AGREEMENT AND PLAN OF MERGER
BY AND AMONG
YAHOO! INC.
HOME PAGE ACQUISITION CORP.
AND
GEOCITIES
Dated as of January 27, 1999
TABLE OF CONTENTS
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ARTICLE I THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 The Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Effective Time; Closing . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Effect of the Merger. . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Certificate of Incorporation. . . . . . . . . . . . . . . . . . . . . 2
1.5 Directors and Officers. . . . . . . . . . . . . . . . . . . . . . . . 2
1.6 Effect on Capital Stock . . . . . . . . . . . . . . . . . . . . . . . 3
1.7 Surrender of Certificates . . . . . . . . . . . . . . . . . . . . . . 4
1.8 No Further Ownership Rights in Company Common Stock . . . . . . . . . 5
1.9 Lost, Stolen or Destroyed Certificates. . . . . . . . . . . . . . . . 5
1.10 Restricted Stock . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.11 Tax and Accounting Consequences. . . . . . . . . . . . . . . . . . . 6
1.12 Taking of Necessary Action; Further Action . . . . . . . . . . . . . 6
ARTICLE II REPRESENTATIONS AND WARRANTIES OF COMPANY . . . . . . . . . . . . . 6
2.1 Organization of Company . . . . . . . . . . . . . . . . . . . . . . . 7
2.2 Company Capital Structure . . . . . . . . . . . . . . . . . . . . . . 7
2.3 Obligations With Respect to Capital Stock . . . . . . . . . . . . . . 8
2.4 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.5 SEC Filings; Company Financial Statements . . . . . . . . . . . . . .10
2.6 Absence of Certain Changes or Events. . . . . . . . . . . . . . . . .11
2.7 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
2.8 Title to Properties; Absence of Liens and Encumbrances. . . . . . . .13
2.9 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . .14
2.10 Compliance; Permits; Restrictions. . . . . . . . . . . . . . . . . .16
2.11 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
2.12 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . .17
2.13 Environmental Matters. . . . . . . . . . . . . . . . . . . . . . . .21
2.14 Agreements, Contracts and Commitments. . . . . . . . . . . . . . . .22
2.15 Pooling of Interests . . . . . . . . . . . . . . . . . . . . . . . .23
2.16 Change of Control Payments . . . . . . . . . . . . . . . . . . . . .23
2.17 Statements; Proxy Statement/Prospectus . . . . . . . . . . . . . . .23
2.18 Board Approval . . . . . . . . . . . . . . . . . . . . . . . . . . .24
2.19 Brokers' and Finders' Fees . . . . . . . . . . . . . . . . . . . . .24
2.20 Fairness Opinion . . . . . . . . . . . . . . . . . . . . . . . . . .24
2.21 Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
2.22 Section 203 Not Applicable . . . . . . . . . . . . . . . . . . . . .24
ARTICLE III REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB. . . . . .25
3.1 Organization of Parent and Merger Sub . . . . . . . . . . . . . . . .25
3.2 Parent and Merger Sub Capital Structure . . . . . . . . . . . . . . .25
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3.3 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
3.4 SEC Filings; Parent Financial Statements. . . . . . . . . . . . . . .26
3.5 Absence of Certain Changes or Events. . . . . . . . . . . . . . . . .27
3.6 Proxy Statement/Prospectus. . . . . . . . . . . . . . . . . . . . . .27
3.7 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
3.8 Pooling of Interests. . . . . . . . . . . . . . . . . . . . . . . . .28
3.9 Affiliates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
3.10 Valid Issuance . . . . . . . . . . . . . . . . . . . . . . . . . . .28
ARTICLE IV CONDUCT PRIOR TO THE EFFECTIVE TIME . . . . . . . . . . . . . . . .28
4.1 Conduct of Business by Company. . . . . . . . . . . . . . . . . . . .28
4.2 Conduct of Business by Parent . . . . . . . . . . . . . . . . . . . .30
ARTICLE V ADDITIONAL AGREEMENTS. . . . . . . . . . . . . . . . . . . . . . . .31
5.1 Proxy Statement/Prospectus; Registration Statement; Other Filings;
Board Recommendations. . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.2 Meeting of Company Stockholders . . . . . . . . . . . . . . . . . . .32
5.3 Confidentiality: Access to Information . . . . . . . . . . . . . . .33
5.4 No Solicitation . . . . . . . . . . . . . . . . . . . . . . . . . . .34
5.5 Public Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . .35
5.6 Reasonable Efforts; Notification. . . . . . . . . . . . . . . . . . .36
5.7 Third Party Consents. . . . . . . . . . . . . . . . . . . . . . . . .37
5.8 Stock Options and ESPP. . . . . . . . . . . . . . . . . . . . . . . .37
5.9 Form S-8. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38
5.10 Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . .38
5.11 Nasdaq Listing . . . . . . . . . . . . . . . . . . . . . . . . . . .38
5.12 Affiliate Agreements . . . . . . . . . . . . . . . . . . . . . . . .39
5.13 [Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39
5.14 GeoCities Stock Option . . . . . . . . . . . . . . . . . . . . . . .39
5.15 Letter of Company's Accountants. . . . . . . . . . . . . . . . . . .42
ARTICLE VI CONDITIONS TO THE MERGER. . . . . . . . . . . . . . . . . . . . . .42
6.1 Conditions to Obligations of Each Party to Effect the Merger. . . . .42
6.2 Additional Conditions to Obligations of Company . . . . . . . . . . .43
6.3 Additional Conditions to the Obligations of Parent and Merger Sub . .44
ARTICLE VII TERMINATION, AMENDMENT AND WAIVER. . . . . . . . . . . . . . . . .45
7.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45
7.2 Notice of Termination Effect of Termination . . . . . . . . . . . . .47
7.3 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . .47
7.4 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .48
7.5 Extension; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . .48
ARTICLE VIII GENERAL PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . .48
8.1 Non-Survival of Representations and Warranties. . . . . . . . . . . .48
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8.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .48
8.3 Interpretation; Certain Defined Terms . . . . . . . . . . . . . . . .49
8.4 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . .50
8.5 Entire Agreement; Third Party Beneficiaries . . . . . . . . . . . . .51
8.6 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . .51
8.7 Other Remedies; Specific Performance. . . . . . . . . . . . . . . . .51
8.8 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . .51
8.9 Rules of Construction . . . . . . . . . . . . . . . . . . . . . . . .51
8.10 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . .51
8.11 Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . .52
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INDEX OF EXHIBITS
Exhibit A Form of GeoCities Voting Agreement
Exhibit B Form of GeoCities Affiliate Agreement
Exhibit C Form of Yahoo! Affiliate Agreement
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER is made and entered into as of
January 27, 1999 (this "AGREEMENT"), among Yahoo! Inc., a California corporation
("YAHOO!"), Home Page Acquisition Corp., a Delaware corporation and a wholly
owned subsidiary of Yahoo! ("MERGER SUB"), and GeoCities, a Delaware corporation
("GEOCITIES").
RECITALS
A. Upon the terms and subject to the conditions of this Agreement and in
accordance with the Delaware General Corporation Law ("DELAWARE LAW"), Yahoo!,
Merger Sub and GeoCities intend to enter into a business combination
transaction.
B. The Board of Directors of GeoCities (i) has determined that the
Merger (as defined in Section 1.1) is consistent with and in furtherance of
the long-term business strategy of GeoCities and advisable and fair to, and
in the best interests of, GeoCities and its stockholders, (ii) has approved
this Agreement, the Merger and the other transactions contemplated by this
Agreement and (iii) has determined to recommend that the stockholders of
GeoCities adopt and approve this Agreement and approve the Merger.
C. The Board of Directors of Yahoo! (i) has determined that the Merger is
consistent with and in furtherance of the long-term business strategy of Yahoo!
and advisable and fair to, and in the best interests of, Yahoo! and its
shareholders and (ii) has approved this Agreement, the Merger and the other
transactions contemplated by this Agreement.
D. Concurrently with the execution of this Agreement, and as a condition
and inducement to Yahoo!'s willingness to enter into this Agreement, certain
stockholders of GeoCities are entering into Voting Agreements in substantially
the form attached hereto as EXHIBIT A (the "GEOCITIES VOTING AGREEMENTS") and
certain persons or entities who may be deemed to be affiliates of GeoCities are
entering into Affiliate Agreements in substantially the form attached hereto as
EXHIBIT B (the "GEOCITIES AFFILIATE AGREEMENTS").
E. The parties intend, by executing this Agreement, to adopt a plan of
reorganization within the meaning of Section 368 of the Internal Revenue Code of
1986, as amended (the "CODE").
F. It is also intended by the parties hereto that the Merger shall
qualify for accounting treatment as a pooling of interests.
NOW, THEREFORE, in consideration of the covenants, agreements,
representations and warranties set forth herein, the parties agree as follows:
ARTICLE I
THE MERGER
1.1 THE MERGER. At the Effective Time and subject to and upon the terms
and conditions of this Agreement and the applicable provisions of Delaware Law,
Merger Sub shall be merged with and into GeoCities (the "MERGER"), the separate
corporate existence of Merger Sub shall cease and GeoCities shall continue as
the surviving corporation. GeoCities as the surviving corporation after the
Merger is hereinafter sometimes referred to as the "SURVIVING CORPORATION."
1.2 EFFECTIVE TIME; CLOSING. Subject to the provisions of this
Agreement, the parties hereto shall cause the Merger to be consummated by
filing a certificate of merger, in such appropriate form as determined by the
parties, with the Secretary of State of the State of Delaware in accordance
with the relevant provisions of Delaware Law (the "CERTIFICATE OF MERGER")
(the time of such filing (or such later time as may be agreed in writing by
GeoCities and Yahoo! and specified in the Certificate of Merger) being the
"EFFECTIVE TIME") as soon as practicable on or after the Closing Date (as
herein defined). The closing of the Merger (the "CLOSING") shall take place
at the offices of Venture Law Group, 0000 Xxxx Xxxx Xxxx, Xxxxx Xxxx,
Xxxxxxxxxx, at a time and date to be specified by the parties, which shall be
no later than the second business day after the satisfaction or waiver of the
conditions set forth in Article VI, or at such other time, date and location
as the parties hereto agree in writing (the "CLOSING DATE").
1.3 EFFECT OF THE MERGER. At the Effective Time, the effect of the Merger
shall be as provided in this Agreement and the applicable provisions of Delaware
Law. Without limiting the generality of the foregoing, at the Effective Time
all the property, rights, privileges, powers and franchises of GeoCities and
Merger Sub shall vest in the Surviving Corporation, and all debts, liabilities
and duties of GeoCities and Merger Sub shall become the debts, liabilities and
duties of the Surviving Corporation.
1.4 CERTIFICATE OF INCORPORATION; BYLAWS.
(a) At the Effective Time, the Certificate of Incorporation of
Merger Sub, as in effect immediately prior to the Effective Time, shall be
the Certificate of Incorporation of the Surviving Corporation until
thereafter amended as provided by law and such Certificate of Incorporation
of the Surviving Corporation; PROVIDED, HOWEVER, that at the Effective Time
Article I of the Certificate of Incorporation of the Surviving Corporation
shall be amended to read: "The name of the corporation is GeoCities."
(b) At the Effective Time, 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.
1.5 DIRECTORS AND OFFICERS. The initial directors of the Surviving
Corporation shall be the directors of Merger Sub immediately prior to the
Effective Time, until their respective successors are duly elected or
appointed and qualified. The initial corporate officers of the
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Surviving Corporation shall be the corporate officers of Merger Sub
immediately prior to the Effective Time, until their respective successors
are duly appointed.
1.6 EFFECT ON CAPITAL STOCK. At the Effective Time, by virtue of the
Merger and without any action on the part of Merger Sub, GeoCities or the
holders of any of the following securities:
(a) CONVERSION OF GEOCITIES COMMON STOCK. Each share of common
stock, par value $0.001 per share, of GeoCities ("GEOCITIES COMMON STOCK")
issued and outstanding immediately prior to the Effective Time, other than any
shares of GeoCities Common Stock to be canceled pursuant to Section 1.6(b), will
be canceled and extinguished and automatically converted (subject to Sections
1.6(d) and (e)) into the right to receive .3384 of a share (the "EXCHANGE
RATIO") of common stock, par value $0.00033 per share ($0.00017 per share
following the pending two-for-one stock split), of Yahoo! ("YAHOO! COMMON
STOCK") upon surrender of the certificate representing such share of GeoCities
Common Stock in the manner provided in Section 1.7. The parties acknowledge
that following completion of Yahoo!'s pending two-for-one stock split the
Exchange Ratio shall be adjusted to equal .6768 of a share of Yahoo! Common
Stock, subject to potential further adjustment as contemplated by subsection (d)
below.
(b) CANCELLATION OF GEOCITIES-OWNED AND YAHOO!-OWNED STOCK. Each
share of GeoCities Common Stock held by GeoCities or owned by Merger Sub, Yahoo!
or any direct or indirect wholly owned subsidiary of GeoCities or of Yahoo!
immediately prior to the Effective Time shall be canceled and extinguished
without any conversion thereof.
(c) CAPITAL STOCK OF MERGER SUB. Each share of common stock, $0.0l
par value per share, of Merger Sub issued and outstanding immediately prior to
the Effective Time shall be converted into one validly issued, fully paid and
nonassessable share of common stock, $0.01 par value per share, of the Surviving
Corporation. Each certificate evidencing ownership of shares of the common
stock of Merger Sub shall evidence ownership of such shares of capital stock of
the Surviving Corporation.
(d) ADJUSTMENTS TO EXCHANGE RATIO. The Exchange Ratio shall be
adjusted to reflect appropriately the effect of any stock split, reverse stock
split, stock dividend (including any dividend or distribution of securities
convertible into Yahoo! Common Stock or GeoCities Common Stock), reorganization,
recapitalization, reclassification or other like change with respect to Yahoo!
Common Stock or GeoCities Common Stock occurring on or after the date hereof and
prior to the Effective Time.
(e) FRACTIONAL SHARES. No fraction of a share of Yahoo! Common Stock
will be issued by virtue of the Merger, but in lieu thereof each holder of
shares of GeoCities Common Stock who would otherwise be entitled to a fraction
of a share of Yahoo! Common Stock (after aggregating all fractional shares of
Yahoo! Common Stock that otherwise would be received by such holder) shall
receive from Yahoo! an amount of cash (rounded to the nearest whole cent) equal
to the product of (i) such fraction, multiplied by (ii) the average closing sale
price of one
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share of Yahoo! Common Stock for the five (5) most recent days that Yahoo!
Common Stock has traded ending on the trading day immediately prior to the
Effective Time, as reported on the Nasdaq Stock Market.
1.7 SURRENDER OF CERTIFICATES.
(a) EXCHANGE AGENT. Yahoo! shall select a bank or trust company
reasonably acceptable to GeoCities to act as the exchange agent (the "EXCHANGE
AGENT") in the Merger.
(b) YAHOO! TO PROVIDE COMMON STOCK. Promptly after the Effective
Time, Yahoo! shall make available to the Exchange Agent for exchange in
accordance with this Article I, the shares of Yahoo! Common Stock issuable
pursuant to Section 1.6 in exchange for outstanding shares of GeoCities Common
Stock, and cash in an amount sufficient for payment in lieu of fractional shares
pursuant to Section 1.6(e) and any dividends or distributions to which holders
of shares of GeoCities Common Stock may be entitled pursuant to Section 1.7(d).
(c) EXCHANGE PROCEDURES. Promptly after the Effective Time, Yahoo!
shall cause the Exchange Agent to mail to each holder of record (as of the
Effective Time) of a certificate or certificates (the "CERTIFICATES"), which
immediately prior to the Effective Time represented outstanding shares of
GeoCities Common Stock, whose shares were converted into shares of Yahoo! Common
Stock pursuant to Section 1.6 (i) a letter of transmittal in customary form
(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 shall contain such other customary provisions as Yahoo! may
reasonably specify) and (ii) instructions for use in effecting the surrender of
the Certificates in exchange for certificates representing shares of Yahoo!
Common Stock, cash in lieu of any fractional shares pursuant to Section 1.6(e)
and any dividends or other distributions pursuant to Section 1.7(d). Upon
surrender of Certificates for cancellation to the Exchange Agent or to such
other agent or agents as may be appointed by Yahoo!, together with such letter
of transmittal, duly completed and validly executed in accordance with the
instructions thereto, the holders of such Certificates shall be entitled to
receive in exchange therefor certificates representing the number of whole
shares of Yahoo! Common Stock into which their shares of GeoCities Common Stock
were converted at the Effective Time, payment in lieu of fractional shares which
such holders have the right to receive pursuant to Section 1.6(e) and any
dividends or distributions payable pursuant to Section 1.7(d), and the
Certificates so surrendered shall forthwith be canceled. Until so surrendered,
outstanding Certificates will be deemed from and after the Effective Time, for
all corporate purposes, to evidence only the ownership of the number of full
shares of Yahoo! Common Stock into which such shares of GeoCities Common Stock
shall have been so converted and the right to receive an amount in cash in lieu
of the issuance of any fractional shares in accordance with Section 1.6(e) and
any dividends or distributions payable pursuant to Section 1.7(d).
(d) DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES. No dividends
or other distributions declared or made after the date of this Agreement with
respect to Yahoo! Common Stock with a record date after the Effective Time will
be paid to the holders of any
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unsurrendered Certificates with respect to the shares of Yahoo! Common Stock
represented thereby until the holders of record of such Certificates shall
surrender such Certificates. Subject to applicable law, following surrender
of any such Certificates, the Exchange Agent shall deliver to the record
holders thereof, without interest, certificates representing whole shares of
Yahoo! Common Stock issued in exchange therefor along with payment in lieu of
fractional shares pursuant to Section 1.6(e) hereof and the amount of any
such dividends or other distributions with a record date after the Effective
Time payable with respect to such shares of Yahoo! Common Stock.
(e) TRANSFERS OF OWNERSHIP. If certificates representing shares of
Yahoo! Common Stock are to be issued in a name other than that in which the
Certificates surrendered in exchange therefor are registered, it will be a
condition of the issuance thereof that the Certificates so surrendered will be
properly endorsed and otherwise in proper form for transfer and that the persons
requesting such exchange will have paid to Yahoo! or any agent designated by it
any transfer or other taxes required by reason of the issuance of certificates
representing shares of Yahoo! Common Stock in any name other than that of the
registered holder of the Certificates surrendered, or established to the
satisfaction of Yahoo! or any agent designated by it that such tax has been paid
or is not payable.
(f) NO LIABILITY. Notwithstanding anything to the contrary in this
Section 1.7, neither the Exchange Agent, Yahoo!, the Surviving Corporation nor
any party hereto shall be liable to a holder of shares of Yahoo! Common Stock or
GeoCities Common Stock for any amount properly paid to a public official
pursuant to any applicable abandoned property, escheat or similar law.
1.8 NO FURTHER OWNERSHIP RIGHTS IN GEOCITIES COMMON STOCK. All shares
of Yahoo! Common Stock issued in accordance with the terms hereof (including
any cash paid in respect thereof pursuant to Section 1.6(e) and 1.7(d)) shall
be deemed to have been issued in full satisfaction of all rights pertaining
to such shares of GeoCities Common Stock, and there shall be no further
registration of transfers on the records of the Surviving Corporation of
shares of GeoCities Common Stock which were outstanding immediately prior to
the Effective Time. If after the Effective Time Certificates are presented
to the Surviving Corporation for any reason, they shall be canceled and
exchanged as provided in this Article I.
1.9 LOST, STOLEN OR DESTROYED CERTIFICATES. In the event that any
Certificates shall have been lost, stolen or destroyed, the Exchange Agent
shall issue in exchange for such lost, stolen or destroyed Certificates, upon
the making of an affidavit of that fact by the holder thereof, certificates
representing the shares of Yahoo! Common Stock into which the shares of
GeoCities Common Stock represented by such Certificates were converted
pursuant to Section 1.6, cash for fractional shares, if any, as may be
required pursuant to Section 1.6(e) and any dividends or distributions
payable pursuant to Section 1.7(d); PROVIDED, HOWEVER, that Yahoo! may, in
its discretion and as a condition precedent to the issuance of such
certificates representing shares of Yahoo! Common Stock, cash and other
distributions, require the owner of such lost, stolen or destroyed
Certificates to deliver a bond in such sum and with customary provisions as
it may
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reasonably direct as indemnity against any claim that may be made against
Yahoo!, the Surviving Corporation or the Exchange Agent with respect to the
Certificates alleged to have been lost, stolen or destroyed.
1.10 RESTRICTED STOCK. Shares of GeoCities Common Stock that are subject
to repurchase by GeoCities in the event a GeoCities employee ceases to be
employed by GeoCities ("GEOCITIES RESTRICTED STOCK") shall be converted into the
right to receive Yahoo! Common Stock on the same basis as provided in Section
1.6. Shares of GeoCities Restricted Stock shall be replaced with shares of
Yahoo! Common Stock, subject to the same restrictions as the original GeoCities
Restricted Stock. Such replacement shares of Yahoo! Common Stock shall be
issued to and registered in the name of the holder, but shall be held by Yahoo!
pending satisfaction of the applicable vesting schedules pursuant to existing
agreements in effect at the Effective Time. GeoCities hereby assigns to the
Surviving Corporation all repurchase rights relating to the GeoCities Restricted
Stock, effective at the Effective Time. A listing of the holders of GeoCities
Restricted Stock, together with the number of shares of GeoCities Restricted
Stock held by each, is set forth on Schedule 1.10 of the GeoCities Schedules (as
defined in Article II below).
1.11 TAX AND ACCOUNTING CONSEQUENCES.
(a) It is intended by the parties hereto that the Merger shall
constitute a reorganization within the meaning of Section 368 of the Code. The
parties hereto adopt this Agreement as a "plan of reorganization" within the
meaning of Sections 1.368-2(g) and 1.368-3(a) of the United States Income Tax
Regulations.
(b) It is intended by the parties hereto that the Merger shall
qualify for accounting treatment as a pooling of interests.
1.12 TAKING OF NECESSARY ACTION; FURTHER ACTION. If, at any time after the
Effective Time, any further action is necessary or desirable to carry out the
purposes of this Agreement and to vest the Surviving Corporation with full
right, title and possession to all assets, property, rights, privileges, powers
and franchises of GeoCities and Merger Sub, the officers and directors of
GeoCities and Merger Sub will take all such lawful and necessary action. Yahoo!
shall cause Merger Sub to perform all of its obligations relating to this
Agreement and the transactions contemplated hereby.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF GEOCITIES
GeoCities represents and warrants to Yahoo! and Merger Sub, subject to the
exceptions specifically disclosed in writing in the disclosure letter delivered
by GeoCities to Yahoo! dated as of the date hereof and certified by a duly
authorized officer of GeoCities (the "GEOCITIES SCHEDULES"), as follows:
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2.1 ORGANIZATION OF GEOCITIES.
(a) GeoCities and each of its subsidiaries (i) is a corporation or
other legal entity duly organized, validly existing and in good standing under
the laws of the jurisdiction in which it is organized; (ii) has the corporate or
other power and authority to own, lease and operate its assets and property and
to carry on its business as now being conducted; and (iii) except as would not
be material to GeoCities, is duly qualified or licensed to do business in each
jurisdiction where the character of the properties owned, leased or operated by
it or the nature of its activities makes such qualification or licensing
necessary.
(b) GeoCities has delivered to Yahoo! a true and complete list of all
of GeoCities' subsidiaries as of the date of this Agreement, indicating the
jurisdiction of organization of each subsidiary and GeoCities' equity interest
therein. Except as set forth on such list, neither GeoCities nor any of its
subsidiaries owns any equity interest in any corporation, partnership or joint
venture arrangement or other business entity that is material to GeoCities.
(c) GeoCities has delivered or made available to Yahoo! a true and
correct copy of the Certificate of Incorporation and Bylaws of GeoCities and
similar governing instruments of each of its subsidiaries (other than the
subsidiary of GeoCities organized under the laws of United Kingdom), each as
amended to date, and each such instrument is in full force and effect. Neither
GeoCities nor any of its subsidiaries is in violation of any of the provisions
of its Certificate of Incorporation or Bylaws or equivalent governing
instruments.
2.2 GEOCITIES CAPITAL STRUCTURE. The authorized capital stock of
GeoCities consists of 60,000,000 shares of Common Stock, par value $0.001 per
share, of which there were 32,034,826 shares issued and outstanding as of
January 27, 1999 (none of which were held by GeoCities in its treasury), and
5,000,000 shares of Preferred Stock, par value $0.001 per share, none of which
are issued or outstanding. All outstanding shares of GeoCities Common Stock are
duly authorized, validly issued, fully paid and nonassessable and are not
subject to preemptive rights created by statute, the Certificate of
Incorporation or Bylaws of GeoCities or any agreement or document to which
GeoCities is a party or by which it is bound. As of January 27, 1999, GeoCities
had reserved an aggregate of (i) 2,670,940 shares of GeoCities Common Stock for
issuance pursuant to GeoCities' 1998 Stock Incentive Plan, 4,759,310 shares of
GeoCities Common Stock for issuance pursuant to GeoCities' 1997 Stock Option
Plan, and (iii) 215,090 shares of GeoCities Common Stock for issuance pursuant
to GeoCities' Starseed, Inc. 1998 Stock Option/Stock Issuance Plan. As of
January 27, 1999, there were options outstanding to purchase an aggregate of (u)
1,664,500 shares of GeoCities Common Stock pursuant to GeoCities' 1998 Stock
Incentive Plan, (v) 4,759,310 shares of GeoCities Common Stock pursuant to
GeoCities' 1997 Stock Option Plan, (w) 215,090 shares of GeoCities Common Stock
pursuant to GeoCities' Starseed, Inc. 1998 Stock Option/Stock Issuance Plan, and
(x) 2,306,054 shares of GeoCities Common Stock pursuant to written agreements
with certain officers, directors, consultants, founders and employees of
GeoCities. GeoCities' 1998 Stock Incentive Plan, GeoCities' 1997 Stock Option
Plan, Starseed, Inc. 1998 Stock Option/Stock Issuance Plan
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and the aforementioned written agreements granting options are collectively
referred to in this Agreement as the "GEOCITIES STOCK OPTION PLANS." There
are no warrants outstanding to purchase any shares of GeoCities Common Stock.
As of January 27, 1999, GeoCities had reserved an aggregate of 300,000
shares of GeoCities Common Stock for issuance pursuant to GeoCities' 1998
Employee Stock Purchase Plan (the "ESPP"). All shares of GeoCities Common
Stock subject to issuance as aforesaid, upon issuance on the terms and
conditions specified in the instruments pursuant to which they are issuable,
would be duly authorized, validly issued, fully paid and nonassessable. The
GeoCities Schedules list for each person who held options or warrants to
acquire shares of GeoCities Common Stock as of January 26, 1999, the name of
the holder of such option or warrant, the exercise price of such option or
warrant, the number of shares as to which such option or warrant had vested
at such date, the vesting schedule for such option or warrant and whether the
exercisability of such option or warrant will be accelerated in any way by
the transactions contemplated by this Agreement, and indicates the extent of
acceleration, if any.
2.3 OBLIGATIONS WITH RESPECT TO CAPITAL STOCK. Except as set forth in
Section 2.2, there are no equity securities, partnership interests or similar
ownership interests of any class of GeoCities equity security, or any securities
exchangeable or convertible into or exercisable for such equity securities,
partnership interests or similar ownership interests, issued, reserved for
issuance or outstanding. Except for securities GeoCities owns free and clear of
all claims and encumbrances, directly or indirectly through one or more
subsidiaries, and except for shares of capital stock or other similar ownership
interests of certain subsidiaries of GeoCities that are owned by certain nominee
equity holders as required by the applicable law of the jurisdiction of
organization of such subsidiaries, there are no equity securities, partnership
interests or similar ownership interests of any class of equity security of any
subsidiary of GeoCities, or any security exchangeable or convertible into or
exercisable for such equity securities, partnership interests or similar
ownership interests, issued, reserved for issuance or outstanding. Except as
set forth in Section 2.2, there are no subscriptions, options, warrants, equity
securities, partnership interests or similar ownership interests, calls, rights
(including preemptive rights), commitments or agreements of any character to
which GeoCities or any of its subsidiaries is a party or by which it is bound
obligating GeoCities or any of its subsidiaries to issue, deliver or sell, or
cause to be issued, delivered or sold, or repurchase, redeem or otherwise
acquire, or cause the repurchase, redemption or acquisition of, any shares of
capital stock, partnership interests or similar ownership interests of GeoCities
or any of its subsidiaries or obligating GeoCities or any of its subsidiaries to
grant, extend, accelerate the vesting of or enter into any such subscription,
option, warrant, equity security, call, right, commitment or agreement. Except
as contemplated by this Agreement, there are no registration rights and thre is
no voting trust, proxy, rights plan, antitakeover plan or other agreement or
understanding to which GeoCities is a party or by which it is bound with respect
to any equity security of any class of GeoCities or with respect to any equity
security, partnership interest or similar ownership interest of any class of any
of its subsidiaries. Stockholders of GeoCities will not be entitled to
dissenters' rights under applicable state law in connection with the Merger.
2.4 AUTHORITY.
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(a) GeoCities has all requisite corporate power and authority to
enter into this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of GeoCities, subject only to the
approval and adoption of this Agreement and the approval of the Merger by
GeoCities' stockholders and the filing of the Certificate of Merger pursuant
to Delaware Law. A vote of the holders of a majority of the outstanding
shares of the GeoCities Common Stock is sufficient for GeoCities'
stockholders to approve and adopt this Agreement and approve the Merger.
This Agreement has been duly executed and delivered by GeoCities and,
assuming the due execution and delivery by Yahoo! and Merger Sub, constitutes
a valid and binding obligation of GeoCities, enforceable against GeoCities in
accordance with its terms, except as enforceability may be limited by
bankruptcy and other similar laws and general principles of equity. The
execution and delivery of this Agreement by GeoCities does not, and the
performance of this Agreement by GeoCities will not, (i) conflict with or
violate the Certificate of Incorporation or Bylaws of GeoCities or the
equivalent organizational documents of any of its subsidiaries, (ii) subject
to obtaining the approval and adoption of this Agreement and the approval of
the Merger by GeoCities' stockholders as contemplated in Section 5.2 and
compliance with the requirements set forth in Section 2.4(b) below, conflict
with or violate any law, rule, regulation, order, judgment or decree
applicable to GeoCities or any of its subsidiaries or by which GeoCities or
any of its subsidiaries or any of their respective properties is bound or
affected, or (iii) result in any material breach of or constitute a material
default (or an event that with notice or lapse of time or both would become a
material default) under, or impair GeoCities' rights or alter the rights or
obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a material lien or encumbrance on any of the material properties
or assets of GeoCities or any of its subsidiaries pursuant to, any note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise, concession, or other instrument or obligation, in each case that
is material to GeoCities, to which GeoCities or any of its subsidiaries is a
party or by which GeoCities or any of its subsidiaries or its or any of their
respective assets are bound or affected. The GeoCities Schedules list all
consents, waivers and approvals under any of GeoCities' or any of its
subsidiaries' agreements, contracts, licenses or leases required to be
obtained in connection with the consummation of the transactions contemplated
hereby, which, if individually or in the aggregate not obtained, would result
in a loss of benefits to GeoCities, Yahoo! or the Surviving Corporation as a
result of the Merger that would be reasonably likely to result in a Material
Adverse Effect with respect to GeoCities, Yahoo! or the Surviving Corporation.
(b) No consent, approval, order or authorization of, or
registration, declaration or filing with any court, administrative agency or
commission or other governmental authority or instrumentality, foreign or
domestic ("GOVERNMENTAL ENTITY"), is required to be obtained or made by
GeoCities in connection with the execution and delivery of this Agreement or
the consummation of the Merger, except for (i) the filing of the Certificate
of Merger with the Secretary of State of the State of Delaware, (ii) the
filing of the Proxy Statement/Prospectus (as defined in Section 2.17) with
the Securities and Exchange Commission ("SEC"), (iii) such consents,
approvals, orders, authorizations, registrations, declarations and filings as
may be
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required under applicable federal, foreign and state securities (or related)
laws and the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended
(the "HSR ACT"), and the securities or antitrust laws of any foreign country,
and (iv) such other consents, authorizations, filings, approvals and
registrations which if not obtained or made would not be material to
GeoCities or Yahoo! or have a material adverse effect on the ability of the
parties hereto to consummate the Merger.
2.5 SEC FILINGS; GEOCITIES FINANCIAL STATEMENTS.
(a) GeoCities has filed all forms, reports and documents required to
be filed by GeoCities with the SEC since August 1, 1998, and has made available
to Yahoo! such forms, reports and documents in the form filed with the SEC. All
such required forms, reports and documents (including those that GeoCities may
file subsequent to the date hereof) are referred to herein as the "GEOCITIES SEC
REPORTS." As of their respective dates, the GeoCities SEC Reports (i) were
prepared in accordance with the requirements of the Securities Act of 1933, as
amended (the "SECURITIES ACT"), or the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT"), as the case may be, and the rules and regulations
of the SEC thereunder applicable to such GeoCities SEC Reports and (ii) did not
at the time they were filed (or if amended or superseded by a filing prior to
the date of this Agreement, then on the date of such filing) contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. None of
GeoCities' subsidiaries is required to file any forms, reports or other
documents with the SEC.
(b) Each of the consolidated financial statements (including, in
each case, any related notes thereto) contained in the GeoCities SEC Reports
(the "GEOCITIES FINANCIALS"), including each GeoCities SEC Reports filed
after the date hereof until the Closing, (i) complied as to form in all
material respects with the published rules and regulations of the SEC with
respect thereto, (ii) was prepared in accordance with United States generally
accepted accounting principles ("GAAP") applied on a consistent basis
throughout the periods involved (except as may be indicated in the notes
thereto or, in the case of unaudited interim financial statements, as may be
permitted by the SEC on Form 10-Q under the Exchange Act) and (iii) fairly
presented the consolidated financial position of GeoCities and its
subsidiaries as at the respective dates thereof and the consolidated results
of GeoCities' operations and cash flows for the periods indicated, except
that the unaudited interim financial statements may not contain footnotes and
were or are subject to normal and recurring year-end adjustments. The
balance sheet of GeoCities contained in GeoCities SEC Reports as of September
30, 1998 is hereinafter referred to as the "GEOCITIES BALANCE SHEET." Except
as disclosed in the GeoCities Financials, since the date of the GeoCities
Balance Sheet neither GeoCities nor any of its subsidiaries has any
liabilities required under GAAP to be set forth on a balance sheet (absolute,
accrued, contingent or otherwise) which are, individually or in the
aggregate, material to the business, results of operations or financial
condition of GeoCities and its subsidiaries taken as a whole, except for
liabilities incurred since the date of the GeoCities Balance Sheet in the
ordinary course of
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business consistent with past practices and liabilities under this Agreement
or incurred in connection with the transactions contemplated hereby.
(c) GeoCities has heretofore furnished to Yahoo! a complete and
correct copy of any amendments or modifications, which have not yet been filed
with the SEC but which are required to be filed, to agreements, documents or
other instruments which previously had been filed by GeoCities with the SEC
pursuant to the Securities Act or the Exchange Act.
2.6 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since the date of the
GeoCities Balance Sheet there has not been: (i) any Material Adverse Effect
(as defined in Section 8.3(c)) with respect to GeoCities and its
subsidiaries, taken as a whole, (ii) any declaration, setting aside or
payment of any dividend on, or other distribution (whether in cash, stock or
property) in respect of, any of GeoCities' capital stock, or any purchase,
redemption or other acquisition by GeoCities of any of GeoCities' capital
stock or any other securities of GeoCities or any options, warrants, calls or
rights to acquire any such shares or other securities except for repurchases
from employees following their termination pursuant to the terms of their
pre-existing stock option or purchase agreements, (iii) any split,
combination or reclassification of any of GeoCities' capital stock, (iv) any
granting by GeoCities or any of its subsidiaries of any increase in
compensation or fringe benefits to any of their officers, directors or
managers or employees who earn more than $100,000 per year, or any payment by
GeoCities or any of its subsidiaries of any bonus to any of their officers,
directors or managers or employees who earn more than $100,000 per year, or
any granting by GeoCities or any of its subsidiaries of any increase in
severance or termination pay or any entry by GeoCities or any of its
subsidiaries into, or material modification or amendment of, any currently
effective employment, severance, termination or indemnification agreement or
any agreement the benefits of which are contingent or the terms of which are
materially altered upon the occurrence of a transaction involving GeoCities
of the nature contemplated hereby, (v) any material change or alteration in
the policy of GeoCities relating to the granting of stock options to its
employees and consultants, (vi) entry by GeoCities or any of its subsidiaries
into, or material modification, amendment or cancellation of, any licensing,
distribution, sponsorship, advertising, merchant program or other similar
agreement or which either is not terminable by GeoCities or its subsidiaries,
as the case may be, without penalty upon no more than 45 days' prior notice
or provides for payments by or to GeoCities or its subsidiaries in an amount
in excess of $50,000 over the term of the agreement, (vii) any material
change by GeoCities in its accounting methods, principles or practices,
except as required by concurrent changes in GAAP, or (viii) any revaluation
by GeoCities of any of its assets, including, without limitation, writing off
notes or accounts receivable other than in the ordinary course of business.
2.7 TAXES.
(a) DEFINITION OF TAXES. For the purposes of this Agreement,
"TAX" or "TAXES" refers to (i) any and all federal, state, local and foreign
taxes, assessments and other governmental charges, duties, impositions and
liabilities relating to taxes, including taxes based upon or measured by
gross receipts, income, profits, sales, use and occupation, and value added,
ad valorem, transfer, franchise, withholding, payroll, recapture, employment,
excise and property
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taxes, together with all interest, penalties and additions imposed with
respect to such amounts, (ii) any liability for payment of any amounts of the
type described in clause (i) as a result of being a member of an affiliated
consolidated, combined or unitary group, and (iii) any liability for amounts
of the type described in clauses (i) and (ii) as a result of any express or
implied obligation to indemnify another person or as a result of any
obligations under any agreements or arrangements with any other person with
respect to such amounts and including any liability for taxes of a
predecessor entity.
(b) TAX RETURNS AND AUDITS.
(i) GeoCities and each of its subsidiaries have timely filed all
material federal, state, local and foreign returns, estimates, information
statements and reports ("RETURNS") relating to Taxes required to be filed by or
on behalf of GeoCities and each of its subsidiaries with any Tax authority, such
Returns are true, correct and complete in all material respects, and GeoCities
and each of its subsidiaries have paid (where required by law or otherwise
accrued) all Taxes shown to be due on such Returns.
(ii) GeoCities and each of its subsidiaries have withheld with
respect to its employees all federal and state income Taxes, Taxes pursuant to
the Federal Insurance Contribution Act ("FICA"), Taxes pursuant to the Federal
Unemployment Tax Act ("FUTA") and other Taxes required to be withheld.
(iii) There is no material Tax deficiency outstanding,
proposed or assessed against GeoCities or any of its subsidiaries, nor has
GeoCities or any of its subsidiaries executed any unexpired waiver of any
statute of limitations on or extending the period for the assessment or
collection of any Tax that is still in effect.
(iv) No audit or other examination of any Return of GeoCities or
any of its subsidiaries by any Tax authority is presently in progress, nor has
GeoCities or any of its subsidiaries been notified of any request for such an
audit or other examination.
(v) No adjustment of Tax relating to any Returns filed by
GeoCities or any of its subsidiaries has been proposed in writing formally or
informally by any Tax authority to GeoCities or any of its subsidiaries or any
representative thereof.
(vi) Neither GeoCities nor any of its subsidiaries has any
liability for unpaid Taxes which has not been accrued for or reserved on the
GeoCities Balance Sheet, whether asserted or unasserted, contingent or
otherwise, which is material to GeoCities, other than any liability for
unpaid Taxes that may have accrued since the date of the GeoCities Balance
Sheet in connection with the operation of the business of GeoCities and its
subsidiaries in the ordinary course.
(vii) There is no contract, agreement, plan or arrangement to
which GeoCities is a party, including but not limited to the provisions of
this Agreement and the agreements entered into in connection with this
Agreement, covering any employee or former
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employee of GeoCities or any of its subsidiaries that, individually or
collectively, would be reasonably likely to give rise to the payment of any
amount that would not be deductible pursuant to Sections 280G, 404 or 162(m)
of the Code.
(viii) Neither GeoCities nor any of its subsidiaries has
filed any consent agreement under Section 341(f) of the Code or agreed to
have Section 341(f)(2) of the Code apply to any disposition of a subsection
(f) asset (as defined in Section 341(f)(4) of the Code) owned by GeoCities.
(ix) Neither GeoCities nor any of its subsidiaries is party
to or has any obligation under any tax-sharing, tax indemnity or tax
allocation agreement or arrangement.
(x) Except as may be required as a result of the Merger,
GeoCities and its subsidiaries have not been and will not be required to
include any material adjustment in Taxable income for any Tax period (or
portion thereof) pursuant to Section 481 or Section 263A of the Code or any
comparable provision under state or foreign Tax laws as a result of
transactions, events or accounting methods employed prior to the Closing.
(xi) GeoCities has made available to Yahoo! or its legal or
accounting representatives copies of all foreign, federal and state income
tax and all state sales and use tax Returns for the GeoCities and each of its
subsidiaries filed for all periods since December 31, 1993.
(xii) There are no liens, pledges, charges, claims,
restrictions on transfer, mortgages, security interests or other encumbrances
of any sort (collectively, "LIENS") on the assets of the GeoCities or any of
its subsidiaries relating to or attributable to Taxes, other than Liens for
Taxes not yet due and payable.
2.8 TITLE TO PROPERTIES; ABSENCE OF LIENS AND ENCUMBRANCES.
(a) GeoCities owns no real property interests. The GeoCities
Schedules list all real property leases to which GeoCities is a party and
each amendment thereto that is in effect as of the date of this Agreement.
All such current leases are in full force and effect, are valid and effective
in accordance with their respective terms, and there is not, under any of
such leases, any existing default or event of default (or event which with
notice or lapse of time, or both, would constitute a default) that would give
rise to a claim against GeoCities in an amount greater than $50,000.
(b) GeoCities has good and valid title to, or, in the case of
leased properties and assets, valid leasehold interests in, all of its
tangible properties and assets, real, personal and mixed, used or held for
use in its business, free and clear of any Liens, except as reflected in the
GeoCities Financials and except for Liens for Taxes not yet due and payable
and such Liens or other imperfections of title and encumbrances, if any,
which are not material in character, amount or extent, and which do not
materially detract from the value, or materially interfere with the present
use, of the property subject thereto or affected thereby.
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2.9 INTELLECTUAL PROPERTY. For the purposes of this Agreement, the
following terms have the following definitions:
"INTELLECTUAL PROPERTY" shall mean any or all of the following and all
rights in, arising out of or associated therewith: (i) all United
States, international and foreign patents and applications therefor
and all reissues, divisions, renewals, extensions, provisionals,
continuations and continuations-in-part thereof; (ii) all inventions
(whether patentable or not), invention disclosures, improvements,
trade secrets, proprietary information, know how, technology,
technical data and customer lists, and all documentation relating to
any of the foregoing; (iii) all copyrights, copyrights registrations
and applications therefor, and all other rights corresponding thereto
throughout the world; (iv) all industrial designs and any
registrations and applications therefor throughout the world; (v) all
trade names, logos, common law trademarks and service marks, trademark
and service xxxx registrations and applications therefor throughout
the world; (vi) all databases and data collections and all rights
therein throughout the world; (vii) all moral and economic rights of
authors and inventors, however denominated, throughout the world; and
(viii) any similar or equivalent rights to any of the foregoing
anywhere in the world.
"GEOCITIES INTELLECTUAL PROPERTY" shall mean any Intellectual Property
that is owned by, or exclusively licensed to, GeoCities or one of its
subsidiaries.
"REGISTERED INTELLECTUAL PROPERTY" means all United States,
international and foreign: (i) patents and patent applications
(including provisional applications); (ii) registered trademarks,
applications to register trademarks, intent-to-use applications, or
other registrations or applications related to trademarks;
(iii) registered copyrights and applications for copyright
registration; and (iv) any other Intellectual Property that is the
subject of an application, certificate, filing, registration or other
document issued, filed with, or recorded by any state, government or
other public legal authority.
"GEOCITIES REGISTERED INTELLECTUAL PROPERTY" means all of the
Registered Intellectual Property owned by, or filed in the name of,
GeoCities or one of its subsidiaries.
(a) No GeoCities Intellectual Property or product or service of
GeoCities is subject to any proceeding or outstanding decree, order, judgment,
agreement, or stipulation restricting in any manner the use, transfer, or
licensing thereof by GeoCities, or which may affect the validity, use or
enforceability of such GeoCities Intellectual Property, which in any such case
would be reasonably likely to have a Material Adverse Effect on GeoCities.
(b) Each material item of GeoCities Registered Intellectual Property
is valid and subsisting. All necessary registration, maintenance and renewal
fees currently due in connection with such Registered Intellectual Property have
been made and all necessary
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documents, recordations and certificates in connection with such Registered
Intellectual Property have been filed with the relevant patent, copyright,
trademark or other authorities in the United States or foreign jurisdictions,
as the case may be, for the purposes of maintaining such Registered
Intellectual Property, except where the failure to do so would not be
reasonably likely to have a Material Adverse Effect on GeoCities.
(c) GeoCities or one of its subsidiaries owns and has good and
exclusive title to, or has license (sufficient for the conduct of its
business as currently conducted and as proposed to be conducted) to, each
material item of GeoCities Intellectual Property used in connection with the
conduct of its business as currently conducted and as proposed to be
conducted free and clear of any lien or encumbrance (excluding licenses and
related restrictions); and GeoCities or one of its subsidiaries is the
exclusive owner of all trademarks and trade names used in connection with and
material to the operation or conduct of the business of GeoCities and its
subsidiaries, including the sale of any products or the provision of any
services by GeoCities and its subsidiaries.
(d) GeoCities or one of its subsidiaries owns exclusively, and has
good title to, all copyrighted works that are GeoCities products or which
GeoCities otherwise expressly purports to own.
(e) To the extent that any material Intellectual Property has been
developed or created by a third party for GeoCities or any of its
subsidiaries, GeoCities or its subsidiaries, as the case may be, has a
written agreement with such third party with respect thereto and GeoCities or
its subsidiary thereby either (i) has obtained ownership of and is the
exclusive owner of, or (ii) has obtained a license (sufficient for the
conduct of its business as currently conducted and as proposed to be
conducted) to all such third party's Intellectual Property in such work,
material or invention by operation of law or by valid assignment, to the
fullest extent it is legally possible to do so.
(f) The GeoCities Schedules list all material contracts, licenses
and agreements to which GeoCities is a party (i) with respect to GeoCities
Intellectual Property licensed or transferred to any third party (other than
end-user licenses in the ordinary course); or (ii) pursuant to which a third
party has licensed or transferred any material Intellectual Property to
GeoCities.
(g) All material contracts, licenses and agreements relating to
the GeoCities Intellectual Property are in full force and effect. The
consummation of the transactions contemplated by this Agreement will neither
violate nor result in the breach, modification, cancellation, termination, or
suspension of such contracts, licenses and agreements in accordance with its
terms, the effect of which would have a Material Adverse Effect on GeoCities.
GeoCities is in material compliance with, and has not materially breached
any term of any of such contracts, licenses and agreements and, to the
knowledge of GeoCities, all other parties to such contracts, licenses and
agreements are in compliance in all material respects with, and have not
materially breached any term of, such contracts, licenses and agreements.
Following the
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Closing Date, the Surviving Corporation will be permitted to exercise all of
GeoCities' rights under such contracts, licenses and agreements to the same
extent GeoCities would have been able to had the transactions contemplated by
this Agreement not occurred and without the payment of any additional amounts
or consideration other than ongoing fees, royalties or payments which
GeoCities would otherwise be required to pay.
(h) The operation of the business of GeoCities as such business
currently is conducted, including GeoCities' design, development, marketing and
sale of the products or services of GeoCities (including with respect to
products currently under development) has not, does not and will not infringe or
misappropriate in any material manner the Intellectual Property of any third
party or, to the knowledge of GeoCities, constitute unfair competition or trade
practices under the laws of any jurisdiction.
(i) GeoCities has not received written notice from any third party,
and to the knowledge of GeoCities, no other pending overt threat from any third
party, that the operation of the business of GeoCities or any act, product or
service of GeoCities, infringes or misappropriates the Intellectual Property of
any third party or constitutes unfair competition or trade practices under the
laws of any jurisdiction.
(j) To the knowledge of GeoCities, no person has or is infringing or
misappropriating any GeoCities Intellectual Property.
(k) GeoCities and its subsidiaries have taken reasonable steps to
protect GeoCities' and its subsidiaries' rights in GeoCities' and such
subsidiaries' confidential information and trade secrets that they wish to
protect or any trade secrets or confidential information of third parties
provided to GeoCities or such subsidiaries, and, without limiting the foregoing,
GeoCities and its subsidiaries have and enforce a policy requiring each employee
and contractor to execute a proprietary information/confidentiality agreement in
substantially the form provided to Yahoo!, and except under confidentiality
obligations, there has been not disclosure by GeoCities or one of its
subsidiaries of any such trade secrets or confidential information.
2.10 COMPLIANCE WITH LAWS; PERMITS; RESTRICTIONS.
(a) Neither GeoCities nor any of its subsidiaries is, in any
material respect, in conflict with, or in default or in violation of (i) any
law, rule, regulation, order, judgment or decree applicable to GeoCities or
any of its subsidiaries or by which GeoCities or any of its subsidiaries or
any of their respective properties is bound or affected, or (ii) any material
note, bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which GeoCities or any of its
subsidiaries is a party or by which GeoCities or any of its subsidiaries or
its or any of their respective properties is bound or affected, except for
conflicts, violations and defaults that (individually or in the aggregate)
would not be reasonably likely to result in a Material Adverse Effect on
GeoCities. No investigation or review by any Governmental Entity is pending
or, to GeoCities' knowledge, has been threatened in a writing delivered to
GeoCities against GeoCities or any of its subsidiaries, nor, to GeoCities'
-16-
knowledge, has any Governmental Entity indicated an intention to conduct an
investigation of GeoCities or any of its subsidiaries. There is no material
agreement, judgment, injunction, order or decree binding upon GeoCities or
any of its subsidiaries which has or could reasonably be expected to have the
effect of prohibiting or materially impairing any business practice of
GeoCities or any of its subsidiaries, any acquisition of material property by
GeoCities or any of its subsidiaries or the conduct of business by GeoCities
as currently conducted.
(b) GeoCities and its subsidiaries hold, to the extent legally
required, all permits, licenses, variances, exemptions, orders and approvals
from governmental authorities that are material to and required for the
operation of the business of GeoCities as currently conducted (collectively, the
"GEOCITIES PERMITS"). GeoCities and its subsidiaries are in compliance in all
material respects with the terms of the GeoCities Permits.
2.11 LITIGATION. There are no claims, suits, actions or proceedings
pending or, to the knowledge of GeoCities, threatened against, relating to or
affecting GeoCities or any of its subsidiaries, before any court, governmental
department, commission, agency, instrumentality or authority, or any arbitrator
that seeks to restrain or enjoin the consummation of the transactions
contemplated by this Agreement or which could reasonably be expected, either
singularly or in the aggregate with all such claims, actions or proceedings, to
have a Material Adverse Effect on GeoCities or the Surviving Corporation
following the Merger or have a material adverse effect on the ability of the
parties hereto to consummate the Merger. No Governmental Entity has at any time
challenged or questioned in a writing delivered to GeoCities the legal right of
GeoCities to design, offer or sell any of its products in the present manner or
style thereof.
2.12 EMPLOYEE BENEFIT PLANS.
(a) DEFINITIONS. With the exception of the definition of "Affiliate"
set forth in Section 2.12(a)(i) below (which definition shall apply only to this
Section 2.12), for purposes of this Agreement, the following terms shall have
the meanings set forth below:
(i) "AFFILIATE" shall mean any other person or entity under
common control with GeoCities within the meaning of Section 414(b), (c), (m) or
(o) of the Code and the regulations issued thereunder;
(ii) "GeoCities Employee Plan" shall mean any plan, program,
policy, practice, contract, agreement or other arrangement providing for
compensation, severance, termination pay, performance awards, stock or
stock-related awards, fringe benefits or other employee benefits or
remuneration of any kind, whether written or unwritten or otherwise, funded
or unfunded, including without limitation, each "employee benefit plan,"
within the meaning of Section 3(3) of ERISA which is or has been maintained,
contributed to, or required to be contributed to, by GeoCities or any
Affiliate for the benefit of any Employee and pursuant to which GeoCities or
any Affiliate has any material liability;
(iii) "COBRA" shall mean the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended;
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(iv) "DOL" shall mean the Department of Labor;
(v) "EMPLOYEE" shall mean any current, former, or retired
employee, officer, or director of GeoCities or any Affiliate;
(vi) "EMPLOYEE AGREEMENT" shall mean each management, employment,
severance, consulting, relocation, repatriation, expatriation, visas, work
permit or similar agreement or contract between GeoCities or any Affiliate and
any Employee or consultant;
(vii) "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended;
(viii) "FMLA" shall mean the Family Medical Leave Act of 1993,
as amended;
(ix) "International Employee Plan" shall mean each GeoCities
Employee Plan that has been adopted or maintained by GeoCities, whether
informally or formally, for the benefit of Employees outside the United States;
(x) "IRS" shall mean the Internal Revenue Service;
(xi) "Multiemployer Plan" shall mean any "Pension Plan" (as
defined below) which is a "multiemployer plan," as defined in Section 3(37) of
ERISA;
(xii) "PBGC" shall mean the Pension Benefit Guaranty
Corporation; and
(xiii) "Pension Plan" shall mean each GeoCities Employee Plan
which is an "employee pension benefit plan," within the meaning of Section 3(2)
of ERISA.
(b) SCHEDULE. The GeoCities Schedules contain an accurate and
complete list of each GeoCities Employee Plan and each Employee Agreement.
GeoCities does not have any plan or commitment to establish any new GeoCities
Employee Plan, to modify any GeoCities Employee Plan or Employee Agreement
(except to the extent required by law or to conform any such GeoCities
Employee Plan or Employee Agreement to the requirements of any applicable
law, in each case as previously disclosed to Yahoo! in writing, or as
required by this Agreement), or to enter into any GeoCities Employee Plan or
Employee Agreement, nor does it have any intention or commitment to do any of
the foregoing. The GeoCities Schedules also contain a list of all GeoCities
employees as of the date hereof, each such person's date of hire and each
such person's annual compensation.
(c) DOCUMENTS. GeoCities has provided to Yahoo!: (i) correct and
complete copies of all material documents embodying to each GeoCities
Employee Plan and each Employee Agreement including all amendments thereto
and written interpretations thereof; (ii)
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the most recent annual actuarial valuations, if any, prepared for each
GeoCities Employee Plan; (iii) the three (3) most recent annual reports (Form
Series 5500 and all schedules and financial statements attached thereto), if
any, required under ERISA or the Code in connection with each GeoCities
Employee Plan or related trust; (iv) if the GeoCities Employee Plan is
funded, the most recent annual and periodic accounting of GeoCities Employee
Plan assets; (v) the most recent summary plan description together with the
summary of material modifications thereto, if any, required under ERISA with
respect to each GeoCities Employee Plan; (vi) all IRS determination, opinion,
notification and advisory letters, and rulings relating to GeoCities Employee
Plans and copies of all applications and correspondence to or from the IRS or
the DOL with respect to any GeoCities Employee Plan; (vii) all material
written agreements and contracts relating to each GeoCities Employee Plan,
including, but not limited to, administrative service agreements, group
annuity contracts and group insurance contracts; (viii) all communications
material to any Employee or Employees relating to any GeoCities Employee Plan
and any proposed GeoCities Employee Plans, in each case, relating to any
amendments, terminations, establishments, increases or decreases in benefits,
acceleration of payments or vesting schedules or other events which would
result in any material liability to GeoCities; and (ix) all registration
statements and prospectuses prepared in connection with each GeoCities
Employee Plan.
(d) EMPLOYEE PLAN COMPLIANCE. (i) GeoCities has performed in all
material respects all obligations required to be performed by it under, is
not in default or violation of; and has no knowledge of any material default
or violation by any other party to each GeoCities Employee Plan, and each
GeoCities Employee Plan has been established and maintained in all material
respects in accordance with its terms and in compliance with all applicable
laws, statutes, orders, rules and regulations, including but not limited to
ERISA or the Code; (ii) each GeoCities Employee Plan intended to qualify
under Section 401(a) of the Code and each trust intended to qualify under
Section 501(a) of the Code has either received a favorable determination
letter from the IRS with respect to each such Plan as to its qualified status
under the Code or has remaining a period of time under applicable Treasury
regulations or IRS pronouncements in which to apply for such a determination
letter and make any amendments necessary to obtain a favorable determination
and no event has occurred which would adversely affect the status of such
determination letter or the qualified status of such Plan; (iii) no
"prohibited transaction," within the meaning of Section 4975 of the Code or
Sections 406 and 407 of ERISA, and not otherwise exempt under Section 408 of
ERISA, has occurred with respect to any GeoCities Employee Plan; (iv) there
are no actions, suits or claims pending, or, to the knowledge of GeoCities,
threatened or reasonably anticipated (other than routine claims for benefits)
against any GeoCities Employee Plan or against the assets of any GeoCities
Employee Plan; (v) each GeoCities Employee Plan can be amended, terminated or
otherwise discontinued after the Effective Time in accordance with its terms,
without liability to Yahoo!, GeoCities or any of its Affiliates (other than
ordinary administration expenses typically incurred in a termination event);
(vi) there are no audits, inquiries or proceedings pending or, to the
knowledge of GeoCities, threatened by the IRS or DOL with respect to any
GeoCities Employee Plan; and (vii) neither GeoCities nor any Affiliate is
subject to any penalty or tax with respect to any GeoCities Employee Plan
under Section 402(i) of ERISA or Sections 4975 through 4980 of the Code.
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(e) PENSION PLANS. GeoCities does not now, nor has it ever,
maintained, established, sponsored, participated in, or contributed to, any
Pension Plan which is subject to Title IV of ERISA or Section 412 of the Code.
(f) MULTIEMPLOYER PLANS. At no time has GeoCities contributed to or
been requested to contribute to any Multiemployer Plan.
(g) NO POST-EMPLOYMENT OBLIGATIONS. No GeoCities Employee Plan
provides, or has any liability to provide, retiree life insurance, retiree
health or other retiree employee welfare benefits to any person for any reason,
except as may be required by COBRA or other applicable statute, and GeoCities
has never represented, promised or contracted (whether in oral or written form)
to any Employee (either individually or to Employees as a group) or any other
person that such Employee(s) or other person would be provided with retiree life
insurance, retiree health or other retiree employee welfare benefit, except to
the extent required by statute.
(h) COBRA; FMLA. Neither GeoCities nor any Affiliate has, prior to
the Effective Time, and in any material respect, violated any of the health care
continuation requirements of COBRA, the requirements of FMLA or any similar
provisions of state law applicable to its Employees.
(i) EFFECT OF TRANSACTION.
(i) The execution of this Agreement and the consummation of the
transactions contemplated hereby will not (either alone or upon the occurrence
of any additional or subsequent events) constitute an event under any GeoCities
Employee Plan, Employee Agreement, trust or loan that will or may result in any
payment (whether of severance pay or otherwise), acceleration, forgiveness of
indebtedness, vesting, distribution, increase in benefits or obligation to fund
benefits with respect to any Employee.
(ii) No payment or benefit which will or may be made by GeoCities
or its Affiliates with respect to any Employee as a result of the transactions
contemplated by this Agreement will be characterized as an "excess parachute
payment," within the meaning of Section 280G(b)(1) of the Code or will be
treated as a nondeductible expense within the meaning of Section 162 of the
Code.
(j) EMPLOYMENT MATTERS. GeoCities: (i) is in compliance in all
material respects with all applicable foreign, federal, state and local laws,
rules and regulations respecting employment, employment practices, terms and
conditions of employment and wages and hours, in each case, with respect to
Employees; (ii) has withheld all amounts required by law or by agreement to be
withheld from the wages, salaries and other payments to Employees; (iii) is not
liable in any material respect for any arrears of wages or any taxes or any
penalty for failure to comply with any of the foregoing; and (iv) is not liable
for any material payment to any trust or other fund or to any governmental or
administrative authority, with respect to unemployment compensation benefits,
social security or other benefits or obligations for Employees (other than
routine payments to be made in the normal course of business and consistent with
past practice).
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There are no pending, or, to GeoCities' knowledge, threatened or reasonably
anticipated claims or actions against GeoCities under any worker's
compensation policy or long-term disability policy which would be reasonably
likely to have a Material Adverse Effect on GeoCities. To GeoCities'
knowledge, no Employee of GeoCities has violated any employment contract,
nondisclosure agreement or noncompetition agreement by which such Employee is
bound due to such Employee being employed by GeoCities and disclosing to
GeoCities or using trade secrets or proprietary information of any other
person or entity.
(k) LABOR. No work stoppage or labor strike against GeoCities is
pending, threatened or reasonably anticipated. GeoCities does not know of any
activities or proceedings of any labor union to organize any Employees. There
are no actions, suits, claims, labor disputes or grievances pending, or, to the
knowledge of GeoCities, threatened or reasonably anticipated relating to any
labor, safety or discrimination matters involving any Employee, including,
without limitation, charges of unfair labor practices or discrimination
complaints, which, if adversely determined, would, individually or in the
aggregate, result in any material liability to GeoCities. Neither GeoCities nor
any of its subsidiaries has engaged in any unfair labor practices within the
meaning of the National Labor Relations Act. GeoCities is not presently, nor
has it been in the past, a party to, or bound by, any collective bargaining
agreement or union contract with respect to Employees and no collective
bargaining agreement is being negotiated by GeoCities.
(l) INTERNATIONAL EMPLOYEE PLAN. Each International Employee Plan
has been established, maintained and administered in material compliance with
its terms and conditions and with the requirements prescribed by any and all
statutory or regulatory laws that are applicable to such International Employee
Plan. Furthermore, no International Employee Plan has unfunded liabilities,
that as of the Effective Time, will not be offset by insurance or fully accrued.
2.13 ENVIRONMENTAL MATTERS.
(a) HAZARDOUS MATERIAL. Except as would not result in material
liability to GeoCities, no underground storage tanks and no amount of any
substance that has been designated by any Governmental Entity or by applicable
federal, state or local law to be radioactive, toxic, hazardous or otherwise a
danger to health or the environment, including, without limitation, PCBs,
asbestos, petroleum, urea-formaldehyde and all substances listed as hazardous
substances pursuant to the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as amended, or defined as a hazardous waste pursuant
to the United States Resource Conservation and Recovery Act of 1976, as amended,
and the regulations promulgated pursuant to said laws, but excluding office and
janitorial supplies, (a "HAZARDOUS MATERIAL") are present, as a result of the
actions of GeoCities or any of its subsidiaries or any affiliate of GeoCities,
or, to GeoCities' knowledge, as a result of any actions of any third party or
otherwise, in, on or under any property, including the land and the
improvements, ground water and surface water thereof that GeoCities or any of
its subsidiaries has at any time owned, operated, occupied or leased.
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(b) HAZARDOUS MATERIALS ACTIVITIES. Except as would not result in a
material liability to GeoCities (in any individual case or in the aggregate) (i)
neither GeoCities nor any of its subsidiaries has transported, stored, used,
manufactured, disposed of released or exposed its employees or others to
Hazardous Materials in violation of any law in effect on or before the Closing
Date, and (ii) neither GeoCities nor any of its subsidiaries has disposed of;
transported, sold, used, released, exposed its employees or others to or
manufactured any product containing a Hazardous Material (collectively
"HAZARDOUS MATERIALS ACTIVITIES") in violation of any rule, regulation, treaty
or statute promulgated by any Governmental Entity in effect prior to or as of
the date hereof to prohibit, regulate or control Hazardous Materials or any
Hazardous Material Activity.
(c) PERMITS. GeoCities and its subsidiaries currently hold all
environmental approvals, permits, licenses, clearances and consents (the
"GEOCITIES ENVIRONMENTAL PERMITS") material to and necessary for the conduct
of GeoCities' and its subsidiaries' Hazardous Material Activities and other
businesses of GeoCities and its subsidiaries as such activities and
businesses are currently being conducted.
2.14 AGREEMENTS, CONTRACTS AND COMMITMENTS. Except as otherwise set forth
in the GeoCities Schedules, neither GeoCities nor any of its subsidiaries is a
party to or is bound by:
(a) any employment agreement, contract or commitment with any
employee or member of GeoCities' Board of Directors, other than those that are
terminable by GeoCities or any of its subsidiaries on no more than thirty days
notice without liability or financial obligation, except to the extent general
principles of wrongful termination law may limit GeoCities' or any of its
subsidiaries' ability to terminate employees at will, or any consulting
agreement;
(b) any agreement or plan, including, without limitation, any stock
option plan, stock appreciation right plan or stock purchase plan, any of the
benefits of which will be increased, or the vesting of benefits of which will be
accelerated, by the occurrence of any of the transactions contemplated by this
Agreement or the value of any of the benefits of which will be calculated on the
basis of any of the transactions contemplated by this Agreement;
(c) any agreement of indemnification or any guaranty;
(d) any agreement, contract or commitment containing any covenant
limiting in any respect the right of GeoCities or any of its subsidiaries to
engage in any line of business or to compete with any person or granting any
exclusive distribution rights;
(e) any agreement, contract or commitment currently in force relating
to the disposition or acquisition by GeoCities or any of its subsidiaries after
the date of this Agreement of a material amount of assets not in the ordinary
course of business or pursuant to which GeoCities has any material ownership
interest in any corporation, partnership, joint venture or other business
enterprise other than GeoCities' subsidiaries;
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(f) any licensing, distribution, sponsorship, advertising, merchant
program or other similar agreement to which GeoCities or one of its subsidiaries
is a party which may not be canceled by GeoCities or its subsidiaries, as the
case may be, without penalty in excess of $50,000 upon notice of 45 days or less
or which provides for payments by or to GeoCities or its subsidiaries in an
amount in excess of $50,000 over the term of the agreement;
(g) any agreement, contract or commitment currently in force to
provide source code to any third party for any product or technology; or
(h) any other agreement, contract or commitment currently in effect
that is material to GeoCities' business as presently conducted and proposed to
be conducted.
Neither GeoCities nor any of its subsidiaries, nor to GeoCities' knowledge
any other party to a GeoCities Contract (as defined below), is in breach,
violation or default under, and neither GeoCities nor any of its subsidiaries
has received written notice (or to its knowledge, any other form of notice) that
it has breached, violated or defaulted under, any of the material terms or
conditions of any of the agreements, contracts or commitments to which GeoCities
or any of its subsidiaries is a party or by which it is bound that are required
to be disclosed in the GeoCities Schedules pursuant to clauses (a) through (h)
above or pursuant to Section 2.9 hereof (any such agreement, contract or
commitment, a "GEOCITIES CONTRACT") in such a manner as would permit any other
party to cancel or terminate any such GeoCities Contract the effect of which
would have a Material Adverse Effect on GeoCities, or would permit any other
party to seek material damages or other remedies (for any or all of such
breaches, violations or defaults, in the aggregate).
2.15 POOLING OF INTERESTS. To the knowledge of GeoCities, based on
consultation with its independent accountants, neither GeoCities nor any of its
directors, officers, affiliates or stockholders has taken or agreed to take any
action which would preclude Yahoo!'s ability to account for the Merger as a
pooling of interests.
2.16 CHANGE OF CONTROL PAYMENTS. The GeoCities Schedules set forth each
plan or agreement pursuant to which any amounts may become payable (whether
currently or in the future) to current or former officers and directors of
GeoCities as a result of or in connection with the Merger.
2.17 STATEMENTS; PROXY STATEMENT/PROSPECTUS. The information supplied
by GeoCities for inclusion in the Registration Statement (as defined in
Section 3.3(b)) shall not at the time the Registration Statement is filed
with the SEC 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 in order to make the
statements therein, in light of the circumstances under which they are made,
not misleading. The information supplied by GeoCities for inclusion in the
proxy statement/prospectus to be sent to the stockholders of GeoCities in
connection with the meeting of GeoCities' stockholders to consider the
approval and adoption of this Agreement and the approval of the Merger (the
"GEOCITIES STOCKHOLDERS' MEETING") (such proxy statement/prospectus as
amended or supplemented is referred to herein as
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the "PROXY STATEMENT/PROSPECTUS") shall not, on the date the Proxy
Statement/Prospectus is first mailed to GeoCities' stockholders or at the
time of the GeoCities 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 false or misleading; or omit to
state any material fact necessary to correct any statement in any earlier
communication with respect to the solicitation of proxies for the GeoCities
Stockholders' Meeting which has become false or misleading. The Proxy
Statement/Prospectus will comply as to form in all material respects with the
provisions of the Securities Act, the Exchange Act and the rules and
regulations thereunder. If at any time prior to the Effective Time any event
relating to GeoCities or any of its affiliates, officers or directors should
be discovered by GeoCities which is required to be set forth in an amendment
to the Registration Statement or a supplement to the Proxy
Statement/Prospectus, GeoCities shall promptly inform Yahoo!.
Notwithstanding the foregoing, GeoCities makes no representation or warranty
with respect to any information supplied by Yahoo! or Merger Sub which is
contained in any of the foregoing documents.
2.18 BOARD APPROVAL. The Board of Directors of GeoCities has, as of the
date of this Agreement, determined (i) that the Merger is advisable and fair to,
and in the best interests of GeoCities and its stockholders and (ii) to
recommend that the stockholders of GeoCities approve and adopt this Agreement
and approve the Merger.
2.19 BROKERS' AND FINDERS' FEES. Except for fees payable to Xxxxxxx, Xxxxx
& Co., GeoCities has not incurred, nor will it incur, directly or indirectly,
any liability for brokerage or finders' fees or agents' commissions or any
similar charges in connection with this Agreement or any transaction
contemplated hereby. A copy of the Xxxxxxx, Sachs & Co. engagement letter with
GeoCities has been previously provided to Yahoo!.
2.20 FAIRNESS OPINION. GeoCities' Board of Directors has received an
opinion from Xxxxxxx, Xxxxx & Co. as of the date hereof, to the effect that, as
of the date hereof, the Exchange Ratio is fair from a financial point of view to
GeoCities' stockholders (other than Yahoo! and its affiliates).
2.21 AFFILIATES. Set forth on the GeoCities Schedules is a list of those
persons who may be deemed to be, in GeoCities' reasonable judgment, affiliates
of GeoCities within the meaning of Rule 145 promulgated under the Securities Act
(each a "GEOCITIES AFFILIATE").
2.22 SECTION 203 NOT APPLICABLE. The Board of Directors of GeoCities has
taken all actions so that the restrictions contained in Section 203 of the
Delaware General Corporation Law applicable to a "business combination" (as
defined in such Section 203) will not apply to the execution, delivery or
performance of this Agreement or to the consummation of the Merger or the other
transactions contemplated by this Agreement.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF YAHOO! AND MERGER SUB
Yahoo! and Merger Sub represent and warrant to GeoCities, subject to the
exceptions specifically disclosed in writing in the disclosure letter delivered
by Yahoo! to GeoCities dated as of the date hereof and certified by a duly
authorized officer of Yahoo! (the "YAHOO! SCHEDULES"), as follows:
3.1 ORGANIZATION OF YAHOO! AND MERGER SUB.
(a) Each of Yahoo! and Merger Sub (i) is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it is organized; (ii) has the corporate or other power and
authority to own, lease and operate its assets and property and to carry on its
business as now being conducted; and (iii) except as would not be material to
Yahoo!, is duly qualified or licensed to do business in each jurisdiction where
the character of the properties owned, leased or operated by it or the nature of
its activities makes such qualification or licensing necessary.
(b) Yahoo! has delivered or made available to GeoCities a true and
correct copy of the Certificate of Incorporation and Bylaws of Yahoo!, each as
amended to date, and each such instrument is in full force and effect. Neither
Yahoo! nor any of its subsidiaries is in violation of any of the provisions of
its Certificate of Incorporation or Bylaws or equivalent governing instruments.
3.2 YAHOO! AND MERGER SUB CAPITAL STRUCTURE. The authorized capital stock
of Yahoo! consists of 225,000,000 shares of Yahoo! Common Stock, of which there
were 99,956,023 shares issued and outstanding as of January 26, 1999, and
10,000,000 shares of Preferred Stock, none of which are issued and outstanding.
All outstanding shares of Yahoo! Common Stock are duly authorized, validly
issued, fully paid and nonassessable and are not subject to preemptive rights
created by statute, the Certificate of Incorporation or Bylaws of Yahoo! or any
agreement or document to which Yahoo! is a party or by which it is bound. As of
January 25, 1999, there were options outstanding to purchase an aggregate of
25,836,093 shares of Yahoo! Common Stock under Yahoo!'s stock option plans. The
authorized capital stock of Merger Sub consists of 1,000 shares of Common Stock,
$0.01 par value, all of which, as of the date hereof, are issued and outstanding
and are held by Yahoo!. Merger Sub was formed for the purpose of consummating
the Merger and has no material assets or liabilities except as necessary for
such purpose.
3.3 AUTHORITY.
(a) Each of Yahoo! and Merger Sub has all requisite corporate power
and authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of Yahoo! and Merger Sub, subject
only to the filing of the Certificate of Merger pursuant to
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Delaware Law. This Agreement has been duly executed and delivered by each of
Yahoo! and Merger Sub and, assuming the due authorization, execution and
delivery by GeoCities, constitutes the valid and binding obligation of Yahoo!
and Merger Sub, enforceable against Yahoo! and Merger Sub in accordance with
its terms, except as enforceability may be limited by bankruptcy and other
similar laws and general principles of equity. The execution and delivery of
this Agreement by each of Yahoo! and Merger Sub does not, and the performance
of this Agreement by each of Yahoo! and Merger Sub will not, (i) conflict
with or violate the Certificate of Incorporation or Bylaws of Yahoo! or
Merger Sub, (ii) conflict with or violate any law, rule, regulation, order,
judgment or decree applicable to Yahoo! or Merger Sub or by which any of
their respective properties is bound or affected, or (iii) result in any
material breach of or constitute a material default (or an event that with
notice or lapse of time or both would become a material default) under, or
impair Yahoo!'s rights or alter the rights or obligations of any third party
under, or give to others any rights of termination, amendment, acceleration
or cancellation of; or result in the creation of a material lien or
encumbrance on any of the material properties or assets of Yahoo! or Merger
Sub pursuant to, any note, bond, mortgage, indenture, contract, agreement,
lease, license, permit, franchise or other instrument or obligation, in each
case that is material to Yahoo!, to which Yahoo! or Merger Sub is a party or
by which Yahoo! or Merger Sub or any of their respective properties are bound
or affected.
(b) No consent, approval, order or authorization of; or registration,
declaration or filing with any Governmental Entity is required to be obtained or
made by Yahoo! or Merger Sub in connection with the execution and delivery of
this Agreement or the consummation of the Merger, except for (i) the filing of a
Form S-4 (or any similar successor form thereto) Registration Statement (the
"REGISTRATION STATEMENT") with the SEC in accordance with the Securities Act,
(ii) the filing of the Certificate of Merger with the Secretary of State of the
State of Delaware, (iii) such consents, approvals, orders, authorizations,
registrations, declarations and filings as may be required under applicable
federal, foreign and state securities (or related) laws and the HSR Act and the
securities or antitrust laws of any foreign country, and (v) such other
consents, authorizations, filings, approvals and registrations which if not
obtained or made would not be material to Yahoo! or GeoCities or have a material
adverse effect on the ability of the parties hereto to consummate the Merger.
3.4 SEC FILINGS; YAHOO! FINANCIAL STATEMENTS.
(a) Yahoo! has filed all forms, reports and documents required to be
filed by Yahoo! with the SEC since January 1, 1997, and has made available to
GeoCities such forms, reports and documents in the form filed with the SEC. All
such required forms, reports and documents (including those that Yahoo! may file
subsequent to the date hereof) are referred to herein as the "YAHOO! SEC
REPORTS." As of their respective dates, the Yahoo! SEC Reports (i) were
prepared in accordance with the requirements of the Securities Act or the
Exchange Act, as the case may be, and the rules and regulations of the SEC
thereunder applicable to such Yahoo! SEC Reports, and (ii) did not at the time
they were filed (or if amended or superseded by a filing prior to the date of
this Agreement, then on the date of such filing) contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary in order
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to make the statements therein, in the light of the circumstances under which
they were made, not misleading. None of Yahoo!'s subsidiaries is required to
file any forms, reports or other documents with the SEC.
(b) Each of the consolidated financial statements (including, in
each case, any related notes thereto) contained in the Yahoo! SEC Reports
(the "YAHOO! FINANCIALS"), including any Yahoo! SEC Reports filed after the
date hereof until the Closing, (i) complied as to form in all material
respects with the published rules and regulations of the SEC with respect
thereto, (ii) was prepared in accordance with GAAP applied on a consistent
basis throughout the periods involved (except as may be indicated in the
notes thereto or, in the case of unaudited interim financial statements, as
may be permitted by the SEC on Form 1O-Q under the Exchange Act) and (iii)
fairly presented the consolidated financial position of Yahoo! and its
subsidiaries as at the respective dates thereof and the consolidated results
of Yahoo!'s operations and cash flows for the periods indicated, except that
the unaudited interim financial statements may not contain footnotes and were
or are subject to normal and recurring year-end adjustments. The balance
sheet of Yahoo! contained in Yahoo! SEC Reports as of September 30, 1998 is
hereinafter referred to as the "YAHOO! BALANCE SHEET."
(c) Yahoo! has heretofore furnished to GeoCities a complete and
correct copy of any amendments or modifications, which have not yet been filed
with the SEC but which are required to be filed, to agreements, documents or
other instruments which previously had been filed by Yahoo! with the SEC
pursuant to the Securities Act or the Exchange Act.
3.5 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since the date of the Yahoo!
Balance Sheet there has not been any Material Adverse Effect with respect to
Yahoo! and its subsidiaries, taken as a whole.
3.6 PROXY STATEMENT/PROSPECTUS. The information supplied by Yahoo! for
inclusion in the Registration Statement shall not at the time the
Registration Statement is filed with the SEC 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 in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. The information
supplied by Yahoo! for inclusion in the Proxy Statement/Prospectus shall not,
on the date the Proxy Statement/Prospectus is first mailed to GeoCities'
stockholders or at the time of the GeoCities 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 false
or misleading, or omit to state any material fact necessary to correct any
statement in any earlier communication with respect to the solicitation of
proxies for the GeoCities Stockholders' Meeting which has become false or
misleading. If at any time prior to the Effective Time, any event relating
to Yahoo! or any of its affiliates, officers or directors should be
discovered by Yahoo! which is required to be set forth in an amendment to the
Registration Statement or a supplement to the Proxy Statement/Prospectus,
Yahoo! shall promptly inform GeoCities. Notwithstanding the foregoing,
Yahoo! makes no representation or
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warranty with respect to any information supplied by GeoCities which is
contained in any of the foregoing documents.
3.7 LITIGATION. There are no claims, suits, actions or proceedings
pending or, to the knowledge of Yahoo!, threatened against, relating to or
affecting Yahoo! or any of its subsidiaries, before any court, governmental
department, commission, agency, instrumentality or authority, or any arbitrator
that seeks to restrain or enjoin the consummation of the transactions
contemplated by this Agreement.
3.8 POOLING OF INTERESTS. To the knowledge of Yahoo!, based on
consultation with its independent accountants, neither Yahoo! nor any of its
directors, officers, affiliates or stockholders has taken or agreed to take any
action which would preclude Yahoo!'s ability to account for the Merger as a
pooling of interests.
3.9 AFFILIATES. Set forth on the Yahoo! Schedules is a list of those
persons who may be deemed to be, in Yahoo!'s reasonable judgment, affiliates of
Yahoo! within the meaning of Rule 145 promulgated under the Securities Act (each
a "YAHOO! AFFILIATE").
3.10 VALID ISSUANCE. The Yahoo! Common Stock to be issued in the Merger,
when issued in accordance with the provisions of this Agreement, will be validly
issued, fully paid and nonassessable.
ARTICLE IV
CONDUCT PRIOR TO THE EFFECTIVE TIME
4.1 CONDUCT OF BUSINESS BY GEOCITIES. During the period from the date of
this Agreement and continuing until the earlier of the termination of this
Agreement pursuant to its terms or the Effective Time, GeoCities and each of its
subsidiaries shall, except to the extent that Yahoo! shall otherwise consent in
writing, carry on its business in the usual, regular and ordinary course, in
substantially the same manner as heretofore conducted and in compliance in all
material respects with all applicable laws and regulations, pay its debts and
taxes when due subject to good faith disputes over such debts or taxes, pay or
perform other material obligations when due, and use its commercially reasonable
efforts consistent with past practices and policies to (i) preserve intact its
present business organization, (ii) keep available the services of its present
officers and employees and (iii) preserve its relationships with customers,
suppliers, licensors, licensees, and others with which it has business dealings.
In addition, except as permitted by the terms of this Agreement, and except
as provided in Schedule 4.1 of the GeoCities Schedules, without the prior
written consent of Yahoo!, during the period from the date of this Agreement and
continuing until the earlier of the termination of this Agreement pursuant to
its terms or the Effective Time, GeoCities shall not do any of the following and
shall not permit its subsidiaries to do any of the following:
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(a) Waive any stock repurchase rights, accelerate, amend or change
the period of exercisability of options or restricted stock, or reprice options
granted under any employee, consultant, director or other stock plans or
authorize cash payments in exchange for any options granted under any of such
plans;
(b) Grant any severance or termination pay to any officer or employee
except pursuant to written agreements in effect, or policies existing, on the
date hereof and as previously disclosed in writing to Yahoo!, or adopt any new
severance plan;
(c) Transfer or license to any person or entity or otherwise extend,
amend or modify in any material respect any rights to the GeoCities Intellectual
Property, other than non-exclusive licenses in the ordinary course of business
and consistent with past practice;
(d) Declare, set aside or pay any dividends on or make any other
distributions (whether in cash, stock, equity securities or property) in respect
of any capital stock or split, combine or reclassify any capital stock or issue
or authorize the issuance of any other securities in respect of, in lieu of or
in substitution for any capital stock;
(e) Purchase, redeem or otherwise acquire, directly or indirectly,
any shares of capital stock of GeoCities or its subsidiaries, except repurchases
of unvested shares at cost in connection with the termination of the employment
relationship with any employee pursuant to stock option or purchase agreements
in effect on the date hereof;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any
shares of capital stock or any securities convertible into shares of capital
stock, or subscriptions, rights, warrants or options to acquire any shares of
capital stock or any securities convertible into shares of capital stock, or
enter into other agreements or commitments of any character obligating it to
issue any such shares or convertible securities, other than the issuance
delivery and/or sale of (i) shares of GeoCities Common Stock pursuant to the
exercise of stock options therefor, and (ii) shares of GeoCities Common Stock
issuable to participants in the ESPP consistent with the terms thereof;
(g) Cause, permit or propose any amendments to its Certificate of
Incorporation, Bylaws or other charter documents (or similar governing
instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or
by purchasing any equity interest in or a portion of the assets of, or by any
other manner, any business or any corporation, partnership, association or other
business organization or division thereof; or otherwise acquire or agree to
acquire any assets which are material, individually or in the aggregate, to the
business of GeoCities or enter into any material joint ventures, strategic
partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any
properties or assets which are material, individually or in the aggregate, to
the business of GeoCities;
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(j) Incur any indebtedness for borrowed money or guarantee any such
indebtedness of another person, issue or sell any debt securities or options,
warrants, calls or other rights to acquire any debt securities of GeoCities,
enter into any "keep well" or other agreement to maintain any financial
statement condition or enter into any arrangement having the economic effect of
any of the foregoing other than (i) in connection with the financing of ordinary
course trade payables consistent with past practice or (ii) pursuant to existing
credit facilities in the ordinary course of business;
(k) Adopt or amend any employee benefit plan or employee stock
purchase or employee stock option plan, or enter into any employment contract or
collective bargaining agreement (other than offer letters and letter agreements
entered into in the ordinary course of business consistent with past practice
with employees who are terminable "at will"), pay any special bonus or special
remuneration to any director or employee, or increase the salaries or wage rates
or fringe benefits (including rights to severance or indemnification) of its
directors, officers, employees or consultants other than in the ordinary course
of business, consistent with past practice;
(l) Modify, amend or terminate any material contract or agreement to
which GeoCities or any subsidiary thereof is a party or waive, release or assign
any material rights or claims thereunder;
(m) Enter into any licensing, distribution, sponsorship, advertising,
merchant program or other similar contracts, agreements, or obligations which
may not be canceled without penalty by GeoCities or its subsidiaries upon notice
of 45 days or less or which provide for payments by or to GeoCities or its
subsidiaries in an amount in excess of $50,000 over the term of the Agreement;
(n) Revalue any of its assets or, except as required by GAAP, make
any change in accounting methods, principles or practices;
(o) Take any action, or omit to take any action, that would be
reasonably likely to interfere with Yahoo!'s ability to account for the Merger
as a pooling of interests, whether or not otherwise permitted by the provisions
of this Article IV;
(p) Fail to make in a timely manner any filings with the SEC required
under the Securities Act or the Exchange Act or the rules and regulations
promulgated thereunder;
(q) Engage in any action with the intent to directly or indirectly
adversely impact any of the transactions contemplated by this Agreement; or
(r) Agree in writing or otherwise to take any of the actions
described in Section 4.1 (a) through (q) above.
4.2 CONDUCT OF BUSINESS BY YAHOO!. During the period from the date of
this Agreement and continuing until the earlier of the termination of this
Agreement pursuant to its
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terms or the Effective Time, without the prior written consent of GeoCities,
Yahoo! shall not do any of the following and shall not permit its
subsidiaries to do any of the following:
(a) Cause, permit or propose any amendments to its Articles of
Incorporation or Bylaws or other charter documents (or similar governing
instruments of any of its subsidiaries) in a manner that would have an adverse
impact on GeoCities' stockholders; PROVIDED that the foregoing shall not
restrict the ability of Yahoo! to reincorporate in another jurisdiction prior to
the termination of this Agreement or the Effective Time; or
(b) Take any action that would be reasonably likely to interfere with
Yahoo!'s ability to account for the Merger as a pooling of interests, whether or
not otherwise permitted by this Article IV.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 PROXY STATEMENT/PROSPECTUS; REGISTRATION STATEMENT; OTHER FILINGS;
BOARD RECOMMENDATIONS.
(a) As promptly as practicable after the execution of this
Agreement, GeoCities and Yahoo! will prepare, and file with the SEC, the
Proxy Statement/Prospectus and Yahoo! will prepare and file with the SEC the
Registration Statement in which the Proxy Statement/Prospectus will be
included as a prospectus. Each of GeoCities and Yahoo! will respond to any
comments of the SEC, will use its respective commercially reasonable efforts
to have the Registration Statement declared effective under the Securities
Act as promptly as practicable after such filing and GeoCities will cause the
Proxy Statement/Prospectus to be mailed to its stockholders at the earliest
practicable time after the Registration Statement is declared effective by
the SEC. As promptly as practicable after the date of this Agreement, each
of GeoCities and Yahoo! will prepare and file any other filings required to
be filed by it under the Exchange Act, the Securities Act or any other
Federal, foreign or Blue Sky or related laws relating to the Merger and the
transactions contemplated by this Agreement (the "OTHER FILINGS"). Each of
GeoCities and Yahoo! will notify the other promptly upon the receipt of any
comments from the SEC or its staff or any other government officials and of
any request by the SEC or its staff or any other government officials for
amendments or supplements to the Registration Statement, the Proxy
Statement/Prospectus or any Other Filing or for additional information and
will supply the other with copies of all correspondence between such party or
any of its representatives, on the one hand, and the SEC or its staff or any
other government officials, on the other hand, with respect to the
Registration Statement, the Proxy Statement/Prospectus, the Merger or any
Other Filing. Each of GeoCities and Yahoo! will cause all documents that it
is responsible for filing with the SEC or other regulatory authorities under
this Section 5.1(a) to comply in all material respects with all applicable
requirements of law and the rules and regulations promulgated thereunder.
Whenever any event occurs which is required to be set forth in an amendment
or supplement to the Proxy Statement/Prospectus, the Registration Statement
or any Other Filing, GeoCities or Yahoo!, as the case may be, will
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promptly inform the other of such occurrence and cooperate in filing with the
SEC or its staff or any other government officials, and/or mailing to
stockholders of GeoCities, such amendment or supplement.
(b) Each of Yahoo! and GeoCities shall use commercially reasonable
efforts to cause its respective independent accountants to deliver as promptly
as practicable following the date hereof audited financial statements for the
year ended December 31, 1998.
5.2 MEETING OF GEOCITIES STOCKHOLDERS.
(a) Promptly after the date hereof, GeoCities will take all action
necessary in accordance with the Delaware Law and its Certificate of
Incorporation and Bylaws to convene the GeoCities Stockholders' Meeting to be
held as promptly as practicable after the declaration of effectiveness of the
Registration Statement, for the purpose of voting upon this Agreement and the
Merger. GeoCities will use its commercially reasonable efforts to solicit from
its stockholders proxies in favor of the adoption and approval of this Agreement
and the approval of the Merger and will take all other action necessary or
advisable to secure the vote or consent of its stockholders required by the
rules of the NASD or Delaware Law to obtain such approvals. Notwithstanding
anything to the contrary contained in this Agreement, GeoCities may adjourn or
postpone GeoCities Stockholders' Meeting to the extent necessary to ensure that
any necessary supplement or amendment to the Prospectus/Proxy Statement is
provided to GeoCities' stockholders in advance of a vote on the Merger and this
Agreement or, if as of the time for which GeoCities Stockholders' Meeting is
originally scheduled (as set forth in the Prospectus/Proxy Statement) there are
insufficient shares of GeoCities Common Stock represented (either in person or
by proxy) to constitute a quorum necessary to conduct the business of the
GeoCities' Stockholders' Meeting. GeoCities shall ensure that the GeoCities
Stockholders' Meeting is called, noticed, convened, held and conducted, and
subject to Section 5.2(c) that all proxies solicited by the GeoCities in
connection with the GeoCities Stockholders' Meeting are solicited, in compliance
with the Delaware Law, its Certificate of Incorporation and Bylaws, the rules of
the NASD and all other applicable legal requirements. GeoCities' obligation to
call, give notice of, convene and hold the GeoCities Stockholders' Meeting in
accordance with this Section 5.2(a) shall not be limited to or otherwise
affected by the commencement, disclosure, announcement or submission to
GeoCities of any Acquisition Proposal, or by any withdrawal, amendment or
modification of the recommendation of the Board of Directors of GeoCities with
respect to the Merger.
(b) Subject to Section 5.2(c): (i) the Board of Directors of
GeoCities shall recommend that GeoCities' stockholders vote in favor of and
adopt and approve this Agreement and the Merger at the GeoCities Stockholders'
Meeting; (ii) the Prospectus/Proxy Statement shall include a statement to the
effect that the Board of Directors of the GeoCities has recommended that
GeoCities' stockholders vote in favor of and adopt and approve this Agreement
and the Merger at the GeoCities Stockholders' Meeting; and (iii) neither the
Board of Directors of GeoCities nor any committee thereof shall withdraw, amend
or modify, or propose or resolve to withdraw, amend or modify in a manner
adverse to Yahoo!, the recommendation of
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the Board of Directors of GeoCities that GeoCities' stockholders vote in
favor of and adopt and approve this Agreement and the Merger.
(c) Nothing in this Agreement shall prevent the Board of Directors of
GeoCities from withholding, withdrawing, amending or modifying its
recommendation in favor of the Merger if (i) a Superior Offer (as defined
below), or an offer reasonably believed by the Board of Directors of GeoCities
to be a Superior Offer, is made to the GeoCities and is not withdrawn, (ii)
neither GeoCities nor any of its representatives shall have violated any of the
restrictions set forth in Section 5.4, and (iii) the Board of Directors of
GeoCities or any committee thereof concludes in good faith, after consultation
with its outside counsel, that, in light of such Superior Offer, the
withholding, withdrawal, amendment or modification of such recommendation is
required in order for the Board of Directors of GeoCities or any committee
thereof to comply with its obligations to GeoCities' stockholders under
applicable law. Nothing contained in this Section 5.2(c) shall limit GeoCities'
obligation to hold and convene the GeoCities Stockholders' Meeting (regardless
of whether the recommendation of the Board of Directors of the GeoCities shall
have been withdrawn, amended or modified). For purposes of this Agreement
("SUPERIOR OFFER") shall mean an unsolicited, bona fide written offer made by a
third party to consummate any of the following transactions: (i) a merger,
consolidation, business combination, recapitalization, liquidation, dissolution
or similar transaction involving GeoCities pursuant to which the stockholders of
GeoCities immediately preceding such transaction hold less than 50% of the
equity interest in the surviving or resulting entity of such transaction; (ii) a
sale or other disposition by GeoCities of assets representing in excess of 50%
of the fair market value of GeoCities' business immediately prior to such sale,
or (iii) the acquisition by any person or group (including by way of a tender
offer or an exchange offer or issuance by GeoCities), directly or indirectly, of
beneficial ownership or a right to acquire beneficial ownership of shares
representing in excess of 50% of the voting power of the then outstanding shares
of capital stock of the GeoCities, on terms that the Board of Directors of
GeoCities determines, in its reasonable judgment, after consultation with its
financial advisor, to be more favorable, or is reasonably likely to be more
favorable, to GeoCities stockholders than the terms of the Merger; PROVIDED,
HOWEVER, that any such offer shall not be deemed to be a "Superior Offer" if any
financing required to consummate the transaction contemplated by such offer is
not committed and is not likely in the judgment of GeoCities' Board of Directors
to be obtained by such third party on a timely basis.
5.3 CONFIDENTIALITY; ACCESS TO INFORMATION.
(a) The parties acknowledge that GeoCities and Yahoo! have previously
executed a Confidentiality Agreement (the "CONFIDENTIALITY AGREEMENT"), which
Confidentiality Agreement will continue in full force and effect in accordance
with its terms.
(b) GeoCities will afford Yahoo! and its accountants, counsel and
other representatives reasonable access during normal business hours to the
properties, books, records and personnel of GeoCities during the period prior to
the Effective Time to obtain all information concerning the business, including
the status of product development efforts, properties, results
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of operations and personnel of GeoCities, as Yahoo! may reasonably request.
Yahoo! will afford GeoCities and its representatives reasonable access to
information concerning Yahoo!'s business that GeoCities may reasonably
request in order to permit, and solely for the purpose of permitting,
GeoCities to confirm the accuracy of the representations and warranties made
by Yahoo! in Article III. No information or knowledge obtained by Yahoo! or
GeoCities in any investigation pursuant to this Section 5.3 will affect or be
deemed to modify any representation or warranty contained herein or the
conditions to the obligations of the parties to consummate the Merger.
5.4 NO SOLICITATION.
(a) From and after the date of this Agreement until the Effective
Time or termination of this Agreement pursuant to Article VII, GeoCities and
its subsidiaries will not, nor will they authorize or permit any of their
respective officers, directors, affiliates or employees or any investment
banker, attorney or other advisor or representative retained by any of them
to, directly or indirectly, (i) solicit, initiate, encourage or induce the
making, submission or announcement of any Acquisition Proposal (as
hereinafter defined), (ii) participate in any discussions or negotiations
regarding, or furnish to any person any non-public information with respect
to, or take any other action to facilitate any inquiries or the making of any
proposal that constitutes or may reasonably be expected to lead to, any
Acquisition Proposal, (iii) engage in discussions with any person with
respect to any Acquisition Proposal, except as to the existence of these
provisions, (iv) subject to Section 5.2(c), approve, endorse or recommend any
Acquisition Proposal or (v) enter into any letter of intent or similar
document or any contract, agreement or commitment contemplating or otherwise
relating to any Acquisition Transaction; PROVIDED, HOWEVER, that prior to the
approval of this Agreement by the required GeoCities stockholder vote, this
Section 5.4(a) shall not prohibit GeoCities from furnishing nonpublic
information regarding GeoCities and its subsidiaries to, entering into a
confidentiality agreement with or entering into discussions with, any person
or group in response to a Superior Offer submitted by such person or group
(and not withdrawn) if (1) neither GeoCities nor any representative of
GeoCities and its subsidiaries shall have violated any of the restrictions
set forth in this Section 5.4, (2) the Board of Directors of GeoCities
concludes in good faith, after consultation with its outside legal counsel,
that such action is required in order for the Board of Directors of GeoCities
to comply with its fiduciary obligations to GeoCities' stockholders under
applicable law, (3) prior to furnishing any such nonpublic information to, or
entering into discussions with, such person or group, GeoCities gives Yahoo!
written notice of the identity of such person or group and of GeoCities'
intention to furnish nonpublic information to, or enter into discussions
with, such person or group and the GeoCities receives from such person or
group an executed confidentiality agreement containing customary limitations
on the use and disclosure of all nonpublic written and oral information
furnished to such person or group by or on behalf of the GeoCities, and (4)
contemporaneously with furnishing any such nonpublic information to such
person or group, GeoCities furnishes such nonpublic information to Yahoo! (to
the extent such nonpublic information has not been previously furnished by
the GeoCities to Yahoo!). GeoCities and its subsidiaries will immediately
cease any and all existing activities, discussions or negotiations with any
parties conducted heretofore with respect to any Acquisition
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Proposal. Without limiting the foregoing, it is understood that any
violation of the restrictions set forth in the preceding two sentences by any
officer, director or employee of GeoCities or any of its subsidiaries or any
investment banker, attorney or other advisor or representative of GeoCities
or any of its subsidiaries shall be deemed to be a breach of this Section 5.4
by GeoCities. In addition to the foregoing, the GeoCities shall provide
Yahoo! with at least two (2) business days or forty-eight (48) hours prior
written notice of a meeting of GeoCities' Board of Directors at which
GeoCities' Board of Directors is reasonably expected to recommend a Superior
Offer to its stockholders and together with such notice a copy of the
documentation relating to such Superior Offer that exists at such time.
For purposes of this Agreement, "ACQUISITION PROPOSAL" shall mean any bona
fide offer or proposal (other than an offer or proposal by Yahoo!) relating to
any Acquisition Transaction. For the purposes of this Agreement, "ACQUISITION
TRANSACTION" shall mean any transaction or series of related transactions other
than the transactions contemplated by this Agreement involving: (A) any
acquisition or purchase from the GeoCities by any person or "group" (as defined
under Section 13(d) of the Exchange Act and the rules and regulations
thereunder) of more than a 15% interest in the total outstanding voting
securities of the GeoCities or any of its subsidiaries or any tender offer or
exchange offer that if consummated would result in any person or "group" (as
defined under Section 13(d) of the Exchange Act and the rules and regulations
thereunder) beneficially owning 15% or more of the total outstanding voting
securities of the GeoCities or any of its subsidiaries or any merger,
consolidation, business combination or similar transaction involving the
GeoCities pursuant to which the stockholders of the GeoCities immediately
preceding such transaction hold less than 85% of the equity interests in the
surviving or resulting entity of such transaction; (B) any sale, lease (other
than in the ordinary course of business), exchange, transfer, license (other
than in the ordinary course of business), acquisition or disposition of more
than 50% of the assets of the GeoCities; or (C) any liquidation or dissolution
of the GeoCities.
(b) In addition to the obligations of GeoCities set forth in
paragraph (a) of this Section 5.4, GeoCities as promptly as practicable shall
advise Yahoo! orally and in writing of any request for non-public information
which GeoCities reasonably believes would lead to an Acquisition Proposal or of
any Acquisition Proposal, or any inquiry with respect to or which GeoCities
reasonably should believe would lead to any Acquisition Proposal, the material
terms and conditions of such Acquisition Proposal (to the extent known), and the
identity of the person or group making any such request, Acquisition Proposal or
inquiry. GeoCities will keep Yahoo! informed in all material respects of any
material amendments or proposed amendments to any such Acquisition Proposal.
5.5 PUBLIC DISCLOSURE. Yahoo! and GeoCities will consult with each
other, and to the extent practicable, agree, before issuing any press release
or otherwise making any public statement with respect to the Merger, this
Agreement or an Acquisition Proposal and will not issue any such press
release or make any such public statement prior to such consultation, except
as may be required by law or any listing agreement with a national securities
exchange. The
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parties have agreed to the text of the joint press release announcing the
signing of this Agreement.
5.6 REASONABLE EFFORTS; NOTIFICATION.
(a) Upon the terms and subject to the conditions set forth in this
Agreement, each of the parties agrees to use all reasonable efforts to take, or
cause to be taken, all actions, and to do, or cause to be done, and to assist
and cooperate with the other parties in doing, all things necessary, proper or
advisable to consummate and make effective, in the most expeditious manner
practicable, the Merger and the other transactions contemplated by this
Agreement, including using reasonable efforts to accomplish the following: (i)
the taking of all reasonable acts necessary to cause the conditions precedent
set forth in Article VI to be satisfied, (ii) the obtaining of all necessary
actions or nonactions, waivers, consents, approvals, orders and authorizations
from Governmental Entities and the making of all necessary registrations,
declarations and filings (including registrations, declarations and filings with
Governmental Entities, if any) and the taking of all reasonable steps as may be
necessary to avoid any suit, claim, action, investigation or proceeding by any
Governmental Entity, (iii) the obtaining of all necessary consents, approvals or
waivers from third parties, (iv) the defending of any suits, claims, actions,
investigations or proceedings, whether judicial or administrative, challenging
this Agreement or the consummation of the transactions contemplated hereby,
including seeking to have any stay or temporary restraining order entered by any
court or other Governmental Entity vacated or reversed, and (v) the execution or
delivery of any additional instruments necessary to consummate the transactions
contemplated by, and to fully carry out the purposes of, this Agreement. In
connection with and without limiting the foregoing, GeoCities and its Board of
Directors shall, if any state takeover statute or similar statute or regulation
is or becomes applicable to the Merger, this Agreement or any of the
transactions contemplated by this Agreement, use all reasonable efforts to
ensure that the Merger and the other ransactions contemplated by this Agreement
may be consummated as promptly as practicable on the terms contemplated by this
Agreement and otherwise to minimize the effect of such statute or regulation on
the Merger, this Agreement and the transactions contemplated hereby.
Notwithstanding anything herein to the contrary, nothing in this Agreement shall
be deemed to require Yahoo! or any of its affiliates to make proposals, execute
or carry out agreements or submit to orders providing for the sale or other
disposition or holding separate (through the establishment of a trust or
otherwise) of any assets or categories of assets of Yahoo!, any of its
affiliates or GeoCities or the holding separate of the shares of GeoCities
Common Stock or imposing or seeking to impose any limitation on the ability of
Yahoo! or any of its subsidiaries or affiliates to conduct their business or own
such assets or to acquire, hold or exercise full rights of ownership of the
shares of GeoCities Common Stock.
(b) GeoCities shall give prompt notice to Yahoo! of any
representation or warranty made by it contained in this Agreement becoming
untrue or inaccurate, or any failure of GeoCities to comply with or satisfy in
any material respect any covenant, condition or agreement to be complied with or
satisfied by it under this Agreement, in each case, such that the conditions set
forth in Section 6.3(a) or 6.3(b) would not be satisfied; PROVIDED, HOWEVER,
that no such
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notification shall affect the representations, warranties, covenants or
agreements of the parties or the conditions to the obligations of the parties
under this Agreement.
(c) Yahoo! shall give prompt notice to GeoCities of any
representation or warranty made by it or Merger Sub contained in this Agreement
becoming untrue or inaccurate, or any failure of Yahoo! or Merger Sub to comply
with or satisfy in any material respect any covenant, condition or agreement to
be complied with or satisfied by it under this Agreement, in each case, such
that the conditions set forth in Section 6.2(a) or 6.2(b) would not be
satisfied; PROVIDED, HOWEVER, that no such notification shall affect the
representations, warranties, covenants or agreements of the parties or the
conditions to the obligations of the parties under this Agreement.
5.7 THIRD PARTY CONSENTS. As soon as practicable following the date
hereof, Yahoo! and GeoCities will each use its commercially reasonable efforts
to obtain any consents, waivers and approvals under any of its or its
subsidiaries' respective agreements, contracts, licenses or leases required to
be obtained in connection with the consummation of the transactions contemplated
hereby.
5.8 STOCK OPTIONS AND ESPP.
(a) At the Effective Time, each outstanding option to purchase shares
of GeoCities Common Stock (each a "GEOCITIES STOCK OPTION") under the GeoCities
Stock Option Plans, whether or not exercisable, will be assumed by Yahoo!. Each
GeoCities Stock Option so assumed by Yahoo! under this Agreement will continue
to have, and be subject to, the same terms and conditions set forth in the
applicable GeoCities Stock Option Plan immediately prior to the Effective Time
(including, without limitation, any repurchase rights or vesting provisions),
except that (i) each GeoCities Stock Option will be exercisable (or will become
exercisable in accordance with its terms) for that number of whole shares of
Yahoo! Common Stock equal to the product of the number of shares of GeoCities
Common Stock that were issuable upon exercise of such GeoCities Stock Option
immediately prior to the Effective Time multiplied by the Exchange Ratio,
rounded down to the nearest whole number of shares of Yahoo! Common Stock and
(ii) the per share exercise price for the shares of Yahoo! Common Stock issuable
upon exercise of such assumed GeoCities Stock Option will be equal to the
quotient determined by dividing the exercise price per share of GeoCities Common
Stock at which such GeoCities Stock Option was exercisable immediately prior to
the Effective Time by the Exchange Ratio, rounded up to the nearest whole cent.
(b) It is intended that GeoCities Stock Options assumed by Yahoo!
shall qualify following the Effective Time as incentive stock options as defined
in Section 422 of the Code to the extent GeoCities Stock Options qualified as
incentive stock options immediately prior to the Effective Time and the
provisions of this Section 5.8 shall be applied consistent with such intent.
(c) GeoCities shall take all actions necessary pursuant to the
terms of the ESPP in order to accelerate the purchase date of the purchase
period under such plan which
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includes the Effective Time (the "CURRENT PURCHASE PERIOD") such that a new
purchase date for such purchase period shall occur prior to the Effective
Time and shares shall be purchased by ESPP participants prior to the
Effective Time. The Current Purchase Period shall expire immediately
following such new purchase date, and the ESPP shall terminate immediately
prior to the Effective Time. Subsequent to such new purchase date, GeoCities
shall take no action, pursuant to the terms of the ESPP, to commence any new
purchase period.
5.9 FORM S-8. Yahoo! agrees to file a registration statement on Form S-8
for the shares of Yahoo! Common Stock issuable with respect to assumed GeoCities
Stock Options as soon as is reasonably practicable after the Effective Time, and
in any event within 30 days after the Effective Time, and intends to maintain
the effectiveness of such registration statement thereafter for so long as any
of such options or other rights remain outstanding.
5.10 INDEMNIFICATION.
(a) From and after the Effective Time, Yahoo! will cause the
Surviving Corporation to fulfill and honor in all respects the obligations of
GeoCities pursuant to any indemnification agreements between GeoCities and its
directors and officers as of the Effective Time (the "INDEMNIFIED PARTIES") and
any indemnification provisions under GeoCities' Certificate of Incorporation or
Bylaws as in effect on the date hereof. The Certificate of Incorporation and
Bylaws of the Surviving Corporation will contain provisions with respect to
exculpation and indemnification that are at least as favorable to the
Indemnified Parties as those contained in the Certificate of Incorporation and
Bylaws of GeoCities as in effect on the date hereof, which provisions will not
be amended, repealed or otherwise modified for a period of three years from the
Effective Time in any manner that would adversely affect the rights thereunder
of individuals who, immediately prior to the Effective Time, were directors,
officers, employees or agents of GeoCities, unless such modification is required
by law.
(b) For a period of three years after the Effective Time, Yahoo! will
cause the Surviving Corporation to use its commercially reasonable efforts to
maintain in effect, if available, directors' and officers' liability insurance
covering those persons who are currently covered by GeoCities' directors' and
officers' liability insurance policy on terms comparable to those applicable to
the current directors and officers of GeoCities; PROVIDED, HOWEVER, that in no
event will Yahoo! or the Surviving Corporation be required to expend in excess
of 125% of the annual premium currently paid by GeoCities for such coverage (or
such coverage as is available for such 125% of such annual premium).
(c) This Section 5.10 shall survive the consummation of the Merger,
is intended to benefit GeoCities, the Surviving Corporation and each indemnified
party, shall be binding on all successors and assigns of the Surviving
Corporation and Yahoo!, and shall be enforceable by the indemnified parties.
5.11 NASDAQ LISTING. Yahoo! agrees to authorize for listing on the Nasdaq
Stock Market the shares of Yahoo! Common Stock issuable, and those required to
be reserved for issuance, in connection with the Merger, upon official notice of
issuance
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5.12 AFFILIATE AGREEMENTS. In addition to those GeoCities Affiliate
Agreements executed and delivered to Yahoo! concurrently with the execution of
this Agreement, GeoCities will use its commercially reasonable efforts to
deliver or cause to be delivered to Yahoo!, as promptly as practicable on or
following the date hereof, from each additional GeoCities Affiliate an executed
GeoCities Affiliate Agreement, each of which will be in full force and effect as
of the Effective Time. Yahoo! will use its commercially reasonable efforts to
deliver or cause to be delivered, as promptly as practicable following the date
hereof, from each Yahoo! Affiliate an executed affiliate agreement in
substantially the form attached hereto as EXHIBIT C (the "YAHOO! AFFILIATE
AGREEMENT"), each of which will be in full force and effect as of the Effective
Time. Yahoo! will be entitled to place appropriate legends on the certificates
evidencing any Yahoo! Common Stock to be received by a GeoCities Affiliate
pursuant to the terms of this Agreement, and to issue appropriate stop transfer
instructions to the transfer agent for the Yahoo! Common Stock, consistent with
the terms of the GeoCities Affiliate Agreement.
5.13 [Reserved]
5.14 GEOCITIES STOCK OPTION.
(a) GRANT OF GEOCITIES STOCK OPTION. Subject to the terms of Section
7.3(d), GeoCities hereby grants to Yahoo! an irrevocable option (the "GEOCITIES
STOCK OPTION") to purchase for $113.66 per share (the "EXERCISE PRICE") in cash
up to 6,370,000 shares of GeoCities Common Stock.
(b) TERM OF GEOCITIES STOCK OPTION. Yahoo! may exercise the
GeoCities Stock Option, in whole or in part, at any time or from time to time
from the day (the "EXERCISE COMMENCEMENT DATE") on which a Triggering Event (as
such term is defined in Section 7.1) shall have occurred or on which this
Agreement shall be terminated in the circumstances contemplated by Section
7.1(d), until the day (the "OPTION TERMINATION DATE") which is the earlier of
(i) the Effective Time or (ii) nine months after the termination of this
Agreement.
(c) CONDITIONS TO PURCHASE. Yahoo! may purchase shares of GeoCities
Common Stock pursuant to the GeoCities Stock Option only if all of the following
conditions are satisfied: (i) Yahoo! is not at the time of purchase in material
breach of its obligations under this Agreement, (ii) no preliminary or permanent
injunction or other order, decree or ruling against the sale or delivery of the
shares of GeoCities Common Stock issued by any federal or state court of
competent jurisdiction in the United States is in effect at such time, and (iii)
any applicable waiting period under the HSR Act shall have expired or been
terminated at or prior to such time.
(d) EXERCISE OF STOCK OPTION. If Yahoo! wishes to exercise the
GeoCities Stock Option, it shall do so by giving the GeoCities notice to such
effect, specifying the number of Shares to be purchased and a place and date
not earlier than one business day nor later than ten business days from the
date such notice is given for the closing of the purchase. If any such
closing cannot be consummated on the date specified by Yahoo! in its notice
of election to exercise the GeoCities Stock Option because any condition to
the purchase of shares of GeoCities Common Stock has not been satisfied or as
a result of any restriction arising under any
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applicable law or regulation, the date for such closing shall be on such date
within five days following the satisfaction of all such conditions and the
cessation of all such restrictions as Yahoo! may specify.
(e) PAYMENT AND DELIVERY OF SHARES. At any closing in connection
with the GeoCities Stock Option, (i) Yahoo! shall make payment to the GeoCities
of the aggregate purchase price for the shares of GeoCities Common Stock to be
purchased by delivery to the GeoCities of a certified, cashier's or bank check
payable to the order of the GeoCities or, if mutually agreed, by wire transfer
of funds to an account designated by the GeoCities, and (ii) the GeoCities shall
deliver to Yahoo! a certificate or certificates representing the shares so
purchased, registered in the name of Yahoo! or its designee.
(f) CERTAIN ADJUSTMENTS. In the event of any change in the
GeoCities' capital stock by reason of stock dividends, stock splits, mergers,
consolidations, recapitalizations, combinations, conversions, exchanges of
shares, extraordinary or liquidating dividends, or other changes in the
corporate or capital structure of the GeoCities which would have the effect of
diluting or changing Yahoo!'s rights hereunder, the number and kind of shares of
GeoCities Common Stock subject to the GeoCities Stock Option and the purchase
price per Share (but not the total purchase price) shall be appropriately and
equitably adjusted so that Yahoo! shall receive upon exercise of the GeoCities
Stock Option the number and class of shares of GeoCities Common Stock or other
securities or property that Yahoo! would have received in respect of the shares
purchasable upon exercise of the GeoCities Stock Option if the GeoCities Stock
Option had been exercised immediately prior to such event.
(g) SURRENDER RIGHT. At any time or from time to time after the
Exercise Commencement Date, Yahoo! may, at its election, upon two days' notice
to the GeoCities, surrender all or a part of the GeoCities Stock Option to
GeoCities, in which event GeoCities shall pay to Yahoo!, on the day of each such
surrender and in consideration thereof, against tender by Yahoo! of an
instrument evidencing such surrender, an amount in cash per share of GeoCities
Common Stock the rights to which are surrendered equal to (i) the closing sale
price of the GeoCities' Common Stock on the Nasdaq Stock Market on the date of
surrender (or the closing price as reported by any other applicable securities
exchange if not listed on the Nasdaq Stock Market), or if not actively traded,
the fair market value as determined by investment bankers chosen by Yahoo over
(ii) the Exercise Price. Upon exercise of its right to surrender the GeoCities
Stock Option or any portion thereof and the receipt by Yahoo! of cash pursuant
to this Section 5.14(g), any and all rights of Yahoo! to purchase shares of
GeoCities Common Stock with respect to the portion of the GeoCities Stock Option
surrendered pursuant to this Section shall be terminated.
(h) LISTING AND RESERVATION OF SHARES; NOTIFICATION OF RECORD DATES.
(i) Promptly after the date hereof, and from time to time
thereafter if necessary, GeoCities will apply to list all of the shares of
GeoCities Common Stock subject to
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the GeoCities Stock Option on the Nasdaq Stock Market and will use its best
efforts to obtain approval of such listing as soon as practicable.
(ii) GeoCities has taken all necessary corporate and other
action to authorize and reserve and to permit it to issue, and at all times
from the date hereof until such time as the obligation to deliver shares of
GeoCities Common Stock upon the exercise of the GeoCities Stock Option
terminates, will have reserved for issuance, upon any exercise of the
GeoCities Stock Option, the number of shares of GeoCities Common Stock
subject to the GeoCities Stock Option (less the number of shares previously
issued upon any partial exercise of the GeoCities Stock Option or as to which
the GeoCities Stock Option may no longer be exercised).
(iii) GeoCities shall give Yahoo! at least ten days' prior
written notice before setting the record date for determining the holders of
record of shares of GeoCities Common Stock entitled to notice of, or to vote on,
any matter, to receive any dividend or distribution or to participate in any
rights offering or other matter, or to receive any other benefit or right, with
respect to shares of GeoCities Common Stock.
(i) REGISTRATION OF THE SHARES.
(i) If Yahoo! requests GeoCities in writing to register under
the Securities Act any of the shares of GeoCities Common Stock owned by Yahoo!,
GeoCities will use its best efforts to cause the offering of the shares so
specified in such request to be registered as soon as practicable so as to
permit the sale or other distribution by Yahoo! of the shares specified in its
request (and to keep such registration in effect for a period of at least 90
days), and in connection therewith prepare and file as promptly as reasonably
possible (but in no event later than 60 days from receipt of Yahoo!'s request) a
registration statement under the Securities Act to effect such registration on
an appropriate form, which would permit the sale of the shares of GeoCities
Common Stock by Yahoo! in the manner specified by Yahoo! in its request.
GeoCities shall not be obligated to make effective more than three registration
statements pursuant to the foregoing sentence. Upon written notice to Yahoo!,
GeoCities may postpone effecting a registration pursuant to this Section 5.14 on
one occasion during any period of six consecutive months for a reasonable time
specified in the notice but not exceeding 90 days (which period may not be
extended or renewed) if (1) an investment banking firm of recognized national
standing shall advise GeoCities and Yahoo! in writing that effecting the
registration would materially and adversely affect an offering of securities of
GeoCities the preparation of which had then been commenced, or (2) GeoCities is
in possession of material non-public information the disclosure of which during
the period specified in such notice GeoCities believes, in its reasonable
judgment, would not be in the best interests of GeoCities. The obligations of
GeoCities under this Section 5.14 (i)(i) shall terminate at such time as Yahoo!
may sell all shares of GeoCities Common Stock without restriction under Rule
144 (k).
(ii) GeoCities shall notify Yahoo! in writing not less than
ten days prior to filing a registration statement under the Securities Act
(other than a filing on Form S-4 or
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S-8) with respect to any shares of GeoCities Common Stock of GeoCities'
intention so to file. If Yahoo! wishes to have any portion of its shares of
GeoCities Common Stock included in such registration statement, it shall
advise GeoCities in writing to that effect within two business days following
receipt of such notice, and GeoCities will thereupon include the number of
shares of GeoCities Common Stock indicated by Yahoo! under such Registration
Statement. If such registration involves an underwritten public offering and
the managing underwriter shall advise GeoCities and Yahoo! that in its view
the number of shares of GeoCities Common Stock requested to be included in
such registration (including any securities which the GeoCities proposes to
be included) exceeds the largest number of shares which can be sold without
having an adverse effect on such offering, including the price at which such
shares can be sold (the "MAXIMUM OFFERING SIZE"), GeoCities will include in
such registration, up to the Maximum Offering Size, first, all securities
proposed to be registered by GeoCities, and second, shares of GeoCities
Common Stock requested to be registered by Yahoo!.
(iii) GeoCities shall pay all fees and expenses in connection
with any registration pursuant to this Section 5.14 other than underwriting
discounts and commissions to brokers or dealers and shall indemnify Yahoo!,
its officers, directors, agents, other controlling persons and any
underwriters retained by Yahoo! in connection with such sale of such shares
of GeoCities Common Stock in the customary way, and agree to customary
contribution provisions with such persons, with respect to claims, damages,
losses and liabilities (and any expenses relating thereto) arising (or to
which Yahoo!, its officers, directors, agents, other controlling persons or
underwriters may be subject) in connection with any such offer or sale under
the federal securities laws or otherwise, except for information furnished in
writing by Yahoo! or its underwriters to GeoCities. Yahoo! and its
underwriters, respectively, shall indemnify GeoCities to the same extent with
respect to information furnished in writing to GeoCities by Yahoo! and such
underwriters.
5.15 LETTER OF GEOCITIES' ACCOUNTANTS. GeoCities shall use all reasonable
efforts to cause to be delivered to Yahoo! a letter of PricewaterhouseCoopers
LLP, dated no more than two (2) business days before the date on which the
Registration Statement becomes effective (and reasonably satisfactory in form
and substance to Yahoo!), that is customary in scope and substance for letters
delivered by independent public accountants in connection with registration
statements similar to the Registration Statement.
ARTICLE VI
CONDITIONS TO THE MERGER
6.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY TO EFFECT THE MERGER. The
respective obligations of each party to this Agreement to effect the Merger
shall be subject to the satisfaction at or prior to the Closing Date of the
following conditions:
(a) GEOCITIES STOCKHOLDER APPROVAL. This Agreement shall have been
approved and adopted, and the Merger shall have been duly approved, by the
requisite vote under applicable law, by the stockholders of GeoCities.
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(b) REGISTRATION STATEMENT EFFECTIVE; PROXY STATEMENT. The SEC shall
have declared the Registration Statement effective. No stop order suspending
the effectiveness of the Registration Statement or any part thereof shall have
been issued and no proceeding for that purpose, and no similar proceeding in
respect of the Proxy Statement/Prospectus, shall have been initiated or
threatened in writing by the SEC.
(c) NO ORDER; HSR ACT. No Governmental Entity shall have enacted,
issued, promulgated, enforced or entered any statute, rule, regulation,
executive order, decree, injunction or other order (whether temporary,
preliminary or permanent) which is in effect and which has the effect of making
the Merger illegal or otherwise prohibiting consummation of the Merger. All
waiting periods, if any, under the HSR Act relating to the transactions
contemplated hereby will have expired or terminated early and all material
foreign antitrust approvals required to be obtained prior to the Merger in
connection with the transactions contemplated hereby shall have been obtained.
(d) TAX OPINIONS. Yahoo! and GeoCities shall each have received
written opinions from their respective tax counsel (Venture Law Group, A
Professional Corporation, and Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP, respectively), in
form and substance reasonably satisfactory to them, to the effect that the
Merger will constitute a reorganization within the meaning of Section 368(a) of
the Code and such opinions shall not have been withdrawn; PROVIDED, HOWEVER,
that if the counsel to either Yahoo! or GeoCities does not render such opinion,
this condition shall nonetheless be deemed to be satisfied with respect to such
party if counsel to the other party renders such opinion to such party. The
parties to this Agreement agree to make reasonable representations as requested
by such counsel for the purpose of rendering such opinions.
(e) NASDAQ LISTING. The shares of Yahoo! Common Stock to be issued
in the Merger shall have been approved for listing on the Nasdaq Stock Market.
(f) OPINION OF ACCOUNTANTS. Yahoo! shall have received letters from
PricewaterhouseCoopers LLP, dated within two (2) business days prior to the
Effective Time, regarding that firm's concurrence with Yahoo!'s management's and
GeoCities' management's conclusions as to the appropriateness of pooling of
interest accounting for the Merger under Accounting Principles Board Opinion No.
16, if the Merger is consummated in accordance with this Agreement; PROVIDED,
HOWEVER, that this condition shall be deemed waived by GeoCities in the event
that any action taken by, or omitted to be taken by, Geocities or any of its
shareholders, employees or affiliates shall have the been the proximate cause of
the inability of Yahoo! to account for the Merger as a pooling of interests.
6.2 ADDITIONAL CONDITIONS TO OBLIGATIONS OF GEOCITIES. The obligation of
GeoCities to consummate and effect the Merger shall be subject to the
satisfaction at or prior to the Closing Date of each of the following
conditions, any of which may be waived, in writing, exclusively by GeoCities:
(a) REPRESENTATIONS AND WARRANTIES. Each representation and
warranty of Yahoo! and Merger Sub contained in this Agreement (i) shall have
been true and correct in all
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material respects as of the date of this Agreement, and (ii) shall be true
and correct on and as of the Closing Date with the same force and effect as
if made on the Closing Date except (A) in each case, or in the aggregate, as
does not constitute a Material Adverse Effect on Yahoo! and Merger Sub, (B)
for changes contemplated by this Agreement, and (C) for those representations
and warranties which address matters only as of a particular date (which
representations shall have been true and correct except as does not
constitute a Material Adverse Effect on Yahoo! and Merger Sub as of such
particular date) (it being understood that, for purposes of determining the
accuracy of such representations and warranties for purposes of clause (ii),
(1) all "Material Adverse Effect" qualifications and other qualifications
based on the word "material" or similar phrases contained in such
representations and warranties shall be disregarded, and (2) any update of or
modification to the Yahoo! Schedules made or purported to have been made
after the date of this Agreement shall be disregarded). GeoCities shall have
received a certificate with respect to the foregoing signed on behalf of
Yahoo! by an authorized officer of Yahoo!.
(b) AGREEMENTS AND COVENANTS. Yahoo! and Merger Sub shall have
performed or complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by them on or prior
to the Closing Date, and GeoCities shall have received a certificate to such
effect signed on behalf of Yahoo! by an authorized officer of Yahoo!.
6.3 ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF YAHOO! AND MERGER SUB.
The obligations of Yahoo! and Merger Sub to consummate and effect the Merger
shall be subject to the satisfaction at or prior to the Closing Date of each of
the following conditions, any of which may be waived, in writing, exclusively by
Yahoo!:
(a) REPRESENTATIONS AND WARRANTIES. Each representation and warranty
of GeoCities contained in this Agreement (i) shall have been true and correct in
all material respects as of the date of this Agreement, and (ii) shall be true
and correct on and as of the Closing Date with the same force and effect as if
made on and as of the Closing Date except (A) in each case, or in the aggregate,
as does not constitute a Material Adverse Effect on GeoCities, (B) for changes
contemplated by this Agreement, and (C) for those representations and warranties
which address matters only as of a particular date (which representations shall
have been true and correct except as does not constitute a Material Adverse
Effect on GeoCities as of such particular date) (it being understood that, for
purposes of determining the accuracy of such representations and warranties, (1)
all "Material Adverse Effect" qualifications and other qualifications based on
the word "material" or similar phrases contained in such representations and
warranties shall be disregarded, and (2) any update of or modification to the
GeoCities Schedules made or purported to have been made after the date of this
Agreement shall be disregarded). Yahoo! shall have received a certificate with
respect to the foregoing signed on behalf of GeoCities by an authorized officer
of GeoCities.
(b) AGREEMENTS AND COVENANTS. GeoCities shall have performed or
complied in all material respects with all agreements and covenants required
by this Agreement to be performed or complied with by it at or prior to the
Closing Date, and Yahoo! shall have received
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a certificate to such effect signed on behalf of GeoCities by the Chief
Executive Officer and the Chief Financial Officer of GeoCities.
(c) AFFILIATE AGREEMENTS. Each of the GeoCities Affiliates shall
have entered into the GeoCities Affiliate Agreement and each of such agreements
will be in full force and effect as of the Effective Time.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
7.1 TERMINATION. This Agreement may be terminated at any time prior to
the Effective Time, whether before or after the requisite approvals of the
stockholders of GeoCities or Yahoo!:
(a) by mutual written consent duly authorized by the Boards of
Directors of Yahoo! and GeoCities;
(b) by either GeoCities or Yahoo! if the Merger shall not have been
consummated by September 30, 1999, for any reason; PROVIDED, HOWEVER, that the
right to terminate this Agreement under this Section 7.1(b) shall not be
available to any party whose action or failure to act has been a principal cause
of or resulted in the failure of the Merger to occur on or before such date;
(c) by either GeoCities or Yahoo! if a Governmental Entity shall have
issued an order, decree or ruling or taken any other action, in any case having
the effect of permanently restraining, enjoining or otherwise prohibiting the
Merger, which order, decree, ruling or other action is final and nonappealable;
(d) by either GeoCities or Yahoo! if the required approval of the
stockholders of GeoCities contemplated by this Agreement shall not have been
obtained by reason of the failure to obtain the required vote at a meeting of
GeoCities stockholders duly convened therefor or at any adjournment thereof
(provided that the right to terminate this Agreement under this Section 7.1(d)
shall not be available to GeoCities where the failure to obtain GeoCities
stockholder approval shall have been caused by the action or failure to act of
GeoCities and such action or failure to act constitutes a breach by GeoCities of
this Agreement);
(e) by Yahoo! if a Triggering Event (as defined below) shall have
occurred.
(f) by GeoCities, upon a breach of any representation, warranty,
covenant or agreement on the part of Yahoo! set forth in this Agreement, or if
any representation or warranty of Yahoo! shall have become untrue, in either
case such that the conditions set forth in Section 6.2(a) or Section 6.2(b)
would not be satisfied as of the time of such breach or as of the time such
representation or warranty shall have become untrue, PROVIDED that if such
inaccuracy in Yahoo!'s representations and warranties or breach by Yahoo! is
curable by Yahoo! through the exercise of its commercially reasonable efforts,
then GeoCities may not terminate this
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Agreement under this Section 7.1(f) for twenty (20) days after delivery of
written notice from GeoCities to Yahoo! of such breach, provided Yahoo!
continues to exercise commercially reasonable efforts to cure such breach (it
being understood that GeoCities may not terminate this Agreement pursuant to
this Section 7.1(f) if it shall have materially breached this Agreement or if
such breach by Yahoo! is cured during such 20-day period and PROVIDED that
such 20-day period does not extend beyond September 30, 1999); or
(g) by Yahoo!, upon a breach of any representation, warranty,
covenant or agreement on the part of GeoCities set forth in this Agreement,
or if any representation or warranty of GeoCities shall have become untrue,
in either case such that the conditions set forth in Section 6.3(a) or
Section 6.3(b) would not be satisfied as of the time of such breach or as of
the time such representation or warranty shall have become untrue, PROVIDED
that if such inaccuracy in GeoCities' representations and warranties or
breach by GeoCities is curable by GeoCities through the exercise of its
commercially reasonable efforts, then Yahoo! may not terminate this Agreement
under this Section 7.1(g) for twenty (20) days after delivery of written
notice from Yahoo! to GeoCities of such breach, provided GeoCities continues
to exercise commercially reasonable efforts to cure such breach (it being
understood that Yahoo! may not terminate this Agreement pursuant to this
Section 7.1(g) if it shall have materially breached this Agreement or if such
breach by GeoCities is cured during such 20-day period and PROVIDED that such
20-day period does not extend beyond September 30, 1999).
For the purposes of this Agreement, a "TRIGGERING EVENT" shall be
deemed to have occurred if: (i) the Board of Directors of GeoCities or any
committee thereof having authority to bind the Board shall for any reason have
withdrawn or shall have amended or modified in a manner adverse to Yahoo! its
recommendation in favor of the adoption and approval of the Agreement or the
approval of the Merger; (ii) GeoCities shall have failed to include in the Proxy
Statement/Prospectus the recommendation of the Board of Directors of GeoCities
in favor of the adoption and approval of the Agreement and the approval of the
Merger; (iii) the Board of Directors of GeoCities fails to reaffirm its
recommendation in favor of the adoption and approval of the Agreement and the
approval of the Merger within ten (10) business days after Yahoo! requests in
writing that such recommendation be reaffirmed at any time following the public
announcement of an Acquisition Proposal; (iv) the Board of Directors of
GeoCities or any committee thereof having authority to bind the Board shall have
approved or publicly recommended any Acquisition Proposal; (v) GeoCities shall
have entered into any letter of intent of similar document or any agreement,
contract or commitment accepting any Acquisition Proposal; (vi) a tender or
exchange offer relating to securities of GeoCities in excess of 15% of its
outstanding voting securities shall have been commenced by a person unaffiliated
with Yahoo! and GeoCities shall not have sent to its securityholders pursuant to
Rule 14e-2 promulgated under the Securities Act, within ten (10) business days
after such tender or exchange offer is first published sent or given, a
statement disclosing that GeoCities recommends rejection of such tender or
exchange offer; or (vii) GeoCities shall have intentionally breached its
obligations under Section 5.4.
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7.2 NOTICE OF TERMINATION EFFECT OF TERMINATION. Any termination of
this Agreement under Section 7.1 above will be effective immediately upon the
delivery of written notice of the terminating party to the other parties
hereto. In the event of the termination of this Agreement as provided in
Section 7.1, this Agreement shall be of no further force or effect, except
(i) as set forth in this Section 7.2, Section 7.3 and Article VIII
(Miscellaneous), each of which shall survive the termination of this
Agreement, and (ii) nothing herein shall relieve any party from liability for
any willful or intentional breach of this Agreement. No termination of this
Agreement shall affect the obligations of the parties contained in the
Confidentiality Agreement, all of which obligations shall survive termination
of this Agreement in accordance with their terms.
7.3 FEES AND EXPENSES.
(a) GENERAL. Except as set forth in this Section 7.3, all fees and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses whether
or not the Merger is consummated; provided, however, that Yahoo! and GeoCities
shall share equally all fees and expenses, other than attorneys' and accountants
fees and expenses, incurred in relation to the printing and filing with the SEC
of the Proxy Statement/Prospectus (including any preliminary materials related
thereto) and the Registration Statement (including financial statements and
exhibits) and any amendments or supplements thereto.
(b) GEOCITIES PAYMENTS. In the event that this Agreement is
terminated by Yahoo! pursuant to Section 7.1(e), GeoCities shall promptly,
but in no event later than one day after the date of such termination, pay
Yahoo! a fee equal to $100 million in immediately available funds (the
"TERMINATION FEE"). In addition, in the event that this Agreement is
terminated by Yahoo! or GeoCities, as the case may be, pursuant to Section
7.1(d) and prior to the vote of GeoCities stockholders at the GeoCities
Stockholders' Meeting an Acquisition Proposal shall have been publicly
announced, GeoCities shall promptly, but in no event later than one day after
the date of such termination, pay Yahoo! a amount equal to Yahoo!'s
documented expenses incurred in connection with the transactions contemplated
by this Agreement, and furthermore, in the event that within nine months
following such termination GeoCities shall enter into a definitive agreement
with respect to an Acquisition Transaction or shall consummate an Acquisition
Transaction with a third party, GeoCities shall contemporaneously with such
execution or consummation, as the case may be, pay Yahoo! a fee equal to the
Termination Fee. GeoCities acknowledges that the agreements contained in
this Section 7.3(b) are an integral part of the transactions contemplated by
this Agreement, and that, without these agreements, Yahoo! would not enter
into this Agreement; accordingly, if GeoCities fails promptly to pay the
amounts due pursuant to this Section 7.3(b), and, in order to obtain such
payment, Yahoo! commences a suit which results in a judgment against
GeoCities for the amounts set forth in this Section 7.3(b), GeoCities shall
pay to Yahoo! its reasonable costs and expenses (including attorneys' fees
and expenses) in connection with such suit, together with interest on the
amounts set forth in this Section 7.3(b) at the prime rate of The Chase
Manhattan Bank in effect on the date such payment was required to be made.
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(c) Payment of the fees described in Section 7.3(b) above shall not
be in lieu of damages incurred in the event of a willful or intentional breach
of this Agreement.
(d) Notwithstanding any provision of this Agreement to the contrary,
the "Total Proceeds" (as hereinafter defined) that Yahoo! shall be permitted to
realize in respect of the Termination Fee and the GeoCities Stock Option shall
not exceed $140 million. In the event Yahoo!'s Total Proceeds would exceed such
amount, Yahoo! shall, at its sole election, (a) reduce the number of shares of
GeoCities Common Stock subject to the GeoCities Stock Option, (b) deliver shares
of GeoCities Common Stock received upon an exercise of the GeoCities Stock
Option to the GeoCities for cancellation, (c) pay an amount of cash to the
GeoCities, or (d) do any combination of the foregoing so that Yahoo!'s actual
realized Total Proceeds shall not exceed $140 million. "TOTAL PROCEEDS" shall
mean the aggregate (before taxes) of (i) any amount received pursuant to the
GeoCities' repurchase of that GeoCities Stock Option (or any portion thereof),
(ii) any amount received pursuant to the GeoCities' repurchase of the shares of
GeoCities Common Stock (less the purchase price for such shares), (iii) any net
cash received pursuant to the sale of shares of GeoCities Common Stock received
by Yahoo! in any exercise of the GeoCities Stock Option to any third party (less
the purchase price of such shares), (iv) any amounts received on transfer of the
GeoCities Stock Option or any portion thereof to a third party, (v) any
equivalent amounts received with respect to the GeoCities Stock Option adjusted
pursuant to Section 5.14(f), and (vi) the Termination Fee actually paid.
7.4 AMENDMENT. Subject to applicable law, this Agreement may be amended
by the parties hereto at any time by execution of an instrument in writing
signed on behalf of each of Yahoo!, Merger Sub and GeoCities.
7.5 EXTENSION; WAIVER. At any time prior to the Effective Time any party
hereto may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties made to such
party contained herein or in any document delivered pursuant hereto, and (iii)
waive compliance with any of the agreements or conditions for the benefit of
such party contained herein. 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. Delay in exercising any right under
this Agreement shall not constitute a waiver of such right.
ARTICLE VIII
GENERAL PROVISIONS
8.1 NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties of GeoCities, Yahoo! and Merger Sub contained in this Agreement
shall terminate at the Effective Time, and only the covenants that by their
terms survive the Effective Time shall survive the Effective Time.
8.2 NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed given if delivered personally or by commercial
delivery service, or sent via
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telecopy (receipt confirmed) to the parties at the following addresses or
telecopy numbers (or at such other address or telecopy numbers for a party as
shall be specified by like notice):
(a) if to Yahoo! or Merger Sub, to:
Yahoo! Inc.
0000 Xxxxxxx Xxxxxxxxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Chief Executive Officer
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
with a copy at the same address to the attention of the General
Counsel and Secretary and with a copy to:
Venture Law Group
A Professional Corporation
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
(b) if to GeoCities, to:
GeoCities
0000 Xxxxxxx Xxxxxx
Xxxxxx Xxx Xxx, Xxxxxxxxxx 00000
Attention: General Counsel
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP
00 Xxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
8.3 INTERPRETATION; CERTAIN DEFINED TERMS.
(a) When a reference is made in this Agreement to Exhibits, such
reference shall be to an Exhibit to this Agreement unless otherwise indicated.
When a reference is made in
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this Agreement to Sections, such reference shall be to a Section of this
Agreement unless otherwise indicated. The words "INCLUDE," "INCLUDES" and
"INCLUDING" when used herein shall be deemed in each case to be followed by
the words "WITHOUT LIMITATIONS." 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. When
reference is made herein to "THE BUSINESS OF" an entity, such reference shall
be deemed to include the business of all direct and indirect subsidiaries of
such entity. Reference to the subsidiaries of an entity shall be deemed to
include all direct and indirect subsidiaries of such entity.
(b) For purposes of this Agreement the term "KNOWLEDGE" means with
respect to a party hereto, with respect to any matter in question, that any of
the executive officers of such party has actual knowledge of such matter.
(c) For purposes of this Agreement, the term "MATERIAL ADVERSE
EFFECT" when used in connection with a party hereto means any change, event,
circumstance or effect that is materially adverse to the business, assets
(including intangible assets), capitalization, financial condition or results of
operations of such party and its subsidiaries taken as a whole, except (i) any
continued or increased operating losses (provided the obligations of GeoCities
set forth in Section 4.1 are complied with) or (ii) to the extent that any such
change, event or effect is attributable to or results from (w) the direct effect
of the public announcement or pendency of the transactions contemplated hereby
on current or prospective customers or revenues of GeoCities, (x) changes in
general economic conditions or changes affecting the industry generally in which
such party operates, (y) changes in trading prices for such party's capital
stock, or (z) stockholder class action litigation arising from allegations of a
breach of fiduciary duty of the GeoCities Board of Directors relating to this
Agreement; PROVIDED, HOWEVER, that with respect to clause (ii)(w) of this
sentence, GeoCities shall bear the burden of proof in any proceeding with regard
to establishing that any change, event, circumstance or effect is attributable
to or results from the direct effect of the public announcement or pendency of
the transactions contemplated hereby.
(d) For purposes of this Agreement, the term "PERSON" shall mean any
individual, corporation (including any non-profit corporation), general
partnership, limited partnership, limited liability partnership, joint venture,
estate, trust, GeoCities (including any limited liability GeoCities or joint
stock GeoCities), firm or other enterprise, association, organization, entity or
Governmental Entity.
(e) For purposes of this Agreement, "SUBSIDIARY" of a specified
entity will be any corporation, partnership, limited liability GeoCities, joint
venture or other legal entity of which the specified entity (either alone or
through or together with any other subsidiary) owns, directly or indirectly,
fifty percent (50%) or more of the stock or other equity or partnership
interests the holders of which are generally entitled to vote for the election
of the Board of Directors or other governing body of such corporation or other
legal entity.
8.4 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, and by facsimile, all of which shall be considered one and the
same agreement and shall become
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effective when one or more counterparts have been signed by each of the
parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
8.5 ENTIRE AGREEMENT; THIRD PARTY BENEFICIARIES. This Agreement and the
documents and instruments and other agreements among the parties hereto as
contemplated by or referred to herein, including the GeoCities Schedules and the
Yahoo! Schedules (a) constitute the entire agreement among the parties with
respect to the subject matter hereof and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof, it being understood that the Confidentiality Agreement
shall continue in full force and effect until the Closing and shall survive any
termination of this Agreement; and (b) are not intended to confer upon any other
person any rights or remedies hereunder, except as specifically provided in
Section 5.10.
8.6 SEVERABILITY. In the event that any provision of this Agreement or
the application thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this
Agreement will continue in full force and effect and the application of such
provision to other persons or circumstances will be interpreted so as reasonably
to effect the intent of the parties hereto. The parties further agree to
replace such void or unenforceable provision of this Agreement with a valid and
enforceable provision that will achieve, to the extent possible, the economic,
business and other purposes of such void or unenforceable provision.
8.7 OTHER REMEDIES; SPECIFIC PERFORMANCE. Except as otherwise provided
herein, any and all remedies herein expressly conferred upon a party will be
deemed cumulative with and not exclusive of any other remedy conferred hereby,
or by law or equity upon such party, and the exercise by a party of any one
remedy will not preclude the exercise of any other remedy. The parties hereto
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. It is accordingly agreed that the
parties shall be entitled to seek an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any state having jurisdiction, this
being in addition to any other remedy to which they are entitled at law or in
equity.
8.8 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.
8.9 RULES OF CONSTRUCTION. The parties hereto agree that they have been
represented by counsel during the negotiation and execution of this Agreement
and, therefore, waive the application of any law, regulation, holding or rule of
construction providing that ambiguities in an agreement or other document will
be construed against the party drafting such agreement or document.
8.10 ASSIGNMENT. No party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other parties. Subject
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to the preceding sentence, this Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
8.11 WAIVER OF JURY TRIAL. EACH OF YAHOO!, GEOCITIES AND MERGER SUB HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE ACTIONS OF YAHOO!, GEOCITIES OR MERGER SUB IN
THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized respective officers as of the date first
written above.
YAHOO! INC.
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
---------------------------------
Title: Chairman and Chief Executive
Officer
--------------------------------
HOME PAGE ACQUISITION CORP.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxx
--------------------------------
Title: President
-------------------------------
GEOCITIES
By: /s/ Xxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxx X. Xxxxx
---------------------------------
Title: President and Chief Executive
Officer
--------------------------------
**** MERGER AGREEMENT ****