Agreement and Plan of Merger (2017)Full Document 

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Execution

AGREEMENT AND PLAN OF MERGER

by and among

EXCALIBUR PARENT, LLC

EXCALIBUR MERGER SUB, INC.

and

XACTLY CORPORATION

Dated as of May 29, 2017


TABLE OF CONTENTS

Page

Article I DEFINITIONS & INTERPRETATIONS

2

1.1

Certain Definitions 2

1.2

Additional Definitions 11

1.3

Certain Interpretations 13

Article II THE MERGER

14

2.1

The Merger 14

2.2

The Effective Time 14

2.3

The Closing 15

2.4

Effect of the Merger 15

2.5

Certificate of Incorporation and Bylaws 15

2.6

Directors and Officers 15

2.7

Effect on Capital Stock 16

2.8

Equity Awards 17

2.9

Exchange of Certificates 19

2.10

No Further Ownership Rights in Company Common Stock 21

2.11

Lost, Stolen or Destroyed Certificates 21

2.12

Required Withholding 21

2.13

No Dividends or Distributions 22

2.14

Necessary Further Actions 22

Article III REPRESENTATIONS AND WARRANTIES OF THE COMPANY

22

3.1

Organization; Good Standing 22

3.2

Corporate Power; Enforceability 22

3.3

Company Board Approval; Fairness Opinion; Anti-Takeover Laws 23

3.4

Requisite Stockholder Approval 23

3.5

Non-Contravention 23

3.6

Requisite Governmental Approvals 24

3.7

Company Capitalization 24

3.8

Subsidiaries 25

3.9

Company SEC Reports 26

3.10

Company Financial Statements; Internal Controls; Indebtedness 26

3.11

No Undisclosed Liabilities 27

3.12

Absence of Certain Changes 27

3.13

Material Contracts 27

3.14

Real Property 28

3.15

Environmental Matters 28

3.16

Intellectual Property 29

3.17

Tax Matters 31

3.18

Employee Plans 32

3.19

Labor Matters 34

3.20

Permits 34

3.21

Compliance with Laws 34

3.22

Legal Proceedings; Orders 35

3.23

Insurance 35

3.24

Related Person Transactions 35

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TABLE OF CONTENTS

(Continued)

Page

3.25

Brokers 35

3.26

Trade Controls; FCPA 35

Article IV REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB

36

4.1

Organization; Good Standing 36

4.2

Power; Enforceability 36

4.3

Non-Contravention 36

4.4

Requisite Governmental Approvals 37

4.5

Legal Proceedings; Orders 37

4.6

Ownership of Company Capital Stock 37

4.7

Brokers 37

4.8

Operations of Parent and Merger Sub 38

4.9

No Parent Vote or Approval Required 38

4.10

Guaranty 38

4.11

Financing 38

4.12

Stockholder and Management Arrangements 39

4.13

Solvency 39

4.14

Exclusivity of Representations and Warranties 40

Article V INTERIM OPERATIONS OF THE COMPANY

41

5.1

Affirmative Obligations 41

5.2

Forbearance Covenants 41

5.3

No Solicitation 44

Article VI ADDITIONAL COVENANTS

48

6.1

Required Action and Forbearance; Efforts 48

6.2

Antitrust Filings 49

6.3

Proxy Statement and Other Required SEC Filings 50

6.4

Company Stockholder Meeting 52

6.5

Equity Financing 52

6.6

Financing Cooperation 53

6.7

Anti-Takeover Laws 57

6.8

Access 57

6.9

Section 16(b) Exemption 57

6.10

Directors’ and Officers’ Exculpation, Indemnification and Insurance 57

6.11

Employee Matters 60

6.12

Obligations of Merger Sub 61

6.13

Notification of Certain Matters 61

6.14

Public Statements and Disclosure 62

6.15

Transaction Litigation 62

6.16

Stock Exchange Delisting; Deregistration 62

6.17

Additional Agreements 63

6.18

Parent Vote 63

6.19

No Control of the Other Party’s Business 63

Article VII CONDITIONS TO THE MERGER

63

7.1

Conditions to Each Party’s Obligations to Effect the Merger 63

7.2

Conditions to the Obligations of Parent and Merger Sub 64

7.3

Conditions to the Company’s Obligations to Effect the Merger 64

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TABLE OF CONTENTS

(Continued)

Page

Article VIII TERMINATION, AMENDMENT AND WAIVER

65

8.1

Termination 65

8.2

Manner and Notice of Termination; Effect of Termination 66

8.3

Fees and Expenses 67

8.4

Amendment 69

8.5

Extension; Waiver 70

8.6

No Liability of Financing Sources 70

Article IX GENERAL PROVISIONS

70

9.1

Survival of Representations, Warranties and Covenants 70

9.2

Notices 71

9.3

Assignment 72

9.4

Confidentiality 72

9.5

Entire Agreement 72

9.6

Third Party Beneficiaries 72

9.7

Severability 73

9.8

Remedies 73

9.9

Governing Law 74

9.10

Consent to Jurisdiction 74

9.11

WAIVER OF JURY TRIAL 75

9.12

Company Disclosure Letter References 75

9.13

Counterparts 75

9.14

No Limitation 76

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AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and entered into as of May 29, 2017, by and among Excalibur Parent, LLC, a Delaware limited liability company ("Parent"), Excalibur Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Parent ("Merger Sub"), and Xactly Corporation, a Delaware corporation (the "Company"). Each of Parent, Merger Sub and the Company are sometimes referred to as a "Party." All capitalized terms that are used in this Agreement have the respective meanings given to them in Article I.

RECITALS

A. The Company Board has (i) determined that it is in the best interests of the Company and its stockholders, and declared it advisable, to enter into this Agreement providing for the merger of Merger Sub with and into the Company (collectively with the other transactions contemplated by this Agreement, the "Merger") in accordance with the General Corporation Law of the State of Delaware (the "DGCL") upon the terms and subject to the conditions set forth herein; (ii) approved the execution and delivery of this Agreement by the Company, the performance by the Company of its covenants and other obligations hereunder, and the consummation of the Merger upon the terms and subject to the conditions set forth herein; and (iii) resolved to recommend that the stockholders of the Company adopt this Agreement and approve the Merger in accordance with the DGCL.

B. Each of the board of managers of Parent and the board of directors of Merger Sub have (i) declared it advisable to enter into this Agreement; and (ii) approved the execution and delivery of this Agreement, the performance of their respective covenants and other obligations hereunder, and the consummation of the Merger upon the terms and subject to the conditions set forth herein.

C. Concurrently with the execution of this Agreement, and as a condition and inducement to the Company’s willingness to enter into this Agreement, Parent and Merger Sub have delivered (i) a limited guaranty (the "Guaranty") from Vista Equity Partners VI, L.P., a Delaware limited partnership (the "Guarantor"), in favor of the Company and pursuant to which, subject to the terms and conditions contained therein, the Guarantor is guaranteeing certain obligations of Parent and Merger Sub in connection with this Agreement and (ii) a commitment letter between Parent and the Guarantor, pursuant to which the Guarantor has committed, subject to the terms and conditions thereof, to invest in Parent, directly or indirectly, the cash amounts set forth therein (the "Equity Commitment Letter").

D. Prior to the execution and delivery of this Agreement, and as a condition to the willingness of Parent and Merger Sub to enter into this Agreement, certain stockholders of the Company have entered into Voting Agreements ("Voting Agreements") in connection with the Merger.

E. Parent, Merger Sub and the Company desire to (i) make certain representations, warranties, covenants and agreements in connection with this Agreement and the Merger; and (ii) prescribe certain conditions with respect to the consummation of the Merger.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing premises and the representations, warranties, covenants and agreements set forth herein, as well as other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and accepted, and intending to be legally bound hereby, Parent, Merger Sub and the Company agree as follows:


ARTICLE I

DEFINITIONS & INTERPRETATIONS

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