Get Started for Free Contexxia identifies hard-to-find pieces of information in SEC filings. No more highlighters, no more redlining, no more poring over huge documents. XURA, INC. (1549872) 10-Q published on Jun 27, 2016 at 7:20 am
Reporting Period: Apr 29, 2016
At the effective time of the Merger (or the Effective Time), each share of our common stock, par value $0.01 per share (or the Common Stock), issued and outstanding immediately prior to the Effective Time (other than (i) certain shares of the Common Stock that are held by us, Parent or Merger Sub or any direct or indirect wholly-owned subsidiary of either our company or Parent, and (ii) certain shares of the Common Stock with respect to which the holder thereof shall have properly complied with the provisions of Section 262 of the General Corporation Law of the State of Delaware as to appraisal rights) shall be converted into the right to receive $25.00 in cash, without interest, less any applicable taxes required to be withheld (referred to as the Merger Consideration).
At the Effective Time, each award of stock options, restricted stock units, and director stock units (whether vested or unvested) outstanding under an equity incentive plan immediately prior to the Effective Time shall become fully vested and shall be canceled in exchange for the payment to the holder of such canceled award of an amount in cash (without interest and less applicable tax withholding) equal to the product of the Merger Consideration (less the applicable exercise price per share in the case of a stock option) and the number of shares of Common Stock subject to such canceled award.
During the period beginning on the date of the Merger Agreement and continuing until 11:59 p.m. New York time on July 7, 2016 (referred to as the Go-Shop Period), we may solicit, initiate, encourage and facilitate any competing acquisition proposal from third parties, participate in discussions and negotiations with such third parties regarding such competing acquisition proposals and provide nonpublic information to such third parties pursuant to an Acceptable Confidentiality Agreement (as defined in the Merger Agreement) with each such third party. Following expiration of the Go-Shop Period and
until the earlier of the Effective Time of the Merger or termination of the Merger Agreement in accordance with its terms, we will be subject to customary “no-shop” restrictions on our ability to solicit, initiate, encourage and facilitate any competing acquisition proposals from third parties, participate in discussions and negotiations with such third parties regarding such competing acquisition proposals and provide nonpublic information to such third parties pursuant to an Acceptable Confidentiality Agreement with each such third party, except that we may continue solicitation of, or discussions or negotiations with, third parties engaged by us during the Go-Shop Period with whom a written acquisition proposal remains pending as of and following the expiration of the Go-Shop Period and which acquisition proposal our Board determines in good faith constitutes or would reasonably be expected to lead to a Superior Proposal (as defined in the Merger Agreement) (each such third party is referred to as, an Excluded Party). Following expiration of the Go-Shop Period, we are not permitted to solicit competing acquisition proposals from third parties or take certain other actions, provided that before we have obtained the Requisite Stockholder Approval, if we receive a written acquisition proposal from a third party, we may furnish any information and other access to such third party and participate in discussions or negotiations with such third party, subject to (i) the Board first determining in good faith (after consultation with its financial advisor and legal counsel) that (a) the failure to take such action would be inconsistent with the directors’ fiduciary duties under applicable law and (b) such proposal either constitutes, or would reasonably be expected to lead to, a Superior Proposal and (ii) if we will provide nonpublic information, we provide any such nonpublic information to such third party pursuant to an Acceptable Confidentiality Agreement.
Prior to us obtaining the Requisite Stockholder Approval, the no-shop restrictions above are subject to a “fiduciary out” provision, which permits the Board, subject to our compliance with certain obligations described below, to change its recommendation to our stockholders regarding the Merger in connection with an intervening event, or authorize or adopt an alternative acquisition agreement with respect to a competing acquisition proposal from a third party (each such action is referred to as, a Change in Company Board Recommendation). With respect to certain Changes in Company Board Recommendation, the Board may take any such actions with respect to a competing acquisition proposal from a third party if the Board determines in good faith (after consultation with its financial advisor and legal counsel) that such proposal constitutes a Superior Proposal and that the failure to take such action would reasonably be expected to be inconsistent with the directors’ fiduciary duties under applicable law. We would be permitted to enter an alternative acquisition agreement with respect to such Superior Proposal only if we terminated the Merger Agreement and paid certain fees owed to Parent as described further below. However, before the Board may make any Change in Company Board Recommendation or we may terminate the Merger Agreement in light of a Superior Proposal, we must comply with certain notice obligations with respect to Parent.
Parent has secured committed financing, consisting of a combination of (i) equity to be provided by Siris Partners III, L.P. and Siris Partners III Parallel, L.P., which are affiliates of Siris, and (ii) debt financing to be provided by affiliates of Cerberus Business Finance, LLC. The Merger Agreement does not contain a financing condition. Further, Siris Partners III, L.P. and Siris Partners III Parallel, L.P. have provided us with a limited guaranty in our favor guaranteeing the payment of the reverse termination fee and certain other monetary obligations, subject to the cap specified therein, that may be owed by Parent to us pursuant to the Merger Agreement. The Merger Agreement also provides that either party may specifically enforce the other party’s obligations under the Merger Agreement, provided that we may only cause Parent to fund the equity financing if certain conditions are satisfied, including the funding of the debt financing or such funding being required to be funded at the closing pursuant to the debt financing commitments if the equity financing is funded at the closing.
The announcement of the Referendum of the United Kingdom’s (or the U.K.) Membership of the European Union (E.U.) (referred to as Brexit), advising for the exit of the United Kingdom from the European Union, could cause disruptions to and create uncertainty surrounding our business, including affecting our relationships with our existing and future customers, suppliers and employees, which could have an adverse effect on our business, financial results and operations. The Referendum is non-binding; however if passed into law, negotiations would commence to determine the future terms of the U.K.’s relationship with the E.U., including the terms of trade between the U.K. and the E.U. The effects of Brexit will depend on any agreements the U.K. makes to retain access to E.U. markets either during a transitional period or more permanently. The measures could potentially disrupt the markets we serve and the tax jurisdictions in which we operate and adversely change tax benefits or liabilities in these or other jurisdictions, and may cause us to lose customers, suppliers, and employees. In addition, Brexit could lead to legal uncertainty and potentially divergent national laws and regulations as the U.K. determines which E.U. laws to replace or replicate.