entered into agreements with its
directors and officers that require JDA to indemnify such
persons to the fullest extent permitted under Delaware law
against expenses, judgments, fines, settlements and other
amounts actually and reasonably incurred (including expenses of
a derivative action) in connection with any proceeding, whether
actual or threatened, to which any such person may be made a
party by reason of the fact that such person is or was a
director or an officer of JDA or any of its affiliated
enterprises. The indemnification agreements also set forth
certain procedures that will apply in the event of a claim for
indemnification thereunder.
Section 145 of the DGCL provides for indemnification in
terms sufficiently broad to indemnify such individuals, under
certain circumstances, for liabilities (including reimbursement
of expenses incurred) arising under the Securities Act.
JDA has obtained policies insuring JDA and its directors and
officers against certain liabilities, including liabilities
under the Securities Act.
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Item 21.
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Exhibits
and Financial Statement Schedules
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(a) Exhibits
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Exhibit
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Number
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Exhibit Description
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2
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.1*
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Agreement and Plan of Merger and Reorganization, dated as of
November 4, 2009, by and among JDA Software Group, Inc.,
Alpha Acquisition Corp., and i2 Technologies, Inc.
(included as
Annex A
to the proxy
statement/prospectus forming part of this registration statement
and incorporated herein by reference).
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3
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.1
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Third Restated Certificate of Incorporation of JDA Software
Group, Inc. (incorporated by reference from JDA Software Group,
Inc.s Quarterly Report on
Form 10-Q
for the quarterly period ended September 30, 2002, as filed
on November 12, 2002).
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3
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.2
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First Amended and Restated Bylaws of JDA Software Group, Inc.
(incorporated by reference from JDA Software Group, Inc.s
Quarterly Report on
Form 10-Q
for the quarterly period ended June 30, 1998, as filed on
August 14, 1998).
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3
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.3**
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Form of Certificate of Incorporation of i2 Technologies,
Inc. (to be in effect after consummation of the merger).
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II-1
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Exhibit
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Number
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Exhibit Description
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4
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.1
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Specimen Common Stock Certificate of JDA Software Group, Inc.
(incorporated by reference to JDA Software Group, Inc.s
Registration Statement on
Form S-1
(File
No. 333-748),
declared effective on March 14, 1996).
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5
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.1**
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Opinion of DLA Piper LLP (US) regarding legality of securities
being registered.
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10
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.1
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Form of i2 Voting Agreement for directors and executive officers
of i2, dated November 4, 2009, by and among JDA, i2 and
directors and officers of i2 (included as
Annex B
to
the proxy statement/prospectus forming part of this registration
statement and incorporated herein by reference).
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10
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.2
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Form of i2 Voting Agreement for R2 Top Hat, Ltd. dated
November 4, 2009, by and among JDA, i2 and R2 Top Hat,
Ltd. (included as
Annex C
to the proxy
statement/prospectus forming part of this registration statement
and incorporated herein by reference).
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23
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.1**
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Consent of Deloitte & Touche LLP (relating to JDA
Software Group, Inc.).
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23
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.2**
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Consent of Grant Thornton LLP (relating to i2 Technologies,
Inc.).
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23
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.3**
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Consent of Deloitte & Touche LLP (relating to
i2 Technologies, Inc.).
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23
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.4**
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Consent of DLA Piper LLP (US) (included as part of
Exhibit 5.1).
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24
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.1***
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Powers of Attorney for JDA Software Group, Inc.
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99
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.1**
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Form of Proxy for i2 Technologies, Inc.
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99
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.2***
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Consent of Thomas Weisel Partners LLC
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*
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Certain schedules have been omitted and JDA agrees to furnish
supplementally to the Securities and Exchange Commission a copy
of any omitted schedules upon request.
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(A) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum
aggregate offering price set forth in the Calculation of
Registration Fee table in the effective registration
statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial,
bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
II-2
(4) That, for the purpose of determining liability under
the Securities Act to any purchaser, each prospectus filed
pursuant to Rule 424(b) as part of a registration statement
relating to an offering other than registration statements
relying on Rule 430B or other than prospectuses filed in
reliance on Rule 430A, shall be deemed to be part of and
included in the registration statement as of the date it is
first used after effectiveness; provided, however, that no
statement made in a registration statement or prospectus that is
part of the registration statement or made in a document
incorporated or deemed incorporated by reference into the
registration statement or prospectus that is part of the
registration statement will, as to a purchaser with a time of
contract of sale prior to such first use, supersede or modify
any statement that was made in the registration statement or
prospectus that was part of the registration statement or made
in any such document immediately prior to such date of first use.
(5) That, in a primary offering of securities of the
undersigned registrant pursuant to this registration statement,
regardless of the underwriting method used to sell the
securities to the purchaser, if the securities are offered or
sold to such purchaser by means of any of the following
communications, the undersigned registrant will be a seller to
the purchaser and will be considered to offer or sell such
securities to such purchaser:
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Any preliminary prospectus or prospectus of the undersigned
registrant relating to the offering required to be filed
pursuant to Rule 424;
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Any free writing prospectus relating to the offering prepared by
or on behalf of the undersigned registrant or used or referred
to by the undersigned registrant;
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The portion of any other free writing prospectus relating to the
offering containing material information about the undersigned
registrant or its securities provided by or on behalf of the
undersigned registrant; and
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Any other communication that is an offer in the offering made by
the undersigned registrant to the purchaser
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(B) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act
of 1933, each filing of the registrants annual report
pursuant to Sections 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plans annual report pursuant to
Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(C) The undersigned registrant undertakes as follows: That
prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this
registration statement, by any person or party who is deemed to
be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering prospectus will contain
the information called for by the applicable registration form
with respect to reofferings by persons who may be deemed
underwriters, in addition to the information called for by the
other items of the applicable form.
(D) The registrant undertakes that every prospectus
(i) that is filed pursuant to the paragraph immediately
proceeding, or (ii) that purports to meet the requirements
of section 10(a)(3) of the Securities Act of 1933 and is
used in connection with an offering of securities subject to
Rule 415, will be filed as a part of an amendment to the
registration statement and will not be used until such amendment
is effective, and that, for purposes of determining any
liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(E) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the
II-3
question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final
adjudication of such issue.
(F) The undersigned registrant hereby undertakes to respond
to requests for information that is incorporated by reference in
the prospectus pursuant to Item 4, 10(b), 11, or 13 of this
form, within one business day of receipt of such request, and to
send the incorporated documents by first class mail or other
equally prompt means. This includes information contained in
documents filed subsequent to the effective date of the
registration statement through the date of responding to the
request.
(G) The undersigned registrant hereby undertakes to supply
by means of a post-effective amendment all information
concerning a transaction, and the company being acquired
involved therein, that was not the subject of and included in
the registration statement when it became effective.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act, the
registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Scottsdale, State of Arizona, on the
17
th
day
of December, 2009.
JDA SOFTWARE GROUP, INC.
Hamish N. Brewer
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Title:
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President and Chief Executive Officer
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Pursuant to the requirements of the Securities Act of 1933, as
amended, this registration statement and the Power of Attorney
has been signed by the following persons in the capacities and
on the dates indicated.
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Signature
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Title
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Date
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/s/
*
James
D. Armstrong
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Chairman of the Board of Directors
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December 17, 2009
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/s/ Hamish
N. Brewer
Hamish
N. Brewer
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President, Chief Executive Officer, and Director (Principal
Executive Officer)
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December 17, 2009
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/s/ Peter
S. Hathaway
Peter
S. Hathaway
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Executive Vice President and Chief Financial Officer (Principal
Financial and Accounting Officer)
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December 17, 2009
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/s/
*
J.
Michael Gullard
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Director
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December 17, 2009
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/s/
*
Douglas
G. Marlin
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Director
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December 17, 2009
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/s/
*
Jock
Patton
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Director
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December 17, 2009
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* By:
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/s/ G.
Michael Bridge
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Name:
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G. Michael Bridge
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Title:
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Attorney in Fact
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II-5
EXHIBIT INDEX
|
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|
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Exhibit
|
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Number
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Exhibit Description
|
|
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2
|
.1*
|
|
Agreement and Plan of Merger and Reorganization, dated as of
November 4, 2009, by and among JDA Software Group, Inc.,
Alpha Acquisition Corp., and i2 Technologies, Inc.
(included as
Annex A
to the proxy
statement/prospectus forming part of this registration statement
and incorporated herein by reference).
|
|
3
|
.1
|
|
Third Restated Certificate of Incorporation of JDA Software
Group, Inc. (incorporated by reference from JDA Software Group,
Inc.s Quarterly Report on
Form 10-Q
for the quarterly period ended September 30, 2002, as filed
on November 12, 2002).
|
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3
|
.2
|
|
First Amended and Restated Bylaws of JDA Software Group, Inc.
(incorporated by reference from JDA Software Group, Inc.s
Quarterly Report on
Form 10-Q
for the quarterly period ended June 30, 1998, as filed on
August 14, 1998).
|
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3
|
.3**
|
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Form of Certificate of Incorporation of i2 Technologies,
Inc. (to be in effect after consummation of the merger).
|
|
4
|
.1
|
|
Specimen Common Stock Certificate of JDA Software Group, Inc.
(incorporated by reference to JDA Software Group, Inc.s
Registration Statement on
Form S-1
(File
No. 333-748),
declared effective on March 14, 1996).
|
|
5
|
.1**
|
|
Opinion of DLA Piper LLP (US) regarding legality of securities
being registered.
|
|
10
|
.1
|
|
Form of i2 Voting Agreement for directors and executive officers
of i2, dated November 4, 2009, by and among JDA, i2 and
directors and officers of i2 (included as
Annex B
to
the proxy statement/prospectus forming part of this registration
statement and incorporated herein by reference).
|
|
10
|
.2
|
|
Form of i2 Voting Agreement for R2 Top Hat, Ltd. dated
November 4, 2009, by and among JDA, i2 and R2 Top Hat, Ltd.
(included as
Annex C
to the proxy
statement/prospectus forming part of this registration statement
and incorporated herein by reference).
|
|
23
|
.1**
|
|
Consent of Deloitte & Touche LLP (relating to JDA
Software Group, Inc.).
|
|
23
|
.2**
|
|
Consent of Grant Thornton LLP (relating to i2 Technologies,
Inc.).
|
|
23
|
.3**
|
|
Consent of Deloitte & Touche LLP (relating to
i2 Technologies, Inc.).
|
|
23
|
.4**
|
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Consent of DLA Piper LLP (US) (included as part of
Exhibit 5.1).
|
|
24
|
.1***
|
|
Powers of Attorney for JDA Software Group, Inc. (included on
signature page).
|
|
99
|
.1**
|
|
Form of Proxy for i2 Technologies, Inc.
|
|
99
|
.2***
|
|
Consent of Thomas Weisel Partners LLC
|
|
|
|
*
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Certain schedules have been omitted and JDA agrees to furnish
supplementally to the Securities and Exchange Commission a copy
of any omitted schedules upon request.
|