EXHIBIT 99.1
SECOND AMENDMENT TO AGREEMENT AND PLAN OF MERGER
THIS SECOND AMENDMENT, dated as of January 7, 2004 (this
"Amendment"), to the Agreement and Plan of Merger, dated as of September 4, 2003
and amended as of October 3, 2003 (the "Merger Agreement"), by and among
CHINADOTCOM CORPORATION, a company organized under the laws of the Cayman
Islands ("Parent"), CDC SOFTWARE HOLDINGS, INC., a Delaware corporation and a
wholly owned subsidiary of Parent ("Merger Sub"), and XXXX SYSTEMS, INC., a
Delaware corporation (the "Company"). Capitalized terms used but not defined
herein have the meanings assigned to such terms in the Merger Agreement.
Pursuant to the terms of the Merger Agreement and in
accordance with Section 9.04 thereof, the parties hereto agree to amend the
Merger Agreement as follows:
SECTION 1 AMENDMENT TO SECTION 1.01. Section 1.01 of the
Merger Agreement is amended by deleting the definition of "Parent Price" in its
entirety and replacing such definition with the following:
"`PARENT PRICE' means the average of the per
share closing prices of Parent Common Stock on the Nasdaq
during the ten consecutive trading days ending on (and
including) the trading day that is two trading days prior to
the date of the Effective Time."
SECTION 2 AMENDMENT TO SECTION 2.04. Section 2.04(a)(i) of the
Merger Agreement is amended by deleting the subsection in its entirety and
replacing such subsection with the following:
"(i) subject to the provisions of Section 2.05, each Share
(together with the associated Company Right) issued
and outstanding immediately prior to the Effective
Time (other than any Shares to be canceled pursuant
to Section 2.04(a)(ii) and any Dissenting Shares (as
hereinafter defined)) shall be canceled and converted
automatically into the right to receive, at the
option of the holder of such Share, either (A) $17.00
in cash (the 'Cash Consideration') or (B) (1) the
number of shares of Parent Common Stock determined by
dividing $14.00 by the Parent Price and rounding the
result to the nearest one thousandth of a share (the
'Exchange Ratio'), payable upon surrender, in the
manner provided in Section 2.05, of the certificate
that formerly evidenced such Share; and (2) $5.00 in
cash ((1) and (2) together being the 'Cash/Stock
Consideration', and the Cash Consideration or the
Cash/Stock Consideration, as applicable, being the
'Merger Consideration'); provided, however, that,
with respect to holders of Shares who elect to
receive the Cash/Stock Consideration, if the Parent
Price would be less than $8.50 per share, Parent may,
at its option, pay a portion of the Exchange Ratio in
cash in lieu of Parent Common Stock so that the
Cash/Stock Consideration would instead consist of (X)
the
number of shares of Parent Common Stock determined by
dividing $14.00 by a number (determined by Parent)
that is in excess of the Parent Price but equal to or
below $8.50 and rounding the result to the nearest
one thousandth of a share (the 'Adjusted Exchange
Ratio'); (Y) cash in an amount equal to the Parent
Price multiplied by the excess of the Exchange Ratio
over the Adjusted Exchange Ratio; and (Z) $5.00 in
cash (the aggregate amount of cash in (Y) and (Z)
being, the `Adjusted Cash Amount'); provided,
further, that, notwithstanding anything to the
contrary contained herein, Parent shall pay a portion
of the Exchange Ratio in cash in lieu of Parent
Common Stock in accordance with the immediately
preceding proviso to this Section 2.04(a)(i) as
necessary to ensure that no approval of Parent's
stockholders shall be required under applicable Law
or under the rules of any securities exchange or the
NASDAQ National Market System in connection with the
issuance of Parent Common Stock in the Merger; and
provided, further, that if Parent adjusts the
Exchange Ratio and the Cash/Stock Consideration in
accordance with this Section 2.04(a)(i), Parent shall
deliver written notice to the Company prior to the
Closing Date, setting forth the Adjusted Exchange
Ratio and the Adjusted Cash Amount."
SECTION 3 AMENDMENT TO SECTION 2.05. Section 2.05(b) of the
Merger Agreement is amended by inserting the following before the first sentence
of such subsection:
"(i) Each holder of record of Shares as of the record date for
the Company Stockholders' Meeting will be entitled to elect to
receive (A) the Cash Consideration per Share for all, but not
less than all, of such Shares (the `Cash Election'); or (B)
the Cash/Stock Consideration per Share for all, but not less
than all, of such Shares (the `Cash/Stock Election' and
together with the Cash Election, the `Elections'). All
Elections shall be made by the close of business on the tenth
Business Day after the date of the Effective Time (the
`Election Deadline'), on a form designed for that purpose that
is mutually acceptable to the Company and Parent and mailed to
the stockholders of the Company with the Proxy Statement (a
`Form of Election'), and pursuant to the instructions for
effecting the Elections contained in such Form of Election.
Each holder of Shares who was not a holder of record of Shares
as of the record date for the Company Stockholders' Meeting,
and each holder of Shares who does not make a valid Election
prior to the Election Deadline, shall be deemed to have made a
Cash/Stock Election.
(ii)"
SECTION 4 AMENDMENTS TO SECTION 3.03. (a) Section 3.03(b) of
the Merger Agreement is amended by deleting the subsection in its entirety and
replacing such subsection with the following:
"(b) For purposes of Section 3.03(a), the `Conversion
Ratio' shall be the sum of (i) the Exchange Ratio, plus (ii)
the quotient obtained by dividing
2
$5.00 by the closing sales price of Parent Common Stock on the
Nasdaq for the last trading day prior to the date of the
Effective Time; provided, however, that if Parent pays a
portion of the Exchange Ratio in cash in accordance with the
provisos to Section 2.04(a)(i), the Conversion Ratio shall be
the sum of (A) the Adjusted Exchange Ratio, plus (B) the
quotient obtained by dividing the Adjusted Cash Amount by the
closing sales price of Parent Common Stock on the Nasdaq for
the last trading day prior to the date of the Effective Time."
(b) The last sentence of Section 3.03(c) shall be amended by
deleting the sentence in its entirety and replacing such sentence with the
following:
"Each Share acquired by such participant pursuant to the ESPP
as of the Effective Time shall, at the Effective Time, be
converted into the right to receive the Merger Consideration
in accordance with Section 2.04(a)."
SECTION 5 AMENDMENT TO SECTION 3.04. The last sentence of
Section 3.04(a) shall be amended by deleting the sentence in its entirety and
replacing such sentence with the following:
"Such stockholders shall be entitled to receive payment of the
appraised value of such Shares held by them, in accordance
with the provisions of such Section 262, except that each
Dissenting Share held by stockholders who shall have failed to
perfect or who effectively shall have withdrawn or lost their
rights to appraisal with respect to such Share under such
Section 262 shall thereupon be deemed to have been converted
into, and to have become exchangeable for, as of the Effective
Time, the right to receive the Merger Consideration, without
any interest thereon, upon surrender, in the manner provided
in Section 2.05, of the certificate that formerly evidenced
such Share."
SECTION 6 AMENDMENT TO SECTION 4.27. Section 4.27 of the
Merger Agreement is amended by deleting the section in its entirety and
replacing such section with the following:
"SECTION 4.27. FAIRNESS OPINION. The Board
has received the opinion of Broadview, financial advisor to
the Company to the effect that, as of the date of such
opinion, the Cash/Stock Consideration is fair to the
stockholders of the Company from a financial point of view."
SECTION 7 AMENDMENT TO SECTION 5.07(B). Section 5.07(b) of the
Merger Agreement is amended by deleting the subsection in its entirety and
replacing such subsection with the following:
"(b) The authorized capital stock of Merger
Sub consists of 100 shares of common stock, par value $0.001
per share, all of which are duly authorized, validly issued,
fully paid and nonassessable and free of any preemptive rights
in respect thereof and all of which are owned by Parent or a
wholly owned subsidiary of Parent in accordance with this
Agreement. Each outstanding share of capital stock of Merger
Sub is duly authorized, validly issued, fully paid and
non-assessable and each such share is owned by Parent or, in
accordance with this Agreement, a wholly owned subsidiary of
Parent, in either case free and clear of all security
interests, liens, claims, pledges, options, rights of first
refusal, agreements, limitations on voting rights, charges and
other encumbrances of any nature whatsoever, except where the
failure to own
3
such shares free and clear would not, individually or in the
aggregate, have a Parent Material Adverse Effect."
SECTION 8 AMENDMENT TO SECTION 6.02. (a) Section 6.02(b) of
the Merger Agreement is amended by deleting the subsection in its entirety and
replacing such subsection with the following:
"(b) enter into any negotiation or Contract with
respect to any transaction (other than the Merger and an
acquisition by Parent of Pivotal Corporation, a company based
in Vancouver, B.C.) that would, to the knowledge of Parent
acting reasonably, (i) materially delay or adversely affect
the ability of the parties to obtain any approvals or
clearances from Governmental Authorities required to permit
consummation of the Merger, or (ii) delay the date of mailing
of the Proxy Statement (or require an amendment to the Proxy
Statement following such mailing) such that the Closing would
be delayed past May 6, 2004."
(b) Section 6.02 of the Parent Disclosure Schedule is amended by
deleting such section in its entirety and replacing such section with the
revised Section 6.02 of the Parent Disclosure Schedule.
SECTION 9 AMENDMENTS TO ARTICLE VII. (a) Section 7.13 of the
Merger Agreement is amended by deleting the section in its entirety and
replacing such section with the following:
"SECTION 7.13. GENERAL COOPERATION. From the
date hereof through the Effective Time, and without limiting
the other provisions of this Agreement, the Company and each
Subsidiary shall use their good faith efforts to operate their
businesses in such a manner as to achieve a smooth transition
consistent with the mutual business interests of the Company
and each Subsidiary and Parent, in manner and scope as
directed by Parent in its sole discretion. In this regard, the
Company and each Subsidiary and Parent agree that they will
enter into good faith discussions concerning the businesses of
the Company and each Subsidiary, including (i) personnel
policies and procedures;(ii) operational matters; (iii) pro
forma financial projections; and (iv) potential transactions
between the Company and each Subsidiary and Parent. Parent and
the Company acknowledge and agree that during the period from
the date hereof through the Effective Time, Parent and the
Company expect to derive significant financial benefits from
synergies and integration initiatives. Based on this
acknowledgement, the Company and Parent will cooperate with
one another following the date hereof and will use good faith
efforts to achieve the types of integration and synergies
contemplated by the parties to the Merger Agreement as set
forth in Section 7.13 of the Company Disclosure Schedule, a
plan for which the Company and Parent agree to finalize in
February 2004."
(b) Article VII of the Merger Agreement is amended by inserting the following
Section 7.18:
"SECTION 7.18. SHARE CONTRIBUTION. Prior to
the Effective Time, Parent shall cause to be incorporated a
direct, wholly owned subsidiary of Parent ("Intermediate
Sub"). In the event that, immediately prior to the Effective
Time, the aggregate value of the shares of Parent Common Stock
to
4
be issued in the Merger would comprise 80% or more of the
aggregate value of the sum of (a) the Merger Consideration to
be issued and paid in the Merger, and (b) any cash in lieu of
fractional shares to be paid in the Merger, Parent shall
transfer or contribute all of the outstanding shares of
capital stock of Merger Sub to Intermediate Sub, so that,
immediately prior to the Effective Time, Merger Sub shall be a
direct wholly owned subsidiary of Intermediate Sub and an
indirect wholly owned subsidiary of Parent. Parent hereby
agrees that Intermediate Sub shall be a direct, wholly owned
subsidiary of Parent, formed solely for the purpose of
engaging in the Transactions, and that, at the Effective Time:
(i) Intermediate Sub shall have engaged
in no other business activities and shall have conducted its
operations only as contemplated by this Agreement;
(ii) Intermediate Sub shall be a
corporation duly organized, validly existing and in good
standing under the Laws of the jurisdiction of its
incorporation and shall have the requisite corporate power and
authority and all necessary governmental approvals to own,
lease and operate its properties and to carry on its business;
(iii) Parent shall have made available to
the Company complete and correct copies of the Certificate of
Incorporation, By-laws or equivalent organizational documents
of Intermediate Sub, and each such instrument shall be in full
force and effect;
(iv) the authorized capital stock of
Intermediate Sub shall consist of 100 shares of common stock,
par value $0.001 per share, all of which shall be duly
authorized, validly issued, fully paid and nonassessable and
free of any preemptive rights in respect thereof and all of
which shall be owned by Parent free and clear of all security
interests, liens, claims, pledges, options, rights of first
refusal, agreements, limitations on voting rights, charges and
other encumbrances of any nature whatsoever;
(v) except as would not have a Parent
Material Adverse Effect, Intermediate Sub shall be, and shall
have at all times been, in compliance with all applicable Law;
and
(vi) neither Parent nor Intermediate Sub
shall have received any written notice or other communication
from any Governmental Authority or other Person regarding any
actual or possible violation of, or failure to comply with,
any Law."
SECTION 10 AMENDMENT TO SECTION 9.01. (a) Section 9.01(b) of
the Merger Agreement is amended by deleting the subsection in its entirety and
replacing such subsection with the following:
"(b) by any of Parent, Merger Sub or the Company if
(i) the Effective Time shall not have occurred on or before
July 1, 2004; provided, however, that the right to terminate
this Agreement under this Section 9.01(b)(i) shall not be
5
available to any party whose failure to fulfill any obligation
under this Agreement has been the cause of, or resulted in,
the failure of the Effective Time to occur on or before the
applicable date; (ii) any Governmental Authority shall have
enacted, issued, promulgated, enforced or entered any
injunction, order, decree or ruling (whether temporary,
preliminary or permanent) which has become final and
nonappealable and has the effect of making consummation of the
Merger illegal or otherwise preventing or prohibiting
consummation of the Merger; or (iii) this Agreement shall not
have been approved and adopted in accordance with Delaware Law
by the Company's stockholders at the Company Stockholders'
Meeting;"
(b) Section 9.01(e) of the Merger Agreement is amended by
deleting the subsection in its entirety.
SECTION 11 CONFIRMATION. (a) As confirmation and not
limitation of the obligations set forth in Sections 7.03 and 7.09(a) of the
Merger Agreement, each of the parties to the Merger Agreement hereby reaffirms
that it shall use its reasonable best efforts to take, or cause to be taken, all
appropriate action, and to do, or cause to be done, all things necessary, proper
or advisable under applicable Laws and regulations to consummate and make
effective the Transactions, including, with respect to Parent and Merger Sub,
the retention of outside counsel in connection with the preparation and filing
of the Registration Statement.
(b) As confirmation and not limitation of the obligations set
forth in Section 9.03(d) of the Merger Agreement, each of the parties to the
Merger Agreement hereby reaffirms that the expenses incurred in connection with
the opinion proposed to be delivered by outside counsel to Parent to the effect
that, for federal income tax purposes, the Merger will qualify as a
reorganization within the meaning of Section 368(a) of the Code (the "Tax
Opinion") shall be shared equally by the Company and Parent. The Company agrees
promptly to pay to Parent an amount equal to that set forth in Section 9.03(d)
of the Parent Disclosure Schedule. Parent represents and warrants that such
amount is equal to one half of the amount set forth in the xxxx received from
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP for services rendered through October 21,
2003 in connection with analyses relating to the Tax Opinion.
SECTION 12 FULL FORCE AND EFFECT. Except as expressly amended
hereby, the Merger Agreement shall continue in full force and effect in
accordance with the provisions thereof on the date hereof.
SECTION 13 GOVERNING LAW. This Amendment shall be governed by,
and construed in accordance with, the Laws of the State of Delaware applicable
to Contracts executed in and to be performed in that State.
SECTION 14 COUNTERPARTS. This Amendment may be executed and
delivered (including by facsimile transmission) in one or more counterparts, and
by the different parties hereto in separate counterparts, each of which when
executed shall be deemed to be an original but all of which taken together shall
constitute one and the same instrument.
6
IN WITNESS WHEREOF, Parent, Merger Sub and the Company have
caused this Amendment to be executed as of the date first written above by their
respective officers thereunto duly authorized.
CHINADOTCOM CORPORATION
By: /s/ Xxxxxx Xxxx
----------------------------------------------
Name: Xxxxxx Xxxx
Title: General Counsel and Company Secretary
CDC SOFTWARE HOLDINGS, INC.
By: /s/ Xxxxxx Xxxx
----------------------------------------------
Name: Xxxxxx Xxxx
Title: Authorized Signatory
XXXX SYSTEMS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President and Secretary
