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AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER
THIS AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER, (this
"Amendment"), dated as of February 22, 2001, by and among iVillage Inc., a
Delaware corporation (the "Parent"), Stanhope Acquisition Sub, LLC, a Delaware
limited liability company (the "Merger Sub") and wholly owned subsidiary of the
Parent, and Xxxxx.xxx Networks, Inc., a Delaware corporation (the "Company").
BACKGROUND
A. The parties hereto are parties to an Agreement and Plan of Merger, dated
as of February 5, 2001 (the "Original Agreement").
B. The parties hereto wish to amend certain provisions of the Original
Agreement, as provided herein.
NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter set forth, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. Article I, Section (n), hereby is amended to read in its entirety as
follows: '"Closing" and "Closing Date" shall mean the date on which the Merger
becomes effective.'
2. Article I, Section (uu), hereby is amended to read in its entirety as
follows: '"Exchange Ratio" shall mean 0.322, as may be decreased pursuant to
Schedule 7.2(g).'
3. The defined term "Fair Market Value" in Section (vv) of Article I of the
Original Agreement hereby is deleted in its entirety and replaced with the
following: "[intentionally omitted]".
4. Article I, Section (ww), hereby is amended to read in its entirety as
follows: '"Final Statement of Working Capital" shall mean a statement of
estimated working capital prepared by the Parent based on the Estimated
Statement of Working Capital and relating to March 31, 2001 and the day before
the Closing, which statement of Parent is delivered to the Company pursuant to
Schedule 7.2(g).'
5. Article I, Section (eeee), hereby is amended to read in its entirety as
follows: '"Per Share Merger Consideration" shall mean a fraction of a share of
Parent Common Stock calculated in accordance with the Exchange Ratio (as may be
adjusted downward pursuant to Schedule 7.2(g)), plus the Cash Amount.'
6. Article I, Section (nnnn), hereby is amended to read in its entirety as
follows: "Shortfall" shall mean the amount by which the Working Capital or cash
of the Company as at March 31, 2001, is less than the amounts set forth in
Section 7.2(g)(i); provided however, that any amount of Working Capital in
excess of the amount set forth in Section 7.2(g)(i) shall be added to the amount
of cash of the Company as at March 31, 2001 when determining any cash
Shortfall.'
7. Section 2.4(a) of the Original Agreement hereby is amended to read in
its entirety as follows:
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"(a) Each share of Company Common Stock issued and
outstanding immediately prior to the Effective Time (other than
shares canceled pursuant to Section 2.4(b) or shares as to which
appraisal rights have been demanded, exercised or perfected in
accordance with Section 262 of the DGCL, which shares shall be
converted into the right to receive any amount required by such
Section 262, except as otherwise provided in Section 2.14) shall
be canceled and shall by virtue of the Merger and without any
action on the part of the holder thereof be converted
automatically into the right to receive the Per Share Merger
Consideration (as may be adjusted downward pursuant to Schedule
7.2(g)), upon the surrender of the Certificate representing such
share in the manner set forth in Section 2.5. All such shares of
Company Common Stock, when so converted (including shares as to
which appraisal rights have been demanded, exercised or
perfected), shall no longer be outstanding and shall
automatically be canceled and retired and shall cease to exist,
and each holder of a Certificate representing such shares shall
cease to have any rights with respect thereto, except the right
to receive that amount of cash and number of shares of Parent
Common Stock into which such shares of Company Common Stock have
been converted, cash in lieu of fractional shares as provided in
Section 2.6(c) and any dividends or other distributions payable
pursuant to Section 2.6 (and any amount required by Section 262
of the DGCL, except as otherwise provided in Section 2.14)."
8. Article II of the Original Agreement hereby is amended by adding to the
end thereof the following new Section 2.14:
"2.14 Appraisal Rights. Notwithstanding Section 2.4, if
appraisal rights are available to the holders of Company Common
Stock pursuant to Section 262 of the DGCL as a result of the
Merger, shares of Company Common Stock outstanding immediately
prior to the Effective Time and held by a holder who has demanded
appraisal for such shares in accordance with Section 262 of the
DGCL shall not be converted into a right to receive from Parent
the Per Share Merger Consideration for each share held as
provided in Section 2.4(a), unless such holder fails to perfect
or withdraws or otherwise loses such right to appraisal. If after
the Effective Time such holder fails to perfect or withdraws or
loses such right to appraisal, such holder's shares of Company
Common Stock shall be treated as if they had been converted as of
the Effective Time into a right to receive from Parent the Per
Share Merger Consideration. The Company shall give Parent prompt
notice of any demands received by the Company for appraisal of
shares of Company Common Stock, and Parent shall have the right
to participate in all negotiations and proceedings with respect
to such demands. The Company shall not, except with the prior
written consent of Parent, make any payment with respect to, or
settle or offer to settle, any such demands. Any amounts paid to
a holder of Company Common Stock pursuant to a right of appraisal
under Section 262 of the DGCL will be paid by the Company out of
the Company's assets and in no event shall Parent or any
affiliate thereof reimburse the Company for such payments."
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9. The reference to Section 5.16 in the definition of "Required Vote"
hereby is amended to be a reference to Section 5.15.
10. The reference to Section 2.6(c) in the last line of Section 2.4(a)
hereby is amended to be a reference to Section 2.5(c).
11. Section 1 of Schedule 7.2(g) of the Original Agreement hereby is amended
to read in its entirety as follows:
"1. On or prior to (a) the earlier of (i) April 2, 2001 and (ii)
three days prior to the Closing, the Company shall deliver to the Parent a
statement of its estimated or actual Working Capital as at March 31, 2001 and
(b) three days prior to the Closing, the Company shall deliver to the Parent a
statement of its estimated Working Capital as of the day before the Closing
(collectively, the "Estimated Statement of Working Capital"), both of which
shall be prepared in accordance with GAAP consistently applied and in the same
manner and using the same principles as used in preparing Schedule 2. The
Company shall deliver to the Parent all work papers and other supporting
documentation used in or relevant to the creation of the Estimated Statement of
Working Capital along with the delivery of the Estimated Statement of Working
Capital."
12. Section 3 of Schedule 7.2(g) of the Original Agreement hereby is amended
to read in its entirety as follows:
"3. In the event that there is less cash or Working Capital on the
Final Statement of Working Capital than the amounts set forth in
Section 7.2(g)(i):
(a) if the Shortfall in the case of cash and/or
Working Capital is $2,000,000 or less, (i) the Exchange Ratio
shall be adjusted downward such that the aggregate number of
shares to be issued pursuant to the Merger in exchange for
Company Common Stock is decreased by the number of shares of
Parent Common Stock equal to the quotient of the Shortfall with
respect to cash or the Shortfall with respect to Working
Capital, whichever is greater, divided by $1.875, and (ii)
Investor may, at its option, purchase from the Parent pursuant
to the Securities Purchase Agreement such number of Shares (as
defined in the Securities Purchase Agreement) as Investor shall
elect equal to or less than the quotient of (x) the Shortfall
with respect to cash or the Shortfall with respect to Working
Capital, whichever is greater, (y) divided by $1.875, which
Shares shall be purchased at a price of $1.875 per Share.
(b) if the Shortfall in the case of either cash or
Working Capital is more than $2,000,000 but less than $4,000,000
(i) the Exchange Ratio shall be adjusted downward such that the
aggregate number of shares to be issued pursuant to the Merger
in exchange for Company Common Stock is decreased by the number
of shares of Parent Common Stock equal to the quotient of the
Shortfall with respect to cash or the Shortfall with respect to
Working Capital, whichever is greater, divided by $1.875; (ii)
Investor shall purchase from the Parent pursuant to the
Securities Purchase Agreement a number of Shares equal to
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the quotient of (x) the amount by which the Shortfall with
respect to cash or the Shortfall with respect to Working
Capital, whichever is greater, exceeds $2,000,000 divided by (y)
$1.875, which Shares shall be purchased at a price of $1.875 per
Share; and (iii) Investor may, at its option, purchase from the
Parent pursuant to the Securities Purchase Agreement such
additional number of Shares as Investor shall elect equal to or
less than the quotient of (x) $2,000,000 divided by (y) $1.875,
which Shares shall be purchased at a price of $1.875 per Share.
(c) if the Shortfall in the case of either cash or
Working Capital is more than $4,000,000, the condition to
Parent's obligation to effect the Merger in Section 7.2(g)(i)
shall not have been satisfied."
13. The Company hereby consents, for the purposes of Section 6.1(c) of the
Original Agreement, to the amendment of Parent's Certificate of Incorporation to
authorize a total of 200,000,000 shares of Parent Common Stock, and to the
submission of such amendment to Parent's stockholders for approval.
14. The parties hereto hereby agree that notwithstanding the Company's
representation in Section 4.24 of the Original Agreement, the holders of Company
Common Stock may be entitled to appraisal rights under Section 262 of the DGCL.
15. Section 7.1(e) of the Original Agreement hereby is amended to read in
its entirety as follows:
(e) The Parent shall have received the Tax Opinion
and the Company shall have received a legal opinion from Xxxxxx
Godward LLP to the effect that for United States federal income
tax purposes each Company stockholder will recognize gain or
loss as a result of the Merger; provided however, that if the
counsel to either Parent or Company 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 such reasonable representations as
requested by such counsel for the purpose of rendering such
opinions.
16. The Original Agreement, as amended hereby, remains in full force and
effect.
17. Capitalized terms used but not defined herein shall have the meanings
designated in the Original Agreement.
18. This Amendment may be executed in two or more counterparts, each of
which shall be deemed an original and all of which together shall constitute one
instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first above written.
XXXXX.XXX NETWORKS, INC.
By: /s/ A. Xxxx Xxxxx
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Name: A. Xxxx Xxxxx
Title: Senior Vice President -
Business Development
iVILLAGE INC.
By: /s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
Title: Executive Vice President
of Operations and Business
Affairs
STANHOPE ACQUISITION SUB, LLC
By: /s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
Title: Executive Vice President
of Operations and Business
Affairs
