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EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION
BY AND AMONG
EGROUPS, INC.,
EG ACQUISITION CORPORATION
AND
ONELIST, INC.
Dated as of November 9, 1999
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TABLE OF CONTENTS
PAGE
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ARTICLE I THE MERGER .................................................................. 1
1.1 The Merger ................................................................ 1
1.2 Effective Time ............................................................ 2
1.3 Effect of the Merger ...................................................... 2
1.4 Articles of Incorporation; Bylaws ......................................... 2
1.5 Directors and Officers .................................................... 2
1.6 Merger Consideration ...................................................... 3
1.7 Dissenting Shares ......................................................... 7
1.8 Surrender of Certificates ................................................. 7
1.9 No Further Ownership Rights in ONElist Common Stock ....................... 8
1.10 Lost, Stolen or Destroyed Certificates ................................... 9
1.11 Tax and Accounting Consequences .......................................... 9
1.12 Taking of Necessary Action; Further Action ............................... 9
ARTICLE II REPRESENTATIONS AND WARRANTIES OF ONELIST .................................. 9
2.1 Organization of ONElist ................................................... 9
2.2 ONElist Capital Structure ................................................. 9
2.3 Subsidiaries .............................................................. 10
2.4 Authority ................................................................. 10
2.5 Financial Statements ...................................................... 11
2.6 No Undisclosed Liabilities ................................................ 11
2.7 No Changes ................................................................ 12
2.8 Tax and Other Returns and Reports ......................................... 13
2.9 Restrictions on Business Activities ....................................... 14
2.10 Title to Properties; Absence of Liens and Encumbrances ................... 15
2.11 Intellectual Property .................................................... 15
2.12 Agreements, Contracts and Commitments .................................... 17
2.13 Interested Party Transactions ............................................ 19
2.14 Compliance with Laws ..................................................... 19
2.15 Litigation ............................................................... 19
2.16 Insurance ................................................................ 20
2.17 Minute Books ............................................................. 20
2.18 Environmental Matters .................................................... 20
2.19 Brokers' and Finders' Fees ............................................... 20
2.20 Employee Matters and Benefit Plans ....................................... 20
2.21 Accounting and Regulatory Matters ........................................ 24
2.22 Year 2000 Compliance ..................................................... 25
2.23 Representations Complete ................................................. 25
ARTICLE III REPRESENTATIONS AND WARRANTIES OF EGROUPS AND MERGER
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TABLE OF CONTENTS
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SUB ........................................................................... 25
3.1 Organization of eGroups and Merger Sub. ................................... 25
3.2 eGroups and Merger Sub Capital Structure .................................. 26
3.3 Subsidiaries .............................................................. 26
3.4 Authority ................................................................. 27
3.5 Financial Statements ...................................................... 27
3.6 No Undisclosed Liabilities ................................................ 28
3.7 No Changes ................................................................ 28
3.8 Tax and Other Returns and Reports ......................................... 29
3.9 Restrictions on Business Activities ....................................... 31
3.10 Title to Properties; Absence of Liens and Encumbrances ................... 31
3.11 Intellectual Property .................................................... 31
3.12 Agreements, Contracts and Commitments .................................... 33
3.13 Interested Party Transactions ............................................ 35
3.14 Compliance with Laws ..................................................... 35
3.15 Litigation ............................................................... 35
3.16 Insurance ................................................................ 35
3.17 Minute Books ............................................................. 36
3.18 Environmental Matters .................................................... 36
3.19 Brokers' and Finders' Fees ............................................... 36
3.20 Employee Matters and Benefit Plans ....................................... 36
3.21 Accounting and Regulatory Matters ........................................ 40
3.22 Year 2000 Compliance ..................................................... 40
3.23 Representations Complete ................................................. 40
ARTICLE IV CONDUCT PRIOR TO THE EFFECTIVE TIME ........................................ 40
4.1 Conduct of Business of ONElist and eGroups ................................ 40
4.2 No ONElist Solicitation ................................................... 46
4.3 No eGroups or Merger Sub Solicitation ..................................... 46
ARTICLE V ADDITIONAL AGREEMENTS ....................................................... 47
5.1 ONElist Shareholder and eGroups Stockholder Approvals ..................... 47
5.2 Restrictions on Transfer .................................................. 48
5.3 Access to Information ..................................................... 49
5.4 Confidentiality ........................................................... 50
5.5 Expenses .................................................................. 50
5.6 Public Disclosure ......................................................... 50
5.7 Consents .................................................................. 50
5.8 FIRPTA Compliance ......................................................... 51
5.9 Reasonable Efforts ........................................................ 51
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TABLE OF CONTENTS
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5.10 Notification of Certain Matters .......................................... 51
5.11 Certain Benefit Plans .................................................... 51
5.12 Accounting and Tax Treatment ............................................. 51
5.13 Additional Documents and Further Assurances .............................. 52
5.14 ONElist's Auditors ....................................................... 52
5.15 eGroups' Auditors ........................................................ 52
5.16 Agreement of Affiliates .................................................. 52
5.17 Voting Agreements ........................................................ 52
5.18 Indemnification .......................................................... 53
ARTICLE VI CONDITIONS TO THE MERGER ................................................... 53
6.1 Conditions to Obligations of Each Party to Effect the Merger .............. 53
6.2 Additional Conditions to Obligations of ONElist ........................... 55
6.3 Additional Conditions to the Obligations of eGroups and Merger Sub. ....... 57
ARTICLE VII NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES; COVENANTS OF MAJOR
SHAREHOLDERS .................................................................. 58
7.1 Non-Survival of Representations and Warranties ............................ 58
ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER ........................................ 59
8.1 Termination ............................................................... 59
8.2 Effect of Termination ..................................................... 59
8.3 Amendment ................................................................. 60
8.4 Extension; Waiver ......................................................... 60
ARTICLE IX GENERAL PROVISIONS ......................................................... 60
9.1 Notices ................................................................... 60
9.2 Interpretation ............................................................ 61
9.3 Counterparts .............................................................. 61
9.4 Entire Agreement; Assignment .............................................. 61
9.5 Severability .............................................................. 61
9.6 Other Remedies ............................................................ 62
9.7 Governing Law ............................................................. 62
9.8 Rules of Construction ..................................................... 62
9.9 Specific Performance ...................................................... 62
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INDEX OF EXHIBITS
EXHIBIT DESCRIPTION
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EXHIBIT A List of eGroups Major Stockholders
EXHIBIT B List of ONElist Major Shareholders
EXHIBIT C Form of Agreement of Merger
EXHIBIT D Form of Fourth Amended and Restated Certificate
of Incorporation of eGroups, Inc.
EXHIBIT E ONElist Schedules
EXHIBIT F eGroups and Merger Sub Schedules
EXHIBIT G Form of eGroups Affiliate Agreement
EXHIBIT H Form of ONElist Affiliate Agreement
EXHIBIT I Form of Amendment to First Amended and Restated Investor
Rights Agreement
EXHIBIT J Form of Amendment to First Amended and Restated Co-Sale
Agreement
EXHIBIT K Form of eGroups Voting Agreement
EXHIBIT L Form of ONElist Voting Agreement
EXHIBIT M Letter Agreement Between ONElist and eGroups dated October 14,
1999
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AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is made and
entered into as of November 9, 1999 among eGroups, Inc., a Delaware corporation
("eGroups"), EG Acquisition Corporation, a California corporation and a
wholly-owned subsidiary of eGroups ("Merger Sub"), and ONElist, Inc., a
California corporation ("ONElist").
RECITALS
A. The Boards of Directors of each of ONElist and eGroups and the sole
shareholder of Merger Sub believe it is in the best interests of each company
and their respective shareholders that eGroups acquire ONElist through the
statutory merger of Merger Sub with and into ONElist (the "Merger") and, in
furtherance thereof, have approved the Merger.
B. Pursuant to the Merger, among other things, and subject to the terms
and conditions of this Agreement, all of the issued and outstanding shares of
capital stock of ONElist and all outstanding options, warrants and other rights
to acquire or receive shares of capital stock of ONElist shall be converted into
the right to receive shares of capital stock of eGroups.
C. It is the intention of the parties to this Agreement that the Merger
for federal income tax purposes shall qualify as a "reorganization" within the
meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the
"Code"), and for accounting purposes shall qualify for treatment as a pooling of
interests.
D. ONElist, eGroups and Merger Sub desire to make certain
representations, warranties, covenants and other agreements in connection with
the Merger.
NOW, THEREFORE, in consideration of the covenants, promises and
representations set forth herein, and for other good and valuable consideration,
intending to be legally bound hereby the parties agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger. At the Effective Time (as defined in Section 1.2) and
subject to and upon the terms and conditions of this Agreement and the
applicable provisions of the California Corporations Code (the "California
Code"), Merger Sub shall be merged with and into ONElist, the separate corporate
existence of Merger Sub shall cease, and ONElist shall continue as the surviving
corporation and as a wholly-owned subsidiary of eGroups. ONElist as the
surviving corporation after the Merger is sometimes referred to hereinafter as
the "Surviving Corporation." The Merger shall be consummated pursuant to the
terms of this Agreement, which has been approved and adopted by the respective
Boards of Directors of ONElist and eGroups, and by eGroups, as the sole
shareholder of Merger Sub.
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1.2 Effective Time. Unless this Agreement is earlier terminated pursuant
to Section 8.1, the closing of the Merger (the "Closing") will take place as
promptly as practicable, but no later than five (5) business days following
satisfaction or waiver of the conditions set forth in Article VI, at the offices
of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx ("WSGR"), 000 Xxxx Xxxx Xxxx, Xxxx Xxxx,
Xxxxxxxxxx, unless another place, time or date is agreed to by eGroups and
ONElist. The date upon which the Closing actually occurs is herein referred to
as the "Closing Date." On or before the Closing Date, the parties hereto shall
cause the Merger to be consummated by filing an Agreement of Merger in
substantially the form attached hereto as Exhibit C (the "Agreement of Merger")
with the Secretary of State of the State of California, in accordance with the
relevant provisions of applicable law (the time of acceptance by the Secretary
of State of the State of California of such filing being referred to herein as
the "Effective Time"). The parties currently intend that the Closing Date will
occur on or prior to November 30, 1999. The parties hereto shall also take such
further actions as may be required by the State of California in connection with
the consummation of the Merger.
1.3 Effect of the Merger. At the Effective Time, the effect of the
Merger shall be as provided in the applicable provisions of the California Code.
Without limiting the generality of the foregoing, and subject thereto, at the
Effective Time, all the property, rights, privileges, powers and franchises of
ONElist and Merger Sub shall vest in the Surviving Corporation, and all debts,
liabilities and duties of ONElist and Merger Sub shall become the debts,
liabilities and duties of the Surviving Corporation.
1.4 Articles of Incorporation; Bylaws.
(a) Unless otherwise determined by eGroups and ONElist prior to
the Effective Time, at the Effective Time, the Articles of Incorporation of
ONElist shall be amended and restated in full as set forth in Exhibit 1 to the
Agreement of Merger until thereafter amended in accordance with the California
Code and as provided in such Articles of Incorporation.
(b) Unless otherwise determined by eGroups and ONElist prior to
the Effective Time, at the Effective Time, the Bylaws of ONElist shall be
amended and restated in full such that the Bylaws of the Merger Sub, as in
effect immediately prior to the Effective Time, shall become the Bylaws of
ONElist as the Surviving Corporation until thereafter amended in accordance with
the California Code and as provided in the Articles of Incorporation of the
Surviving Corporation and such Bylaws.
1.5 Directors and Officers.
(a) Surviving Corporation. Unless otherwise determined by eGroups
and ONElist prior to the Effective Time, the directors of Merger Sub immediately
prior to the Effective Time shall be the directors of the Surviving Corporation,
each to hold the office of a director of the Surviving Corporation in accordance
with the provisions of the California Code and the Articles of Incorporation and
Bylaws of the Surviving Corporation until their successors are duly elected and
qualified. The officers of Merger Sub immediately prior to the Effective Time
shall be the initial officers of the Surviving Corporation, each to hold office
in accordance with the provisions of the Bylaws of the Surviving Corporation.
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(b) eGroups. At the Effective Time, the directors of eGroups
shall be as follows:.
Xxxx Xxxxxxxxxx
Jan Xxxxxxxx
Xxxx Xxxxxxxx
Xxxxxx Roscheisen
Xxxxxxx Xxxxx
Xxxxx Xxxxx
Xxxxxxx Xxxxxx
1.6 Merger Consideration.
(a) Certain Definitions. For purposes of this Agreement, the
following terms shall have the following meanings:
"Comdisco Securities" shall mean: (i) that certain warrant dated
June 23, 1999, issued by eGroups to Comdisco, Inc. ("Comdisco") for the purchase
of eGroups Series B Preferred Stock; and (ii) that right of Comdisco to purchase
up to $1,800,000 worth of preferred stock sold by eGroups in its next round of
equity financing.
"Consideration Shares" shall mean those shares of eGroups Common
Stock and eGroups Series C Preferred Stock to be received by ONElist
Shareholders pursuant to Section 1.6.
"eGroups Capital Stock" shall mean shares of eGroups Common
Stock, eGroups Preferred Stock and any shares of other capital stock of eGroups.
"eGroups Common Stock" shall mean shares of common stock of
eGroups.
"eGroups Convertible Securities" shall mean all issued and
outstanding rights (other than eGroups Preferred Stock and eGroups Options) to
acquire or receive shares of eGroups Capital Stock.
"eGroups Fully-Diluted Capitalization Number" shall mean all of
the issued and outstanding shares of eGroups Common Stock as of the Effective
Time calculated on a fully-diluted basis as if all outstanding eGroups Preferred
Stock had been fully converted, all outstanding eGroups Options had been fully
exercised and the Comdisco Securities had been fully exercised and/or converted
immediately prior to such issuance (and the resulting securities fully converted
into eGroups Common Stock) as of such date. The foregoing calculation shall be
performed in accordance with Section 1.6(b) hereof.
"eGroups Options" shall mean all issued and outstanding options
to purchase or otherwise acquire eGroups Common Stock (whether or not vested)
held by officers, employees or directors of or consultants to eGroups or other
persons.
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"eGroups Preferred Stock" shall mean shares of Series A Preferred
Stock and Series B Preferred Stock of eGroups.
"eGroups Series C Preferred Stock" shall mean the Series C
Preferred Stock of eGroups with the rights, preferences, privileges and
restrictions set forth in eGroups' Fourth Amended and Restated Certificate of
Incorporation in the form attached as Exhibit D hereto (the "Fourth Amended and
Restated Certificate").
"Exchange Ratio" shall mean the product of (A) the quotient of
(x) the eGroups Fully-Diluted Capitalization Number divided by (y) ONElist
Fully-Diluted Capitalization Number multiplied by (B) the quotient of (a) 57
divided by (b) 43 (with the result rounded to five decimal places).
"GAAP" shall mean U.S. generally accepted accounting principles.
"Knowledge" shall mean, with respect to ONElist or eGroups, what
is within the actual knowledge of any of the officers or directors of ONElist or
eGroups, as the case may be.
"Material Adverse Effect" shall mean any change, event or effect
that is materially adverse to the business, assets (including intangible
assets), financial condition or results of operations of ONElist or eGroups, as
applicable.
"Xxxxxxx Xxxxx Option" shall mean, assuming the completion of the
Merger and the next round of equity financing of eGroups, the stock option to be
granted to Xxxxxxx Xxxxx for that number of shares of eGroups Common Stock that,
upon the completion of such equity financing, would bring his total ownership of
eGroups stock to 3.42% of the total outstanding stock on a fully diluted basis.
"ONElist Capital Stock" shall mean shares of ONElist Common
Stock, ONElist Preferred Stock and any shares of other capital stock of ONElist.
"ONElist Common Stock" shall mean shares of common stock of
ONElist.
"ONElist Fully-Diluted Capitalization Number" shall mean all of
the issued and outstanding shares of ONElist Common Stock as of the Effective
Time calculated on a fully-diluted basis as if all outstanding ONElist Preferred
Stock had been fully converted, all outstanding ONElist Options had been fully
exercised and the Xxxxxxx Xxxxx Option had been fully exercised as of such date.
The foregoing calculation shall be performed in accordance with Section 1.6(b)
hereof.
"ONElist Options" shall mean all issued and outstanding options
to purchase or otherwise acquire ONElist Common Stock (whether or not vested)
held by officers, employees, directors of or consultants to ONElist or other
persons.
"ONElist Preferred Stock" shall mean shares of Series A Preferred
Stock of ONElist.
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"ONElist Shareholders" shall mean holders of any shares of
ONElist Capital Stock immediately prior to the Effective Time.
(b) Calculation Methodology. The parties have agreed to a method
for estimating the Comdisco Securities and the shares issuable upon exercise of
the Xxxxxxx Xxxxx Option. Such method is defined in a spreadsheet separately
initialed by ONElist and eGroups. Based upon such method and the agreed upon
formulae and methodology in such spreadsheet ONElist and eGroups have jointly
calculated the Exchange Ratio. Shortly before the Effective Time, ONElist and
eGroups agree to jointly recalculate the Exchange Ratio in accordance with such
method after giving effect to any changes in the eGroups Fully-Diluted
Capitalization Number and/or the ONElist Fully-Diluted Capitalization Number
that occur between the date hereof and the Effective Time.
(c) Effect on ONElist Capital Stock. At the Effective Time, by
virtue of the Merger and without any action on the part of ONElist or the
ONElist Shareholders, each share of ONElist Capital Stock issued and outstanding
immediately prior to the Effective Time (other than any Dissenting Shares, as
defined in Section 1.7 hereof and any shares owned by eGroups, Merger Sub or
ONElist or any direct or indirect wholly owned subsidiary thereof) shall be
canceled and extinguished and shall be converted automatically into the right to
receive, upon surrender of the certificate representing such shares of ONElist
Capital Stock and upon the terms and subject to conditions set forth below and
throughout this Agreement, including, without limitation, Sections 1.6(f), (g)
and (h) hereof (i) in the case of each share of ONElist Common Stock, a number
of shares of eGroups Common Stock equal to the Exchange Ratio and (ii) in the
case of each share of ONElist Preferred Stock, a number of Shares of eGroups
Series C Preferred Stock equal to the Exchange Ratio.
(d) Assumption of ONElist Options. At the Effective Time, each
outstanding ONElist Option issued pursuant to ONElist's 1998 Stock Plan (the
"ONElist Option Plan") or otherwise, whether vested or unvested, will be assumed
by eGroups in connection with the Merger. Each ONElist Option so assumed by
eGroups under this Agreement shall continue to have, and be subject to, the same
terms and conditions set forth in the ONElist Option Plan and/or as provided in
the respective option agreements immediately prior to the Effective Time
(including, without limitation, any vesting schedule or repurchase rights),
except that (i) each ONElist Option will be exercisable, subject to the same
terms and conditions set forth in the ONElist Option Plan and/or as provided in
the respective option agreements immediately prior to the Effective Time
(including, without limitation, any vesting schedule or repurchase rights), for
that number of whole shares of eGroups Common Stock equal to the product of the
number of shares of ONElist Common Stock that were issuable upon exercise of
such ONElist Option immediately prior to the Effective Time multiplied by the
Exchange Ratio, rounded down to the nearest whole number of shares of eGroups
Common Stock, (ii) the per share exercise price for the shares of eGroups Common
Stock issuable upon exercise of such assumed ONElist Option will be equal to the
quotient determined by dividing the exercise price per share of ONElist Capital
Stock at which such ONElist Option was exercisable immediately prior to the
Effective Time by the Exchange Ratio, rounded up to the nearest whole cent and
(iii) eGroups and its Board of Directors shall be substituted for ONElist and
the Committee
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of ONElist's Board of Directors (including, if applicable, the entire Board of
Directors of ONElist) administering the ONElist Option Plan.
(e) Option Status. It is the intention of the parties hereto that
the ONElist Options assumed by eGroups following the Closing pursuant to this
Section 1.6 will, to the extent permitted by applicable law, qualify as
incentive stock options as defined in Section 422 of the Code, to the extent any
such ONElist Options qualified as incentive stock options immediately prior to
the Effective Time.
(f) Adjustments to Exchange Ratio. The Exchange Ratio shall be
equitably adjusted to reflect fully the effect of any stock split, reverse
split, stock dividend (including any dividend or distribution of securities
convertible into eGroups Capital Stock or ONElist Capital Stock),
reorganization, recapitalization or other like change with respect to eGroups
Capital Stock or ONElist Capital Stock occurring after the date hereof and prior
to the Effective Time. Any such change for which a record date is established
shall be deemed for the purposes of this Section 1.6(f) to have occurred on the
record date.
(g) Fractional Shares. No fractional share of eGroups Common
Stock or eGroups Series C Preferred Stock shall be issued in the Merger. In lieu
thereof, any fractional share shall be rounded to the nearest whole share (with
0.5 being rounded up) of eGroups Common Stock or eGroups Series C Preferred
Stock, as the case may be.
(h) Cancellation of eGroups-owned and ONElist-owned Stock. At the
Effective Time, by virtue of the Merger and without any action on the part of
any of the parties hereto, each share of ONElist Capital Stock owned by eGroups,
Merger Sub, ONElist or any direct or indirect wholly-owned subsidiary thereof
immediately prior to the Effective Time, shall be cancelled and extinguished
without any conversion thereof.
(i) Capital Stock of Merger Sub. At the Effective Time, by virtue
of the Merger and without any action on the part of any of the parties hereto,
each share of capital stock of Merger Sub issued and outstanding immediately
prior to the Effective Time shall be converted into and exchanged for one
validly issued, fully paid and nonassessable share of common stock of the
Surviving Corporation. Each stock certificate of Merger Sub evidencing ownership
of any such shares shall continue to evidence ownership of such shares of
capital stock of the Surviving Corporation.
1.7 Dissenting Shares. "Dissenting Shares" shall mean any shares of
ONElist Capital Stock held by a holder who has demanded and perfected appraisal
rights for such shares in accordance with the California Code and who, as of the
Effective Time, has not effectively withdrawn or lost such appraisal rights. Any
Dissenting Shares shall be converted into the right to receive from the
Surviving Corporation such consideration as may be determined to be due with
respect to each such Dissenting Share pursuant to Chapter 13 of the California
Code; provided, however, that shares of ONElist Capital Stock that are
Dissenting Shares at the Effective Time of the Merger and are held by a holder
who shall, after the Effective Time of the Merger, withdraw his demand for
appraisal or lose his right of appraisal as provided in the California Code,
shall be
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deemed to be converted, as of the Effective Time of the Merger, into the right
to receive consideration in accordance with the procedures specified in Section
1.6(c). ONElist shall give eGroups (i) prompt notice of any written demands for
appraisal, withdrawals of demands for appraisal and any other instruments served
pursuant to the California Code received by ONElist and (ii) the opportunity to
participate in all negotiations and proceedings with respect to demands for
appraisal under the California Code. ONElist will not voluntarily make any
payment with respect to any demands for appraisal and will not, except with the
prior written consent of eGroups, settle or offer to settle any such demands. It
is understood and agreed that the obligation to make any payment in connection
with Dissenting Shares under Chapter 13 of the California Code shall be
exclusively that of the Surviving Corporation and that eGroups shall be under no
obligation to perform and discharge any such obligation or to reimburse or make
any contribution to the capital of the Surviving Corporation to enable it to
perform and discharge any such obligation. eGroups shall give ONElist prompt
notice of any written demands for appraisal, withdrawals of demands for
appraisal and any other instruments served pursuant to the California Code
received by eGroups.
1.8 Surrender of Certificates.
(a) Exchange Agent. WSGR shall serve as the exchange agent (the
"Exchange Agent") in the Merger.
(b) eGroups to Provide Common Stock and Series C Preferred Stock.
Immediately prior to the Effective Time, eGroups shall make available to the
Exchange Agent for exchange in accordance with this Article I, certificates
representing the shares of eGroups Common Stock and eGroups Series C Preferred
Stock issuable to ONElist Shareholders pursuant to Section 1.6 in exchange for
outstanding shares of ONElist Capital Stock.
(c) Exchange Procedures. As soon as practicable after the Closing
Date, the Surviving Corporation shall cause to be mailed to each ONElist
Shareholder, (i) a letter of transmittal (which shall be in such form and have
such other provisions as eGroups may reasonably specify and shall specify that
delivery shall be effected, and risk of loss and title to the certificates (the
"Certificates") which immediately prior to the Effective Time represent
outstanding shares of ONElist Capital Stock whose shares are converted into the
right to receive such ONElist Shareholder's pro rata portion of the
Consideration Shares pursuant to Section 1.6, shall pass, only upon delivery of
the Certificates to the Exchange Agent) and (ii) instructions for use in
effecting the surrender of the Certificates in exchange for certificates
representing such ONElist Shareholder's pro rata portion of the Consideration
Shares. Upon surrender of a Certificate for cancellation to the Exchange Agent
or to such other agent or agents as may be appointed by eGroups, together with
such letter of transmittal, duly completed and validly executed in accordance
with the instructions thereto, the holder of such Certificate shall be entitled
to receive, and the Exchange Agent shall promptly deliver in exchange therefor,
a certificate bearing the legend set forth in Section 5.2 hereof representing
the number of whole Consideration Shares to which such holder is entitled
pursuant to Section 1.6, and the Certificate so surrendered shall forthwith be
canceled. Until so surrendered, each outstanding Certificate that, prior to the
Effective Time, represented shares of ONElist Capital Stock will be deemed from
and after the Effective Time, for all corporate purposes, other than the
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payment of dividends, to evidence the ownership of the number of full shares of
eGroups Common Stock and/or eGroups Series C Preferred Stock, as the case may
be, into which such shares of ONElist Capital Stock shall have been so
converted.
(d) Distributions With Respect to Unexchanged Shares. No
dividends or other distributions declared or made after the Effective Time with
respect to eGroups Common Stock or eGroups Series C Preferred Stock, as the case
may be, with a record date after the Effective Time will be paid to the holder
of any unsurrendered Certificate with respect to the shares of eGroups Common
Stock and/or eGroups Series C Preferred Stock represented thereby until the
holder of record of such Certificate shall surrender such Certificate. Subject
to applicable law, following surrender of any such Certificate, there shall be
paid to the record holder of the certificates representing whole shares of
eGroups Common Stock and/or eGroups Series C Preferred Stock issued in exchange
therefor, at the time of such surrender, the amount of dividends or other
distributions (without interest) with a record date after the Effective Time
theretofore paid with respect to such whole shares of eGroups Common Stock
and/or eGroups Series C Preferred Stock.
(e) Transfers of Ownership. If any certificate for shares of
eGroups Common Stock and/or eGroups Series C Preferred Stock is to be issued in
a name other than that in which the Certificate surrendered in exchange therefor
is registered, it will be a condition of the issuance thereof that the
Certificate so surrendered will be properly endorsed and otherwise in proper
form for transfer and that the person requesting such exchange will have paid to
eGroups or any agent designated by it any transfer or other taxes required by
reason of the issuance of a certificate for shares of eGroups Common Stock
and/or eGroups Series C Preferred Stock, as the case may be, in any name other
than that of the registered holder of the Certificate surrendered.
(f) No Liability. Notwithstanding anything to the contrary in
this Section 1.8, neither the Exchange Agent, the Surviving Corporation nor any
party hereto shall be liable to a holder of shares of eGroups Capital Stock or
ONElist Capital Stock for any amount properly paid to a public official pursuant
to any applicable abandoned property, escheat or similar law.
1.9 No Further Ownership Rights in ONElist Common Stock. All shares of
eGroups Common Stock and eGroups Series C Preferred Stock issued in accordance
with the terms hereof shall be deemed to have been issued in full satisfaction
of all rights pertaining to shares of ONElist Capital Stock outstanding prior to
the Effective Time, and there shall be no further registration of transfers on
the records of the Surviving Corporation of shares of ONElist Capital 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.
1.10 Lost, Stolen or Destroyed Certificates. In the event any
Certificates evidencing shares of ONElist Capital Stock shall have been lost,
stolen or destroyed, the Exchange Agent shall issue in exchange for such lost,
stolen or destroyed Certificates, upon the making and delivery of an affidavit
of that fact by the holder thereof, such shares of eGroups Common Stock and/or
eGroups Series C Preferred Stock as may be required pursuant to Section 1.6;
provided, however, that eGroups may, in its discretion and as a condition
precedent to the issuance thereof, require the owner
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of such lost, stolen or destroyed Certificates to deliver a bond in such sum as
it may reasonably direct as indemnity against any claim that may be made against
eGroups or the Exchange Agent with respect to the Certificates alleged to have
been lost, stolen or destroyed.
1.11 Tax and Accounting Consequences. It is intended by the parties
hereto that the Merger shall (i) constitute a reorganization within the meaning
of Section 368 of the Code and (ii) qualify for accounting treatment as a
pooling of interests. 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. Each party has consulted with its own tax
advisers and accountants with respect to the tax and accounting consequences of
the Merger.
1.12 Taking of Necessary Action; Further Action. If, at any time after
the Effective Time, any such 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 ONElist and Merger Sub, the officers and directors of
ONElist and Merger Sub are fully authorized in the name of their respective
corporations or otherwise to take, and will take, all such lawful and necessary
action.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF ONELIST
As of the date hereof, ONElist hereby represents and warrants to eGroups
and Merger Sub, subject to such exceptions as are specifically disclosed in the
disclosure schedules supplied by ONElist to eGroups dated as of the date hereof
and attached hereto as Exhibit E (the "ONElist Schedules"), as follows:
2.1 Organization of ONElist. ONElist is a corporation duly organized,
validly existing and in good standing under the laws of the State of California.
ONElist has the corporate power to own its properties and to carry on its
business as now being conducted. ONElist is duly qualified to do business and in
good standing as a foreign corporation in each jurisdiction in which the failure
to be so qualified would have a Material Adverse Effect on ONElist. ONElist has
delivered a true and correct copy of its Articles of Incorporation and Bylaws,
each as amended to date, to eGroups.
2.2 ONElist Capital Structure.
(a) The authorized capital stock of ONElist consists of
10,000,000 shares of authorized Common Stock, no par value, of which 2,457,429
shares are issued and outstanding; 2,400,000 shares of authorized Series A
Preferred Stock, no par value, of which 2,330,665 are issued and outstanding.
The ONElist Capital Stock is held of record by the persons, with the addresses
of record and in the amounts set forth on Schedule 2.2(a). All outstanding
shares of ONElist Capital Stock are duly authorized, validly issued, fully paid
and non-assessable and not subject to preemptive rights created by statute, the
Articles of Incorporation or Bylaws of ONElist or any material agreement to
which ONElist is a party or by which it is bound.
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(b) ONElist has reserved 1,665,000 shares of ONElist Common Stock
for issuance to directors, employees and consultants pursuant to the ONElist
Option Plan, of which 819,322 shares are subject to outstanding, unexercised
options and 444,928 shares remain available for future grant. All of the ONElist
Options have been duly authorized and validly issued, as applicable, in
accordance with the applicable terms of the ONElist Option Plan and Blue Sky
laws. Schedule 2.2(b) sets forth for each outstanding ONElist Option (i) the
name of the holder of such security, (ii) the number of shares of capital stock
subject to such security, (iii) the exercise price of such security, (iv) the
date of grant of such security, (v) the date on which such security expires, and
(vi) whether the exercisability of such security will be accelerated and become
exercisable by reason of the transactions contemplated by this Agreement. Except
as set forth in Schedule 2.2(b), there are no options, warrants, calls, rights,
commitments or agreements of any character, written or oral, to which ONElist is
a party or by which it is bound obligating ONElist to issue, deliver, sell,
repurchase or redeem, or cause to be issued, delivered, sold, repurchased or
redeemed, any shares of the capital stock of ONElist or obligating ONElist to
grant, extend, accelerate the vesting of, change the price of, otherwise amend
or enter into any such option, warrant, call, right, commitment or agreement.
The holders of ONElist Options have been or will be given, or shall have
properly waived, any required notice prior to the Merger, and all such rights
will be terminated at or prior to the Effective Time. As a result of the Merger,
eGroups will be the record and sole beneficial owner of all ONElist Capital
Stock and all rights to acquire or receive ONElist Capital Stock.
2.3 Subsidiaries. Except as set forth on Schedule 2.3, ONElist does not
have any subsidiaries and does not otherwise own and has never otherwise owned
any shares of capital stock or any interest in, or control, directly or
indirectly, any other corporation, partnership, limited liability company,
association, joint venture or other business entity.
2.4 Authority. Subject only to the requisite approval of the Merger and
this Agreement by ONElist's shareholders, ONElist 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 ONElist, subject
only to the approval of the Merger by ONElist's shareholders. ONElist's Board of
Directors has unanimously approved the Merger and this Agreement. This Agreement
has been duly executed and delivered by ONElist and constitutes the valid and
binding obligation of ONElist, enforceable in accordance with its terms (except
in all cases as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, receivership, conservatorship, moratorium, or
similar laws affecting the enforcement of creditors' rights generally and except
that the availability of the equitable remedy of specific performance or
injunctive relief is subject to the discretion of the court before which any
proceeding may be brought). Except as set forth on Schedule 2.4, subject only to
the approval of the Merger and this Agreement by ONElist's shareholders, the
execution and delivery of this Agreement by ONElist does not, and, as of the
Effective Time, the consummation of the transactions contemplated hereby will
not, conflict with, or result in any violation of, or default under (with or
without notice or lapse of time, or both), or give rise to a right of
termination, cancellation or acceleration of any obligation or loss of any
benefit under (any such event, a "ONElist Conflict") (i) any provision of the
Articles of Incorporation or Bylaws of ONElist or (ii) any material mortgage,
indenture, lease, contract or
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other material agreement or instrument, permit, concession, franchise, license,
judgment, order, decree, statute, law, ordinance, rule or regulation applicable
to ONElist or its properties or assets. No consent, waiver, approval, order or
authorization of, or registration, declaration or filing with, any court,
administrative agency or commission or other federal, state, county, local or
foreign governmental authority, instrumentality, agency or commission
("Governmental Entity") or any third party (so as not to trigger any ONElist
Conflict) is required by or with respect to ONElist in connection with the
execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby, except for (i) the filing of the Agreement of Merger with
the California Secretary of State, (ii) such consents, waivers, approvals,
orders, authorizations, registrations, declarations and filings as may be
required under applicable federal and state securities laws and (iii) such other
consents, waivers, authorizations, filings, approvals and registrations which
are set forth on Schedule 2.4.
2.5 Financial Statements. Schedule 2.5 sets forth ONElist's unaudited
balance sheet as of December 31, 1998, and the related unaudited statements of
operations and cash flow for the twelve month period ended December 31, 1998
(the "ONElist Year-End Financials") and ONElist's unaudited balance sheet as of
September 30, 1999 and the related unaudited statements of operations and cash
flows for the nine months then ended (the "ONElist Interim Financials")
(collectively, such financial statements are sometimes referred to herein as
"ONElist Financial Statements"). The ONElist Financial Statements have been
prepared in accordance with GAAP applied on a basis consistent throughout the
periods indicated and consistent with each other. The ONElist Financial
Statements present fairly the financial condition, operating results and cash
flows of ONElist as of the dates and during the periods indicated therein,
subject to normal year-end adjustments, which will not be material in amount or
significance. ONElist's unaudited balance sheet dated as of September 30, 1999,
shall be referred to as the "ONElist Current Balance Sheet".
2.6 No Undisclosed Liabilities. Except as set forth in Schedule 2.6,
ONElist does not have any liability, indebtedness, obligation, expense, claim,
deficiency, guaranty or endorsement of any type, whether accrued, absolute,
contingent, matured, unmatured or other (whether or not required to be reflected
in financial statements in accordance with generally accepted accounting
principles), which individually or in the aggregate, (i) has not been reflected
in the ONElist Current Balance Sheet, or (ii) has not arisen in the ordinary
course of ONElist's business since the date of the ONElist Current Balance
Sheet, consistent with past practices.
2.7 No Changes. Except as set forth in Schedule 2.7, since the date of
the ONElist Current Balance Sheet, there has not been, occurred or arisen any:
(a) transaction by ONElist except in the ordinary course of
business as conducted as of the date of the ONElist Current Balance Sheet and
consistent with past practices;
(b) amendments or changes to the Articles of Incorporation or
Bylaws of ONElist;
(c) capital expenditure or commitment by ONElist, either
individually or in the aggregate, exceeding $50,000;
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(d) destruction of, damage to or loss of any material assets,
business or customer of ONElist (whether or not covered by insurance);
(e) labor trouble or claim of wrongful discharge or other
unlawful labor practice or action;
(f) change in accounting methods or practices (including any
change in depreciation or amortization policies or rates) by ONElist;
(g) revaluation by ONElist of any of its assets;
(h) declaration, setting aside or payment of a dividend or other
distribution with respect to the capital stock of ONElist, or any direct or
indirect redemption, purchase or other acquisition by ONElist of any of its
capital stock;
(i) increase in the salary or other compensation payable or to
become payable to any of its officers, directors, employees or advisors, or the
declaration, payment or commitment or obligation of any kind for the payment of
a bonus or other additional salary or compensation to any such person except as
otherwise contemplated by this Agreement or in the ordinary course of business
and consistent with past practices;
(j) sale, lease, license or other disposition of any of the
assets or properties of ONElist, except in the ordinary course of business and
consistent with past practices;
(k) material amendment or termination of any material contract,
agreement or license to which ONElist is a party or by which it is bound;
(l) loan by ONElist to any person or entity, incurring by ONElist
of any indebtedness, guaranteeing by ONElist of any indebtedness, issuance or
sale of any debt securities of ONElist or guaranteeing of any debt securities of
others, except for advances to employees for travel and business expenses in the
ordinary course of business, consistent with past practices;
(m) waiver or release of any right or claim of ONElist, including
any write-off or other compromise of any account receivable of ONElist other
than in the ordinary course of business;
(n) change in pricing or royalties set or charged by ONElist to
its customers or licensees or in pricing or royalties set or charged by persons
who have licensed Intellectual Property to ONElist;
(o) event or condition of any character that has or could be
reasonably expected to have a Material Adverse Effect on ONElist; or
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(p) negotiation or agreement by ONElist or any officer or
employees thereof to do any of the things described in the preceding clauses (a)
through (o) (other than negotiations with eGroups and its representatives
regarding the transactions contemplated by this Agreement).
2.8 Tax and Other Returns and Reports.
(a) Definition of Taxes. For the purpose of this Agreement, "Tax"
or "Taxes" means any and all federal, state, local and foreign taxes,
assessments and other governmental charges, duties, impositions and liabilities,
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 taxes, together
with all interest, penalties and additions imposed with respect to such amounts
and 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. Except as set forth in Schedule 2.8:
(i) ONElist as of the Effective Time will have prepared
and filed all required federal, state, local and foreign returns, estimates,
information statements and reports ("Returns") due on or before the Effective
Time relating to any and all Taxes concerning or attributable to ONElist or its
operations and such Returns are or will be prior to filing true and correct in
all material respects and have been completed in accordance with applicable law.
(ii) ONElist as of the Effective Time: (A) will have paid
or accrued on the ONElist Interim Financials all Taxes it is required to pay or
which are attributable to the period ending September 30, 1999 and (B) will have
withheld with respect to its employees all federal and state income taxes, FICA,
FUTA and other Taxes required to be withheld.
(iii) ONElist has not been delinquent in the payment of
any Tax nor is there any Tax deficiency outstanding, assessed, or to its
Knowledge proposed against ONElist, nor has ONElist executed any waiver of any
statute of limitations on or extending the period for the assessment or
collection of any Tax.
(iv) No audit or other examination of any Return of
ONElist is currently in progress, nor has ONElist been notified of any request
for such an audit or other examination.
(v) ONElist does not have any liabilities for unpaid
federal, state, local and foreign Taxes which have not been accrued or reserved
for in accordance with GAAP on the ONElist Current Balance Sheet, whether
asserted or unasserted, contingent or otherwise, and ONElist has no Knowledge of
any basis for the assertion of any such liability attributable to ONElist, its
assets or operations.
(vi) ONElist has provided to eGroups or has made available
to representatives of eGroups for inspection copies of all federal and state
income and all state sales and use Tax Returns for all periods since the date of
ONElist's incorporation.
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(vii) There are (and as of immediately following the
Effective Date there will be) no liens, pledges, charges, claims, security
interests or other encumbrances of any sort on the assets ("Liens") of ONElist
relating to or attributable to Taxes.
(viii) Except as set forth in Schedule 2.8(b)(viii), as of
the Effective Time, there will not be any contract, agreement, plan or
arrangement, excluding any arrangement to which eGroups or any of its employees
is a party, covering any employee or former employee of ONElist that,
individually or collectively, could give rise to the payment of any amount that
would not be deductible pursuant to Section 280G, 404 or 162(m) of the Code as a
result of the Merger.
(ix) ONElist has not 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 ONElist.
(x) ONElist is not a party to a tax sharing or allocation
agreement nor does ONElist owe any amount under any such agreement.
(xi) ONElist is not, and has not been at any time, a
"United States real property holding corporation" within the meaning of Section
897(c)(2) of the Code.
(xii) Except as may be required as a result of the Merger,
ONElist has not been and will not be required to include any 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.
(xiii) Since September 30, 1999 no Taxes have been
incurred except in the ordinary course of business.
2.9 Restrictions on Business Activities. There is no agreement
(noncompete or otherwise), commitment, judgment, injunction, order or decree to
which ONElist is a party or otherwise binding upon ONElist which has or
reasonably could be expected to have the effect of materially prohibiting or
impairing any business practice of ONElist, any acquisition of property
(tangible or intangible) by ONElist or the conduct of business by ONElist.
Without limiting the foregoing, ONElist has not entered into any agreement under
which ONElist is restricted from developing, selling, licensing, marketing,
promoting or otherwise distributing any products, services or technology to any
class of customers, or entering into any strategic alliances, in any geographic
area, during any period of time or in any segment of the market.
2.10 Title to Properties; Absence of Liens and Encumbrances.
(a) ONElist owns no real property, nor has it ever owned any real
property. All such 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 material default or event of default (or event which with
notice or lapse of time, or both, would constitute a default).
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(b) ONElist 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 ONElist
Financial Statements or in Schedule 2.10(b) and except for liens for taxes not
yet due and payable and such 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.
2.11 Intellectual Property.
(a) For 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, URLs, 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.
"ONElist Intellectual Property" shall mean any Intellectual Property
that is used in the ONElist business as currently conducted and as currently
proposed to be conducted.
"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.
"ONElist Registered Intellectual Property" means all of the Registered
Intellectual Property owned by, or filed in the name of, ONElist.
(b) No material ONElist Intellectual Property or product or
service of ONElist is subject to any proceeding or outstanding decree, order,
judgment, agreement or stipulation restricting in any manner the use, transfer,
or licensing thereof by ONElist, or which may affect the validity, use or
enforceability of such ONElist Intellectual Property.
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(c) Each material item of ONElist 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 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.
(d) ONElist owns and has good and exclusive title to, or has
license (sufficient for the conduct of its business as currently conducted and
as currently proposed to be conducted) to, each material item of ONElist
Intellectual Property or other Intellectual Property used by ONElist free and
clear of any lien or encumbrance (excluding licenses and related restrictions);
and, to the Knowledge of ONElist, ONElist is the exclusive owner of all
trademarks and trade names used in connection with the operation or conduct of
the business of ONElist, including the sale of any products or the provision of
any services by ONElist.
(e) ONElist owns exclusively, and has good title to, all
copyrighted works that are ONElist products or which ONElist otherwise expressly
purports to own.
(f) To the extent that any material Intellectual Property has
been developed or created by a third party for ONElist, ONElist has a written
agreement with such third party with respect thereto and ONElist 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 currently 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, except to the extent restricted by applicable law.
(g) ONElist has not transferred ownership of, or granted any
exclusive license with respect to, any Intellectual Property that is or was
material to ONElist Intellectual Property, to any third party.
(h) Schedule 2.11(h) lists all material contracts, licenses and
agreements to which ONElist is a party as of the date hereof (i) with respect to
ONElist 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
ONElist.
(i) All material contracts, licenses and agreements relating to
ONElist 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. ONElist is in material compliance with, and
has not materially breached any term any of such contracts, licenses and
agreements and, to the Knowledge of ONElist, all other parties to such
contracts, licenses and agreements are in compliance with, and have not
materially breached any term of, such contracts, licenses and agreements.
Following the Closing Date, the Surviving Corporation will be permitted to
exercise all of ONElist's rights under such contracts, licenses and agreements
to the same extent ONElist would have been able to had the transactions
contemplated by this Agreement not occurred and without the payment
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of any additional amounts or consideration other than ongoing fees, royalties or
payments which ONElist would otherwise be required to pay.
(j) To the Knowledge of ONElist, the operation of the business of
ONElist as such business currently is conducted, including ONElist's design,
development, manufacture, marketing and sale of the products or services of
ONElist (including with respect to products and services currently under
development) has not, does not and will not infringe or misappropriate the
Intellectual Property of any third party in any respect adverse to such party or
constitute unfair competition or trade practices under the laws of any
jurisdiction in which ONElist currently conducts business.
(k) ONElist has not received notice from any third party that the
operation of the business of ONElist or any act, product or service of ONElist,
infringes or misappropriates the Intellectual Property of any third party or
constitutes unfair competition or trade practices under the laws of any
jurisdiction in which ONElist currently conducts business.
(l) To the Knowledge of ONElist, no person has or is infringing
or misappropriating, in any respect materially adverse to ONElist, any ONElist
Intellectual Property.
(m) ONElist has taken reasonable steps to protect ONElist's
rights in ONElist's confidential information and trade secrets that it wishes to
protect or any trade secrets or confidential information of third parties
provided to ONElist, and, without limiting the foregoing, ONElist has and
enforces a policy requiring each employee and contractor to execute a
proprietary information/confidentiality and invention assignment agreement and
all current and former employees and contractors of ONElist have executed such
an agreement, except where the failure to do so is not reasonably expected to be
material to ONElist.
2.12 Agreements, Contracts and Commitments.
(a) Except as set forth on Schedule 2.12(a), ONElist does not
have, is not a party to nor is it bound by:
(i) any collective bargaining agreements;
(ii) any agreements or arrangements that contain any
severance pay or post-employment liabilities or obligations;
(iii) any bonus, deferred compensation, pension, profit
sharing or retirement plans, or any other employee benefit plans or
arrangements;
(iv) any material employment or consulting agreement,
contract or commitment with an employee or individual consultant or salesperson
or any material consulting or sales agreement, contract or commitment under
which any firm or other organization provides services to ONElist;
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(v) any agreement or plan, including, without limitation,
any stock option plan, stock appreciation rights 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;
(vi) any fidelity or surety bond or completion bond;
(vii) any lease of personal property having a value
individually in excess of $50,000;
(viii) any agreement of indemnification or guaranty;
(ix) any agreement, contract or commitment containing any
covenant limiting the freedom of ONElist to engage in any line of business or to
compete with any person;
(x) any agreement, contract or commitment relating to
capital expenditures and involving future payments in excess of $50,000;
(xi) any agreement, contract or commitment relating to the
disposition or acquisition of assets or any interest in any business enterprise
outside the ordinary course of ONElist's business;
(xii) any mortgages, indentures, loans or credit
agreements, security agreements or other agreements or instruments relating to
the borrowing of money or extension of credit, including guaranties referred to
in clause (viii) hereof;
(xiii) any purchase order or contract for the purchase of
raw materials involving $50,000 or more;
(xiv) any construction contracts;
(xv) any distribution, joint marketing or development
agreement;
(xvi) any agreement pursuant to which ONElist has granted
or may be required to grant in the future, to any party, a source-code license
or option or other right to use or acquire source-code; or
(xvii) any other agreement, contract or commitment that
involves $50,000 or more or is not cancelable without penalty within thirty (30)
days.
(b) Except for such alleged breaches, violations and defaults,
and events that would constitute a breach, violation or default with the lapse
of time, giving of notice, or both, as are noted in Schedule 2.12(b), ONElist
has not breached, violated or defaulted under, or received notice that it has
breached, violated or defaulted under, any of the terms or conditions of any
agreement, contract or commitment required to be set forth on Schedule 2.12(a)
or Schedule 2.11(h) (any such
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agreement, contract or commitment, a "ONElist Contract"). Each ONElist Contract
is in full force and effect and, except as otherwise disclosed in Schedule
2.12(b), is not subject to any default thereunder of which ONElist has Knowledge
by any party obligated to ONElist pursuant thereto.
2.13 Interested Party Transactions. Except as set forth on Schedule
2.13, (i) no officer, director or, to the Knowledge of ONElist (without any duty
to investigate), any ONElist Shareholder has, directly or indirectly, an
economic interest worth greater than $25,000 in any entity which furnished or
sold, or furnishes or sells, services or products that ONElist furnishes or
sells, or proposes to furnish or sell, (ii) no officer or director, or to the
Knowledge of ONElist (without any duty to investigate), any ONElist Shareholder
has, directly or indirectly, an economic interest worth greater than $25,000 in
any entity that purchases from or sells or furnishes to, ONElist, any goods or
services or (iii) no officer, director or ONElist Shareholder has, directly or
indirectly, a beneficial interest in any contract or agreement worth greater
than $25,000 set forth in Schedule 2.12(a) or Schedule 2.11(h); provided, that
ownership of no more than one percent (1%) of the outstanding voting stock of a
publicly traded corporation shall not be deemed an "economic interest in any
entity" for purposes of this Section 2.13. For the purposes of this subsection,
"officer" and "director" shall include any parent, child, sibling or spouse of
any of such persons, or any trust, partnership or corporation in which such
officer or director has a controlling interest.
2.14 Compliance with Laws. ONElist has complied in all material respects
with, is not in material violation of, and has not received any notices of
violation with respect to, any foreign, federal, state or local statute, law or
regulation.
2.15 Litigation. Except as set forth in Schedule 2.15, there is no
action, suit or proceeding of any nature pending or to ONElist's Knowledge
threatened against ONElist, its properties or any of its officers or directors
in their respective capacities as such. Except as set forth in Schedule 2.15, to
ONElist's Knowledge, there is no investigation pending or threatened against
ONElist, its properties or any of its officers or directors (in their respective
capacities as such) by or before any governmental entity. Schedule 2.15 sets
forth, with respect to any pending or threatened action, suit, proceeding or
investigation, the forum, the parties thereto, the subject matter thereof and
the amount of damages claimed or other remedy requested. No Governmental Entity
has at any time challenged or questioned the legal right of ONElist to
manufacture, offer or sell any of its products in the present manner or style
thereof.
2.16 Insurance. With respect to the insurance policies and fidelity
bonds covering the assets, business, equipment, properties, operations,
employees, officers and directors of ONElist, there is no claim by ONElist
pending under any of such policies or bonds as to which coverage has been
questioned, denied or disputed by the underwriters of such policies or bonds.
All premiums due and payable under all such policies and bonds have been paid or
will be paid when due and ONElist is otherwise in material compliance with the
terms of such policies and bonds (or other policies and bonds providing
substantially similar insurance coverage). ONElist has no Knowledge of any
threatened termination of, or material premium increase with respect to, any of
such policies.
2.17 Minute Books. The minute books of ONElist made available to counsel
for eGroups are the only minute books of ONElist and contain a reasonably
accurate summary of all meetings of
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directors (or committees thereof) and shareholders or actions by written consent
since the time of incorporation of ONElist.
2.18 Environmental Matters. ONElist is not in violation of any
applicable statute, law or regulation relating to the environment or
occupational health and safety, and to its Knowledge, no material expenditures
are or will be required in order to comply with any such existing statute, law
or regulation.
2.19 Brokers' and Finders' Fees. ONElist has not incurred, nor will it
incur, directly or indirectly, any liability for brokerage or finders' fees,
investment banking fees, consulting fees or agents' commissions or any similar
charges in connection with this Agreement or any transaction contemplated
hereby.
2.20 Employee Matters and Benefit Plans.
(a) Definitions. For purposes of this Section 2.20 and Section
3.20 of this Agreement, the following terms shall have the meanings set forth
below:
(i) "ONElist Affiliate" shall mean any other corporation,
partnership, limited liability company, trade, business, person or other entity
that, together with ONElist, is treated as a single employer under Section
414(b), (c), (m) or (o) of the Code;
(ii) "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended;
(iii) "ONElist Employee Plan" shall refer to 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 formal or informal, funded or unfunded and whether or not
legally binding, including without limitation, each "employee benefit plan",
within the meaning of Section 3(3) of ERISA which (A) is or has been sponsored,
maintained, contributed to, or required to be contributed to, by ONElist or any
ONElist Affiliate for the benefit of any "ONElist Employee" (as defined below),
or (B) with respect to which ONElist or any ONElist Affiliate has or could have
any material liability or obligation, contingent or otherwise;
(iv) "ONElist Employee" shall mean any current, former, or
retired employee, officer, or director of ONElist or any ONElist Affiliate;
(v) "ONElist Employee Agreement" shall refer to each
written management, employment, severance, consulting, relocation, repatriation,
expatriation, visas, work permit or similar agreement or contract between
ONElist or any ONElist Affiliate and any ONElist Employee or consultant. Except
as set forth on Schedule 2.20(a)(v), ONElist represents and warrants that there
are no oral agreements between ONElist or any Affiliate and any ONElist Employee
or consultant pertaining to management, employment, severance, consulting,
relocation, repatriation, expatriation, visas, work permit or similar matters or
arrangements;
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(vi) "IRS" shall mean the Internal Revenue Service;
(vii) "Multiemployer Plan" shall mean any Pension Plan (as
defined below) which is a "multiemployer plan," as defined in Section 3(37) or
4001(a)(3) of ERISA or Section 414(f) of the Code;
(viii) "Multiple Employer Plan" means any Pension Plan (as
defined below) which is a "multiple employer plan," within the meaning of
Section 4063 or 4064 of ERISA or Section 413(c) of the Code; and
(ix) "Pension Plan" shall mean any "employee pension
benefit plan," as defined in Section 3(2) of ERISA.
(b) Schedule. Schedule 2.20(b) contains an accurate and complete
list of each ONElist Employee Plan and each ONElist Employee Agreement. ONElist
does not have any plan or commitment, whether legally binding or not, to
establish any new ONElist Employee Plan or ONElist Employee Agreement, to modify
any ONElist Employee Plan or ONElist Employee Agreement (except to the extent
required by law or to conform any such ONElist Employee Plan or ONElist Employee
Agreement to the requirements of any applicable law, in each case as previously
disclosed to eGroups in writing, or as required by this Agreement), or to enter
into any ONElist Employee Plan or ONElist Employee Agreement, nor does it have
any intention or commitment to do any of the foregoing. There has been no
amendment, interpretation or other announcement (written or oral) by ONElist or,
to the Knowledge of ONElist, any other Person relating to, or change in
participation or coverage under, any ONElist Employee Plan or ONElist Employee
Agreement that, either alone or together with other such items or events, could
materially increase the expense of maintaining the ONElist Employee Plans and
ONElist Employee Agreements above the level of expense incurred with respect
thereto for the most recent fiscal year included in the ONElist Financial
Statements.
(c) Documents. ONElist has provided, or will provide within three
(3) days following the execution of this Agreement, to eGroups (i) correct and
complete copies of all documents embodying or materially affecting the
interpretation or application of each ONElist Employee Plan and each ONElist
Employee Agreement including all amendments thereto; (ii) the most recent annual
actuarial valuations, if any, prepared for each ONElist Employee Plan; (iii) the
three most recent annual reports (Series 5500 and all schedules thereto), if
any, required under ERISA or the Code in connection with each ONElist Employee
Plan or related trust; (iv) if the ONElist Employee Plan is funded, the most
recent annual and periodic accounting of ONElist Employee Plan assets; (v) the
most recent summary plan description together with the most recent summary of
material modifications, if any, required under ERISA with respect to each
ONElist Employee Plan which has a material adverse effect on such ONElist
Employee Plan; (vi) the most recent IRS determination, opinion, notification or
advisory letters as applicable, and rulings relating to ONElist Employee Plans
and copies of all applications and correspondence to or from the IRS or the
Department of Labor ("DOL") with respect to any ONElist Employee Plan or ONElist
Employee Agreement; (vii) all material written agreements and contracts relating
to each ONElist Employee Plan and ONElist Employee Agreement, including, but not
limited to, trust agreements,
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administrative service agreements, group annuity contracts and group insurance
contracts; (viii) all communications material distributed to any ONElist
Employee or ONElist Employees relating to any ONElist Employee Plan or ONElist
Employee Agreement and any proposed ONElist Employee Plan or ONElist Employee
Agreement, 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 ONElist; and (ix) all registration statements and prospectuses prepared in
connection with each ONElist Employee Plan not otherwise publicly available on
the SEC website.
(d) Employee Plan Compliance. Except as set forth on Schedule
2.20(d): (i) ONElist and, to the Knowledge of ONElist, all other Persons have
properly performed in all material respects all obligations required to be
performed by them under each ONElist Employee Plan and ONElist Employee
Agreement; (ii) each ONElist Employee Plan and ONElist Employee Agreement is,
and at all times since inception has been, established, maintained,
administered, operated and funded 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 and the Code; (iii) each
ONElist 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 is, and at all
times since inception has been, so qualified, and has either received a
favorable determination letter from the IRS with respect to its qualified status
under the Code, including all amendments to the Code effected by the Tax Reform
Act of 1986 and subsequent legislation, 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; (iv) no "prohibited transaction", within the meaning of Section
4975 of the Code or Sections 406 and 407 of ERISA, has occurred with respect to
any ONElist Employee Plan for which an exemption is not applicable; (v) there
are no actions, suits or claims pending, or, to the Knowledge of ONElist,
threatened or anticipated (other than routine claims for benefits) against any
ONElist Employee Plan or against the assets of any ONElist Employee Plan; and
(vi) each ONElist Employee Plan can be amended, terminated or otherwise
discontinued after the Effective Time in accordance with its terms, without
material liability to ONElist, eGroups or any ONElist Affiliates (other than
ordinary administration expenses typically incurred in a termination event);
(vii) there are no audits, inquiries or proceedings pending or, to the Knowledge
of ONElist, threatened by the IRS or DOL with respect to any ONElist Employee
Plan or ONElist Employee Agreement; (viii) all contributions, premiums and other
payments due or required to be paid to (or with respect to) each ONElist
Employee Plan have been timely paid, or if not yet due, have been properly
accrued on ONElist's books consistent with past practice; and (ix) neither
ONElist nor any ONElist Affiliate has incurred, and to the Knowledge of ONElist
there exists no condition or set of circumstances in connection with which
either ONElist or any ONElist Affiliate could incur, a material liability or
expense (except for benefit claims and funding obligations payable in the
ordinary course) under ERISA, the Code or any other applicable law, statute,
order, rule or regulation with respect to any ONElist Employee Plan or ONElist
Employee Agreement.
(e) Pension Plans. At no time has ONElist or any ONElist
Affiliate sponsored, maintained, participated in, or contributed to (or been
required to contribute to), any Pension Plan
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which is subject to Part 3 of Subtitle B of Title I of ERISA, Title IV of ERISA
or Section 412 of the Code.
(f) Multiemployer Plans. At no time has ONElist or any ONElist
Affiliate contributed to or been requested (or obligated) to contribute to any
Multiemployer Plan or Multiple Employer Plan.
(g) No Post-Employment Obligations. Except as set forth in
Schedule 2.20(g), neither ONElist nor any ONElist Employee Plan provides, or has
any liability to provide, life insurance, medical or other employee welfare
benefits to any ONElist Employee upon his or her retirement or termination of
employment for any reason, except as may be required by statute, and ONElist has
never represented, promised or contracted (whether in oral or written form) to
any ONElist Employee (either individually or to ONElist Employees as a group) or
any other person that such ONElist Employee(s) or other person would be provided
with life insurance, medical or other employee welfare benefits upon their
retirement or termination of employment, except to the extent required by
statute. The term "other employee welfare benefits" means those benefits
traditionally provided under an "employee benefit welfare plan" as defined in
ERISA Section 3(1).
(h) Health Care Compliance. Neither the ONElist nor any ONElist
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, the requirements of the Health Insurance Portability and Accountability
Act of 1996, the requirements of the Women's Health and Cancer Rights Act, the
requirements of the Newborns' and Mothers' Health Protection Act of 1996, or any
amendment to each such Act, or any similar provisions of state law applicable to
its Employees.
(i) Effect of Transaction. Except as set forth on Schedule
2.20(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 ONElist
Employee Plan, ONElist 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 ONElist Employee.
(j) Employment Matters. ONElist (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
ONElist Employees; (ii) has withheld all amounts required by law or by agreement
to be withheld from the wages, salaries and other payments to ONElist Employees;
(iii) is not liable for any arrears of wages, other than arrears normally
included in its payroll schedule and system, or any taxes or any penalty for
failure to comply with any of the foregoing; and (iv) is not liable for any
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 ONElist Employees (other than routine
payments to be made in the normal course of business and consistent with past
practice). There are no pending, threatened or reasonably anticipated claims or
actions against ONElist under any worker's compensation policy or long-term
disability policy.
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To ONElist's Knowledge, no employee of ONElist has violated any employment
contract, nondisclosure agreement or noncompetition agreement by which such
employee is bound due to such employee being employed by ONElist and disclosing
to ONElist or using trade secrets or proprietary information of any other person
or entity.
(k) Labor. To the Knowledge of ONElist, no work stoppage or
labor strike against ONElist is pending or threatened. Except as set forth in
Schedule 2.20(k), ONElist is not involved in or, to the Knowledge of ONElist,
threatened with, any labor dispute, grievance, or litigation relating to labor,
safety or discrimination matters involving any ONElist Employee, including,
without limitation, charges of unfair labor practices or discrimination
complaints, which, if adversely determined, would, individually or in the
aggregate, result in a material liability to ONElist. To the Knowledge of
ONElist, neither ONElist nor any of its subsidiaries has engaged in any unfair
labor practices within the meaning of the National Labor Relations Act which
would, individually or in the aggregate, directly or indirectly result in a
liability to ONElist. Except as set forth in Schedule 2.20(k), ONElist 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 ONElist Employees and no
collective bargaining agreement is being negotiated by ONElist.
2.21 Accounting and Regulatory Matters.
(a) For purposes of this Agreement, the following terms have the
following meanings:
An "Affiliate" of a Person shall mean: (i) any other Person directly, or
indirectly through one or more intermediaries, controlling, controlled by or
under common control with such Person; (ii) any officer, director, partner,
employer, or direct or indirect beneficial owner of any 5% or greater equity or
voting interest of such Person; or (iii) any other Person for which a Person
described in clause (ii) acts in any such capacity. Notwithstanding the
foregoing, the terms "ONElist Affiliate" and "eGroups Affiliate" as used in
Sections 2.20 and 3.20 hereof, respectively, shall have the meanings assigned to
them in said sections.
"Person" shall mean an individual, a corporation, a partnership, an
association, a joint-stock company, a trust, any unincorporated organization, or
a government or political subdivision thereof.
(b) ONElist has no Knowledge of any action taken or agreed to be
taken by ONElist or any Affiliate of ONElist nor has any Knowledge of any fact
or circumstance that is reasonably likely to (a) prevent the Merger from
qualifying for pooling-of-interests accounting treatment, or (b) materially
impede or delay receipt of any consents of regulatory authorities referred to in
Section 6.1(j).
2.22 Year 2000 Compliance. All of ONElist's products and services
(including products and services currently under development) to the extent they
record, store, process, calculate and present dates, if at all, will record,
store, process, calculate and present dates falling on and after January 1,
2000, will calculate any information dependent on or relating to such dates in
the same manner and with the same functionality, data integrity and performance
as the products record, store,
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process, calculate and present calendar dates on or before December 31, 1999, or
calculate any information dependent on or relating to such dates (collectively
"Year 2000 Compliant"). All of ONElist's material products and services will
lose no functionality with respect to the introduction of records containing
dates falling on or after January 1, 2000. To the Knowledge of ONElist, all of
ONElist's internal computer systems, including without limitation, its
accounting systems, are Year 2000 Compliant.
2.23 Representations Complete. None of the representations or warranties
made by ONElist (as modified by the ONElist Schedules), nor any statement made
in any schedule or certificate furnished by ONElist pursuant to this Agreement,
or furnished in or in connection with documents mailed or delivered to the
shareholders of ONElist in connection with soliciting their consent to this
Agreement and the Merger, contains or will contain at the Effective Time, any
untrue statement of a material fact, or omits or will omit at the Effective Time
to state any material fact necessary in order to make the statements contained
herein or therein, in the light of the circumstances under which they were made,
not misleading.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF EGROUPS AND MERGER SUB
As of the date hereof, eGroups and Merger Sub hereby represent and
warrant to ONElist, subject to such exceptions as are specifically disclosed in
the disclosure schedule supplied by eGroups and Merger Sub to ONElist dated as
of the date hereof and attached hereto as Exhibit F (the "eGroups and Merger Sub
Schedules"), as follows:
3.1 Organization of eGroups and Merger Sub. eGroups is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware. Merger Sub is a corporation duly organized, validly existing
and in good standing under the laws of the State of California. eGroups has the
corporate power to own its properties and to carry on its business as now being
conducted. eGroups is duly qualified to do business and in good standing as a
foreign corporation in each jurisdiction in which the failure to be so qualified
would have a Material Adverse Effect on eGroups. eGroups has delivered a true
and correct copy of its Articles of Incorporation and Bylaws, each as amended to
date, to ONElist. Merger Sub has delivered a true and correct copy of its
Articles of Incorporation and Bylaws, each as amended to date, to ONElist.
3.2 eGroups and Merger Sub Capital Structure.
(a) The authorized capital stock of eGroups consists of
20,000,000 shares of authorized Common Stock, of which 7,255,624 shares are
issued and outstanding, 1,620,000 shares of authorized Series A Preferred Stock,
of which 1,620,000 shares are issued and outstanding, and 3,600,000 shares of
authorized Series B Preferred Stock, of which 3,556,772 are issued and
outstanding. The shares of the capital stock of eGroups are held of record by
the persons, with the addresses of record and in the amounts set forth on
Schedule 3.2(a). All outstanding shares of eGroups Capital Stock are duly
authorized, validly issued, fully paid and non-assessable and not
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subject to preemptive rights created by statute, the Certificate of
Incorporation or Bylaws of eGroups or any agreement to which eGroups is a party
or by which it is bound.
(b) The authorized capital stock of Merger Sub consists of 1,000
shares of authorized Common Stock, all of which are issued and outstanding and
held of record by eGroups. All outstanding shares of the capital stock of Merger
Sub are duly authorized, validly issued, fully paid and non-assessable and not
subject to preemptive rights created by statute, the Articles of Incorporation
or Bylaws of Merger Sub or any agreement to which the Merger Sub is a party or
by which it is bound.
(c) eGroups has reserved 2,900,000 shares of Common Stock for
issuance to directors, employees and consultants pursuant to eGroups' 1998 Stock
Plan ("eGroups Stock Plan"), of which 873,850 shares are subject to outstanding,
unexercised options ("eGroups Options") and 82,250 shares remain available for
future grant. Schedule 3.2(c) sets forth for each outstanding eGroups Option and
eGroups Convertible Security, (i) the name of the holder of such security, (ii)
the number of shares of capital stock subject to such security, (iii) the
exercise price of such security, (iv) the date of grant of such security, (v)
the date on which such security expires, and (vi) whether the exercisability of
such security will be accelerated and become exercisable by reason of the
transactions contemplated by this Agreement. Except for the eGroups Convertible
Securities described in Schedule 3.2(c), there are no options, warrants, calls,
rights, commitments or agreements of any character, written or oral, to which
eGroups is a party or by which it is bound obligating eGroups to issue, deliver,
sell, repurchase or redeem, or cause to be issued, delivered, sold, repurchased
or redeemed, any shares of the capital stock of eGroups or obligating eGroups to
grant, extend, accelerate the vesting of, change the price of, otherwise amend
or enter into any such option, warrant, call, right, commitment or agreement.
3.3 Subsidiaries. Other than Merger Sub and except as set forth on
Schedule 3.3, eGroups does not have any subsidiaries and does not otherwise own
and has never otherwise owned any shares of capital stock or any interest in, or
control, directly or indirectly, any other corporation, partnership, limited
liability company, association, joint venture or other business entity.
3.4 Authority. Subject only to the requisite approval of the Merger and
this Agreement by eGroups' shareholders and Merger Sub's shareholder, each of
eGroups 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 eGroups and Merger Sub, subject only to the
approval of the Merger by eGroups' stockholders and Merger Sub's shareholder.
Each of eGroups' Board of Directors and Merger Sub's Board of Directors have
unanimously approved the Merger and this Agreement. This Agreement has been duly
executed and delivered by eGroups and Merger Sub and constitutes the valid and
binding obligation of eGroups and Merger Sub, enforceable in accordance with its
terms (except in all cases as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, receivership, conservatorship,
moratorium, or similar laws affecting the enforcement of creditors' rights
generally and except that the availability of the equitable remedy of specific
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performance or injunctive relief is subject to the discretion of the court
before which any proceeding may be brought). Except as set forth on Schedule
3.4, subject only to the approval of the Merger and this Agreement by eGroups'
stockholders and Merger Sub's shareholder, the execution and delivery of this
Agreement by eGroups and Merger Sub does not, and, as of the Effective Time, the
consummation of the transactions contemplated hereby will not, conflict with, or
result in any violation of, or default under (with or without notice or lapse of
time, or both), or give rise to a right of termination, cancellation or
acceleration of any obligation or loss of any benefit under (any such event, a
"eGroups Conflict") (i) any provision of the Third Amended and Restated
Certificate of Incorporation (the "Third Amended and Restated Certificate") or
Bylaws of eGroups, (ii) any provision of the Articles of Incorporation or Bylaws
of Merger Sub, or (iii) any material mortgage, indenture, lease, contract or
other material agreement or instrument, permit, concession, franchise, license,
judgment, order, decree, statute, law, ordinance, rule or regulation applicable
to eGroups or its properties or assets. No consent, waiver, approval, order or
authorization of, or registration, declaration or filing with, any Governmental
Entity or any third party (so as not to trigger any eGroups Conflict) is
required by or with respect to eGroups or Merger Sub in connection with the
execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby, except for (i) the filing of the Agreement of Merger with
the California Secretary of State, (ii) such consents, waivers, approvals,
orders, authorizations, registrations, declarations and filings as may be
required under applicable federal and state securities laws, and (iii) such
other consents, waivers, authorizations, filings, approvals and registrations
which are set forth on Schedule 3.4. eGroups, as the sole shareholder of Merger
Sub, has voted prior to the Effective Time the shares of Merger Sub's Common
Stock in favor of approval of this Agreement, as and to the extent required by
applicable law.
3.5 Financial Statements. Schedule 3.5 sets forth eGroups' unaudited
balance sheet as of July 31, 1999, and the related unaudited statement of income
and cash flow for the twelve month period ended July 31, 1999 (the "eGroups
Year-End Financials"), and eGroups' unaudited balance sheet as of September 30,
1999 and the related unaudited statements of income and cash flows for the two
months then ended (the "eGroups Interim Financials") (collectively, such
financial statements are sometimes referred to herein as "eGroups Financial
Statements"). The eGroups Financial Statements have been prepared in accordance
with GAAP applied on a basis consistent throughout the periods indicated and
consistent with each other. The eGroups Financial Statements present fairly the
financial condition, operating results and cash flows of eGroups as of the dates
and during the periods indicated therein, subject to normal year-end
adjustments, which will not be material in amount or significance. eGroups'
unaudited balance sheet dated as of September 30, 1999 shall be referred to as
the "eGroups Current Balance Sheet."
3.6 No Undisclosed Liabilities. Except as set forth in Schedule 3.6,
eGroups does not have any liability, indebtedness, obligation, expense, claim,
deficiency, guaranty or endorsement of any type, whether accrued, absolute,
contingent, matured, unmatured or other (whether or not required to be reflected
in financial statements in accordance with generally accepted accounting
principles), which individually or in the aggregate, (i) has not been reflected
in the eGroups Current Balance Sheet, or (ii) has not arisen in the ordinary
course of eGroups' business since the date of the eGroups Current Balance Sheet,
consistent with past practices.
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3.7 No Changes. Except as set forth in Schedule 3.7, since the date of
the eGroups Current Balance Sheet, there has not been, occurred or arisen any:
(a) transaction by eGroups except in the ordinary course of
business as conducted as of the date of the eGroups Current Balance Sheet and
consistent with past practices;
(b) amendments or changes to the Third Amended and Restated
Certificate or Bylaws of eGroups;
(c) capital expenditure or commitment by eGroups, either
individually or in the aggregate, exceeding $50,000;
(d) destruction of, damage to or loss of any material assets,
business or customer of eGroups (whether or not covered by insurance);
(e) labor trouble or claim of wrongful discharge or other
unlawful labor practice or action;
(f) change in accounting methods or practices (including any
change in depreciation or amortization policies or rates) by eGroups;
(g) revaluation by eGroups of any of its assets;
(h) declaration, setting aside or payment of a dividend or other
distribution with respect to the capital stock of eGroups, or any direct or
indirect redemption, purchase or other acquisition by eGroups of any of its
capital stock;
(i) increase in the salary or other compensation payable or to
become payable to any of eGroups' officers, directors, employees or advisors, or
the declaration, payment or commitment or obligation of any kind for the payment
of a bonus or other additional salary or compensation to any such person except
as otherwise contemplated by this Agreement or in the ordinary course of
business and consistent with past practices;
(j) sale, lease, license or other disposition of any of the
assets or properties of eGroups, except in the ordinary course of business as
conducted on that date and consistent with past practices;
(k) material amendment or termination of any material contract,
agreement or license to which eGroups is a party or by which it is bound;
(l) loan by eGroups to any person or entity, incurring by eGroups
of any indebtedness, guaranteeing by eGroups of any indebtedness, issuance or
sale of any debt securities of eGroups or guaranteeing of any debt securities of
others, except for advances to employees for travel and business expenses in the
ordinary course of business, consistent with past practices;
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(m) waiver or release of any right or claim of eGroups, including
any write-off or other compromise of any account receivable of eGroups other
than in the ordinary course of business;
(n) change in pricing or royalties set or charged by eGroups to
its customers or licensees or in pricing or royalties set or charged by persons
who have licensed Intellectual Property to eGroups;
(o) event or condition of any character that has or could be
reasonably expected to have a Material Adverse Effect on eGroups; or
(p) negotiation or agreement by eGroups or any officer or
employees thereof to do any of the things described in the preceding clauses (a)
through (o) (other than negotiations with ONElist and its representatives
regarding the transactions contemplated by this Agreement).
3.8 Tax and Other Returns and Reports.
(a) Tax Returns and Audits. Except as set forth in Schedule 3.8:
(i) eGroups as of the Effective Time will have prepared
and filed all required Returns relating to any and all Taxes concerning or
attributable to eGroups or its operations and such Returns are true and correct
in all material respects and have been completed in accordance with applicable
law.
(ii) eGroups as of the Effective Time: (A) will have paid
or accrued on the eGroups Interim Financials all Taxes it is required to pay or
which are attributable to the period ending September 30, 1999 and (B) will have
withheld with respect to its employees all federal and state income taxes, FICA,
FUTA and other Taxes required to be withheld.
(iii) eGroups has not been delinquent in the payment of
any Tax nor is there any Tax deficiency outstanding, assessed, or to its
Knowledge proposed against eGroups, nor has eGroups executed any waiver of any
statute of limitations on or extending the period for the assessment or
collection of any Tax.
(iv) No audit or other examination of any Return of
eGroups is currently in progress, nor has eGroups been notified of any request
for such an audit or other examination.
(v) eGroups does not have any liabilities for unpaid
federal, state, local and foreign Taxes which have not been accrued or reserved
against in accordance with GAAP on the eGroups Current Balance Sheet, whether
asserted or unasserted, contingent or otherwise, and eGroups has no Knowledge of
any basis for the assertion of any such liability attributable to ONElist, its
assets or operations.
(vi) eGroups has provided to ONElist copies of all federal
and state income and all state sales and use Tax Returns for all periods since
the date of eGroups' incorporation.
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(vii) There are (and as of immediately following the
Effective Date there will be) no Liens on the assets of eGroups relating to or
attributable to Taxes.
(viii) Except as set forth in Schedule 3.8(a)(viii), as of
the Effective Time, there will not be any contract, agreement, plan or
arrangement, excluding any arrangement to which ONElist or any of its employees
are a party, covering any employee or former employee of eGroups that,
individually or collectively, could give rise to the payment of any amount that
would not be deductible pursuant to Section 280G, 404 or 162(m) of the Code as a
result of the Merger.
(ix) eGroups has not 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 eGroups.
(x) eGroups is not a party to a tax sharing or allocation
agreement nor does eGroups owe any amount under any such agreement.
(xi) eGroups is not, and has not been at any time, a
"United States real property holding corporation" within the meaning of Section
897(c)(2) of the Code.
(xii) Except as may be required as a result of the Merger,
eGroups has not been and will not be required to include any 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.
(xiii) Since September 30, 1999, no Taxes have been
incurred except in the ordinary course of business.
3.9 Restrictions on Business Activities. There is no agreement
(noncompete or otherwise), commitment, judgment, injunction, order or decree to
which eGroups is a party or otherwise binding upon eGroups which has or
reasonably could be expected to have the effect of materially prohibiting or
impairing any business practice of eGroups, any acquisition of property
(tangible or intangible) by eGroups or the conduct of business by eGroups.
Without limiting the foregoing, eGroups has not entered into any agreement under
which eGroups is restricted from developing, selling, licensing, marketing,
promoting or otherwise distributing any products, services or technology to any
class of customers, or entering into any strategic alliances, in any geographic
area, during any period of time or in any segment of the market.
3.10 Title to Properties; Absence of Liens and Encumbrances.
(a) eGroups owns no real property, nor has it ever owned any real
property. All such 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 material default or event of default (or event which with
notice or lapse of time, or both, would constitute a default).
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(b) eGroups 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 eGroups
Financial Statements or in Schedule 3.10(b) and except for liens for taxes not
yet due and payable and such 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.
3.11 Intellectual Property.
(a) For purposes of this Agreement, the following terms have the
following definitions:
"eGroups Intellectual Property" shall mean any Intellectual Property
that is used in eGroups business as currently conducted and as currently
proposed to be conducted.
"eGroups Registered Intellectual Property" means all of the Registered
Intellectual Property owned by, or filed in the name of, eGroups.
(b) No material eGroups Intellectual Property or product or
service of eGroups is subject to any proceeding or outstanding decree, order,
judgment, agreement or stipulation restricting in any manner the use, transfer,
or licensing thereof by eGroups, or which may affect the validity, use or
enforceability of such eGroups Intellectual Property.
(c) Schedule 3.11(c) sets forth a complete and accurate list of
all eGroups Registered Intellectual Property as of the date hereof and
specifies, where applicable, the jurisdictions in which each such item of
eGroups Registered Intellectual Property has been issued or registered or in
which an application for such issuance and registration has been filed,
including the respective registration or application numbers. Each material item
of eGroups 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
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.
(d) eGroups owns and has good and exclusive title to, or has
license (sufficient for the conduct of its business as currently conducted and
as currently proposed to be conducted) to, each material item of eGroups
Intellectual Property or other Intellectual Property used by eGroups free and
clear of any lien or encumbrance (excluding licenses and related restrictions);
and, to the Knowledge of eGroups, eGroups is the exclusive owner of all
trademarks and trade names used in connection with the operation or conduct of
the business of eGroups, including the sale of any products or the provision of
any services by eGroups.
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(e) eGroups owns exclusively, and has good title to, all
copyrighted works that are eGroups products or which eGroups otherwise expressly
purports to own.
(f) To the extent that any material Intellectual Property has
been developed or created by a third party for eGroups, eGroups has a written
agreement with such third party with respect thereto and eGroups 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 currently 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, except to the extent restricted by applicable law.
(g) eGroups has not transferred ownership of, or granted any
exclusive license with respect to, any Intellectual Property that is or was
material to eGroups Intellectual Property, to any third party.
(h) Schedule 3.11(h) lists all material contracts, licenses and
agreements to which eGroups is a party as of the date hereof (i) with respect to
eGroups 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
eGroups.
(i) All material contracts, licenses and agreements relating to
eGroups 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. eGroups is in material compliance with, and
has not materially breached any term any of such contracts, licenses and
agreements and, to the Knowledge of eGroups, all other parties to such
contracts, licenses and agreements are in compliance with, and have not
materially breached any term of, such contracts, licenses and agreements.
Following the Closing Date, eGroups will be permitted to exercise all of
eGroups' rights under such contracts, licenses and agreements to the same extent
eGroups 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 eGroups would
otherwise be required to pay.
(j) To the Knowledge of eGroups, the operation of the business of
eGroups as such business currently is conducted, including eGroups' design,
development, manufacture, marketing and sale of the products or services of
eGroups (including with respect to products and services currently under
development) has not, does not and will not infringe or misappropriate the
Intellectual Property of any third party in any respect adverse to such party or
constitute unfair competition or trade practices under the laws of any
jurisdiction in which eGroups currently conducts business.
(k) eGroups has not received notice from any third party that the
operation of the business of eGroups or any act, product or service of eGroups,
infringes or misappropriates the Intellectual Property of any third party or
constitutes unfair competition or trade practices under the laws of any
jurisdiction in which eGroups currently conducts business.
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(l) To the Knowledge of eGroups, no person has or is
infringing or misappropriating, in any respect materially adverse to eGroups,
any eGroups Intellectual Property.
(m) eGroups has taken reasonable steps to protect eGroups' rights
in eGroups' confidential information and trade secrets that it wishes to protect
or any trade secrets or confidential information of third parties provided to
eGroups, and, without limiting the foregoing, eGroups has and enforces a policy
requiring each employee and contractor to execute a proprietary
information/confidentiality and invention assignment agreement and all current
and former employees and contractors of eGroups have executed such an agreement,
except where the failure to do so is not reasonably expected to be material to
eGroups.
3.12 Agreements, Contracts and Commitments.
(a) Except as set forth on Schedule 3.12(a), eGroups does not
have, is not a party to nor is it bound by:
(i) any collective bargaining agreements;
(ii) any agreements or arrangements that contain any
severance pay or post-employment liabilities or obligations;
(iii) any bonus, deferred compensation, pension, profit
sharing or retirement plans, or any other employee benefit plans or
arrangements;
(iv) any material employment or consulting agreement,
contract or commitment with an employee or individual consultant or salesperson
or any material consulting or sales agreement, contract or commitment under
which any firm or other organization provides services to eGroups;
(v) any agreement or plan, including, without limitation,
any stock option plan, stock appreciation rights 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;
(vi) any fidelity or surety bond or completion bond;
(vii) any lease of personal property having a value
individually in excess of $50,000;
(viii) any agreement of indemnification or guaranty;
(ix) any agreement, contract or commitment containing any
covenant limiting the freedom of eGroups to engage in any line of business or to
compete with any person;
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(x) any agreement, contract or commitment relating to
capital expenditures and involving future payments in excess of $50,000;
(xi) any agreement, contract or commitment relating to the
disposition or acquisition of assets or any interest in any business enterprise
outside the ordinary course of eGroups' business;
(xii) any mortgages, indentures, loans or credit
agreements, security agreements or other agreements or instruments relating to
the borrowing of money or extension of credit, including guaranties referred to
in clause (viii) hereof;
(xiii) any purchase order or contract for the purchase of
raw materials involving $50,000 or more;
(xiv) any construction contracts;
(xv) any distribution, joint marketing or development
agreement;
(xvi) any agreement pursuant to which eGroups has granted
or may grant in the future, to any party, a source-code license or option or
other right to use or acquire source-code; or
(xvii) any other agreement, contract or commitment that
involves $50,000 or more or is not cancelable without penalty within thirty (30)
days.
(b) Except for such alleged breaches, violations and defaults,
and events that would constitute a breach, violation or default with the lapse
of time, giving of notice, or both, as are all noted in Schedule 3.12(b),
eGroups has not breached, violated or defaulted under, or received notice that
it has breached, violated or defaulted under, any of the terms or conditions of
any agreement, contract or commitment required to be set forth on Schedule
3.12(a), Schedule 3.11(c) or Schedule 3.11(h) (any such agreement, contract or
commitment, a "eGroups Contract"). Each eGroups Contract is in full force and
effect and, except as otherwise disclosed in Schedule 3.12(b), is not subject to
any default thereunder of which eGroups has Knowledge by any party obligated to
eGroups pursuant thereto.
3.13 Interested Party Transactions. Except as set forth on Schedule
3.13, (i) no officer, director or, to the Knowledge of eGroups (without any duty
to investigate), any stockholder of eGroups has, directly or indirectly, an
economic interest worth greater than $25,000 in any entity which furnished or
sold, or furnishes or sells, services or products that eGroups furnishes or
sells, or proposes to furnish or sell, (ii) no officer, director or, to the
Knowledge of eGroups (without any duty to investigate), any stockholder of
eGroups has, directly or indirectly, an economic interest worth greater than
$25,000 in any entity that purchases from or sells or furnishes to, eGroups, any
goods or services or (iii) no officer, director or stockholder of eGroups has,
directly or indirectly, a beneficial interest worth greater than $25,000 in any
contract or agreement set forth in Schedule 3.12(a), Schedule 3.11(c) or
Schedule 3.11(h); provided, that ownership of no more than
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one percent (1%) of the outstanding voting stock of a publicly traded
corporation shall not be deemed an "economic interest in any entity" for
purposes of this Section 3.13. For the purposes of this subsection, "officer"
and "director" shall include any parent, child, sibling or spouse of any of such
persons, or any trust, partnership or corporation in which such officer or
director has a controlling interest.
3.14 Compliance with Laws. eGroups has complied in all material respects
with, is not in material violation of, and has not received any notices of
violation with respect to, any foreign, federal, state or local statute, law or
regulation.
3.15 Litigation. Except as set forth in Schedule 3.15, there is no
action, suit or proceeding of any nature pending or to eGroups' Knowledge
threatened against eGroups, its properties or any of its officers or directors,
in their respective capacities as such. Except as set forth in Schedule 3.15, to
eGroups' Knowledge, there is no investigation pending or threatened against
eGroups, its properties or any of its officers or directors (in their respective
capacities as such) by or before any governmental entity. Schedule 3.15 sets
forth, with respect to any pending or threatened action, suit, proceeding or
investigation, the forum, the parties thereto, the subject matter thereof and
the amount of damages claimed or other remedy requested. No Governmental Entity
has at any time challenged or questioned the legal right of eGroups to
manufacture, offer or sell any of its products in the present manner or style
thereof.
3.16 Insurance. With respect to the insurance policies and fidelity
bonds covering the assets, business, equipment, properties, operations,
employees, officers and directors of eGroups, there is no claim by eGroups
pending under any of such policies or bonds as to which coverage has been
questioned, denied or disputed by the underwriters of such policies or bonds.
All premiums due and payable under all such policies and bonds have been paid
and eGroups is otherwise in material compliance with the terms of such policies
and bonds (or other policies and bonds providing substantially similar insurance
coverage). eGroups has no Knowledge of any threatened termination of, or
material premium increase with respect to, any of such policies.
3.17 Minute Books. The minute books of eGroups made available to counsel
for ONElist are the only minute books of eGroups and contain a reasonably
accurate summary of all meetings of directors (or committees thereof) and
stockholders or actions by written consent since the time of incorporation of
eGroups.
3.18 Environmental Matters. eGroups is not in violation of any
applicable statute, law or regulation relating to the environment or
occupational health and safety, and to its Knowledge, no material expenditures
are or will be required in order to comply with any such existing statute, law
or regulation.
3.19 Brokers' and Finders' Fees. eGroups has not incurred, nor will it
incur, directly or indirectly, any liability for brokerage or finders' fees,
investment banking fees, consulting fees or agents' commissions or any similar
charges in connection with this Agreement or any transaction contemplated
hereby.
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3.20 Employee Matters and Benefit Plans.
(a) Definitions. For purposes of this Agreement, the following
terms shall have the meanings set forth below:
(i) "eGroups Affiliate" shall mean any other corporation,
partnership, limited liability company, trade, business, person or other entity
that, together with eGroups, is treated as a single employer under Section
414(b), (c), (m) or (o) of the Code;
(ii) "eGroups Employee Plan" shall refer to 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 formal or informal, funded or unfunded and whether or not
legally binding, including without limitation, each "employee benefit plan",
within the meaning of Section 3(3) of ERISA, (A) which is or has been sponsored,
maintained, contributed to, or required to be contributed to, by eGroups or any
eGroups Affiliate for the benefit of any "eGroups Employee" (as defined below),
or (B) with respect to which eGroups or any eGroups Affiliate has or could have
any material liability or obligation, contingent or otherwise;
(iii) "eGroups Employee" shall mean any current, former,
or retired employee, officer, or director of eGroups or any eGroups Affiliate;
(iv) "eGroups Employee Agreement" shall refer to each
written management, employment, severance, consulting, relocation, repatriation,
expatriation, visas, work permit or similar agreement or contract between
eGroups or any eGroups Affiliate and any eGroups Employee or consultant. Except
as set forth on Schedule 3.20(a)(iv), eGroups represents and warrants that there
are no oral agreements between eGroups or any Affiliate and any eGroups Employee
or consultant pertaining to management, employment, severance, consulting,
relocation, repatriation, expatriation, visas, work permit or similar matters or
arrangements;
(b) Schedule. Schedule 3.20(b) contains an accurate and complete
list of each eGroups Employee Plan and each eGroups Employee Agreement together
with a schedule of all liabilities, whether or not accrued, under each such
eGroups Employee Plan or eGroups Employee Agreement only to the extent not
reflected on the eGroups Current Balance Sheet. eGroups does not have any plan
or commitment, whether legally binding or not, to establish any new eGroups
Employee Plan or eGroups Employee Agreement, to modify any eGroups Employee Plan
or eGroups Employee Agreement (except to the extent required by law or to
conform any such eGroups Employee Plan or eGroups Employee Agreement to the
requirements of any applicable law, in each case as previously disclosed to
eGroups in writing, or as required by this Agreement), or to enter into any
eGroups Employee Plan or eGroups Employee Agreement, nor does it have any
intention or commitment to do any of the foregoing. There has been no amendment,
interpretation or other announcement (written or oral) by eGroups or, to the
Knowledge of eGroups, any other Person relating to, or change in participation
or coverage under, any eGroups Employee Plan or eGroups Employee Agreement that,
either alone or together with other such items or events, could materially
increase the expense of maintaining the eGroups Employee Plans and eGroups
Employee
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Agreements above the level of expense incurred with respect thereto for the most
recent fiscal year included in the eGroups Financial Statements.
(c) Documents. eGroups has provided, or will provide within three
(3) days following the execution of this Agreement, to ONElist (i) correct and
complete copies of all documents embodying or materially affecting the
interpretation or application of each eGroups Employee Plan and each eGroups
Employee Agreement including all amendments thereto; (ii) the most recent annual
actuarial valuations, if any, prepared for each eGroups Employee Plan; (iii) the
three most recent annual reports (Series 5500 and all schedules thereto), if
any, required under ERISA or the Code in connection with each eGroups Employee
Plan or related trust; (iv) if the eGroups Employee Plan is funded, the most
recent annual and periodic accounting of eGroups Employee Plan assets; (v) the
most recent summary plan description together with the most recent summary of
material modifications, if any, required under ERISA with respect to each
eGroups Employee Plan which has a material adverse effect on such eGroups
Employee Plan; (vi) the most recent IRS determination, opinion, notification or
advisory letters as applicable, and rulings relating to eGroups Employee Plans
and copies of all applications and correspondence to or from the IRS or the DOL
with respect to any eGroups Employee Plan or eGroups Employee Agreement; (vii)
all material written agreements and contracts relating to each eGroups Employee
Plan and eGroups Employee Agreement, including, but not limited to, trust
agreements, administrative service agreements, group annuity contracts and group
insurance contracts; (viii) all communications material distributed to any
eGroups Employee or eGroups Employees relating to any eGroups Employee Plan or
eGroups Employee Agreement and any proposed eGroups Employee Plan or eGroups
Employee Agreement, 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 eGroups; and (ix) all registration statements and prospectuses prepared in
connection with each eGroups Employee Plan not otherwise publicly available on
the SEC website.
(d) Employee Plan Compliance. Except as set forth on Schedule
3.20(d), (i) eGroups and, to the Knowledge of eGroups, all other Persons have
properly performed in all material respects all obligations required to be
performed by them under each eGroups Employee Plan and eGroups Employee
Agreement; (ii) each eGroups Employee Plan and eGroups Employee Agreement is,
and at all times since inception has been, established, maintained,
administered, operated and funded 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 and the Code; (iii) each
eGroups 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 is, and at all
times since inception has been, so qualified, and has either received a
favorable determination letter from the IRS with respect to its qualified status
under the Code, including all amendments to the Code effected by the Tax Reform
Act of 1986 and subsequent legislation, 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; (iv) no "prohibited transaction", within the meaning of Section
4975 of the Code or Sections 406 and 407 of ERISA, has occurred with respect to
any eGroups Employee Plan for which an exemption is not applicable;
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(v) there are no actions, suits or claims pending, or, to the Knowledge of
eGroups, threatened or anticipated (other than routine claims for benefits)
against any eGroups Employee Plan or against the assets of any eGroups Employee
Plan; and (vi) each eGroups Employee Plan can be amended, terminated or
otherwise discontinued after the Effective Time in accordance with its terms,
without material liability to ONElist, eGroups or any eGroups Affiliates (other
than ordinary administration expenses typically incurred in a termination
event); (vii) there are no audits, inquiries or proceedings pending or, to the
Knowledge of eGroups, threatened by the IRS or DOL with respect to any eGroups
Employee Plan or eGroups Employee Agreement; (viii) all contributions, premiums
and other payments due or required to be paid to (or with respect to) each
eGroups Employee Plan have been timely paid, or if not yet due, have been
properly accrued on eGroups's books consistent with past practice; and (ix)
neither eGroups nor any eGroups Affiliate has incurred, and to the Knowledge of
eGroups there exists no condition or set of circumstances in connection with
which either eGroups or any eGroups Affiliate could incur, a material liability
or expense (except for benefit claims and funding obligations payable in the
ordinary course) under ERISA, the Code or any other applicable law, statute,
order, rule or regulation with respect to any eGroups Employee Plan or eGroups
Employee Agreement.
(e) Pension Plans. At no time has eGroups or any eGroups
Affiliate sponsored, maintained, participated in, or contributed to (or been
required to contribute to), any Pension Plan which is subject to Part 3 of
Subtitle B of Title I of ERISA, Title IV of ERISA or Section 412 of the Code.
(f) Multiemployer Plans. At no time has eGroups or any eGroups
Affiliate contributed to or been requested (or obligated) to contribute to any
Multiemployer Plan or Multiple Employer Plan.
(g) No Post-Employment Obligations. Except as set forth in
Schedule 3.20(g), neither eGroups nor any eGroups Employee Plan provides, or has
any liability to provide, life insurance, medical or other employee welfare
benefits to any eGroups Employee upon his or her retirement or termination of
employment for any reason, except as may be required by statute, and eGroups has
never represented, promised or contracted (whether in oral or written form) to
any eGroups Employee (either individually or to eGroups Employees as a group) or
any other person that such eGroups Employee(s) or other person would be provided
with life insurance, medical or other employee welfare benefits upon their
retirement or termination of employment, except to the extent required by
statute. The term "other employee welfare benefits" means those benefits
traditionally provided under an "employee benefit welfare plan" as defined in
ERISA Section 3(1).
(h) Health Care Compliance. Neither eGroups nor any eGroups
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, the requirements of the Health Insurance Portability and Accountability
Act of 1996, the requirements of the Women's Health and Cancer Rights Act, the
requirements of the Newborns' and Mothers' Health Protection Act of 1996, or any
amendment to each such Act, or any similar provisions of state law applicable to
its Employees.
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(i) Effect of Transaction. Except as set forth on Schedule
3.20(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 eGroups
Employee Plan, eGroups 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 eGroups Employee.
(j) Employment Matters. eGroups (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
eGroups Employees; (ii) has withheld all amounts required by law or by agreement
to be withheld from the wages, salaries and other payments to eGroups Employees;
(iii) is not liable for any arrears of wages, other than arrears normally
included in its payroll schedule and system, or any taxes or any penalty for
failure to comply with any of the foregoing; and (iv) is not liable for any
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 eGroups Employees (other than routine
payments to be made in the normal course of business and consistent with past
practice). There are no pending, threatened or reasonably anticipated claims or
actions against eGroups under any worker's compensation policy or long-term
disability policy. To eGroups' Knowledge, no employee of eGroups has violated
any employment contract, nondisclosure agreement or noncompetition agreement by
which such employee is bound due to such employee being employed by eGroups and
disclosing to eGroups or using trade secrets or proprietary information of any
other person or entity.
(k) Labor. To the Knowledge of eGroups, no work stoppage or labor
strike against eGroups is pending or threatened. Except as set forth in Schedule
3.20(k), eGroups is not involved in or, to the Knowledge of eGroups, threatened
with, any labor dispute, grievance, or litigation relating to labor, safety or
discrimination matters involving any eGroups Employee, including, without
limitation, charges of unfair labor practices or discrimination complaints,
which, if adversely determined, would, individually or in the aggregate, result
in liability to eGroups. To the Knowledge of eGroups, neither eGroups nor any of
its subsidiaries has engaged in any unfair labor practices within the meaning of
the National Labor Relations Act which would, individually or in the aggregate,
directly or indirectly result in a material liability to eGroups. Except as set
forth in Schedule 3.20(k), eGroups 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 eGroups Employees and no collective bargaining
agreement is being negotiated by eGroups.
3.21 Accounting and Regulatory Matters. eGroups has no Knowledge of any
action taken by eGroups or any Affiliate of eGroups or agreed to be taken nor
has any Knowledge of any fact or circumstance that is reasonably likely to (a)
prevent the Merger from qualifying for pooling-of-interests accounting
treatment, or (b) materially impede or delay receipt of any consents of
regulatory authorities referred to in Section 6.1(j).
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3.22 Year 2000 Compliance. All of eGroups' products and services
(including products and services currently under development) to the extent they
record, store, process, calculate and present dates, if at all, are Year 2000
Compliant. All of eGroups' material products and services will lose no
functionality with respect to the introduction of records containing dates
falling on or after January 1, 2000. To the Knowledge of eGroups, all of
eGroups' internal computer systems, including without limitation, its accounting
systems, are Year 2000 Compliant.
3.23 Representations Complete. None of the representations or warranties
made by eGroups or Merger Sub (as modified by the eGroups and Merger Sub
Schedules), nor any statement made in any schedule or certificate furnished by
eGroups or Merger Sub pursuant to this Agreement, or furnished in or in
connection with documents mailed or delivered to the stockholders of eGroups or
Merger Sub in connection with soliciting their consent to this Agreement and the
Merger, contains or will contain at the Effective Time, any untrue statement of
a material fact, or omits or will omit at the Effective Time to state any
material fact necessary in order to make the statements contained herein or
therein, in the light of the circumstances under which they were made, not
misleading.
ARTICLE IV
CONDUCT PRIOR TO THE EFFECTIVE TIME
4.1 Conduct of Business of ONElist and eGroups.
(a) ONElist Conduct. During the period from the date of this
Agreement and continuing until the earlier of the termination of this Agreement
or the Effective Time, ONElist agrees (except to the extent that eGroups shall
otherwise consent in writing or as expressly contemplated herein) to carry on
its business in the usual, regular and ordinary course in substantially the same
manner as heretofore conducted, to pay its debts and Taxes when due, to pay or
perform other obligations when due, and, to the extent consistent with such
business, to use all reasonable efforts consistent with past practice and
policies to preserve intact its present business organization, keep available
the services of its present officers and employees and preserve their
relationships with customers, suppliers, distributors, licensors, licensees, and
others having business dealings with it, all with the goal of preserving
unimpaired its goodwill and ongoing businesses at the Effective Time. ONElist
shall promptly notify eGroups of any material event or occurrence or emergency
not in the ordinary course of its business, and any material event involving or
adversely affecting ONElist or its business. Except as expressly contemplated by
this Agreement and except as set forth on Schedule 4.1(a), ONElist shall not,
without the prior written consent of eGroups:
(i) Enter into any commitment, activity or transaction not
in the ordinary course of business;
(ii) Transfer to any person or entity any rights to any
ONElist Intellectual Property (other than pursuant to end-user licenses in the
ordinary course of business);
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(iii) Enter into or amend any agreements pursuant to which
any other party is granted manufacturing, marketing, distribution or similar
rights of any type or scope with respect to any products of ONElist;
(iv) Amend or otherwise modify (or agree to do so), except
in the ordinary course of business, or violate the terms of, any of the
agreements set forth or described in the ONElist Schedules;
(v) Commence any litigation;
(vi) Declare, set aside or pay any dividends on or make
any other distributions (whether in cash, stock or property) in respect of any
of its capital stock, or split, combine or reclassify any of its capital stock
or issue or authorize the issuance of any other securities in respect of, in
lieu of or in substitution for shares of capital stock of ONElist, or
repurchase, redeem or otherwise acquire, directly or indirectly, any shares of
its capital stock (or options, warrants or other rights exercisable therefor);
(vii) Except as may be required for the issuance of shares
of ONElist Capital Stock upon exercise or conversion of presently outstanding
ONElist Options and except pursuant to agreements previously entered into and
agreements that ONElist will enter into in the ordinary course of business and
consistent with past practice in connection with the employment of non-officer
employees, issue, grant, deliver or sell or authorize or propose the issuance,
grant, delivery or sale of, or purchase or propose the purchase of, any shares
of its capital stock or securities convertible into, or subscriptions, rights,
warrants or options to acquire, or other agreements or commitments of any
character obligating it to issue any such shares or other convertible
securities;
(viii) Cause or permit any amendments to its Articles of
Incorporation or Bylaws;
(ix) Acquire or agree to acquire by merging or
consolidating with, or by purchasing any assets or equity securities 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 ONElist;
(x) Sell, lease, license or otherwise dispose of any of
its properties or assets, except in the ordinary course of business and
consistent with past practice, or create any security interest in such assets or
properties;
(xi) Incur any indebtedness for borrowed money or
guarantee any such indebtedness or issue or sell any debt securities of ONElist
or guarantee any debt securities of others;
(xii) Grant any severance or termination pay to any
director, officer, employee or consultant, except payments (a) required by law
or, (b) with respect to non-officer
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employees and consultants (i) made pursuant to written agreements outstanding on
the date hereof (which such agreements are disclosed on Schedule 4.1(a)(xii)),
or (ii) pursuant to ONElist policy in effect on the date hereof and that has
been disclosed to eGroups;
(xiii) Adopt or amend any employee benefit plan, program,
policy or arrangement, or enter into any employment contract, extend any
employment offer, pay or agree to pay any special bonus or special remuneration
to any director, employee or consultant, or increase the salaries or wage rates
of its employees other than in the ordinary course of business and consistent
with past practice;
(xiv) Revalue any of its assets, including without
limitation writing down the value of inventory or writing off notes or accounts
receivable other than in the ordinary course of business and consistent with
past practice;
(xv) Take any action, including the acceleration of
vesting of any options, warrants, restricted stock or other rights to acquire
shares of the capital stock of ONElist which would be reasonably likely to
interfere with eGroups' ability to account for the Merger as a pooling of
interests or any other action that could jeopardize the tax-free reorganization
hereunder;
(xvi) Pay, discharge or satisfy, in an amount in excess of
$25,000, in any one case, or $100,000, in the aggregate, any claim, liability or
obligation (absolute, accrued, asserted or unasserted, contingent or otherwise),
other than the payment, discharge or satisfaction in the ordinary course of
business of liabilities reflected or reserved against in the ONElist Financial
Statements or incurred in the ordinary course of business since September 30,
1999;
(xvii) Make or change any material election in respect of
Taxes, adopt or change any accounting method in respect of Taxes, enter into any
closing agreement, settle any claim or assessment in respect of Taxes, or
consent to any extension or waiver of the limitation period applicable to any
claim or assessment in respect of Taxes;
(xviii) Enter into any strategic alliance, joint
development or joint marketing arrangement or agreement;
(xix) Fail to pay or otherwise satisfy its monetary
obligations as they become due, except such as are being contested in good
faith;
(xx) Waive or commit to waive any rights with a value in
excess of $10,000, in any one case, or $25,000, in the aggregate;
(xxi) Cancel, materially amend or renew any insurance
policy other than in the ordinary course of business;
(xxii) Alter, or enter into any commitment to alter, its
interest in any corporation, association, joint venture, partnership or business
entity in which ONElist directly or indirectly holds any interest on the date
hereof; or
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(xxiii) Take, or agree in writing or otherwise to take,
any of the actions described in Sections 4.1(a)(i) through (xxii) above, or any
other action that would prevent ONElist from performing or cause ONElist not to
perform its covenants hereunder.
(b) eGroups Conduct. During the period from the date of this
Agreement and continuing until the earlier of the termination of this Agreement
or the Effective Time, eGroups agrees (except to the extent that ONElist shall
otherwise consent in writing or as expressly contemplated herein) to carry on
its business in the usual, regular and ordinary course in substantially the same
manner as heretofore conducted, to pay its debts and Taxes when due, to pay or
perform other obligations when due, and, to the extent consistent with such
business, to use all reasonable efforts consistent with past practice and
policies to preserve intact its present business organization, keep available
the services of its present officers and employees and preserve their
relationships with customers, suppliers, distributors, licensors, licensees, and
others having business dealings with it, all with the goal of preserving
unimpaired its goodwill and ongoing businesses at the Effective Time. eGroups
shall promptly notify ONElist of any material event or occurrence or emergency
not in the ordinary course of its business, and any material event involving or
adversely affecting eGroups or its business. Except as expressly contemplated by
this Agreement and except as set forth on Schedule 4.1(b), eGroups shall not,
without the prior written consent of ONElist:
(i) Enter into any commitment, activity or transaction not
in the ordinary course of business;
(ii) Transfer to any person or entity any rights to any
eGroups Intellectual Property (other than pursuant to end-user licenses in the
ordinary course of business);
(iii) Enter into or amend any agreements pursuant to which
any other party is granted manufacturing, marketing, distribution or similar
rights of any type or scope with respect to any products of eGroups;
(iv) Amend or otherwise modify (or agree to do so), except
in the ordinary course of business, or violate the terms of, any of the
agreements set forth or described in the eGroups and Merger Sub Schedules;
(v) Commence any litigation;
(vi) Declare, set aside or pay any dividends on or make
any other distributions (whether in cash, stock or property) in respect of any
of its capital stock, or split, combine or reclassify any of its capital stock
or issue or authorize the issuance of any other securities in respect of, in
lieu of or in substitution for shares of capital stock of eGroups, or
repurchase, redeem or otherwise acquire, directly or indirectly, any shares of
its capital stock (or options, warrants or other rights exercisable therefor);
(vii) Except for the issuance of shares of eGroups capital
stock upon exercise or conversion of presently outstanding eGroups Convertible
Securities and except pursuant to agreements previously entered into and
agreements that eGroups will enter into in the ordinary
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course of business and consistent with past practice in connection with the
employment of non-officer employees, issue, grant, deliver or sell or authorize
or propose the issuance, grant, delivery or sale of, or purchase or propose the
purchase of, any shares of its capital stock or securities convertible into, or
subscriptions, rights, warrants or options to acquire, or other agreements or
commitments of any character obligating it to issue any such shares or other
convertible securities;
(viii) Cause or permit any amendments to its Third Amended
and Restated Certificate or Bylaws;
(ix) Acquire or agree to acquire by merging or
consolidating with, or by purchasing any assets or equity securities 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 eGroups;
(x) Sell, lease, license or otherwise dispose of any of
its properties or assets, except in the ordinary course of business and
consistent with past practice, or create any security interest in such assets or
properties;
(xi) Incur any indebtedness for borrowed money or
guarantee any such indebtedness or issue or sell any debt securities of eGroups
or guarantee any debt securities of others;
(xii) Grant any severance or termination pay to any
director, officer, employee or consultant, except payments (a) required by law
or, (b) with respect to non-officer employees and consultants (i) made pursuant
to written agreements outstanding on the date hereof (which such agreements are
disclosed on Schedule 4.1(b)(xii)), or (ii) pursuant to eGroups policy in effect
on the date hereof and that has been disclosed to ONElist;
(xiii) Adopt or amend any employee benefit plan, program,
policy or arrangement, or enter into any employment contract, extend any
employment offer, pay or agree to pay any special bonus or special remuneration
to any director, employee or consultant, or increase the salaries or wage rates
of its employees other than in the ordinary course of business and consistent
with past practice;
(xiv) Revalue any of its assets, including without
limitation writing down the value of inventory or writing off notes or accounts
receivable other than in the ordinary course of business and consistent with
past practice;
(xv) Take any action, including the acceleration of
vesting of any options, warrants, restricted stock or other rights to acquire
shares of the capital stock of eGroups which would be reasonably likely to
interfere with eGroups' ability to account for the Merger as a pooling of
interests or any other action that could jeopardize the tax-free reorganization
hereunder;
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(xvi) Pay, discharge or satisfy, in an amount in excess of
$25,000, in any one case, or $100,000, in the aggregate, any claim, liability or
obligation (absolute, accrued, asserted or unasserted, contingent or otherwise),
other than the payment, discharge or satisfaction in the ordinary course of
business of liabilities reflected or reserved against in the eGroups Financial
Statements or incurred in the ordinary course of business since September 30,
1999;
(xvii) Make or change any material election in respect of
Taxes, adopt or change any accounting method in respect of Taxes, enter into any
closing agreement, settle any claim or assessment in respect of Taxes, or
consent to any extension or waiver of the limitation period applicable to any
claim or assessment in respect of Taxes;
(xviii) Enter into any strategic alliance, joint
development or joint marketing arrangement or agreement;
(xix) Fail to pay or otherwise satisfy its monetary
obligations as they become due, except such as are being contested in good
faith;
(xx) Waive or commit to waive any rights with a value in
excess of $10,000, in any one case, or $25,000, in the aggregate;
(xxi) Cancel, materially amend or renew any insurance
policy other than in the ordinary course of business;
(xxii) Alter, or enter into any commitment to alter, its
interest in any corporation, association, joint venture, partnership or business
entity in which eGroups directly or indirectly holds any interest on the date
hereof; or
(xxiii) Take, or agree in writing or otherwise to take,
any of the actions described in Sections 4.1(b)(i) through (xxii) above, or any
other action that would prevent eGroups from performing or cause eGroups not to
perform its covenants hereunder.
4.2 No ONElist Solicitation.
(a) Until the earlier of (i) the Effective Time or (ii) the date
of termination of this Agreement pursuant to the provisions of Section 8.1
hereof, ONElist will not (nor will ONElist permit any of ONElist's employees,
officers, directors, advisors, stockholders, agents, representatives or
Affiliates to) directly or indirectly, take any of the following actions with
any party other than eGroups and its designees: (A) solicit, initiate,
entertain, respond to or encourage any proposals or offers from, or conduct
discussions with or engage in negotiations with, any person relating to any
possible acquisition of ONElist or any of its subsidiaries (whether by way of
merger, purchase of capital stock, purchase of assets or
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otherwise), any material portion of its or their capital stock or assets or any
equity interest in ONElist or any of its subsidiaries, (B) provide information
with respect to it to any person, other than eGroups, relating to, or otherwise
cooperate with, facilitate or encourage any effort or attempt by any such person
with regard to, any possible acquisition of ONElist (whether by way of merger,
purchase of capital stock, purchase of assets or otherwise), any material
portion of its or their capital stock or assets or any equity interest in
ONElist or any of its subsidiaries, (C) enter into an agreement with any person,
other than eGroups, providing for the acquisition of ONElist (whether by way of
merger, purchase of capital stock, purchase of assets or otherwise), any
material portion of its or their capital stock or assets or any equity interest
in ONElist or any of its subsidiaries, or (D) make or authorize any statement,
recommendation or solicitation in support of any possible acquisition of ONElist
or any of its subsidiaries (whether by way of merger, purchase of capital stock,
purchase of assets or otherwise), any material portion of its or their capital
stock or assets or any equity interest in ONElist or any of its subsidiaries by
any person, other than by eGroups. ONElist shall immediately cease and cause to
be terminated any such contacts or negotiations with third parties relating to
any such transaction or proposed transaction. In addition to the foregoing, if
ONElist receives prior to the Effective Time or the termination of this
Agreement any offer or proposal relating to any of the above, ONElist shall
immediately notify eGroups thereof, including information as to the identity of
the offeror or the party making any such offer or proposal and the specific
terms of such offer or proposal, as the case may be, and such other information
related thereto as eGroups may reasonably request. Except as contemplated by
this Agreement, disclosure by ONElist of the terms hereof (other than the
prohibition of this section) shall be deemed to be a violation of this Section
4.2.
(b) Notwithstanding anything to the contrary contained herein, in
the event that the Closing has not occurred on or before November 30, 1999,
ONElist may engage in the activities set forth in clauses (A) through (D) of
Section 4.2(a) solely for the purpose of effecting a private equity or debt
financing.
4.3 No eGroups or Merger Sub Solicitation.
(a) Until the earlier of (i) the Effective Time or (ii) the date
of termination of this Agreement pursuant to the provisions of Section 8.1
hereof, eGroups and Merger Sub will not (nor will eGroups or Merger Sub permit
any of their employees, officers, directors, advisors, stockholders, agents,
representatives or Affiliates to) directly or indirectly, take any of the
following actions with any party other than ONElist and its designees: (A)
solicit, initiate, entertain, respond to or encourage any proposals or offers
from, or conduct discussions with or engage in negotiations with, any person
relating to any possible acquisition of eGroups or any of its subsidiaries
(whether by way of merger, purchase of capital stock, purchase of assets or
otherwise), any material portion of its or their capital stock or assets or any
equity interest in eGroups or any of its subsidiaries, (B) provide information
with respect to it to any person, other than ONElist, relating to, or otherwise
cooperate with, facilitate or encourage any effort or attempt by any such person
with regard to, any possible acquisition of eGroups (whether by way of merger,
purchase of capital stock, purchase of assets or otherwise), any material
portion of its or their capital stock or assets or any equity interest in
eGroups or any of its subsidiaries, (C) enter into an agreement with any person
providing for the acquisition of eGroups (whether by way of merger, purchase of
capital stock, purchase of assets or otherwise), any material portion of its or
their capital stock or assets or any equity interest in eGroups or any of its
subsidiaries, or (D) make or authorize any statement, recommendation or
solicitation in support of any possible acquisition of eGroups or any of its
subsidiaries (whether by way of merger, purchase of capital stock, purchase of
assets or otherwise), any material portion of its
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or their capital stock or assets or any equity interest in eGroups or any of its
subsidiaries by any person. eGroups shall immediately cease and cause to be
terminated any such contacts or negotiations with third parties relating to any
such transaction or proposed transaction. In addition to the foregoing, if
eGroups receives prior to the Effective Time or the termination of this
Agreement any offer or proposal relating to any of the above, eGroups shall
immediately notify ONElist thereof, including information as to the identity of
the offeror or the party making any such offer or proposal and the specific
terms of such offer or proposal, as the case may be, and such other information
related thereto as ONElist may reasonably request. Except as contemplated by
this Agreement, disclosure by eGroups of the terms hereof (other than the
prohibition of this section) shall be deemed to be a violation of this Section
4.3.
(b) Notwithstanding anything to the contrary contained herein, in
the event that the Closing has not occurred on or before November 30, 1999,
eGroups may engage in the activities set forth in clauses (A) through (D) of
Section 4.3(a) solely for the purpose of effecting a private equity or debt
financing.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 ONElist Shareholder and eGroups Stockholder Approvals.
(a) As promptly as practicable, ONElist shall submit this
Agreement and the transactions contemplated hereby, including without limitation
the Merger, to ONElist's shareholders for approval as provided by California law
and ONElist's Articles of Incorporation and Bylaws. The materials submitted to
ONElist's shareholders shall be subject to review and approval by eGroups and
include information regarding eGroups and ONElist, the terms of the Merger and
this Agreement and the unanimous recommendation of the Board of Directors of
ONElist in favor of the Merger, this Agreement and the transactions contemplated
hereby.
(b) As promptly as practicable, eGroups shall submit this
Agreement and the transactions contemplated hereby, including without limitation
the Merger, to eGroups' stockholders for approval and adoption as provided by
California law, Delaware law and eGroups' Third Amended and Restated Certificate
and Bylaws. The materials submitted to eGroups' stockholders shall include the
unanimous recommendation of the Board of Directors of eGroups in favor of the
Merger, this Agreement and the transactions contemplated hereby.
5.2 Restrictions on Transfer.
(a) All certificates representing Consideration Shares
deliverable to any ONElist Shareholder pursuant to this Agreement and in
connection with the Merger and any certificates subsequently issued with respect
thereto or in substitution therefor (including any shares issued or issuable in
respect of any such shares upon any stock split stock dividend,
recapitalization, conversion or similar event) shall be stamped or otherwise
imprinted with legends in the following form:
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THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE
SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
THEREFROM UNDER SAID ACT. THE TRANSFER RESTRICTIONS APPLICABLE TO
THESE SHARES ARE BINDING ON TRANSFEREES OF THESE SHARES.
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD,
PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED DIRECTLY OR
INDIRECTLY FOR SUCH PERIOD OF TIME NOT TO EXCEED ONE HUNDRED
EIGHTY (180) DAYS FOLLOWING THE EFFECTIVE DATE OF ANY
REGISTRATION STATEMENT OF THE ISSUER FILED UNDER THE SECURITIES
ACT IN CONNECTION WITH THE INITIAL PUBLIC OFFERING OF THE
ISSUER'S COMMON STOCK.
(b) The certificates evidencing the Consideration Shares shall
also bear any legend required by the Commissioner of Corporations of the State
of California or such as are required pursuant to any state, local or foreign
law governing such securities.
(c) The Consideration Shares will not be registered under the
Securities Act in connection with the Merger.
(d) No ONElist Shareholder shall be permitted to sell, transfer
or otherwise dispose of any Consideration Shares received in the Merger, unless
(i) such sale, transfer or other disposition is made in conformity with Rule
145(d) promulgated under the Securities Act, (ii) such sale, transfer or other
disposition has been registered under the Securities Act or (iii) eGroups
receives a written opinion of counsel reasonably acceptable to it stating that
the proposed transfer of the Consideration Shares may be effected without
registration under the Securities Act.
(e) Each ONElist Shareholder agrees that, during the period of
duration (up to, but not exceeding, one hundred eighty (180) days) specified by
eGroups and an underwriter of common stock or other securities of eGroups,
following the effective date of a registration statement of eGroups filed under
the Securities Act of 1933, as amended, it shall not, to the extent requested by
eGroups and such underwriter, directly or indirectly sell, offer to sell,
contract to sell (including, without limitation, any short sale), grant any
option to purchase or otherwise transfer or dispose of (other than to donees who
agree to be similarly bound) any securities of eGroups held by it at any time
during such period except Common Stock included in such registration; provided,
however that
(i) such agreement shall be applicable only to the first
such registration statement of eGroups which covers common stock (or other
securities) to be sold on its behalf to the public in an underwritten offering;
and
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(ii) all officers and directors of eGroups, all one
percent security holders, and all other persons with registration rights
(whether or not pursuant to the Investors Rights Agreement (as defined below))
enter into similar agreements.
In order to enforce the foregoing covenant, eGroups may impose
stop-transfer instructions with respect to any registrable securities (and the
shares of securities of every other person subject to the foregoing restriction)
until the end of such period, and each holder of registrable securities shall
execute an agreement in the form provided by the underwriter containing terms
which are essentially consistent with the provisions of this Section
5.2(e)
Notwithstanding the foregoing, the obligations described in this Section
5.2(e) shall not apply to a registration relating solely to employee benefit
plans on Form S-1 or Form S-8 or similar forms which may be promulgated in the
future, or a registration relating solely to an SEC Rule 145 transaction on Form
S-4 or similar forms which may be promulgated in the future.
5.3 Access to Information. Each party shall afford the others and its
accountants, counsel and other representatives, and with respect to clause (b)
below, shall cause its accountants to afford, reasonable access during normal
business hours during the period prior to the Effective Time to: (a) all of its
properties, books, personnel, contracts, commitments and records; (b) the
accountants of the other party, the audit work papers and other records of the
accounts of such party; and (c) all other information concerning the business,
properties and personnel (subject to restrictions imposed by applicable law) of
it as the others may reasonably request. No information or knowledge obtained in
any investigation pursuant to this Section 5.3 shall affect or be deemed to
modify any representation or warranty contained herein.
5.4 Confidentiality. Each of the parties hereto hereby agrees to keep
the terms of this Agreement (except to the extent contemplated hereby) and such
information or knowledge obtained in any investigation pursuant to Section 5.3,
or pursuant to the negotiation and execution of this Agreement or the
effectuation of the transactions contemplated hereby, confidential; provided,
however, that the foregoing shall not apply to information or knowledge which:
(a) a party can demonstrate, through its written records in existence prior to
the date hereof, was already lawfully in its possession prior to the disclosure
thereof by the other party; (b) is generally known to the public and did not
become so known through any violation of law; (c) became known to the public
through no fault, action or inaction of the party receiving the information; (d)
is later lawfully acquired by the receiving party without confidentiality
restrictions from other sources; (e) is required to be disclosed by order of
court or government agency with subpoena powers (provided that such party shall
have provided the other party with prior notice of such order or subpoena and an
opportunity to object or take other available action); or (f) which is disclosed
in the course of any litigation between any of the parties hereto. In the event
that this Agreement is terminated in accordance with Section 8.1 hereof, the
parties agree that that certain letter agreement by and between ONElist and
eGroups dated October 14, 1999 (a true and complete copy of which is attached
hereto as Exhibit M and is hereby incorporated by reference and made a part
hereof) (the "Letter Agreement") shall remain in full force and effect. In the
event of any conflict between the terms of the Letter Agreement and this
Agreement, the terms of the Letter Agreement shall control.
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5.5 Expenses.
(a) Third Party Expenses. In the event the Merger is not
consummated, all fees and expenses incurred in connection with the Merger
including, without limitation, all legal, accounting, financial advisory,
consulting and all other fees and expenses of third parties incurred by a party
in connection with the negotiation and effectuation of the terms and conditions
of this Agreement and the transactions contemplated hereby, shall be the
obligation of the respective party incurring such fees and expenses.
(b) Brokers' or Finders' Fees. Each party hereto shall indemnify
and hold the other party harmless from any claim for brokers' fees or finders'
fees arising out of the transactions contemplated hereby by any Person claiming
to have been engaged by the indemnifying party.
5.6 Public Disclosure. Unless otherwise required by law (including,
without limitation, federal and state securities laws) prior to the Effective
Time, no disclosure (whether or not in response to an inquiry) of the subject
matter of this Agreement shall be made by any party hereto unless approved by
eGroups and ONElist prior to release, provided that such approval shall not be
unreasonably withheld. The parties will mutually agree in advance on the form,
timing and contents of announcements and disclosures regarding the Merger.
5.7 Consents. eGroups and ONElist shall use commercially reasonable
efforts to obtain the consents, waivers and approvals under any of the eGroups
Contracts and ONElist Contracts as may be required in connection with the Merger
(all of such consents, waivers and approvals are set forth in the ONElist
Schedules and eGroups and Merger Sub Schedules) so as to preserve all rights of
and benefits to eGroups and ONElist thereunder.
5.8 FIRPTA Compliance. On or prior to the Closing Date, ONElist shall
deliver to eGroups a properly executed statement in a form reasonably acceptable
to eGroups for purposes of satisfying eGroups' obligations under Treasury
Regulation Section 1.1445-2(c)(3).
5.9 Reasonable Efforts. Subject to the terms and conditions provided in
this Agreement, each of the parties hereto shall use commercially reasonable
efforts to ensure that its representations and warranties remain true and
correct in all material respects, and to take promptly, or cause to be taken,
all actions, and to do promptly, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated hereby, to obtain all necessary waivers,
consents and approvals, to effect all necessary registrations and filings, and
to remove any injunctions or other impediments or delays, legal or otherwise, in
order to consummate and make effective the transactions contemplated by this
Agreement for the purpose of securing to the parties hereto the benefits
contemplated by this Agreement.
5.10 Notification of Certain Matters. ONElist shall give prompt notice
to eGroups, and eGroups shall give prompt notice to ONElist, of (i) the
occurrence or non-occurrence of any event, the occurrence or non-occurrence of
which is likely to cause any representation or warranty of ONElist, eGroups or
Merger Sub, respectively, contained in this Agreement to be untrue or
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inaccurate at or prior to the Effective Time and (ii) any failure of ONElist or
eGroups, as the case may be, to comply with or satisfy any covenant, condition
or agreement to be complied with or satisfied by it hereunder; provided,
however, that the delivery of any notice pursuant to this Section 5.10 shall not
limit or otherwise affect any remedies available to the party receiving such
notice. No disclosure pursuant to this Section 5.10 shall be deemed to amend or
supplement the ONElist Schedules or the eGroups and Merger Sub Schedules, as the
case may be, or prevent or cure any misrepresentation, breach of warranty or
breach of covenant.
5.11 Certain Benefit Plans. Subject to compliance with
pooling-of-interest accounting treatment of the Merger, eGroups shall take such
reasonable actions as are necessary to allow eligible employees of ONElist to
participate in the benefit programs of eGroups provided to similarly situated
employees of eGroups, or alternative benefits programs substantially comparable
to those provided to similarly situated employees of eGroups, as soon as
reasonably practicable after the Effective Time. For purposes of participation
and vesting under eGroups' employee benefit plans, the service with ONElist of
the employees of ONElist prior to the Effective Time shall be treated as service
with eGroups. eGroups shall cause the Surviving Corporation to honor in
accordance with their terms all employment, severance, consulting and other
compensation contracts or agreements disclosed in the ONElist Schedules between
ONElist and any current or former director, officer or employee thereof, and all
provisions for vested benefits or other vested amounts earned or accrued through
the Effective Time under the ONElist Benefit Plans.
5.12 Accounting and Tax Treatment. Each of the parties undertakes and
agrees to use its reasonable efforts to cause the Merger, and to take no action
which would cause the Merger not, to qualify for treatment as a pooling of
interests for accounting purposes and each of the parties agrees to take no
action which would cause the Merger not to qualify as a "reorganization" within
the meaning of Section 368(a) of the Internal Revenue Code for federal income
tax purposes.
5.13 Additional Documents and Further Assurances. Each party hereto, at
the request of the other party hereto, shall execute and deliver such other
instruments and do and perform such other acts and things as may be necessary or
desirable for effecting completely the consummation of this Agreement and the
transactions contemplated hereby.
5.14 ONElist's Auditors. ONElist will use its commercially reasonable
efforts to cause its management and its independent auditors to facilitate on a
timely basis (i) the review of any ONElist audit work papers for up to the past
three years, including selected interim financial statements and data and (ii)
the delivery of such representations from ONElist's independent accountants as
may be reasonably requested by eGroups or its accountants in order for eGroups'
accountants to render the opinion called for by Section 6.1(m) hereof.
5.15 eGroups' Auditors. eGroups will use its commercially reasonable
efforts to cause its management and its independent auditors to facilitate on a
timely basis (i) the review of any eGroups audit or review work papers for up to
the past three years, including the examination of selected interim financial
statements and data and (ii) the delivery of such representations from eGroups'
independent accountants as may be reasonably requested by ONElist or its
accountants in order for ONElist's accountants to render the opinion called for
by Section 6.1(m) hereof.
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5.16 Agreement of Affiliates. ONElist and eGroups have disclosed in
Schedule 5.16 of the ONElist Schedules and the eGroups and Merger Sub Schedules,
respectively, each Person whom such party reasonably believes is an Affiliate of
such party. If the Merger is accounted for using the pooling-of-interests method
of accounting, shares of eGroups Common Stock held by such Persons shall not be
transferable until such time as financial results covering at least 30 days of
combined operations of eGroups and ONElist have been published within the
meaning of Section 201.01 of the SEC's Codification of Financial Reporting
Policies (and eGroups shall be entitled to place restrictive legends upon
certificates for shares of eGroups Common Stock issued to Affiliates of ONElist
pursuant to this Agreement to enforce the provisions of this Section 5.16).
5.17 Voting Agreements.
(a) Concurrently with the execution of this Agreement, eGroups
shall cause those of its stockholders listed on Exhibit A hereto to execute
Voting Agreements in the form attached hereto as Exhibit K, whereby each such
stockholder agrees to vote, whether at a meeting of stockholders or pursuant to
a written consent, all shares of eGroups Capital Stock held by such stockholder
and by affiliates controlled by such stockholder in favor of the Merger, this
Agreement and the transactions contemplated by this Agreement.
(b) Concurrently with the execution of this Agreement, ONElist
shall cause those of its shareholders listed on Exhibit B hereto to execute
Voting Agreements in the form attached hereto as Exhibit L, whereby each such
shareholder agrees to vote, whether at a meeting of shareholders or pursuant to
a written consent, all shares of ONElist Capital Stock held by such shareholder
and by affiliates controlled by such shareholder in favor of the Merger, this
Agreement and the transactions contemplated by this Agreement.
5.18 Indemnification.
(a) For a period of three years after the Effective Time, eGroups
shall, and shall cause the Surviving Corporation to, indemnify, defend and hold
harmless the present and former directors, officers, employees and agents of
ONElist (each, an "Indemnified Party") against all liabilities arising out of
actions or omissions arising out of the Indemnified Party's service or services
as directors, officers, employees or agents of ONElist occurring at or prior to
the Effective Time (including the transactions contemplated by this Agreement)
to the fullest extent permitted under California law and by ONElist's Articles
of Incorporation and Bylaws as in effect on the date hereof, including
provisions relating to advances of expenses incurred in the defense of any
litigation and whether or not eGroups is insured against any such matter.
Without limiting the foregoing, in any case in which approval by the Surviving
Corporation is required to effectuate any indemnification, the Surviving
Corporation shall direct, at the election of the Indemnified Party, that the
determination of any such approval shall be made by independent counsel mutually
and reasonably agreed upon between eGroups and the Indemnified Party.
(b) This Section 5.18 shall survive the Effective Time and is
intended to benefit ONElist, the Surviving Corporation and each of the
Indemnified Parties and shall be binding upon
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all successors and assigns (whether by operation of law or by contract) of
eGroups and the Surviving Corporation for the period specified above.
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 of the following
conditions:
(a) ONElist Shareholder Approval. This Agreement and the Merger
shall have been approved by the ONElist Shareholders by the requisite vote under
applicable law and ONElist's Articles of Incorporation and Bylaws.
(b) eGroups Stockholder Approval. This Agreement, the Merger and
the Fourth Amended and Restated Certificate of eGroups shall have been approved
and adopted by the stockholders of eGroups by the requisite vote under
applicable law and eGroups' Third Amended and Restated Certificate and Bylaws.
(c) eGroups Fourth Amended and Restated Certificate. The Fourth
Amended and Restated Certificate of eGroups shall have been filed with the
Secretary of State of the State of Delaware.
(d) No Injunctions or Restraints; Illegality. No temporary
restraining order, preliminary or permanent injunction or other order issued by
any court of competent jurisdiction or other legal restraint or prohibition
preventing the consummation of the Merger shall be in effect, nor shall any
proceeding brought by an administrative agency or commission or other
governmental authority or instrumentality, domestic or foreign, seeking any of
the foregoing be pending; nor shall there be any action taken, or any statute,
rule, regulation or order enacted, entered, enforced or deemed applicable to the
Merger, which makes the consummation of the Merger illegal.
(e) Dissenters Rights. Holders of more than ten percent (10%) of
the outstanding shares of ONElist Capital Stock and eGroups Capital Stock, on an
aggregate basis, shall not have exercised, nor shall they have any continued
right to exercise, appraisal rights under applicable law with respect to their
shares by virtue of the Merger.
(f) Tax Opinions. eGroups and ONElist shall each have received
written opinions from their respective tax counsel (Xxxxxxx Coie LLP ("Xxxxxxx
Coie") and WSGR, respectively), in form and substance reasonably satisfactory to
them, to the effect that the Merger will constitute a tax-free reorganization
within the meaning of Section 368(a) of the Code and such opinions shall not
have been withdrawn. The parties to this Agreement agree to make reasonable
representations (and to cause their Affiliates to make reasonable
representations) as requested by counsel for the purpose of rendering the
opinions discussed herein.
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(g) Investors Rights Agreement. The First Amended and Restated
Investors Rights Agreement, dated as of December 17, 1998 (the "Investors Rights
Agreement"), by and among eGroups and certain holders of eGroups' securities
shall have been amended, in substantially the form attached hereto as Exhibit I,
and executed by eGroups, the shareholders of ONElist who possess registration
rights pursuant to written agreements existing on the date hereof with respect
to certain securities of ONElist, and a sufficient number of the existing
holders of registration rights with respect to eGroups' securities in order to
permit the granting of such rights to such ONElist shareholders under the
Investors Rights Agreement.
(h) Co-Sale Agreement. The First Amended and Restated Co-Sale
Agreement, dated as of December 17, 1998 (the "Co-Sale Agreement"), by and among
eGroups and certain holders of eGroups' securities shall have been amended, in
substantially the form attached hereto as Exhibit J, and executed by eGroups,
the shareholders of ONElist who possess co-sale rights pursuant to written
agreements existing on the date hereof with respect to certain securities of
ONElist, and a sufficient number of the existing holders of co-sale rights with
respect to eGroups' securities in order to permit the granting of such rights to
such ONElist shareholders under the Co-Sale Agreement.
(i) Termination of Prior Agreements. ONElist shall have
terminated its: (i) Rights Agreement by and among ONElist and certain holders of
its capital stock, dated as of December 28, 1998 and amended as of February 26,
1999; and (ii) Right of First Refusal and Co-Sale Agreement by and among ONElist
and certain holders of its capital stock, dated as of December 28, 1998 and
amended as of February 26, 1999.
(j) Governmental Approvals. All approvals from Governmental
Entities, including without limitation any requisite Blue Sky approvals, which
are appropriate or necessary for the consummation of the Merger, shall have been
obtained.
(k) Litigation. There shall be no bona fide action, suit, claim
or proceeding of any nature pending, or overtly threatened, against eGroups or
ONElist, their respective properties or any of their officers or directors,
arising out of, or in any way connected with, the Merger or other transactions
contemplated by the terms of this Agreement.
(l) Consents and Approvals. Each party hereto shall have obtained
any and all consents required for consummation of the Merger or for the
preventing of any breach of or default under any ONElist Contract or eGroups
Contract, as the case may be, or any other contract or agreement to which either
party is a party or to which it is bound, which, if not obtained or made, is
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on either ONElist or eGroups, as applicable. No consent so obtained which
is necessary to consummate the transactions contemplated hereby shall be
conditioned or restricted in a manner which in the reasonable judgment of the
Board of Directors of either party would so materially adversely impact the
economic or business benefits of the transactions contemplated by this Agreement
that, had such condition or requirement been known, such party would not, in its
reasonable judgment, have entered into this Agreement.
(m) Pooling Letters.
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(i) eGroups shall have received from Ernst & Young LLP
("Ernst & Young"), independent auditors for eGroups, a letter dated as of the
Closing Date (which may contain customary qualifications and assumptions), to
the effect that Ernst & Young concurs with eGroups' management's conclusion that
eGroups may account for the Merger as a pooling of interests under Accounting
Principles Board Opinion No. 16, and ONElist shall have received a copy of said
letter.
(ii) ONElist shall have received from
PricewaterhouseCoopers LLP ("PricewaterhouseCoopers"), independent auditors for
ONElist, a letter dated as of the Closing Date (which may contain customary
qualifications and assumptions), to the effect that PricewaterhouseCoopers
concurs with ONElist's management's conclusion that no conditions exist related
to ONElist that would preclude eGroups from accounting for the Merger as a
pooling of interests under Accounting Principles Board Opinion No. 16.
(n) Affiliate Agreements. Each of the persons and entities listed
as Affiliates of eGroups on Schedule 5.16 shall have executed and delivered
Affiliate Agreements in substantially the form of Exhibit G, and each of the
persons and entities listed as Affiliates of ONElist on Schedule 5.16 shall have
executed and delivered Affiliate Agreements in substantially the form of Exhibit
H, and all such Affiliate Agreements shall be in full force and effect.
6.2 Additional Conditions to Obligations of ONElist. The obligations of
ONElist to consummate the Merger and the transactions contemplated by this
Agreement shall be subject to the satisfaction at or prior to the Closing of
each of the following conditions, any of which may be waived, in writing,
exclusively by ONElist:
(a) Representations and Warranties. The representations and
warranties of eGroups and Merger Sub contained in this Agreement shall be true
and correct in all material respects on and as of the Closing Date, except for
changes contemplated by this Agreement and except for those representations and
warranties which address matters only as of a particular date (which shall
remain true and correct as of such date), with the same force and effect as if
made on and as of the Closing Date, except for those representations and
warranties that are qualified by references to "material" or "Material Adverse
Effect" which all shall be true and correct in all respects, and except, in all
such cases, for such breaches, inaccuracies or omissions of such representations
and warranties which have neither had nor reasonably would be expected to have a
Material Adverse Effect on eGroups; and ONElist shall have received a
certificate to such effect signed on behalf of eGroups by the chief executive
officer and chief financial officer of eGroups.
(b) Agreements and Covenants. eGroups 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 Effective Time, and ONElist shall have received a certificate to such
effect signed by the chief executive officer and chief financial officer of
eGroups.
(c) Third Party Consents. ONElist shall have been furnished with
evidence satisfactory to it that eGroups has obtained the consents, approvals
and waivers set forth in Schedule 6.2(c) to the eGroups and Merger Sub
Schedules.
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(d) Exchange Agent Certification. The Exchange Agent shall have
delivered to ONElist a certificate, dated as of the Effective Time, to the
effect that the Exchange Agent has received from eGroups appropriate
instructions and authorization for the Exchange Agent to issue a sufficient
number of shares of eGroups Common Stock and eGroups Series C Preferred Stock in
exchange for outstanding shares of ONElist Capital Stock.
(e) Legal Opinion. ONElist shall have received a legal opinion
from Xxxxxxx Coie, counsel to eGroups, in form and substance mutually agreed
upon with WSGR.
(f) Material Adverse Change. There shall not have occurred any
material adverse change in the business, assets (including intangible assets),
liabilities, financial conditions or results of operations of eGroups since the
date of the eGroups Current Balance Sheet.
(g) Indemnification. The Articles of Incorporation of Merger Sub
shall contain officer and director indemnification provisions that are
substantially similar to the officer and director indemnification provisions
contained in ONElist's Articles of Incorporation in the form delivered to
eGroups on the date of this Agreement.
(h) Due Diligence Investigation. ONElist shall have completed its
due diligence investigation of eGroups to ONElist's reasonable satisfaction,
provided that no information or knowledge obtained in such investigation shall
affect or be deemed to modify any representation or warranty of eGroups
contained herein. In this regard, ONElist's due diligence investigation shall be
conclusively deemed to have been completed to ONElist's reasonable satisfaction
in the event that the preliminary eGroups Schedules attached hereto are not
subsequently modified, or otherwise do not require subsequent modification in
order to make eGroups' representations and warranties true and correct in all
material respects on and as of the Closing Date.
(i) Termination of 401(k) Plan. If agreed to in writing by both
ONElist and eGroups at least three (3) days prior to the Closing Date, eGroups
and its Affiliates, if applicable, shall terminate its or their 401(k) plan(s)
immediately prior to Closing. If the parties so agree, eGroups shall provide to
ONElist evidence that the eGroups' and each Affiliate's (if applicable) 401(k)
plans have been terminated pursuant to resolutions of each such entity's Board
of Directors (the form and substance of which resolutions shall be subject to
review and approval by both ONElist and eGroups, effective immediately preceding
the Closing.
(j) Amendment to Comdisco Agreement. ONElist shall have received
evidence satisfactory to it that eGroups and Comdisco have amended Section 1.33
of that certain Subordinated Loan and Security Agreement dated as of October 8,
1999 between eGroups and Comdisco to read as follows: "`Preferred Stock' means
the Borrower's Series D Preferred Stock."
6.3 Additional Conditions to the Obligations of eGroups and Merger Sub.
The obligations of eGroups and Merger Sub to consummate the Merger and the
transactions contemplated by this Agreement shall be subject to the satisfaction
at or prior to the Closing of each of the following conditions, any of which may
be waived, in writing, exclusively by eGroups:
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(a) Representations and Warranties. The representations and
warranties of ONElist contained in this Agreement shall be true and correct in
all material respects on and as of the Closing Date, except for changes
contemplated by this Agreement and except for those representations and
warranties which address matters only as of a particular date (which shall
remain true and correct as of such date), with the same force and effect as if
made on and as of the Closing Date, except for those representations and
warranties that are qualified by references to "material" or "Material Adverse
Effect" which all shall be true and correct in all respects, and except, in all
such cases, for such breaches, inaccuracies or omissions of such representations
and warranties which have neither had nor reasonably would be expected to have a
Material Adverse Effect on ONElist or eGroups; and eGroups and Merger Sub shall
have received a certificate to such effect signed on behalf of ONElist by the
chief executive officer and chief financial officer of ONElist.
(b) Agreements and Covenants. ONElist 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 on or prior to the
Effective Time, and eGroups and Merger Sub shall have received a certificate to
such effect signed by the chief executive officer and chief financial officer of
ONElist.
(c) Third Party Consents. eGroups shall have been furnished with
evidence satisfactory to it that ONElist has obtained the consents, approvals
and waivers set forth in Schedule 6.3(c) to the ONElist Schedules.
(d) Legal Opinion. eGroups shall have received a legal opinion
from WSGR, in form and substance mutually agreed upon with Xxxxxxx Coie.
(e) Material Adverse Change. There shall not have occurred any
material adverse change in the business, assets (including intangible assets),
liabilities, financial conditions or results of operations of ONElist since the
date of the eGroups Current Balance Sheet.
(f) Due Diligence Investigation. eGroups shall have completed its
due diligence investigation of ONElist to eGroups' reasonable satisfaction,
provided that no information or knowledge obtained in such investigation shall
affect or be deemed to modify any representation or warranty of ONElist
contained herein. In this regard, eGroups' due diligence investigation shall be
conclusively deemed to have been completed to eGroups' reasonable satisfaction
in the event that the preliminary ONElist Schedules attached hereto are not
subsequently modified, or otherwise do not require subsequent modification, in
order to make ONElist's representations and warranties true and correct in all
material respects on and as of the Closing Date.
(g) Termination of 401(k) Plan. If agreed to in writing by both
ONElist and eGroups at least three (3) days prior to the Closing Date, ONElist
and its Affiliates, if applicable, shall terminate its or their 401(k) plan(s)
immediately prior to Closing. If the parties so agree, ONElist shall provide to
eGroups evidence that the ONElist's and each Affiliate's (if applicable) 401(k)
plans have been terminated pursuant to resolutions of each such entity's Board
of Directors (the form and substance of which resolutions shall be subject to
review and approval by both ONElist and eGroups, effective immediately preceding
the Closing.
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(h) Proprietary Information and Inventions Agreements. Each of
ONElist's employees, including Xx Xxxxxxxxxxx, Xxxxx Xxxxxxxxxx, Xxxxxx Xxxxxx,
Xxxxx Xxxx and Xxxx Xxxxxxxx, will have executed the ONElist form proprietary
information and inventions agreement.
ARTICLE VII
NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES
7.1 Non-Survival of Representations and Warranties. All of the
representations and warranties of ONElist, eGroups and Merger Sub contained in
this Agreement or in any instrument delivered pursuant to this Agreement (each
as modified by the corresponding schedules thereto) shall terminate at the
Effective Time.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
8.1 Termination. Except as provided in Section 8.2 below, this Agreement
may be terminated and the Merger abandoned at any time prior to the Effective
Time:
(a) by mutual consent of ONElist and eGroups;
(b) by eGroups or ONElist if: (i) the Effective Time has not
occurred before 5:00 p.m. (Pacific time) on December 31, 1999 (provided that the
right to terminate this Agreement under this clause 8.1(b)(i) shall not be
available to any party whose failure to use its commercially reasonable efforts
to fulfill any obligation hereunder has been the cause of, or resulted in, the
failure of the Effective Time to occur on or before such date); (ii) there shall
be a final nonappealable order of a federal or state court in effect preventing
consummation of the Merger; or (iii) there shall be any statute, rule,
regulation or order enacted, promulgated or issued or deemed applicable to the
Merger by any governmental entity that would make consummation of the Merger
illegal;
(c) by eGroups or ONElist if there shall be any action taken, or
any statute, rule, regulation or order enacted, promulgated or issued or deemed
applicable to the Merger, by any Governmental Entity, which would: (i) prohibit
eGroups' or ONElist's ownership or operation of all or any portion of the
business of ONElist or (ii) compel eGroups or ONElist to dispose of or hold
separate all or a portion of the business or assets of ONElist or eGroups as a
result of the Merger;
(d) by eGroups if it is not in material breach of its obligations
under this Agreement and there has been a material breach of any representation,
warranty, covenant or agreement contained in this Agreement on the part of
ONElist and (i) such breach has not been cured within fifteen (15) days after
written notice to ONElist (provided that, no cure period shall be required for a
breach which by its nature cannot be cured), and (ii) as a result of such breach
the conditions set forth in Section 6.3(a) or 6.3(b), as the case may be, would
not then be satisfied; or
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(e) by ONElist if it is not in material breach of its obligations
under this Agreement and there has been a material breach of any representation,
warranty, covenant or agreement contained in this Agreement on the part of
eGroups or Merger Sub and (i) such breach has not been cured within fifteen (15)
days after written notice to eGroups (provided that, no cure period shall be
required for a breach which by its nature cannot be cured), and (ii) as a result
of such breach the conditions set forth in Section 6.2(a) or 6.2(b), as the case
may be, would not then be satisfied.
Where action is taken to terminate this Agreement pursuant to this
Section 8.1, it shall be sufficient for such action to be authorized by the
Board of Directors (as applicable) of the party taking such action.
8.2 Effect of Termination. In the event of termination of this Agreement
as provided in Section 8.1, this Agreement shall forthwith become void and there
shall be no liability or obligation on the part of eGroups, Merger Sub or
ONElist, or their respective officers, directors or shareholders, provided that
each party shall remain liable for any breaches of this Agreement prior to its
termination; and provided further that, the provisions of Sections 5.4, 5.5 and
8.2 and Article IX of this Agreement shall remain in full force and effect and
survive any termination of this Agreement.
8.3 Amendment. Except as is otherwise required by applicable law after
the shareholders of ONElist and the stockholders of eGroups approve this
Agreement, 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 the parties
hereto.
8.4 Extension; Waiver. At any time prior to the Effective Time, eGroups
and Merger Sub, on the one hand, and ONElist, on the other, may, to the extent
legally allowed, (i) extend the time for the performance of any of the
obligations of the other party 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.
ARTICLE IX
GENERAL PROVISIONS
9.1 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 mailed by registered or certified mail (return receipt
requested) or sent via facsimile (with acknowledgment of complete transmission)
to the parties at the following addresses (or at such other address for a party
as shall be specified by like notice):
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(i) if to ONElist, to:
ONElist, Inc.
0000 Xxxxxxxxxxx Xxxx, Xxxx X
Xxxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Xx., Esq.
Xxxxxxx X. Xxxxxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
(ii) if to eGroups or Merger Sub, to:
eGroups, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx XX 00000
Attention: Chief Executive Officer
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxxxx Coie LLP
000 Xxxxxxxxxxxx Xxxxx
Xxxxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
9.2 Interpretation. The words "include," "includes" and "including" when
used herein shall be deemed in each case to be followed by the words "without
limitation." 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.
9.3 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more
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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.
9.4 Entire Agreement; Assignment. This Agreement, the Schedules and
Exhibits hereto, and the documents and instruments and other agreements among
the parties hereto referenced herein: (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; (b) are not intended to confer upon any
other person any rights or remedies hereunder (except with respect to Section
5.18); and (c) shall not be assigned by operation of law or otherwise except as
otherwise specifically provided, except that eGroups and Merger Sub may assign
their respective rights and delegate their respective obligations hereunder to
their respective Affiliates.
9.5 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.
9.6 Other Remedies. 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.
9.7 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.
9.8 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.
9.9 Specific Performance. 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 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.
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IN WITNESS WHEREOF, eGroups, Merger Sub, and ONElist have caused this
Agreement to be signed by their duly authorized respective officers and
representatives, all as of the date first written above.
ONELIST, INC. EGROUPS, INC.
By: By:
--------------------------- ---------------------------------
Name: Name:
Title: Title:
EG ACQUISITION CORPORATION
By
----------------------------------
Name:
Title:
SIGNATURE PAGE TO AGREEMENT AND PLAN OF REORGANIZATION
