EXHIBIT 1
Execution Copy
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AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
among
DOUBLECLICK INC.
ATLAS ACQUISITION CORP.
and
MESSAGEMEDIA, INC.
Dated as of June 1, 2001
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS..................................................................................1
SECTION 1.01 Certain Defined Terms.........................................................1
ARTICLE II THE MERGER..................................................................................6
SECTION 2.01 The Merger....................................................................6
SECTION 2.02 Closing.......................................................................7
SECTION 2.03 Effective Time................................................................7
SECTION 2.04 Effect of the Merger..........................................................7
SECTION 2.05 Certificate of Incorporation; Bylaws; Directors and Officers of
Surviving Corporation.........................................................7
ARTICLE III CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES.........................................8
SECTION 3.01 Conversion of Shares..........................................................8
SECTION 3.02 Exchange of Shares Other than Treasury Shares.................................8
SECTION 3.03 Stock Transfer Books.........................................................10
SECTION 3.04 No Fractional Share Certificates.............................................10
SECTION 3.05 Options and Warrants to Purchase Company Common Stock........................11
SECTION 3.06 Unvested Stock...............................................................11
SECTION 3.07 Company Stock Purchase Plan..................................................12
SECTION 3.08 Certain Adjustments..........................................................12
SECTION 3.09 Lost, Stolen or Destroyed Certificates.......................................12
SECTION 3.10 Taking of Necessary Action; Further Action...................................12
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF COMPANY..................................................13
SECTION 4.01 Organization and Qualification; Subsidiaries.................................13
SECTION 4.02 Certificate of Incorporation and Bylaws......................................13
SECTION 4.03 Capitalization...............................................................14
SECTION 4.04 Authority Relative to This Agreement.........................................15
SECTION 4.05 No Conflict; Required Filings and Consents...................................15
SECTION 4.06 Permits; Compliance with Laws................................................16
SECTION 4.07 SEC Filings; Financial Statements............................................16
SECTION 4.08 Absence of Certain Changes or Events.........................................17
SECTION 4.09 Employee Benefit Plans; Labor Matters........................................18
SECTION 4.10 Customers and Suppliers......................................................21
SECTION 4.11 Certain Tax Matters..........................................................22
SECTION 4.12 Contracts....................................................................22
SECTION 4.13 Litigation...................................................................22
SECTION 4.14 Environmental Matters........................................................22
i.
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SECTION 4.15 Intellectual Property........................................................23
SECTION 4.16 Taxes........................................................................26
SECTION 4.17 Insurance....................................................................28
SECTION 4.18 Properties; Bank Accounts....................................................29
SECTION 4.19 Affiliates...................................................................29
SECTION 4.20 Opinion of Financial Advisor.................................................29
SECTION 4.21 Brokers......................................................................29
SECTION 4.22 Certain Business Practices...................................................30
SECTION 4.23 Business Activity Restriction................................................30
SECTION 4.24 Section 203 of the DGCL Not Applicable.......................................30
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB....................................30
SECTION 5.01 Organization and Qualification...............................................31
SECTION 5.02 Certificate of Incorporation and Bylaws......................................31
SECTION 5.03 Capitalization...............................................................31
SECTION 5.04 Authority Relative to This Agreement.........................................32
SECTION 5.05 No Conflict; Required Filings and Consents...................................32
SECTION 5.06 SEC Filings; Financial Statements............................................33
SECTION 5.07 Certain Tax Matters..........................................................33
SECTION 5.08 Brokers......................................................................34
SECTION 5.09 No Parent Material Adverse Effect............................................34
ARTICLE VI COVENANTS..................................................................................34
SECTION 6.01 Conduct of Business Pending the Closing......................................34
SECTION 6.02 Notices of Certain Events....................................................36
SECTION 6.03 Access to Information; Confidentiality.......................................37
SECTION 6.04 No Solicitation of Transactions..............................................37
SECTION 6.05 Tax-Free Transaction.........................................................38
SECTION 6.06 Control of Operations........................................................39
SECTION 6.07 Further Action; Consents; Filings............................................39
SECTION 6.08 Additional Reports...........................................................40
SECTION 6.09 Tax Matters..................................................................40
SECTION 6.10 Employee Benefits............................................................40
ARTICLE VII ADDITIONAL AGREEMENTS.....................................................................41
SECTION 7.01 Registration Statement; Proxy Statement......................................41
SECTION 7.02 Company Stockholders' Meetings...............................................43
SECTION 7.03 Indemnification; Directors' and Officers' Insurance..........................43
SECTION 7.04 No Shelf Registration........................................................44
SECTION 7.05 Public Announcements.........................................................44
ii.
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SECTION 7.06 NNM Listing..................................................................45
SECTION 7.07 Company Stock Options/Registration Statements on Form S-8....................45
SECTION 7.08 Employee Benefit Matters.....................................................45
SECTION 7.09 Affiliates...................................................................45
SECTION 7.10 Taking of Additional Actions.................................................45
ARTICLE VIII CONDITIONS TO THE MERGER.................................................................46
SECTION 8.01 Conditions to the Obligations of Each Party to Consummate the Merger.........46
SECTION 8.02 Conditions to the Obligations of Company.....................................46
SECTION 8.03 Conditions to the Obligations of Parent......................................47
ARTICLE IX TERMINATION, AMENDMENT AND WAIVER..........................................................48
SECTION 9.01 Termination..................................................................48
SECTION 9.02 Effect of Termination........................................................50
SECTION 9.03 Amendment....................................................................50
SECTION 9.04 Waiver.......................................................................51
SECTION 9.05 Termination Fee; Expenses....................................................51
ARTICLE X GENERAL PROVISIONS..........................................................................52
SECTION 10.01 Non-Survival of Representations and Warranties...............................52
SECTION 10.02 Notices......................................................................52
SECTION 10.03 Severability.................................................................53
SECTION 10.04 Assignment; Binding Effect; Benefit..........................................53
SECTION 10.05 Incorporation of Exhibits....................................................53
SECTION 10.06 Governing Law................................................................53
SECTION 10.07 Waiver of Jury Trial.........................................................53
SECTION 10.08 Headings; Interpretation.....................................................54
SECTION 10.09 Counterparts.................................................................54
SECTION 10.10 Entire Agreement.............................................................54
Annexes
Annex A Stockholder Agreement
iii.
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION, dated as of June 1,
2001 (as amended, supplemented or otherwise modified from time to time in
accordance with the terms hereof, this "Agreement"), among DOUBLECLICK INC., a
Delaware corporation ("Parent"), MESSAGEMEDIA, INC., a Delaware corporation
("Company"), and ATLAS ACQUISITION CORP., a Delaware corporation and a direct
wholly owned Subsidiary of Parent ("Merger Sub").
W I T N E S S E T H:
WHEREAS, the boards of directors of Parent and Company have determined
that it is advisable and in the best interests of their respective companies and
stockholders to enter into a business combination by means of the merger of
Merger Sub with and into Company (the "Merger") and have approved and adopted
this Agreement;
WHEREAS, concurrently with the execution of this Agreement and as an
inducement to Parent to enter into this Agreement, certain stockholders of
Company have entered into a stockholder agreement ("Stockholder Agreement") in
the form attached hereto as Annex A;
WHEREAS, upon the terms and subject to the conditions of this Agreement
and in accordance with the General Corporation Law of the State of Delaware (the
"DGCL"), Parent will acquire all of the common stock of Company through the
Merger of Merger Sub with and into Company; and
WHEREAS, for United States Federal income tax purposes, it is intended
that the Merger shall qualify as a "reorganization" under Section 368(a) of the
Internal Revenue Code of 1986, as amended (together with the rules and
regulations promulgated thereunder, the "Code"), and that this Agreement shall
be, and hereby is, adopted as a plan of reorganization for purposes of Section
368 of the Code.
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements set forth herein, and
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, and intending to be legally bound hereby, the parties
hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 Certain Defined Terms. Unless the context otherwise
requires, the following terms, when used in this Agreement, shall have the
respective meanings specified below (such meanings to be equally applicable to
the singular and plural forms of the terms defined):
"Affiliate" shall mean, with respect to any Person, any other Person
that controls, is controlled by or is under common control with the first
Person.
"Blue Sky Laws" shall mean state securities or "blue sky" Laws.
"Business Day" shall mean any day on which the principal offices of the
SEC in Washington, D.C. are open to accept filings, or, in the case of
determining a date when any payment is due, any day on which banks are not
required or authorized by Law or executive order to close in the City of New
York.
"Company Common Stock" shall mean the shares of common stock, par value
$0.001 per share, of Company.
"Company Competing Transaction" shall mean any of the following
involving Company (other than the Merger):
(i) any merger, consolidation, share exchange, business
combination, recapitalization, liquidation, dissolution or other
similar transaction (other than, for the purpose of Section
9.05(b)(ii)(B), such a transaction in which Company acquires another
Person and the shares of Company Common Stock issued to the
equityholders of such other Person constitute less than 50% of the
capital stock of the successor company in such transaction);
(ii) any sale, lease, exchange, transfer or other disposition of
20% or more of the assets of Company and the Company Subsidiaries (as
defined in Section 4.01), taken as a whole, in a single transaction or
series of related transactions;
(iii) any tender offer or exchange offer for 20% or more of the
outstanding voting securities of Company or the filing of a
registration statement under the Securities Act in connection
therewith;
(iv) any Person having acquired "beneficial ownership" or the
right to acquire "beneficial ownership" of, or any "group" (as such
terms are defined under Section 13(d) of the Exchange Act) having been
formed that beneficially owns, or has the right to acquire beneficial
ownership of, 20% or more of the outstanding voting securities of
Company;
(v) any solicitation in opposition to the approval of this
Agreement by the stockholders of Company; or
(vi) any public announcement of a proposal, plan or intention to
do any of the foregoing or any agreement to engage in any of the
foregoing.
"Company Disclosure Schedule" shall mean the disclosure schedule
delivered by Company to Parent concurrently with the execution of this Agreement
and forming a part hereof.
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"Company Material Adverse Effect" shall mean any change in or effect on
the business of Company or the Company Subsidiaries that, individually or in the
aggregate (taking into account all other such changes or effects), is, or is
reasonably likely to be, materially adverse to the business, assets,
liabilities, prospects, financial condition or results of operations of Company
and the Company Subsidiaries, taken as a whole; provided, however, that in no
event shall any of the following, in and of themselves, be considered a Company
Material Adverse Effect: (a) any decrease in the market price or trading volume
of the Company Common Stock after the date hereof or the de-listing thereof from
the NNM listing or a litigation relating thereto; (b) the fact that Company does
not meet the revenue predictions in Company's internal projections separately
delivered to Parent on the date hereof; (c) any litigation or loss of current or
prospective customers, employees, suppliers or distributors, or any reductions
in sales or revenues, that arose from the announcement or pendency of the
Merger; (d) any changes in general economic conditions or changes affecting the
industry generally in which Company operates (provided that such changes do not
affect Company in a materially disproportionate manner); (e) any adverse change
arising from or relating to any change in accounting requirements or principles
or any change in applicable Laws, rules or regulations or the interpretation
thereof and (f) any loss of customers to Parent or DoubleClick Email Canada Inc.
(formerly known as FloNetwork Inc.).
"Company Stock Plans" shall mean Company's 1995 Stock Plan and 1999
Non-Officer Stock Option Plan and Decisive Technology Corporation's 1996 Stock
Option Plan.
"Company Stock Purchase Plan" shall mean Company's Employee Stock
Purchase Plan.
"Confidentiality Agreement" shall mean the confidentiality agreement,
dated as of February 22, 2001, between Parent and Company.
"$" shall mean United States Dollars.
"Encumbrances" shall mean all claims, security interests, liens,
pledges, escrows, options, proxies, rights of first refusal, preemptive rights,
mortgages, hypothecations, prior assignments, title retention agreements,
indentures, security agreements or any other similar encumbrance or right.
"Environmental Law" shall mean any Law and any enforceable judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, relating to pollution or protection of the
environment or natural resources, including, without limitation, those relating
to the use, handling, transportation, treatment, storage, disposal, release or
discharge of Hazardous Material.
"Environmental Permit" shall mean any permit, approval, identification
number, license or other authorization required under or issued pursuant to any
applicable Environmental Law.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
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"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, together with the rules and regulations promulgated thereunder.
"Expenses" shall mean, with respect to any party hereto, all reasonable
out-of-pocket expenses (including, without limitation, all fees and expenses of
counsel, accountants, investment bankers, experts and consultants to a party
hereto and its Affiliates) incurred by such party or on its behalf in connection
with or related to the authorization, preparation, negotiation, execution and
performance of its obligations pursuant to this Agreement and the consummation
of the Merger, the preparation, printing, filing and mailing of the Registration
Statement (as defined in Section 7.01) and the Proxy Statement (as defined in
Section 7.01), the solicitation of stockholder approvals, the filing of HSR Act
notification and report form, if any, and all other matters related to the
transactions contemplated hereby and the closing of the Merger.
"Governmental Entity" shall mean any United States Federal, state or
local or any foreign governmental, regulatory or administrative authority,
agency or commission or any court, tribunal or arbitral body.
"Governmental Order" shall mean any order, writ, judgment, injunction,
decree, stipulation, determination or award entered by or with any Governmental
Entity.
"Hazardous Material" shall mean (i) any petroleum, petroleum products,
by-products or breakdown products, radioactive materials, friable
asbestos-containing materials or polychlorinated biphenyls or (ii) any chemical,
material or substance defined or regulated as toxic or hazardous or as a
pollutant or contaminant or waste under any applicable Environmental Law.
"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended, together with the rules and regulations promulgated
thereunder.
"IRS" shall mean the United States Internal Revenue Service.
"Knowledge of Company" shall mean that any officer or director of
Company or any Company Subsidiary is actually aware of a fact or other matter or
should have been aware of a fact or other matter based upon reasonable inquiry
and investigation.
"Knowledge of Parent" shall mean that any officer or director of Parent
is actually aware of a fact or other matter or should have been aware of a fact
or other matter based upon reasonable inquiry and investigation.
"Law" shall mean any Federal, state, foreign or local statute, law,
ordinance, regulation, rule, code, order, judgment, decree, other requirement or
rule of law of the United States or any other jurisdiction, and any other
similar act or law.
"NNM" shall mean The Nasdaq National Market.
"Parent Common Stock" shall mean the shares of common stock, par value
$0.001 per share, of Parent.
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"Parent Convertible Notes" shall mean the $250,000,000 4.75%
Convertible Notes of Parent due 2006.
"Parent Disclosure Schedule" shall mean the disclosure schedule
delivered by Parent to Company concurrently with the execution of this Agreement
and forming a part hereof.
"Parent Material Adverse Effect" shall mean any change in or effect on
the business of Parent and the Parent Subsidiaries (as defined in Section 5.03)
that, individually or in the aggregate (taking into account all other such
changes or effects), is, or is reasonably likely to be, materially adverse to
the business, assets, liabilities, financial condition or results of operations
of Parent and the Parent Subsidiaries, taken as a whole; provided, however, that
in no event shall any of the following, in and of themselves, be considered a
Parent Material Adverse Effect: (a) any decrease in the market price or trading
volume of the Parent Common Stock after the date hereof or a litigation relating
thereto; (b) any changes in general economic conditions or changes affecting the
industry generally in which Parent operates (provided that such changes do not
affect Parent in a materially disproportionate manner); or (c) any adverse
change arising from or relating to any change in accounting requirements or
principles or any change in applicable Laws, rules or regulations or the
interpretation thereof.
"Parent Stock Plans" shall mean Parent's 1996 Stock Plan, 1997 Stock
Incentive Plan, 1999 Non-Officer Stock Option/Stock Issuance Plan, Employee
Stock Purchase Plan and all plans assumed by Parent in connection with its
acquisitions.
"Permitted Encumbrances" shall mean (i) liens for Taxes, assessments
and other governmental charges not yet due and payable, (ii) immaterial unfiled
mechanics', workmen's, repairmen's, warehousemen's, carriers' or other like
liens arising or incurred in the ordinary course of business which are not yet
due and payable, (iii) equipment leases with third parties entered into in the
ordinary course of business, (iv) liens held by Xxxxx Fargo Equipment Finance,
Inc. on all of Company's assets and (v) Encumbrances described on Section 4.18
of the Company Disclosure Schedule.
"Person" shall mean an individual, corporation, partnership, limited
partnership, limited liability partnership, limited liability company,
syndicate, individual (including, without limitation, a "person" as defined in
Section 13(d)(3) of the Exchange Act), trust, association, entity or government
or political subdivision, agency or instrumentality of a government.
"SEC" shall mean the United States Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended,
together with the rules and regulations promulgated thereunder.
"Subsidiary" shall mean, with respect to any Person, any corporation,
limited liability company, partnership, joint venture or other legal entity of
which such Person (either alone or through or together with any other subsidiary
of such Person) owns, directly or indirectly, a majority of the stock or other
equity interests, the holders of which are generally entitled to vote for the
election of the board of directors or other governing body of such corporation
or other legal entity, other than, with respect to Company and the Company
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Subsidiaries, Message Media Europe, B.V., a company existing under the laws of
the Netherlands, and any of its Subsidiaries.
"Tax" shall mean (i) any and all taxes, fees, levies, duties, tariffs,
imposts and other charges of any kind (together with any and all interest,
penalties, additions to tax and additional amounts imposed with respect thereto)
imposed by any Governmental Entity or other taxing authority ("Taxing
Authority"), including, without limitation, income, franchise, windfall or other
profits, gross or net receipts, property, sales, use, capital stock, payroll,
employment, social security, workers' compensation, unemployment compensation or
net worth taxes; taxes or other charges in the nature of excise, withholding, ad
valorem, stamp, transfer, value-added or gains taxes; license, registration and
documentation fees; and customs duties, tariffs and similar charges; (ii) any
liability for the payment of any amounts of the type described in (i) as a
result of being a member of an affiliated, combined, consolidated or unitary
group for any taxable period; and (iii) any liability for the payment of amounts
of the type described in (i) or (ii) as a result of being a transferee of, or a
successor in interest to, any Person or as a result of an express or implied
obligation to indemnify any Person.
"Tax Return" shall mean any return, statement or form (including,
without limitation, any estimated tax report or return, withholding tax reports
or return and information report or return) required to be filed with respect to
any Taxes.
"U.S. GAAP" shall mean United States generally accepted accounting
principles.
ARTICLE II
THE MERGER
SECTION 2.01 The Merger. Upon the terms and subject to the conditions
set forth in this Agreement, and in accordance with the DGCL, at the Effective
Time (as defined in Section 2.03), Merger Sub shall be merged with and into
Company. As a result of the Merger, the separate corporate existence of Merger
Sub shall cease and Company shall continue as the surviving corporation of the
Merger, as a wholly owned Subsidiary of Parent (the "Surviving Corporation").
Notwithstanding the foregoing, Parent may elect at any time prior to the
Effective Time to change the method of effecting the business combination
between Parent and Company if and to the extent that Parent deems such change to
be desirable, including, without limitation, (a) in lieu of merging Merger Sub
with and into Company as provided herein, to merge Company with and into Merger
Sub or to merge Company with and into Parent (provided that Company shall not be
deemed to have breached any of its representations, warranties, covenants or
other agreements set forth herein solely by reason of such election), or (b) to
substitute any direct or indirect wholly owned Subsidiary of Parent for Merger
Sub as a constituent corporation in the Merger; provided, however, such change
shall not be effected without Company's prior written consent if such change
will negatively affect Company or its stockholders. In the event of an election
by Parent to the effect of any such change, the parties shall execute an
appropriate amendment to this Agreement.
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SECTION 2.02 Closing. Unless this Agreement shall have been terminated
and the Merger herein contemplated shall have been abandoned pursuant to Section
9.01 and subject to the satisfaction or waiver of the conditions set forth in
Article VIII, the consummation of the Merger shall take place as promptly as
practicable (and in any event within three (3) Business Days) after satisfaction
or waiver of the conditions set forth in Article VIII, at a closing (the
"Closing") to be held at the offices of Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP, 0000
Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, unless another date, time or
place is agreed to by Parent and Company.
SECTION 2.03 Effective Time. At and after the time of the Closing, the
parties shall cause the Merger to be consummated by filing a certificate of
merger (the "Certificate of Merger") with the Secretary of State of the State of
Delaware in such form as required by, and executed in accordance with, the
relevant provisions of the DGCL (the date and time of such filing, or such later
date and time as may be set forth therein, being the "Effective Time").
SECTION 2.04 Effect of the Merger. At the Effective Time, the effect of
the Merger shall be as provided in the applicable provisions of the DGCL.
Without limiting the generality of the foregoing, and subject thereto, at the
Effective Time, except as otherwise provided herein, all the property, rights,
privileges, powers and franchises of Company and Merger Sub shall vest in
Company as the Surviving Corporation, and all debts, liabilities and duties of
Company and Merger Sub shall become the debts, liabilities and duties of Company
as the Surviving Corporation.
SECTION 2.05 Certificate of Incorporation; Bylaws; Directors and
Officers of Surviving Corporation. Unless otherwise agreed by Parent and Company
before the Effective Time, at the Effective Time:
(a) subject to the requirements of Section 7.03(a), the Certificate of
Incorporation and the Bylaws of Merger Sub in effect immediately prior to
the Effective Time shall be the Certificate of Incorporation and the Bylaws
of the Surviving Corporation, until thereafter amended as provided by Law
and such Certificate of Incorporation or Bylaws; provided, however, that
Article I of the Certificate of Incorporation of the Surviving Corporation
shall be amended to change the name of the Surviving Corporation;
(b) the officers of Merger Sub immediately prior to the Effective Time
shall serve in their respective offices of the Surviving Corporation from
and after the Effective Time, in each case until their successors are
elected or appointed and qualified or until their resignation or removal;
and
(c) the directors of Merger Sub immediately prior to the Effective
Time shall serve as the directors of the Surviving Corporation from and
after the Effective Time, in each case until their successors are elected
or appointed and qualified or until their resignation or removal.
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ARTICLE III
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
SECTION 3.01 Conversion of Shares. At the Effective Time, by virtue of
the Merger, and without any action on the part of Parent, Merger Sub, Company or
the holders of any of the following securities:
(a) Each share of Company Common Stock issued and outstanding
immediately before the Effective Time (excluding those shares to be cancelled in
accordance with Section 3.01(b)) and all rights in respect thereof shall
forthwith cease to exist and be converted into and exchangeable for .0436 share
(the "Exchange Ratio") of Parent Common Stock.
(b) Each share of Company Common Stock held in the treasury of Company
or owned by Parent, Merger Sub or any wholly owned Subsidiary of Company or
Parent immediately prior to the Effective Time shall be canceled and retired and
no shares of stock or other securities of Parent, the Surviving Corporation or
any other corporation shall be issuable, and no payment of other consideration
shall be made, with respect thereto.
(c) Each issued and outstanding share of capital stock of Merger Sub
shall be converted into and become one fully paid and nonassessable share of
common stock of the Surviving Corporation. From and after the Effective Time,
each outstanding certificate theretofore representing shares of Merger Sub
common stock shall be deemed for all purposes to evidence ownership of and to
represent the number of shares of Surviving Corporation common stock into which
such shares of Merger Sub common stock shall have been converted.
SECTION 3.02 Exchange of Shares Other than Treasury Shares
(a) Exchange Agent. As of the Effective Time, Parent shall enter into
an agreement with American Stock Transfer & Trust Company, Inc. or such other
bank or trust company as may be designated by Parent to act as exchange agent
for the Merger (the "Exchange Agent").
(b) Parent to Provide Common Stock and Cash. Promptly after the
Effective Time, Parent shall make available to the Exchange Agent for the
benefit of the holders of Company Common Stock: (i) certificates of Parent
Common Stock ("Parent Certificates") representing the number of whole shares of
Parent Common Stock issuable pursuant to Section 3.01(a) in exchange for shares
of Company Common Stock outstanding immediately prior to the Effective Time and
(ii) sufficient funds to permit payment in lieu of fractional shares pursuant to
Section 3.04.
(c) Exchange Procedures. The Exchange Agent shall mail to each holder
of record of certificates representing shares of Company Common Stock ("Company
Certificates"), whose shares were converted into the right to receive Parent
Common Stock (and cash in lieu of fractional shares pursuant to Section 3.04)
promptly after the Effective Time (and in any event not later than the later to
occur of seven (7) Business Days after (i) the Effective Time and (ii) receipt
by Parent of a complete list from Company of the names and addresses of its
holders
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of record): (i) a form letter of transmittal (which shall specify that delivery
shall be effected, and risk of loss and title to the Company Certificates shall
pass, only upon receipt of the Company Certificates by the Exchange Agent, and
shall be in such form and have such other provisions as Parent may reasonably
specify); and (ii) instructions for use in effecting the surrender of the
Company Certificates in exchange for Parent Certificates (and cash in lieu of
fractional shares). Upon surrender of a Company Certificate for cancellation to
the Exchange Agent or to such other agent or agents as may be appointed by
Parent, together with such letter of transmittal, duly completed and validly
executed, and such other documents as may be reasonably required by the Exchange
Agent, the holder of such Company Certificate shall be entitled to receive, in
exchange therefor, a Parent Certificate representing the number of whole shares
of Parent Common Stock that such holder has the right to receive pursuant to
this Article III, dividends or distributions declared or made on such Parent
Common Stock after the Effective Time and payable between the Effective Time and
the time of such surrender and/or payment of cash in lieu of fractional shares
which such holder has the right to receive pursuant to Section 3.04, and the
Company Certificate so surrendered shall forthwith be canceled. Until so
surrendered, each outstanding Company Certificate that, prior to the Effective
Time, represented shares of Company Common Stock will be deemed from and after
the Effective Time, to represent for all purposes only the right to receive the
number of full shares of Parent Common Stock into which such shares of Company
Common Stock are so convertible, any dividends or distributions declared or made
on such Parent Common Stock after the Effective Time and payable between the
Effective Time and the time of such surrender and the right to receive an amount
in cash in lieu of the issuance of any fractional shares in accordance with
Section 3.04. Notwithstanding any other provision of this Agreement, no interest
will be paid or will accrue on any cash payable to holders of Company
Certificates pursuant to the provisions of this Article III.
(d) Distributions With Respect to Unexchanged Shares. No dividends or
other distributions with respect to Parent Common Stock with a record date after
the Effective Time will be paid to the holder of any unsurrendered Company
Certificate with respect to the shares of Parent Common Stock represented
thereby until the holder of record of such Company Certificate shall surrender
such Company Certificate. Subject to the effect of applicable escheat or similar
Laws, following surrender of any such Company Certificate, there shall be paid
to the record holder of the Parent Certificates issued in exchange therefor,
without interest, at the time of such surrender, the amount of any such
dividends or other distributions with a record date after the Effective Time
theretofore payable (but for the provisions of this Section 3.02(d)) with
respect to such shares of Parent Common Stock.
(e) Transfer of Ownership. If any Parent Certificate is to be issued in
a name, or cash in lieu of fractional shares paid to a Person, other than that
in which the Company Certificate surrendered in exchange therefor is registered,
it will be a condition of the issuance and/or payment thereof that the Company
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
Parent or any agent designated by it any transfer or other Taxes required by
reason of the issuance of a Parent Certificate for shares of Parent Common Stock
in any name other than that of the registered holder of the Company Certificate
surrendered, or established to the satisfaction of Parent or any agent
designated by it that such Tax has been paid or is not payable.
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(f) Termination of Exchange Agent Funding. Any portion of funds
(including any interest earned thereon) or Parent Certificates held by the
Exchange Agent which have not been delivered to holders of Company Certificates
pursuant to this Article III within six months after the Effective Time shall
promptly be paid or delivered, as appropriate, to Parent, and thereafter holders
of Company Certificates who have not theretofore complied with the exchange
procedures set forth in and contemplated by this Section 3.02 shall thereafter
look only to Parent (subject to abandoned property, escheat and similar Laws)
only as general creditors thereof for their claim for shares of Parent Common
Stock, any cash in lieu of fractional shares of Parent Common Stock and any
dividends or distributions (with a record date after the Effective Time) with
respect to Parent Common Stock to which they are entitled.
(g) No Liability. Notwithstanding anything to the contrary in this
Section 3.02, none of the Exchange Agent, the Surviving Corporation nor any
party hereto shall be liable to any Person in respect of any shares of Parent
Common Stock or cash delivered to a public official pursuant to any applicable
abandoned property, escheat or similar Law.
SECTION 3.03 Stock Transfer Books. As of the Effective Time, the stock
transfer books of Company shall be closed, and there shall be no further
registration of transfers of shares of Company Common Stock thereafter on the
records of any such stock transfer books. In the event of a transfer of
ownership of shares of Company Common Stock that is not registered in the stock
transfer records of Company at the Effective Time, a certificate or certificates
representing the number of full shares of Parent Common Stock into which such
shares of Company Common Stock shall have been converted shall be issued to the
transferee together with a cash payment in lieu of fractional shares, if any, in
accordance with Section 3.04 hereof, and a cash payment in the amount of
dividends, if any, in accordance with Section 3.02(d) hereof, if the certificate
or certificates representing such shares of Company Common Stock, as the case
may be, is or are surrendered in accordance with the provisions of Section
3.02(c) hereof, accompanied by all documents required to evidence and effect
such transfer and by evidence of payment of any applicable stock transfer Tax.
SECTION 3.04 No Fractional Share Certificates. No scrip or fractional
share Parent Certificate shall be issued upon the surrender for exchange of
Company Certificates, and an outstanding fractional share interest shall not
entitle the owner thereof to vote, to receive dividends or to any rights of a
stockholder of Parent or of Surviving Corporation with respect to such
fractional share interest. As promptly as practicable following the Effective
Time, Parent shall deposit with the Exchange Agent an amount in cash sufficient
for the Exchange Agent to pay each holder of Company Common Stock an amount in
cash, rounded to the nearest whole cent, equal to the product obtained by
multiplying (i) the fractional share interest to which such holder would
otherwise be entitled (after taking into account all shares of Company Common
Stock held at the Effective Time by such holder) by (ii) the closing price for a
share of Parent Common Stock on the NNM on the Business Day immediately prior to
the Effective Time. As soon as practicable after the determination of the amount
of cash, if any, to be paid to holders of Company Common Stock with respect to
any fractional share interests, the Exchange Agent shall make available such
amounts, net of any required withholding Taxes, to such holders of Company
Common Stock subject to and in accordance with the terms of Section 3.02 hereof.
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SECTION 3.05 Options and Warrants to Purchase Company Common Stock. At
the Effective Time, the Company Stock Plans and each option granted by Company
to purchase shares of Company Common Stock pursuant to the Company Stock Plans
or otherwise listed on Schedule 4.03 of the Company Disclosure Schedule
("Company Stock Options") which is outstanding and unexercised immediately prior
to the Effective Time, and each warrant to purchase shares of Company Common
Stock ("Company Warrants") listed on Schedule 4.03 of the Company Disclosure
Schedule which is outstanding and unexercised immediately prior to the Effective
Time, shall be assumed by Parent and converted into an option or warrant, as the
case may be, to purchase shares of Parent Common Stock in such number and at
such exercise price as provided below and otherwise having the same terms and
conditions as in effect immediately prior to the Effective Time (except (a) to
the extent that such terms, conditions and restrictions may be altered in
accordance with their terms, or the terms of the agreements between Company and
the holder of a Company Stock Option set forth on Section 3.05 of the Company
Disclosure Schedule, as a result of the Merger contemplated hereby and (b) that
all references in each such Company Stock Option or Company Warrant to Company
shall be deemed to refer to Parent):
(a) the number of shares of Parent Common Stock to be subject
to the new option or warrant, as the case may be, shall be equal to the
product of (x) the number of shares of Company Common Stock subject to
the original Company Stock Option or Company Warrant immediately prior
to the Effective Time and (y) the Exchange Ratio;
(b) the exercise price per share of Parent Common Stock under
the new option or warrant, as the case may be, shall be equal to (x)
the exercise price per share of Company Common Stock in effect under
the original Company Stock Option or Company Warrant immediately prior
to the Effective Time divided by (y) the Exchange Ratio; and
(c) in effecting such assumption and conversion, the aggregate
number of shares of Parent Common Stock to be subject to each assumed
Company Stock Option or Company Warrant will be rounded down, if
necessary, to the next whole share and the aggregate exercise price
shall be rounded up, if necessary, to the next whole cent.
The adjustments provided herein with respect to any options that are
"incentive stock options" (as defined in Section 422 of the Code) shall be
effected in a manner consistent with the requirements of Section 424(a) of the
Code.
SECTION 3.06 Unvested Stock. At the Effective Time, any unvested shares
of Company Common Stock awarded to, or otherwise held by, employees, directors
and consultants pursuant to a Company Stock Plan outstanding immediately prior
to the Effective Time shall be converted into unvested shares of Parent Common
Stock in accordance with the Exchange Ratio and shall remain subject to the same
terms, restrictions and vesting schedule as in effect immediately prior to the
Effective Time. All outstanding rights which Company may hold immediately prior
to the Effective Time to repurchase unvested shares of Company Common Stock
shall be assigned to the Parent in the Merger and shall thereafter be
exercisable by Parent upon the same terms and subject to the same conditions in
effect immediately prior to the Effective Time, except that the shares
purchasable pursuant to such rights and the purchase price payable per share
shall be adjusted to reflect the Exchange Ratio (with the number of
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shares rounded down to the nearest whole share and the purchase price rounded up
to the nearest whole cent).
SECTION 3.07 Company Stock Purchase Plan. Immediately prior to the
Effective Time, each outstanding purchase right pursuant to the Company Stock
Purchase Plan shall be exercised for the purchase of Company Common Stock at the
price per share set forth in the Company Stock Purchase Plan, and the Company
Common Stock so purchased shall be considered issued and outstanding immediately
prior to the Effective Time and shall be converted pursuant to Section 3.02
hereof. The Company Stock Purchase Plan shall terminate effective with such
exercise of purchase rights described herein and no further purchase rights
shall be granted thereafter.
SECTION 3.08 Certain Adjustments. If between the date of this Agreement
and the Effective Time, (a) the outstanding shares of Parent Common Stock, or
Company Common Stock shall be changed into a different number of shares by
reason of any reclassification, recapitalization, split-up, combination or
exchange of shares, or any dividend payable in stock or other securities shall
be declared thereon with a record date within such period, or (b) except as
otherwise permitted pursuant to this Agreement, the number of outstanding shares
of Company Common Stock (calculated in accordance with the Treasury Method under
U.S. GAAP as of the date of this Agreement) is in excess of that specified in
Section 4.03 or disclosed on Schedule 4.03 of the Company Disclosure Schedule
(regardless of whether such excess is a result of an additional issuance of
capital stock or a correction to such Sections), then, in either case, the
Exchange Ratio shall be adjusted accordingly to provide to Parent and Company
the same economic effect as contemplated by this Agreement prior to such
reclassification, recapitalization, split-up, combination, exchange, dividend or
increase.
SECTION 3.09 Lost, Stolen or Destroyed Certificates. In the event any
Company Certificates shall have been lost, stolen or destroyed, the Exchange
Agent shall issue in exchange for such lost, stolen or destroyed Company
Certificates, upon the making of an affidavit of that fact by the holder
thereof, such shares of Parent Common Stock (and cash in lieu of fractional
shares) as may be required pursuant to Section 3.01; provided, however, that
Parent may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen or destroyed Company
Certificates to indemnify Parent against any claim that may be made against
Parent, the Surviving Corporation or the Exchange Agent with respect to the
Company Certificates alleged to have been lost, stolen or destroyed.
SECTION 3.10 Taking of Necessary Action; Further Action. If, at any
time after the Effective Time, any further action is necessary or desirable to
carry out the purposes of this Agreement and to vest the Surviving Corporation
with full right, title and possession to all assets, property, rights,
privileges, powers and franchises of Company, the officers and directors of
Company are hereby fully authorized in the name of their corporation or
otherwise to take, and will use all good faith efforts to take, all such lawful
and necessary action, so long as such action is not inconsistent with this
Agreement.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF COMPANY
Company hereby represents and warrants to Parent and Merger Sub,
subject to the exceptions specifically disclosed in writing in the Company
Disclosure Schedule, all such exceptions to be referenced to a specific
representation set forth in this Article IV and any other representation or
warranty of Company to the extent that it is apparent from such disclosure that
such disclosure is applicable to such other representation or warranty, that:
SECTION 4.01 Organization and Qualification; Subsidiaries.
(a) Company has been duly organized and is validly existing and in good
standing under the Laws of the State of Delaware and has the requisite corporate
power and authority to own, lease and operate its properties and to carry on its
business as it is now being conducted. Each Subsidiary of Company (a "Company
Subsidiary") has been duly organized and is validly existing and in "good
standing" (with respect to jurisdictions that recognize the concept of good
standing or similar concepts) under the Laws of the jurisdiction in which it is
incorporated or chartered and has the requisite corporate or other power and
authority to own, lease and operate its properties and to carry on its business
as it is now being conducted. Each of Company and the Company Subsidiaries is
duly qualified or licensed to do business, and is in "good standing" (with
respect to jurisdictions that recognize the concept of good standing or similar
concepts), in each jurisdiction where the character of the properties owned,
leased or operated by it or the nature of its business makes such qualification
or licensing necessary.
(b) Company does not own, directly or indirectly, any equity or similar
interest in, or any interest convertible or exchangeable or exercisable for, any
equity or similar interest in, any corporation, partnership or joint venture
arrangement, other business entity or other Person. Schedule 4.01(b) of the
Company Disclosure Schedule sets forth the percentage of the equity or similar
interest in each such corporation, partnership or joint venture arrangement,
other business entity or other Person owned by Company and the Company
Subsidiaries and, if applicable, other Persons. All outstanding shares of
capital stock of each such corporation, partnership or joint venture
arrangement, other business entity or other Person are duly authorized, validly
issued, fully paid and nonassessable. All of the outstanding shares of capital
stock of each Company Subsidiary are owned by Company free and clear of all
Encumbrances. There are no outstanding subscriptions, options, warrants, puts,
calls, rights, exchangeable or convertible securities or other commitments,
arrangements, or agreements of any character relating to the issued or unissued
capital stock or other securities of any such Company Subsidiary, or otherwise
obligating Company or any such Company Subsidiary to issue, transfer, sell,
purchase, redeem or otherwise acquire any such securities.
SECTION 4.02 Certificate of Incorporation and Bylaws. The copies of the
certificate of incorporation and bylaws of Company, the certificate of
incorporation, bylaws or equivalent organizational documents of each Company
Subsidiary and the organizational documents (including the operating agreements)
of each joint venture entity owned by Company previously presented to Parent by
Company are true, complete and correct copies thereof. Such certificates of
incorporation, bylaws and equivalent organizational documents are in full force
13
and effect. Neither Company nor any Company Subsidiary is in violation of any of
the provisions of its respective certificate of incorporation, bylaws or
equivalent organizational documents.
SECTION 4.03 Capitalization. The authorized capital stock of Company
consists of 100,000,000 shares of Company Common Stock and 5,000,000 shares of
the Company's Preferred Stock, par value $0.001 per share (the "Company
Preferred Stock"). As of the close of business on May 29, 2001, (i) 68,632,410
shares of Company Common Stock were issued and outstanding, all of which are
validly issued, fully paid and nonassessable, (ii) no shares of Company Common
Stock were held in the treasury of Company, (iii) 19,285,103 shares of Company
Common Stock were reserved for future issuance pursuant to Company Stock
Options, Company Warrants and the Company Stock Purchase Plan and (iv) no shares
of Company Preferred Stock were issued and outstanding. A true and complete list
as of the date hereof of each holder of an outstanding Company Stock Option or
Company Warrant, the grant or issuance date of each Company Stock Option or
Company Warrant, the plan under which such Company Stock Option was granted, if
any, the number of shares of Company Common Stock for which each Company Stock
Option or Company Warrant is exercisable, the exercise price of each Company
Stock Option or Company Warrant, the vesting schedule of each Company Stock
Option (including the extent vested to the date of this Agreement and whether
and to what extent the exercisability of such Company Stock Option will be
accelerated and become exercisable as a result of or relating to the
transactions contemplated by this Agreement), the status of each Company Stock
Option as either an "incentive stock option" (as defined in Section 422 of the
Code) or a nonstatutory stock option; a true and complete list as of the date
hereof of each holder of an outstanding purchase right under the Company Stock
Purchase Plan, including the payroll deduction amount elected by such holder and
the price per share of Company Common Stock at the start of the current purchase
period; and a true and complete list of the name of each holder of any shares of
Company Common Stock that are unvested as of the date hereof, including the
grant or issuance date of such stock, the per share purchase price, if any,
payable upon forfeiture or repurchase by Company of such stock, the vesting
schedule applicable to such Company Common Stock (including the extent vested to
the date of this Agreement and whether and to what extent the vesting of such
Company Common Stock will be accelerated as a result of or relating to the
transactions contemplated by this Agreement), and the status of each share of
Company Common Stock as acquired pursuant to the exercise of an "incentive stock
option" (as defined in Section 422 of the Code) or not, are set forth on
Schedule 4.03 of the Company Disclosure Schedule. Except for shares of Company
Common Stock issuable pursuant to the Company Stock Plans, the Company Warrants,
the Company Stock Purchase Plan and as otherwise set forth on Schedule 4.03 of
the Company Disclosure Schedule, there are not issued, reserved for issuance or
outstanding, (A) any shares of capital stock or other voting securities of
Company or any Company Subsidiary or (B) any options, warrants, convertible or
exchangeable securities or other rights, agreements, arrangements or commitments
of any character to which Company or any Company Subsidiary is a party or by
which Company or any Company Subsidiary is bound relating to the issued or
unissued capital stock of Company or any Company Subsidiary or obligating
Company or any Company Subsidiary to issue or sell any shares of capital stock
of, or other equity interests in, Company or any Company Subsidiary. All shares
of Company Common Stock subject to issuance as aforesaid, upon issuance prior to
the Effective Time on the terms and conditions specified in the instruments
pursuant to which they are issuable, will be duly authorized, validly issued,
fully paid and nonassessable. There are no
14
outstanding contractual obligations of Company to repurchase, redeem or
otherwise acquire any shares of Company Common Stock. There are no outstanding
contractual obligations of Company to provide funds to, or make any investment
(in the form of a loan, capital contribution or otherwise) in, any Company
Subsidiary or other Person. Company has provided to Parent complete copies of
the Company Stock Plans and all documents pursuant to which Company has granted
Company Stock Options that are currently outstanding and the form of all stock
option agreements evidencing such Company Stock Options. Company has provided to
Parent complete copies of all documents pursuant to which Company has granted
Company Warrants that are currently outstanding and the form of all warrant
agreements evidencing such Company Warrants.
SECTION 4.04 Authority Relative to This Agreement. Company has all
necessary corporate power and authority to execute and deliver this Agreement,
to perform its obligations hereunder, and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by Company and
the consummation by Company of the transactions contemplated hereby have been
duly and validly authorized by all necessary corporate action, and no other
corporate proceedings on the part of Company are necessary to authorize this
Agreement or to consummate the transactions contemplated hereby (other than,
with respect to the Merger, the approval of this Agreement by the holders of a
majority of the outstanding shares of Company Common Stock entitled to vote with
respect thereto at the Company Stockholders' Meeting (as defined in Section
7.02), and the filing and recordation of the Certificate of Merger as required
by the DGCL). This Agreement has been duly executed and delivered by Company
and, assuming the due authorization, execution and delivery by the other parties
hereto, constitutes the legal, valid and binding obligation of Company,
enforceable against Company in accordance with its terms, except to the extent
that enforceability hereof may be limited by applicable bankruptcy, insolvency,
reorganization or other similar Laws affecting the enforcement of creditors'
rights generally and by principles of equity regarding the availability of
remedies (whether in a proceeding at Law or in equity).
SECTION 4.05 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by Company do not, and
the performance by Company of its obligations hereunder and the consummation of
the Merger will not, (i) conflict with or violate any provision of the
certificate of incorporation or bylaws of Company or any equivalent
organizational documents of any Company Subsidiary; (ii) assuming that all
consents, approvals, authorizations and permits described in Section 4.05(b)
have been obtained and all filings and notifications described in Section
4.05(b) have been made, conflict with or violate any Law applicable to Company
or any Company Subsidiary or by which any property or asset of Company or any
Company Subsidiary is subject; or (iii) result in any breach of or constitute a
default (or an event which with the giving of notice or lapse of time or both
could reasonably be expected to become a default) under, or give to others any
right of termination, amendment, acceleration or cancellation of, or result in
the creation of an Encumbrance on any property or asset of Company or any
Company Subsidiary pursuant to, any material note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation.
15
(b) The execution and delivery of this Agreement by Company do not, and
the performance by Company of its obligations hereunder and the consummation of
the Merger will not, require any consent, approval, authorization or permit of,
or filing by Company with or notification by Company to, any Governmental
Entity, except pursuant to applicable requirements of the Exchange Act, the
Securities Act, the Blue Sky Laws, the rules and regulations of the NNM, the
premerger notification requirements of the HSR Act, if any, and the filing and
recordation of the Certificate of Merger as required by the DGCL.
SECTION 4.06 Permits; Compliance with Laws. Each of Company and the
Company Subsidiaries is in possession of all franchises, grants, authorizations,
licenses, establishment registrations, product listings, permits, easements,
variances, exceptions, consents, certificates, identification and registration
numbers, approvals and orders of any Governmental Entity necessary for Company
and the Company Subsidiaries to own, lease and operate their respective
properties and assets, or to store, distribute and market their respective
products or otherwise to carry on their respective businesses as they are now
being conducted (collectively, the "Company Permits"), and, as of the date of
this Agreement, none of the Company Permits has been suspended or cancelled nor
is any such suspension or cancellation pending or threatened in writing. Neither
Company nor any Company Subsidiary is in conflict with, or in default or
violation of, (i) any Law applicable to Company or such Company Subsidiary or by
which any property or asset of Company or such Company Subsidiary is bound or
affected or (ii) any Company Permits. Schedule 4.06 of the Company Disclosure
Schedule sets forth, as of the date of this Agreement, all actions, proceedings,
investigations or surveys pending or, to the Knowledge of Company, threatened in
writing against Company or any Company Subsidiary that could reasonably be
expected to result in the suspension or cancellation of any Company Permit.
Since December 31, 1997,, neither Company nor any Company Subsidiary has
received from any Governmental Entity any written notification with respect to
possible conflicts, defaults or violations of Laws. The Merger will not result
in the suspension or cancellation of any Company Permit.
SECTION 4.07 SEC Filings; Financial Statements.
(a) Company has timely filed all forms, reports, statements and
documents required to be filed by it (A) with the SEC and the NNM since December
13, 1996 (collectively, together with any such forms, reports, statements and
documents Company may file subsequent to the date hereof until the Closing, the
"Company Reports") and (B) with any other Governmental Entities. Each Company
Report (i) was prepared in accordance with the requirements of the Securities
Act, the Exchange Act or the rules and regulations of the NNM, as the case may
be, and (ii) did not at the time it was filed (or, with respect to any
registration statement filed under the Securities Act, at the time of
effectiveness) contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading. Each form, report, statement and document referred to in
clause (B) of this Section 4.07(a) was prepared in all material respects in
accordance with the requirements of applicable Law. No Company Subsidiary is
subject to the periodic reporting requirements of the Exchange Act or required
to file any form, report or other document with the SEC, the NNM, any other
stock exchange or any other comparable Governmental Entity.
16
(b) Each of the consolidated financial statements (including, in each
case, any notes thereto) contained in the Company Reports was prepared in
accordance with U.S. GAAP (except, in the case of unaudited financial
statements, for the absence of footnotes and subject to normal year end
adjustments, which adjustments are not material) applied on a consistent basis
throughout the periods indicated (except as may be indicated in the notes
thereto) and each presented fairly the consolidated financial position of
Company and the Company Subsidiaries as at the respective dates thereof, and
their consolidated results of operations, stockholders' equity and cash flows
for the respective periods indicated therein, except as otherwise noted therein
(subject, in the case of unaudited statements, to normal and recurring
immaterial year-end adjustments).
(c) Except as and to the extent set forth or reserved against on the
most recent consolidated balance sheet of Company as reported in the Company
Reports, including the notes thereto, Company has no liabilities or obligations
of any nature (whether accrued, absolute, contingent or otherwise) that would be
required to be reflected on a balance sheet or in notes thereto prepared in
accordance with U.S. GAAP, except for liabilities or obligations incurred in the
ordinary course of business consistent with past practice since December 31,
2000.
(d) Subject to any reserves set forth in Company's financial
statements, the accounts receivable shown thereon represent bona fide claims
against debtors for sales and other charges, and are not subject to discount
except for normal cash and immaterial trade discounts. The amount carried for
doubtful accounts and allowances disclosed in Company's financial statements was
calculated in accordance with U.S. GAAP and in a manner consistent with prior
periods.
SECTION 4.08 Absence of Certain Changes or Events. Since December 31,
2000, each of Company and the Company Subsidiaries has conducted its business
only in the ordinary course consistent with past practice and, since such date,
there has not been (i) any Company Material Adverse Effect, (ii) any event that
could reasonably be expected to prevent or materially delay the performance of
Company's obligations pursuant to this Agreement and the consummation of the
Merger by Company, (iii) any change by Company or any Company Subsidiary in its
accounting methods, principles or practices, (iv) any declaration, setting aside
or payment of any dividend or distribution in respect of the shares of Company
Common Stock or any redemption, purchase or other acquisition of any of
Company's securities, (v) any increase in the compensation or benefits or
establishment of any bonus, insurance, severance, deferred compensation,
pension, retirement, profit sharing, stock option (including, without
limitation, the granting of stock options, stock appreciation rights,
performance awards or restricted stock awards), stock purchase or other employee
benefit plan, or any other increase in the compensation payable or to become
payable to employees, officers, consultants or directors of Company or any
Company Subsidiary, (vi) any issuance or sale of any stock, notes, bonds or
other securities other than pursuant to the exercise of outstanding securities,
or entering into any agreement with respect thereto, (vii) any amendment to
Company's certificate of incorporation or bylaws or any Company Subsidiary's
certificate of incorporation, bylaws or equivalent organizational documents,
(viii) other than in the ordinary course of business, any (x) purchase, sale,
assignment or transfer of any material assets, (y) Encumbrance on any material
assets or properties, tangible or intangible, except for liens for Taxes not yet
delinquent or (z) waiver of any rights of material value or cancellation or any
material debts or claims, (ix) any incurrence of
17
any material liability (absolute or contingent), except for current liabilities
and obligations incurred in the ordinary course of business consistent with past
practice, (x) any settlement, waiver, release, assignment or compromise relating
to any action, suit, proceeding, claim arbitration or litigation involving
Company or any Company Subsidiary, (xi) any incurrence of any damage,
destruction or similar loss, whether or not covered by insurance, materially
affecting the business or properties of Company or any Company Subsidiary, (xii)
any entering into any transaction of a material nature other than in the
ordinary course of business, consistent with past practices or (xiii) any
negotiation or agreement by Company or any Company Subsidiary to do any of the
things described in the preceding clauses (i) through (xii).
SECTION 4.09 Employee Benefit Plans; Labor Matters.
(a) Section 4.09(a) of the Company Disclosure Schedule lists each
employee benefit fund, plan, program, arrangement and contract (including,
without limitation, any "pension" plan, fund or program, as defined in Section
3(2) of ERISA, and any "employee benefit plan", as defined in Section 3(3) of
ERISA) and any plan, program, arrangement or contract providing for severance;
medical, dental or vision benefits; life insurance or death benefits; disability
benefits, sick pay or other wage replacement; vacation, holiday or sabbatical;
pension or profit-sharing benefits; stock options or other equity compensation;
bonus or incentive pay or other material fringe benefits), whether written or
not ("Benefit Plans"), maintained, sponsored or contributed to or required to be
contributed to by Company or other trade or business (whether or not
incorporated) treated as a single employer with Company (a "Company ERISA
Affiliate") pursuant to Code Section 414(b), (c), (m) or (o), or with respect to
which Company or any Company ERISA Affiliate could incur liability under Section
4069, 4212(c) or 4204 of ERISA or Section 412 of the Code (the "Company Benefit
Plans"), and Company has delivered or made available to Parent a true, complete
and correct copy of (i) such Company Benefit Plan and the most recent summary
plan description related to such Company Benefit Plan, if a summary plan
description is required therefor, (ii) each trust agreement or other funding
arrangement relating to such Company Benefit Plan, (iii) the most recent annual
report (Form 5500) filed with the IRS with respect to such Company Benefit Plan,
(iv) the most recent actuarial report or financial statement relating to such
Company Benefit Plan and (v) the most recent determination, notification,
advisory or opinion letter issued by the IRS with respect to such Company
Benefit Plan, if it is intended to be qualified under Section 401(a) of the
Code, and any pending request for such a letter. Neither Company nor any Company
ERISA Affiliate nor, to the Knowledge of Company, any other Person, has any
express or implied commitment, whether legally enforceable or not, to modify,
change or terminate any Company Benefit Plan, other than with respect to a
modification, change or termination required by ERISA or the Code.
(b) Each Company Benefit Plan has been administered in all material
respects in accordance with its terms and all applicable Laws, including,
without limitation, ERISA and the Code, and all contributions required to be
made under the terms of any of the Company Benefit Plans as of the date of this
Agreement have been timely made or have been reflected on the most recent
consolidated balance sheet filed or incorporated by reference in the Company
Reports prior to the date of this Agreement. With respect to the Company Benefit
Plans, no event has occurred and there exists no condition or set of
circumstances in connection with which Company or any Company ERISA Affiliate is
likely to be subject to any material liability
18
(other than for routine benefit liabilities) under the terms of, or with respect
to, such Company Benefit Plans, under ERISA, the Code or any other applicable
Law.
(c) Company, on behalf of itself and each Company ERISA Affiliate,
hereby represents that: (i) each Company Benefit Plan which is intended to
qualify under Section 401(a), 401(k), 401(m) or 4975(e)(6) of the Code has
received a favorable determination or is currently awaiting receipt of a
favorable advisory or opinion letter from the IRS as to its qualified status
under the Code, and each trust established in connection with any Company
Benefit Plan which is intended to be exempt from federal income taxation under
Section 501(a) of the Code has received a determination letter from the IRS that
it is so exempt, or such Company Benefit Plan has been established under a
standardized prototype plan for which an IRS opinion letter has been obtained by
the Plan sponsor and is valid as to Company and no fact or event has occurred
that could adversely affect the qualified status of any such Company Benefit
Plan or the exempt status of any such trust, or otherwise could not be corrected
through various IRS or Department of Labor plan correction programs without the
loss of qualified status; (ii) each Company Benefit Plan that is required to be
registered under any other applicable Law has been duly registered and no fact
or event has occurred that could adversely affect the registration or status of
such Company Benefit Plan under applicable Law; (iii) there has been no
prohibited transaction (within the meaning of Section 406 of ERISA or Section
4975 of the Code) with respect to any Company Benefit Plan; and (iv) each
Company Benefit Plan can be amended, terminated or otherwise discontinued after
the Effective Time in accordance with its terms, without liability, other than
(A) liability for ordinary administrative expenses, including surrender charges
and related financial fees typically incurred in a termination event, (B) if the
Company Benefit Plan is a pension benefit plan subject to Part 2 of Title I of
ERISA, liability for the accrued benefits as of the date of such termination (if
and to the extent required by ERISA) to the extent that either there are
sufficient assets set aside in a trust or insurance contract to satisfy such
liability or such liability is reflected on the most recent consolidated balance
sheet filed or incorporated by reference in the Company Reports prior to the
date of this Agreement or (C) liability for continuation health care coverage
under COBRA. No suit, administrative proceeding, action or other litigation has
been brought, or to the Knowledge of Company, is threatened, against or with
respect to any Company Benefit Plan, including any audit or inquiry by the IRS
or United States Department of Labor (other than routine benefits claims) or any
other Governmental Entity.
(d) No Company Benefit Plan is a multiemployer pension plan (as defined
in Section 3(37) of ERISA) or other pension plan subject to Title IV of Part 3
of Title I ERISA or Section 412 of the Code and neither Company nor any Company
ERISA Affiliate has sponsored or contributed to or been required to contribute
to a multiemployer pension plan or other pension plan subject to Title IV of
ERISA. No material liability under Title IV of ERISA has been incurred by
Company or any Company ERISA Affiliate that has not been satisfied in full, and
no condition exists that presents a material risk to Company or any Company
ERISA Affiliate of incurring or being subject (whether primarily, jointly or
secondarily) to a material liability thereunder. None of the assets of Company
or any Company ERISA Affiliate is, or may reasonably be expected to become, the
subject of any lien arising under ERISA or Section 412(n) of the Code.
19
(e) With respect to each Company Benefit Plan that is subject to Title
IV or Part 3 of Title I of ERISA or Section 412 of the Code, (i) no reportable
event (within the meaning of Section 4043 of ERISA, other than an event that is
not required to be reported before or within 30 days of such event) has occurred
or is expected to occur, (ii) there was not an accumulated funding deficiency
(within the meaning of Section 302 of ERISA or Section 412 of the Code), whether
or not waived, as of the most recently ended plan year of such Company Benefit
Plan; and (iii) there is no "unfunded benefit liability" (within the meaning of
Section 4001(a)(18) of ERISA).
(f) Company has set forth on Schedule 4.09(f) of the Company Disclosure
Schedule and has delivered to Parent true, complete and correct copies of (i)
all written employment agreements with officers, or in the case of oral
agreements, written descriptions of such agreements, and all written consulting
agreements of Company and the Company Subsidiaries, or in the case of oral
agreements, written descriptions of such agreements, providing for annual
compensation in excess of $100,000 and in effect as of the date of this
Agreement, (ii) all severance plans, agreements, programs and policies of
Company and the Company Subsidiaries with or relating to their respective
employees, directors or consultants and in effect as of the date of this
Agreement, and (iii) all plans, programs, agreements and other arrangements of
Company and the Company Subsidiaries with or relating to their respective
employees, directors or consultants which contain "change of control"
provisions. Except as set forth on Schedule 4.09(f) of the Company Disclosure
Schedule, which discloses the Company's estimate of excess parachute payments
based on assumptions described therein, no payment or benefit which will be made
by Company or any Company Subsidiary or Parent under any Company Benefit Plan or
other arrangement will constitute an excess parachute payment under Section
280G(b)(1) of the Code. The consummation of the transactions contemplated by
this Agreement will not individually or in conjunction with any other possible
event (including termination of employment) (i) entitle any current or former
employee or other service provider of Company or any Company Subsidiary to
severance benefits or any other payment, compensation or benefit (including
forgiveness of indebtedness), except as expressly provided by this Agreement, or
(ii) accelerate the time of payment or vesting, or increase the amount of
compensation or benefit due any such employee or service provider.
(g) Neither Company nor any Company Subsidiary is a party to, nor has
any obligations under or with respect to, any collective bargaining or other
labor union contract applicable to Persons employed by Company or such Company
Subsidiary and no collective bargaining agreement is being negotiated by
Company, any Company Subsidiary or any Person that may bind Company or any
Company Subsidiary thereunder. As of the date of this Agreement, there is no
labor dispute, strike or work stoppage against Company or any Company Subsidiary
pending or, to the Knowledge of Company, threatened, which may interfere with
the business activities of Company or any Company Subsidiary. As of the date of
this Agreement, none of Company, the Company Subsidiaries nor any of their
respective representatives or employees has committed any unfair labor practice
in connection with the operation of the respective businesses of Company or the
Company Subsidiaries, and there is no charge or complaint against Company or any
Company Subsidiary by the National Labor Relations Board or any comparable
Governmental Entity pending or, to the Knowledge of Company, threatened.
20
(h) Except as required by Law, no Company Benefit Plan provides any of
the following retiree or post-employment benefits to any Person: medical,
disability or life insurance benefits. Company and each Company ERISA Affiliate
are in material compliance with (i) the requirements of the applicable health
care continuation and notice provisions of the Consolidated Omnibus Budget
Reconciliation Act of 1985 and the rules and regulations (including proposed
rules and regulations) thereunder ("COBRA") and (ii) the applicable requirements
of the Health Insurance Portability and Accountability Act of 1996 and the rules
and regulations (including the proposed rules and regulations) thereunder.
(i) Each of Company and the Company Subsidiaries is in compliance in
all material respects with all currently applicable Laws and regulations
respecting employment, discrimination in employment, terms and conditions of
employment, wages, hours and occupational safety and health and employment
practices (including, without limitation, relating to termination of employment
and notices relating thereto), and is not engaged in any unfair labor practice.
Each of Company and the Company Subsidiaries has withheld all amounts required
by Law or by agreement to be withheld from the wages, salaries, and other
payments to employees. Neither Company nor any Company Subsidiary is liable for
any arrears of wages or any Taxes or any penalty for failure to comply with any
of the foregoing. Neither Company nor any Company Subsidiary is liable for any
payment to any trust or other fund or to any Governmental Entity, with respect
to unemployment compensation benefits, social security or other benefits or
obligations for employees (other than routine payments to be made in the normal
course of business and consistent with past practice). There are no pending
claims against Company or any Company Subsidiary under any workers compensation
plan or policy or for long-term disability. There are no controversies pending
or, to the Knowledge of Company, threatened, among Company or any Company
Subsidiary, on the one hand, and any of their respective employees, on the other
hand, which controversies have or could reasonably be expected to result in an
action, suit, proceeding, claim, arbitration or investigation before any
Governmental Entity.
(j) Section 4.09(j) of the Company Disclosure Schedule sets forth a
true and complete list of all employees of Company by department and grade and
the base compensation and any severance amounts payable to such employees. Each
employee whose employment has been terminated by Company has signed Company's
standard separation agreement, a form of which has been provided to Parent.
SECTION 4.10 Customers and Suppliers. No customer which individually
accounted for more than one percent (1%) of Company's consolidated gross
revenues during the 12-month period preceding the date hereof has canceled or
otherwise terminated, or made any written threat to Company or any Company
Subsidiary to cancel or otherwise terminate its relationship with Company or
such Company Subsidiary, and no customer which individually accounted for more
than three percent (3%) of Company's consolidated gross revenues during the
12-month period preceding the date hereof (a "3% Customer") has decreased
materially its relationship with Company or any Company Subsidiary or its usage
of the services or products of Company or any Company Subsidiary. Neither
Company nor any Company Subsidiary has actual knowledge of any facts or
circumstances relating to any of its 3% Customers which Company or any Company
Subsidiary believes could reasonably be expected to negatively impact the
business or operations of Company or such Company Subsidiary. Schedule 4.10 sets
21
forth a true and complete list of all customer contracts currently up for
renewal or subject to renewal within three months of the date hereof.
SECTION 4.11 Certain Tax Matters. None of Company, any Company
Subsidiary nor any of their respective Affiliates has taken or agreed to take
any action that could reasonably be expected to prevent the Merger from
constituting a "reorganization" under Section 368 of the Code.
SECTION 4.12 Contracts. Schedule 4.12 of the Company Disclosure
Schedule sets forth a list of each contract or agreement that is material to the
business, assets, liabilities, financial condition or results of operations of
Company (each, a "Material Contract"). Company is not in material violation of
or in material default under (nor does there exist any condition which with the
passage of time or the giving of notice could reasonably be expected to cause
such a material violation of or material default under) any Material Contract.
Each Material Contract is in full force and effect and is a legal, valid and
binding obligation of Company and, to the Knowledge of Company, each of the
other parties thereto, enforceable in accordance with its terms.
SECTION 4.13 Litigation. Except as set forth on Section 4.13 of the
Company Disclosure Schedule, there is no suit, claim, action, proceeding or
investigation pending or, to the Knowledge of Company, threatened in writing
against Company or any Company Subsidiary or any of their respective properties
or any of their respective officers or directors (in their capacities as such)
and, to the Knowledge of Company, there are no existing facts or circumstances
that could reasonably be expected to result in such a suit, claim, action,
proceeding or investigation. Neither Company nor any Company Subsidiary is aware
of any facts or circumstances that could reasonably be expected to result in the
denial of insurance coverage under policies issued to Company or the Company
Subsidiaries in respect of such suits, claims, actions, proceedings and
investigations, except in any case as could not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect. Neither
Company nor any Company Subsidiary is subject to any outstanding order, writ,
injunction or decree which could reasonably be expected to have, individually or
in the aggregate, a Company Material Adverse Effect or materially interfere with
Company's ability to consummate the transactions contemplated herein. Schedule
4.13 of the Company Disclosure Schedule sets forth all litigation that Company
and the Company Subsidiaries have pending against other parties.
SECTION 4.14 Environmental Matters. Each of Company and the Company
Subsidiaries is in compliance with all applicable Environmental Laws and all
Company Permits required by Environmental Laws. All past noncompliance of
Company or any Company Subsidiary with Environmental Laws or Environmental
Permits has been resolved without any pending, ongoing or future obligation,
cost or liability. Neither Company nor any Company Subsidiary has released a
Hazardous Material at, or transported a Hazardous Material to or from, any real
property currently or formerly owned, leased or occupied by Company or any
Company Subsidiary in violation of any Environmental Law.
22
SECTION 4.15 Intellectual Property.
(a) All patents (including, without limitation, all U.S. and foreign
patents, patent applications, patent disclosures, and any and all divisions,
continuations, continuations-in-part, reissues, re-examinations and extensions
thereof); design rights, trademarks, trade names and service marks (whether or
not registered); trade dress; Internet domain names; internet protocol
addresses; copyrights (whether or not registered) and any renewal rights
therefor; sui generis database rights; data; statistical models; technology;
inventions; supplier lists; trade secrets and know-how; computer software
programs or applications in both source and object code form; databases;
technical documentation of such software programs and databases ("Technical
Documentation"); registrations and applications for any of the foregoing and all
other tangible or intangible proprietary information or materials that are or
have been used in (including, without limitation, in the development of)
Company's business and/or in any product, technology or process (i) currently
being or formerly manufactured, published or marketed by Company or (ii)
previously or currently under development for possible future manufacturing,
publication, marketing or other use by Company are hereinafter referred to as
the "Company Intellectual Property." For purposes of this Section 4.15, the term
"Company" shall mean Company and all Company Subsidiaries.
(b) Schedule 4.15(b) of the Company Disclosure Schedule contains a true
and complete list of Company's patents, patent applications, registered
trademarks, trademark applications, common law trademarks, trade names,
registered service marks, service xxxx applications, common law service marks,
Internet domain names, Internet domain name applications, copyright
registrations and applications and other filings and formal actions made or
taken pursuant to Federal, state, local and foreign Laws by Company to protect
its interests in Company Intellectual Property, and includes details of all due
dates for further filings, maintenance, payments or other actions falling due in
respect of Company Intellectual Property within twelve (12) months of the
Closing Date. All of Company's patents, patent applications, registered
trademarks, trademark applications, registered service marks and service xxxx
registrations, and registered copyrights remain in good standing with all fees
and filings due as of the Closing Date duly made and the due dates specified in
the Company Disclosure Schedule are accurate and complete. Schedule 4.15(b) of
the Company Disclosure Schedule contains a true and complete list of the data
processing-related registrations that Company has obtained anywhere in the
World. Company has made all such registrations which it is required to have made
and is in good standing with respect to such registrations with all fees due as
of the Effective Time duly made.
(c) Company Intellectual Property contains only those items and rights
which are: (i) owned by Company; (ii) in the public domain; or (iii) rightfully
used by Company pursuant to a valid and enforceable license (the "Company
Licensed Intellectual Property"), the parties, date, term and subject matter of
each such license agreement (each, a "License Agreement") being set forth on
Schedule 4.15(c) of the Company Disclosure Schedule. Schedule 4.15(c) contains a
true and complete list of license or other agreements (including territories
associated with such rights) with third parties wherein Company has licensed or
otherwise provided any exclusive rights to any of the Company Intellectual
Property to such third party.
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Company has all rights in Company Intellectual Property necessary to
carry out Company's current activities and Company's future activities to the
extent such future activities are already planned (and had all rights necessary
to carry out its former activities at the time such activities were being
conducted), including, without limitation, to the extent required to carry out
such activities, rights to make, use, reproduce, modify, adopt, create
derivative works based on, translate, distribute (directly and indirectly),
transmit, display and perform publicly, license, rent and lease and, other than
with respect to Company Licensed Intellectual Property, assign and sell, Company
Intellectual Property.
(d) To the Knowledge of Company, the reproduction, manufacturing,
distribution, licensing, sublicensing, sale or any other exercise of rights in
any Company Intellectual Property, product, work, technology or process as now
used or offered or proposed for use, licensing or sale by Company does not
infringe on any patent, design right, trademark, trade name, service xxxx, trade
dress, Internet domain name, copyright, database, statistical model, technology,
invention, supplier list, trade secret, know-how, computer software program or
application of any Person. No claims (i) challenging the validity, effectiveness
or, other than with respect to Company Licensed Intellectual Property, ownership
by Company of any Company Intellectual Property, or (ii) to the effect that the
use, distribution, licensing, sublicensing, sale or any other exercise of rights
in any product, work, technology or process as now used or offered or proposed
for use, licensing, sublicensing or sale by Company or its agents or use by its
customers infringes or will infringe on any intellectual property or other
proprietary or personal right of any Person, have been asserted or are
threatened in writing by any Person, nor, to the Knowledge of Company, are there
any valid grounds for any bona fide claim of any such kind. To the Knowledge of
Company, all of the rights within the Company Intellectual Property are
enforceable and subsisting. There is no unauthorized use, infringement or
misappropriation of any Company Intellectual Property by any third party,
employee or former employee, to the Knowledge of Company, and Company has not
been notified of any such unauthorized use, infringement or misappropriation of
any Company Intellectual Property by any third party, employee or former
employee.
(e) All personnel, including employees, agents, consultants and
contractors, who have contributed to or participated in the conception and
development of Company Intellectual Property on behalf of Company, have executed
nondisclosure agreements in the form set forth in Schedule 4.15(e) of the
Company Disclosure Schedule and either (i) have been a party to an enforceable
"work-for-hire" arrangement or agreements with Company in accordance with
applicable federal and state Law that has accorded Company full, effective,
exclusive and original ownership of all tangible and intangible property thereby
arising, or (ii) have executed appropriate instruments of assignment in favor of
Company as assignee that have conveyed to Company effective and exclusive
ownership of all tangible and intangible property thereby arising.
(f) Company is not, nor as a result of the execution or delivery of
this Agreement, or performance of Company's obligations hereunder, will Company
be, in violation of any license, sublicense, agreement or instrument to which
Company is a party or otherwise bound, nor will execution or delivery of this
Agreement, or performance of Company's obligations hereunder, cause the
diminution, termination or forfeiture of any Company Intellectual Property.
24
(g) Schedule 4.15(g) of the Company Disclosure Schedule contains a true
and complete list of all of Company's proprietary software programs (the
"Company Software Programs").
(h) The source code and system documentation relating to the Company
Software Programs (i) have at all times been maintained in strict confidence,
(ii) have been disclosed by Company only to employees who have a "need to know"
the contents thereof in connection with the performance of their duties to
Company and who have executed the nondisclosure agreements referred to in this
Section 4.15, and (iii) have not been disclosed to any third party.
(i) Company has taken all reasonable steps, in accordance with normal
industry practice, to preserve and maintain complete notes and records relating
to Company Intellectual Property to cause the same to be readily understood,
identified and available.
(j) The Company Software Programs (i) have been designed to ensure year
2000 compatibility, which includes, but is not limited to, date data century
recognition, and calculations that accommodate same century and multi-century
formulas and date values; (ii) operate and will operate in accordance with their
specifications prior to, during and after the calendar year 2000 AD; and (iii)
shall not end abnormally or provide invalid or incorrect results as a result of
date data, specifically including date data which represents or references
different centuries or more than one century.
(k) As of the date of this Agreement, all Company Intellectual Property
is free and clear of any and all Encumbrances other than Permitted Encumbrances.
(l) Company does not owe any royalties or other payments to third
parties in respect of Company Intellectual Property. All royalties or other
payments due on Company Intellectual Property and Company Licensed Intellectual
Property that have accrued prior to the date of this Agreement have been paid
and all royalties or other payments due on Company Intellectual Property and
Company Licensed Intellectual Property between the date of this Agreement and
the Effective Time shall have been paid.
(m) Company regularly scans all Company Software Programs, Company
Intellectual Property and Company Licensed Intellectual Property with "best in
class" commercially available virus detection software. To the Knowledge of
Company, the Company Software Programs and other Company Intellectual Property
contain no "viruses." For the purposes of this Agreement, "virus" means any
computer code intentionally designed to disrupt, disable or harm in any manner
the operation of any software or hardware. None of the foregoing contains any
worm, bomb, backdoor, clock, timer, or other disabling device code, design or
routine which causes the software to be erased, inoperable, or otherwise
incapable of being used, either automatically or upon command by any party.
(n) Company has implemented all commercially reasonable steps in the
physical and electronic protection of its information assets from unauthorized
disclosure, use or modification. Schedule 4.15(n) of the Company Disclosure
Schedule sets forth (i) each breach
25
of security of which Company is aware, (ii) its known or anticipated
consequences and (iii) the steps Company has taken to remedy such breach.
(o) All information (the "Database Information") contained in the
databases maintained by Company (the "Databases") has been (i) collected in
accordance with fair information collection practices (including, but not
limited to, (a) the standards promulgated by the Online Privacy Alliance; (b)
the standards promulgated by the Direct Marketing Association, and (c) all
applicable Laws, including, but not limited, to those relating to the use of
information collected from or about consumers) so that, at a minimum and prior
to submitting any information to Company or its agents, Internet users received
notice of how the information will be used and a choice whether to submit such
information; and (ii) stored, maintained and used in accordance with such
notices and all Laws.
(p) Company has the sole and exclusive right to use and commercially
exploit the Database Information, free of consideration to any third party.
(q) Company has not collected and maintains no personal information
about persons in violation of any Law. Company is, and has always been, in
compliance with (i) its then-current privacy policy (including the policy posted
on Company's Web site(s)) during the period in effect or posted and (ii) its
customers' privacy policies, when required to do so by contract. No change needs
to be made to the business or operations of Company in order to comply with any
applicable Laws relating to privacy as in effect on the date hereof. Company's
standard customer email delivery agreement requires that customers represent
contractually that (A) all email lists provided by such customers contain email
addresses of subscribers who have "opted-in" to receive emails from such
customers; and (B) emails sent on behalf of such customers include instructions
on how to unsubscribe. Company does not deliver any emails to any subscribers
who have unsubscribed from receiving emails either from Company's customers or
from Company to the extent Company has been advised of such requests to
unsubscribe.
(r) Schedule 4.15(r) of Company Disclosure Schedule provides a list and
summary of all material communications (oral and written) between Company and
any private or public organizations purporting to police unsolicited email (an
"Email Organization"). As of the date of this Agreement, Company has informed
Parent of all such communications between Company and any Email Organization.
Other than as disclosed on Schedule 4.15(r) of Company Disclosure Schedule,
there have been no communication(s) between Company and any Email Organization
that could be reasonably expected to result in a Company Material Adverse
Effect. Other than as disclosed on Schedule 4.15(r) of the Company Disclosure
Schedule, there is no action, suit, proceeding, claim, arbitration or
investigation pending against Company with any Email Organization, or, to the
Knowledge of Company, threatened against Company or against any of its
properties or against any of its officers or directors (in their capacities as
such).
SECTION 4.16 Taxes.
(a) Company and the Company Subsidiaries have properly completed and
timely filed all Tax Returns required to be filed by them and have paid all
Taxes shown as due thereon. The Company Reports reflect all liabilities for
unpaid Taxes of Company and the Company Subsidiaries for periods and portions of
periods through the date of the Company's
26
latest financial statements included in the Company Reports. Neither Company nor
any Company Subsidiary has any material liability for unpaid Taxes accruing
after the date of the Company's latest financial statements included in the
Company Reports.
(b) There is (i) no material claim for Taxes that is a lien against the
property of Company or is being asserted against Company or any Company
Subsidiary other than liens for Taxes not yet due and payable, (ii) to the
Knowledge of Company, no audit, administrative proceeding or court proceeding
with respect to any Taxes or of any Tax Return of Company or any Company
Subsidiary being conducted by a Tax Authority; (iii) no extension of the statute
of limitations on the assessment of any Taxes that has been granted by Company
or any Company Subsidiary and currently in effect, and (iv) no deficiency,
refund litigation, proposed adjustment or matter in controversy with respect to
any Taxes due and owing by Company or any Company Subsidiary.
(c) To the Knowledge of Company, no claim or notice has ever been made
by a Tax Authority in a jurisdiction where Company or any Company Subsidiary has
not filed a Tax Return that the Company or any Company Subsidiary is or may be
subject to taxation by such jurisdiction.
(d) There has been no change in ownership of Company that has caused
the utilization of any losses of Company or any Company Subsidiary to be limited
pursuant to Section 382 of the Code, and any loss carryovers reflected on the
latest financial statements included in the Company Reports are properly
computed and reflected.
(e) Neither Company nor any Company Subsidiary has been or will be
required to include any material adjustment in taxable income for any Tax period
(or portion thereof) pursuant to Section 481 or 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 Merger except
as may occur incident to or as a result of the Merger.
(f) Neither Company nor any Company Subsidiary has filed or will file
any consent to have the provisions of Section 341(f)(2) of the Code (or
comparable provisions of any state Tax Laws) apply to Company or any Company
Subsidiary.
(g) Neither Company nor any Company Subsidiary is a party to any Tax
sharing or Tax allocation agreement, nor does Company or any Company Subsidiary
have any liability or potential liability to another party under any such
agreement, nor has Company or any Company Subsidiary incurred any liability for
Taxes of any Person under Treas. Reg. ss.1.1502-6 (or any similar provision of
state, local or foreign Law), as a transferee or successor, by contract or
otherwise.
(h) Company has not filed any disclosures under Section 6662 of the
Code or comparable provisions of state, local or foreign Law to prevent the
imposition of penalties with respect to any Tax reporting position taken on any
Tax Return.
(i) Neither Company nor any Company Subsidiary has ever been a member
of a consolidated, combined or unitary group of which Company was not the
ultimate parent corporation.
27
(j) Company has not ever been a "personal holding company" within the
meaning of Section 542 of the Code or a "United States real property holding
corporation" within the meaning of Section 897 of the Code.
(k) Company has not constituted either a "distributing corporation" or
a "controlled corporation" (within the meaning of Section 355(a)(1)(A) of the
Code) in a distribution of stock qualifying for tax-free treatment under Section
355 of the Code (i) in the two years prior to the date hereof or (ii) in a
distribution which could otherwise constitute part of a "plan" or "series of
related transactions" (within the meaning of Section 355(e) of the Code) in
conjunction with the Merger.
(l) Each of Company and the Company Subsidiaries withheld and paid all
Taxes required to have been withheld and paid in connection with amounts paid or
owing to any employee, independent contractor, creditor, stockholder or other
third party. Each of Company and the Company Subsidiaries has collected all
amounts required to be collected by it on account of Taxes and has remitted the
same to the appropriate Governmental Entity in the manner and within the time
required under any applicable Law, or if not yet due, has set such amounts aside
in appropriate accounts for payment when due.
(m) No power of attorney has been granted by Company or any Company
Subsidiary with respect to any matters relating to Taxes that is currently in
effect.
(n) Neither Company nor any Company Subsidiary has settled any claim,
audit or administrative or court proceeding with respect to Taxes.
SECTION 4.17 Insurance. Each of Company and the Company Subsidiaries is
presently insured, and during each of the past three calendar years (including
2001) has been insured, against such risks as companies engaged in a similar
business would, in accordance with good business practice, customarily be
insured. The policies of fire, theft, liability and other insurance maintained
with respect to the assets or businesses of Company and the Company Subsidiaries
provide adequate coverage against loss. Set forth on Schedule 4.17 of the
Company Disclosure Schedule is a complete and correct list as of the date hereof
of all insurance policies maintained by Company and the Company Subsidiaries,
and Company has provided to Parent complete and correct copies of all such
policies, together with all riders and amendments thereto. All such policies:
(i) are with insurance companies reasonably believed by Company to be
financially sound and reputable; (ii) are in full force and effect; (iii) are
sufficient for compliance by Company and the Company Subsidiaries with all
requirements of applicable Law and of all material agreements to which Company
and the Company Subsidiaries are party; (iv) are valid and outstanding policies
enforceable against the insurer; (v) insure against risks of companies similarly
situated and by companies engaged in similar businesses and owning similar
assets; and (vi) provide that they remain in full force and effect through the
Effective Date and all premiums due thereon have been paid. Each of Company and
the Company Subsidiaries has complied in all material respects with the terms of
such policies.
28
SECTION 4.18 Properties; Bank Accounts.
(a) Each of Company and the Company Subsidiaries has good and valid
title, free and clear of all Encumbrances, except for Permitted Encumbrances, to
all its material properties and assets, whether real, personal or mixed,
reflected in Company's consolidated financial statements contained in Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 2000 as being
owned by Company and the Company Subsidiaries as of the date thereof, other than
(i) any properties or assets that have been sold or otherwise disposed of in the
ordinary course of business since the date of such financial statements, (ii)
liens disclosed in the notes to such financial statements and (iii) liens
arising in the ordinary course of business after the date of such financial
statements. All buildings, and all fixtures, equipment and other property and
assets that are material to the business of Company and the Company Subsidiaries
on a consolidated basis, held under leases or sub-leases by Company or the
Company Subsidiaries are held under valid instruments enforceable in accordance
with their respective terms, subject to applicable Laws of bankruptcy,
insolvency or similar Laws relating to creditors' rights generally and to
general principles of equity (whether applied in a proceeding in Law or equity).
Substantially all of Company's and the Company Subsidiaries' equipment in
regular use has been reasonably maintained and is in serviceable condition,
reasonable wear and tear excepted. Each of Company and the Company Subsidiaries
owns or has the valid and subsisting right to use all assets and properties
necessary or advisable to operate its business in the manner presently
conducted. Schedule 4.18 of the Company Disclosure Schedule identifies each
parcel of real property ever owned or leased by Company or the Company
Subsidiaries.
(b) Schedule 4.18 of the Company Disclosure Schedule sets forth the
names and addresses of all banks and other institutions at which Company and the
Company Subsidiaries have accounts, deposits or the like, and the names of all
Persons authorized to draw on or give instructions with respect thereto or
holding a power-of-attorney on behalf of Company or the Company Subsidiaries.
Any cash held in such accounts is not subject to any restrictions or limitations
as to withdrawal.
SECTION 4.19 Affiliates. Schedule 4.19 of the Company Disclosure
Schedule sets forth the names and addresses of each Person who is, in Company's
reasonable judgment, an affiliate (as such term is used in Rule 145 under the
Securities Act) of Company.
SECTION 4.20 Opinion of Financial Advisor. Xxxxxxxx Inc. ("Company
Financial Advisor") has delivered to the board of directors of Company its
opinion to the effect that, as of the date hereof, the consideration to be
received in the Merger by Company stockholders is fair to the holders of shares
of Company Common Stock from a financial point of view.
SECTION 4.21 Brokers.
(a) Other than the fee of the Company Financial Advisor, which will not
exceed $900,000, no broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the Merger
based upon arrangements made by or on behalf of Company.
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(b) Attached hereto as Schedule 4.21(b) of the Company Disclosure
Schedule are true, complete and correct copies of all agreements between Company
and Company Financial Advisor. Other than as attached hereto as Schedule 4.21(b)
of the Company Disclosure Schedule, there are no other agreements between
Company and Company Financial Advisor.
SECTION 4.22 Certain Business Practices. None of Company, any Company
Subsidiary nor any of their respective directors, officers, agents or employees
(in their capacities as such) has (i) used any funds for unlawful contributions,
gifts, entertainment or other unlawful expenses relating to political activity,
(ii) made any unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns or violated
any provision of the Foreign Corrupt Practices Act of 1977, as amended, or (iii)
made any other unlawful payment, gift or contribution.
SECTION 4.23 Business Activity Restriction. Other than as set forth on
Schedule 4.23, there is no non-competition or other similar agreement,
commitment, judgment, injunction, order or decree to which Company or any
Company Subsidiary is a party or subject to that has or could reasonably be
expected to have the effect of prohibiting or impairing the conduct of business
by Company or any Company Subsidiary or the consummation of the Merger by
Company. Other than as set forth on Schedule 4.23, neither Company nor any
Company Subsidiary has entered into any agreement under which Company or such
Company Subsidiary is restricted from selling, licensing or otherwise
distributing any of its technology or products to, or providing services to,
customers or potential customers or any class of customers, in any geographic
area, during any period of time or in any segment of the market or line of
business.
SECTION 4.24 Section 203 of the DGCL Not Applicable. The board of
directors of Company has approved the Merger, this Agreement and the Stockholder
Agreements, and such approval is sufficient to render inapplicable to the
Merger, this Agreement and the Stockholder Agreements (including any amendments
to this Agreement and the Stockholder Agreements) and the transactions
contemplated by this Agreement and the Stockholder Agreements the provisions of
Section 203 of the DGCL. No other state takeover statute or similar statute or
regulation applies or purports to apply to the Merger, this Agreement, the
Stockholder Agreements or the transactions contemplated by this Agreement and
the Stockholder Agreements.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF PARENT AND MERGER SUB
Each of Parent and Merger Sub hereby represents and warrants to
Company, subject to the exceptions specifically disclosed in the Parent
Disclosure Schedule, all such exceptions to be referenced to a specific
representation set forth in this Article V and any other representation or
warranty of Parent or Merger Sub to the extent that it is apparent from such
disclosure that such disclosure is applicable to such other representation or
warranty, that:
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SECTION 5.01 Organization and Qualification. Parent and Merger Sub have
each been duly organized and each is validly existing and in good standing under
the Laws of the State of Delaware and has the requisite corporate power and
authority and all necessary governmental approvals to own, lease and operate its
properties and to carry on its business as it is now being conducted. Each of
Parent and Merger Sub is duly qualified or licensed to do business, and each is
in good standing (to the extent applicable), in each jurisdiction where the
character of the properties owned, leased or operated by it or the nature of its
business makes such qualification or licensing necessary, except for such
failures to be so qualified or licensed and in good standing that could not
reasonably be expected to have, individually or in the aggregate, a Parent
Material Adverse Effect.
SECTION 5.02 Certificate of Incorporation and Bylaws. The copies of
each of Parent's and Merger Sub's certificate of incorporation and bylaws
previously provided to Company by Parent are true, complete and correct copies
thereof. Such certificates of incorporation and bylaws are in full force and
effect. Neither Parent nor Merger Sub is in violation of any of the provisions
of its respective certificate of incorporation or bylaws.
SECTION 5.03 Capitalization.
(a) The authorized capital stock of Parent consists of 400,000,000
shares of Parent Common Stock and 5,000,000 shares of preferred stock, no par
value per share ("Parent Preferred Stock"). As of the close of business on May
1, 2001, (i) 130,880,992 shares of Parent Common Stock were issued and
outstanding, all of which are validly issued, fully paid and nonassessable, (ii)
no shares of Parent Common Stock were held in the treasury of Parent, (iii) no
shares of Parent Common Stock were held by any directly or indirectly owned
Subsidiary of Parent, including Merger Sub (each a "Parent Subsidiary"), and
(iv) one (1) share of Parent Preferred Stock was issued and outstanding. Except
for the shares of Parent Common Stock issuable pursuant to the Parent Stock
Plans, shares of Parent Common Stock issuable upon conversion of the Parent
Convertible Notes, shares of Parent Common Stock issuable upon exchange of the
exchangeable shares of Parent's Subsidiary, Thunderball Acquisition II Inc.
(which shares were issued in connection with Parent's acquisition of FloNetwork
Inc.) and shares of Parent Common Stock issuable pursuant to the Letter
Agreement, dated as of May 7, 2001, among Parent and the former stockholders of
DoubleClick Scandinavia AB, there are no options, warrants, convertible or
exchangeable securities or other rights, agreements, arrangements or commitments
of any character to which Parent or any Parent Subsidiary is a party or by which
Parent or any Parent Subsidiary is bound relating to the issued or unissued
capital stock of Parent or any Parent Subsidiary or obligating Parent or any
Parent Subsidiary to issue or sell any shares of capital stock of, or other
equity interests in, Parent or any Parent Subsidiary. All shares of Parent
Common Stock subject to issuance as aforesaid, upon issuance prior to the
Effective Time on the terms and conditions specified in the instruments pursuant
to which they are issuable, will be duly authorized, validly issued, fully paid
and nonassessable. There are no outstanding contractual obligations of Parent to
repurchase, redeem or otherwise acquire any shares of Parent Common Stock. There
are no material outstanding contractual obligations of Parent to provide funds
to, or make any material investment (in the form of a loan, capital contribution
or otherwise) in, any Parent Subsidiary or any other Person.
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(b) All of the shares of Parent Common Stock to be issued (i) in
connection with the Merger, when issued in accordance with this Agreement, and
(ii) upon the conversion of any Company Stock Option or Company Warrant into an
option or warrant, as the case may be, to purchase shares of Parent Common Stock
in accordance with Section 3.05, when issued upon exercise thereof following the
Effective Time, have been duly authorized, will be validly issued, fully paid
and nonassessable and will not be subject to preemptive rights or similar
contractual rights granted by Parent.
SECTION 5.04 Authority Relative to This Agreement. Each of Parent and
Merger Sub has all necessary corporate power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated hereby. The execution and delivery of this
Agreement by each of Parent and Merger Sub and the consummation by Parent and
Merger Sub of the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action, and no other corporate proceedings
on the part of Parent or Merger Sub are necessary to authorize this Agreement or
to consummate the transactions contemplated hereby (other than, with respect to
the Merger, the consent of Parent as sole stockholder of Merger Sub and the
filing and recordation of the Certificate of Merger as required by the DGCL).
This Agreement has been duly executed and delivered by each of Parent and Merger
Sub and, assuming the due authorization, execution and delivery by Company,
constitutes a legal, valid and binding obligation of each of Parent and Merger
Sub, enforceable against Parent and Merger Sub in accordance with its terms,
except to the extent that enforceability hereof may be limited by applicable
bankruptcy, insolvency, reorganization or other similar Laws affecting the
enforcement of creditors' rights generally and by principles of equity regarding
the availability of remedies (whether in a proceeding at Law or in equity).
SECTION 5.05 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by Parent and Merger
Sub do not, and the performance by Parent and Merger Sub of their obligations
hereunder and the consummation of the Merger will not, (i) conflict with or
violate any provision of the certificate of incorporation or bylaws of Parent or
any equivalent organizational documents of any Parent Subsidiary, (ii) assuming
that all consents, approvals, authorizations and permits described in Section
5.05(b) have been obtained and all filings and notifications described in
Section 5.05(b) have been made, conflict with or violate any Law applicable to
Parent or any Parent Subsidiary or by which any property or asset of Parent or
any Parent Subsidiary is subject or (iii) result in any breach of or constitute
a default (or an event which with the giving of notice or lapse of time or both
could reasonably be expected to become a default) under, or give to others any
right of termination, amendment, acceleration or cancellation of, or result in
the creation of an Encumbrance on any property or asset of Parent pursuant to,
any material note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation.
(b) The execution and delivery of this Agreement by Parent and Merger
Sub do not, and the performance by Parent and Merger Sub of their obligations
hereunder and the consummation of the Merger will not, require any consent,
approval, authorization or permit of, or filing by Parent with or notification
by Parent to, any Governmental Entity, except pursuant to applicable
requirements of the Exchange Act, the Securities Act, the Blue Sky Laws, the
rules
32
and regulations of the NNM, the premerger notification requirements of the HSR
Act, if any, and the filing and recordation of the Certificate of Merger as
required by the DGCL.
SECTION 5.06 SEC Filings; Financial Statements.
(a) Parent has filed all forms, reports, statements and documents
required to be filed by it (A) with the SEC and the NNM since February 20, 1998
(collectively, together with any such forms, reports, statements and documents
Parent may file subsequent to the date hereof until the Closing, the "Parent
Reports") and (B) with any other Governmental Entities. Each Parent Report (i)
was prepared in accordance with the requirements of the Securities Act, the
Exchange Act or the rules and regulations of the NNM, as the case may be, and
(ii) did not at the time it was filed (or, with respect to any registration
statement filed under the Securities Act, at the time of effectiveness) contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading. Each form, report, statement and document referred to in clause (B)
of this Section 5.06(a) was prepared in all material respects in accordance with
the requirements of applicable Law. No Parent Subsidiary is subject to the
periodic reporting requirements of the Exchange Act or required to file any
form, report or other document with the SEC, the NNM, any other stock exchange
or any other comparable Governmental Entity.
(b) Except as provided in the Parent Reports, each of the consolidated
financial statements (including, in each case, any notes thereto) contained in
the Parent Reports was prepared in accordance with U.S. GAAP (except, in the
case of unaudited financial statements, for the absence of footnotes and subject
to normal year end adjustments, which adjustments are not material) applied on a
consistent basis throughout the periods indicated (except as may be indicated in
the notes thereto) and each presented fairly, in all material respects, the
consolidated financial position of Parent and the consolidated Parent
Subsidiaries as at the respective dates thereof, and their consolidated results
of operations, stockholders' equity and cash flows for the respective periods
indicated therein, except as otherwise noted therein (subject, in the case of
unaudited statements, to normal and recurring immaterial year-end adjustments).
(c) Except as and to the extent set forth or reserved against on the
most recent consolidated balance sheet of Parent and the Parent Subsidiaries as
reported in the Parent Reports, including the notes thereto, neither Parent nor
any Parent Subsidiary has any liabilities or obligations of any nature (whether
accrued, absolute, contingent or otherwise) that would be required to be
reflected on a balance sheet or in notes thereto prepared in accordance with
U.S. GAAP, except for liabilities or obligations incurred in the ordinary course
of business consistent with past practice since December 31, 2000.
SECTION 5.07 Certain Tax Matters. Neither Parent nor any of its
Affiliates has taken or agreed to take any action that could reasonably be
expected to prevent the Merger from constituting a "reorganization" under
Section 368 of the Code.
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SECTION 5.08 Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the Merger based upon arrangements made by or on behalf of Parent.
SECTION 5.09 No Parent Material Adverse Effect. Since December 31,
2000, there has been no Parent Material Adverse Effect.
ARTICLE VI
COVENANTS
SECTION 6.01 Conduct of Business Pending the Closing. Company agrees
that, between the date of this Agreement and the Effective Time, unless Parent
shall otherwise agree in writing and except as contemplated or permitted by this
Agreement or as set forth in Schedule 6.01 to the Company Disclosure Schedule,
(x) the business of Company and the Company Subsidiaries shall be conducted only
in, and Company shall not take any action, or permit any of the Company
Subsidiaries to take action, except in, the ordinary course of business
consistent with past practice and (y) Company shall use its reasonable efforts
to keep available the services of such of the current officers, significant
employees and significant consultants of Company and to preserve the current
relationships of Company and the Company Subsidiaries with such of the corporate
partners, customers, suppliers and other Persons with which Company and the
Company Subsidiaries have significant business relations in order to preserve
substantially intact its business organization. By way of amplification and not
limitation, Company shall not, between the date of this Agreement and the
Effective Time, directly or indirectly, do or agree to do, or permit any of the
Company Subsidiaries, directly or indirectly, to do or agree to do, any of the
following without the prior written consent of Parent:
(a) amend or otherwise change its certificate of incorporation
or bylaws or equivalent organizational documents;
(b) issue, deliver, sell, pledge, dispose of, grant, transfer,
lease, license, guarantee or encumber, or authorize the issuance,
delivery, sale, pledge, disposition, grant, transfer, lease, license,
guarantee or Encumbrance of, (i) any shares of capital stock of Company
or any Company Subsidiary of any class, or securities convertible into
or exchangeable or exercisable for any shares of such capital stock, or
any options, warrants or other rights of any kind to acquire any shares
of such capital stock, or any other ownership interest (including,
without limitation, any phantom interest), of Company or any Company
Subsidiary, other than (x) the issuance of shares of Company Common
Stock pursuant to the exercise of stock options or warrants therefor
outstanding as of the date of this Agreement, (y) the issuance of up to
an additional 350,000 shares of Company Common Stock pursuant to new
grants of options or share purchase rights to future employees and
consultants (including, without limitation, any employees who transfer
from MessageMedia Europe B.V. or any of its subsidiaries to Company),
and (z) the issuance of shares of Company Common Stock to participants
in the Company Stock Purchase Plan in accordance with its terms or (ii)
any material property or assets of Company or any Company Subsidiary
except pursuant to
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existing contracts, provided that Company may issue nonexclusive
software licenses in the ordinary course of business consistent with
past practice;
(c) (i) acquire (including, without limitation, by merger,
consolidation, or acquisition of stock or assets) any interest in any
corporation, partnership, other business organization or Person or any
division thereof; (ii) incur any indebtedness for borrowed money (other
than de minimus amounts) or issue any debt securities or assume,
guarantee or endorse, or otherwise as an accommodation become
responsible for, the obligations of any Person for borrowed money or
make any loans or advances material to the business, assets,
liabilities, financial condition or results of operations of Company
and the Company Subsidiaries, taken as a whole; (iii) terminate, cancel
or request any material change in, or agree to any material change in,
any Material Contract other than in the ordinary course of business
consistent with past practice; (iv) make or authorize any capital
expenditure, other than capital expenditures set forth on Schedule
6.01(c) to the Company Disclosure Schedule; or (v) enter into or amend
any contract, agreement, commitment or arrangement that, if fully
performed, would not be permitted under this Section 6.01(c)
(d) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with
respect to any of its capital stock, except that any Company Subsidiary
may pay dividends or make other distributions to Company;
(e) reclassify, combine, split, subdivide or redeem, purchase
or otherwise acquire, directly or indirectly, any of its capital stock,
except repurchases of de minimus amounts of unvested shares at cost in
connection with the termination of the employment relationship with any
employee pursuant to stock option or purchase agreements in effect on
the date hereof;
(f) amend or change the period (or permit any acceleration,
amendment or change) of exercisability of options granted under the
Company Stock Plans or authorize cash payments in exchange for any
Company Stock Options granted under any of such plans;
(g) amend the terms of, repurchase, redeem or otherwise
acquire any of its securities, or propose to do any of the foregoing,
except repurchases of de minimus amounts of unvested shares at cost in
connection with the termination of the employment relationship with any
employee pursuant to stock option or purchase agreements in effect on
the date hereof;
(h) except as set forth in Section 6.01(h) of the Company
Disclosure Schedule, increase the compensation payable or to become
payable to its directors, officers, consultants or employees, grant any
rights to retention, severance or termination pay to, or enter into any
employment, retention or severance agreement; except as set forth in
Section 6.01(h) of the Company Disclosure Schedule, establish, adopt,
enter into or amend any collective bargaining, bonus, profit sharing,
thrift, compensation, stock option, restricted stock, pension,
retirement, deferred compensation, employment,
35
termination, severance or other plan, agreement, trust, fund, policy or
arrangement for the benefit of any director, officer, consultant or
employee of Company or any Company Subsidiary (except as allowed by
Section 6.01(b)), except to the extent required by applicable Law or
the terms of a collective bargaining agreement; or, except as set forth
in Section 6.01(h) of the Company Disclosure Schedule, enter into or
amend any contract, agreement, commitment or arrangement between
Company or any Company Subsidiary, on the one hand, and any of
Company's or any Company Subsidiary's directors, officers, consultants
or employees (except as allowed by Section 6.01(b)), on the other hand;
(i) except as permitted under Section 6.01(c), pay, discharge
or satisfy any claims, liabilities or obligations (whether absolute,
accrued, asserted or unasserted, contingent or otherwise), other than
the payment, discharge or satisfaction of claims, liabilities or
obligations (A) in the ordinary course of business and consistent with
past practice or (B) reflected or reserved against on the latest
balance sheet included in the Company Reports or (C) as otherwise set
forth on Schedule 6.01(i) of the Company Disclosure Schedule;
(j) make any change with respect to Company's or any Company
Subsidiary's accounting policies, principles, methods or procedures,
including, without limitation, revenue recognition policies, other than
as required by U.S. GAAP;
(k) other than as is required to comply with Section 8.03(f),
make any Tax election or settle or compromise any Tax liability; or
(l) authorize or enter into any formal or informal agreement
or otherwise make any commitment to do any of the foregoing or to take
any action which would make any of the representations or warranties of
Company contained in this Agreement untrue, incomplete or incorrect or
prevent or materially impair Company or any Company Subsidiary from
performing, or cause Company or any Company Subsidiary not to, perform
its covenants hereunder or result in any of the conditions to the
Merger set forth herein not being satisfied.
SECTION 6.02 Notices of Certain Events. Each of Parent and Company
shall give prompt notice to the other of (i) any notice or other communication
from any Person alleging that the consent of such Person is or may be required
in connection with the Merger; (ii) any notice or other communication from any
Governmental Entity in connection with the Merger; and (iii) any actions, suits,
claims, investigations or proceedings commenced or, to the Knowledge of Company
or the Knowledge of Parent, as the case may be, threatened in writing against,
relating to or involving or otherwise affecting Parent or Company, respectively,
or any of their respective Subsidiaries, which, if pending on the date hereof,
would have been required to have been disclosed in this Agreement, or that
otherwise relate to the consummation of the Merger. In addition, Company shall
give prompt notice to Parent of the occurrence of a default or event that, with
the giving of notice or lapse of time or both, will become a default under any
Company Material Contract, and each of Parent and Company shall notify the other
of any change that could reasonably be expected to have a Parent Material
Adverse Effect or a Company Material Adverse Effect, respectively, or to
materially delay or impede the ability of
36
Company or Parent, respectively, to perform their respective obligations
pursuant to this Agreement and to effect the consummation of the Merger.
SECTION 6.03 Access to Information; Confidentiality.
(a) Except as required pursuant to any confidentiality agreement or
similar agreement or arrangement to which Parent or Company or a Company
Subsidiary is a party (which has been disclosed to Company or Parent, as the
case may be, prior to the date of this Agreement) or pursuant to applicable Law
or the regulations or requirements of any stock exchange or other regulatory
organization with whose rules a party hereto is required to comply, from the
date of this Agreement to the Effective Time, Parent shall and Company shall (i)
provide to the other (and its officers, directors, employees, accountants,
consultants, legal counsel, financial advisors, agents and other representatives
(collectively, "Representatives")) access at reasonable times upon prior notice
to its and its Subsidiaries' officers, employees, agents, properties, offices
and other facilities and to the books and records thereof and (ii) furnish
promptly such information concerning its and its Subsidiaries' business,
properties, contracts, assets, liabilities and personnel as the other party or
its Representatives may reasonably request. No investigation conducted pursuant
to this Section 6.03 shall affect or be deemed to modify any representation or
warranty made in this Agreement.
(b) The parties hereto shall comply with, and shall cause their
respective Representatives to comply with, all of their respective obligations
under the Confidentiality Agreement with respect to the information disclosed
pursuant to this Agreement.
SECTION 6.04 No Solicitation of Transactions.
(a) Unless and until this Agreement shall have been terminated as
provided or permitted herein, Company shall not, directly or indirectly, and
shall cause its Representatives (including Representatives of Company
Subsidiaries) not to, directly or indirectly, solicit, initiate or encourage
(including, without limitation, by way of furnishing nonpublic information), any
inquiries or the making of any proposal or offer (including, without limitation,
any proposal or offer to its stockholders) that constitutes, or may reasonably
be expected to lead to, any Company Competing Transaction, or enter into or
maintain or continue discussions or negotiate with any Person in furtherance of
such inquiries or to obtain a Company Competing Transaction, or agree to or
endorse any Company Competing Transaction, or authorize or knowingly permit any
of Company's Representatives or any Company Subsidiary, or any Representative of
a Company Subsidiary, to take any such action; provided, however, that nothing
contained in this Section 6.04 shall prohibit the board of directors of Company
(i) from complying with Rule 14d-9 or 14e-2(a) promulgated under the Exchange
Act with regard to a tender or exchange offer not made in violation of this
Section 6.04 or (ii) prior to receipt of the approval by the stockholders of
Company of this Agreement and the Merger, from providing information (subject to
a confidentiality agreement at least as restrictive as the Confidentiality
Agreement, except that such confidentiality agreement shall permit any
disclosure required under this Section 6.04) in connection with, and
negotiating, another unsolicited, bona fide written proposal regarding a Company
Competing Transaction that (x) Company's board of directors shall have concluded
in good faith, after consultation with Xxxxxx Godward LLP or other independent
outside counsel of nationally recognized reputation, that taking such action is
necessary to prevent the Company's
37
board of directors from violating its fiduciary duties to Company's stockholders
under applicable Law, (y) if any cash consideration is involved, shall not be
subject to any financing contingency, and with respect to which Company's board
of directors shall have determined in the proper exercise of its fiduciary
duties to Company's stockholders that the acquiring party is capable of
consummating such Company Competing Transaction on the terms proposed, and (z)
Company's board of directors shall have determined (based upon advice of
Company's independent financial advisors of nationally recognized reputation,
which Parent hereby acknowledges that Xxxxxxx, Inc. shall qualify) in the proper
exercise of its fiduciary duties to Company's stockholders that such Company
Competing Transaction provides greater value to the stockholders of Company than
the Merger (and Company's independent financial advisors of nationally
recognized reputation opine in writing that such Company Competing Transaction
is superior from a financial point of view) (any such Company Competing
Transaction fulfilling each of the requirements of this clause (ii) of Section
6.04(a) being referred to herein as a "Company Superior Proposal"). Any
violation of the restrictions set forth in this Section 6.04 by any
Representative of Company (including any Representative of a Company
Subsidiary), whether or not such Person is purporting to act on behalf of
Company or otherwise, shall be deemed to be a breach of this Section 6.04 by
Company. Company shall notify Parent in accordance with the notice provisions of
this Agreement in writing and orally within 24 hours after any of Company's
Chief Executive Officer, Chief Financial Officer or Senior Vice President,
Business Development receive any proposal or offer, or promptly after any
inquiry or contact with any Person with respect thereto, regarding a Company
Competing Transaction is made or received, such notice to include the identity
of the Person making such proposal, offer, inquiry or contact, and the terms of
such Company Competing Transaction, and, by way of amplification and without
limitation, Company shall keep Parent apprised (in accordance with the notice
provisions of this Agreement) on a current basis, of the status of such Company
Competing Transaction and of any modifications to the terms thereof. In
addition, Company shall notify Parent promptly (and in any event within 24
hours) orally and in writing if at any time the Company's board of directors
determines that it believes any such proposal fulfills the requirements of
Section 6.04(a)(ii)(x) - (z). In connection with any such potential Company
Competing Transaction, prior to furnishing any information or entering into any
discussions or negotiations with any Person making such proposal, Company shall
provide to Parent prompt oral and written notice (and in any event within 24
hours) to the effect that Company is furnishing information to, or entering into
discussions or negotiations with, such Person and Company shall keep Parent
promptly informed of the status of the terms and conditions of any such
discussions or negotiations. Prior to accepting a Company Competing Proposal,
Company shall provide Parent with 24 hours' oral and written notice of such
intention.
(b) Company immediately shall cease and cause to be terminated all
existing discussions or negotiations with any parties conducted heretofore with
respect to a Company Competing Transaction. Company shall not release any third
party from, or waive any provision of, any confidentiality or standstill
agreement to which it is a party.
SECTION 6.05 Tax-Free Transaction.
(a) From and after the date of this Agreement, each party hereto shall
use reasonable efforts to cause the Merger to qualify, and shall not knowingly
take any actions or
38
cause any actions to be taken which could reasonably be expected to prevent the
Merger from qualifying as a "reorganization" under Section 368(a) of the Code.
(b) Each of Company and Parent shall execute and deliver to Company
counsel and Parent counsel rendering the tax opinions referred to in Sections
8.02(c) and 8.02(d) or 8.03(e), as applicable, respectively, a certificate, in
form and substance reasonably acceptable to such counsel, signed by an officer
of Company or Parent, as the case may be, setting forth factual representations
and covenants that will serve as a basis for the tax opinions required under
Sections 8.02(c)and 8.02(d) or 8.03(e) hereof, as applicable. Company and Parent
shall use reasonable efforts to obtain the tax opinions that would satisfy the
condition to the Closing set forth in Sections 8.02(c) and 8.02(d) or 8.03(e),
as applicable.
SECTION 6.06 Control of Operations. Nothing contained in this Agreement
shall give Parent, directly or indirectly, the right to control or direct the
operations of Company and the Company Subsidiaries prior to the Effective Time.
Prior to the Effective Time, Company shall exercise, consistent with the terms
and conditions of this Agreement, complete control and supervision over its
operations.
SECTION 6.07 Further Action; Consents; Filings.
(a) Upon the terms and subject to the conditions hereof, each of the
parties hereto shall use all reasonable efforts to (i) take, or cause to be
taken, all appropriate action, and do, or cause to be done, all things
necessary, proper or advisable under applicable Law or otherwise to consummate
and make effective the Merger, (ii) obtain from Governmental Entities any
consents, licenses, permits, waivers, approvals, authorizations or orders
required to be obtained or made by Parent or Company or any of their respective
Subsidiaries in connection with the authorization, execution and delivery of
this Agreement and the consummation of the Merger and (iii) promptly make all
necessary filings, and thereafter make any other required or appropriate
submissions, with respect to this Agreement and the Merger required under (A)
the rules and regulations of the NNM, (B) the Securities Act, the Exchange Act
and any other applicable Federal or state securities Laws, (C) the HSR Act and
any related governmental request thereunder, if any, and (D) any other
applicable Law. The parties hereto shall cooperate and consult with each other
in connection with the making of all such filings, including, without
limitation, by providing copies of all such documents to the nonfiling parties
and their advisors prior to filing, and none of the parties shall file any such
document if any of the other parties shall have reasonably objected to the
filing of such document. Company and Parent shall use commercially reasonable
efforts to furnish to each other all information required for any application or
other filing to be made pursuant to the rules and regulations of any applicable
Law (including all information required to be included in the Proxy Statement
and the Registration Statement) in connection with the transactions contemplated
by this Agreement. No party shall consent to any voluntary extension of any
statutory deadline or waiting period or to any voluntary delay of the
consummation of the Merger at the behest of any Governmental Entity without the
consent and agreement of the other parties hereto, which consent shall not be
unreasonably withheld or delayed.
(b) Each of Company and Parent will give (or will cause their
respective Subsidiaries to give) any notices to third Persons, and use, and
cause their respective Subsidiaries
39
to use, commercially reasonable efforts to obtain any consents from third
Persons necessary, proper or advisable (as determined by Parent in good faith
with respect to notices or consents to be delivered or obtained by Company) to
consummate the transactions contemplated by this Agreement.
SECTION 6.08 Additional Reports. Company and Parent shall each furnish
to the other, if requested, copies of any reports of the type referred to in
Sections 4.07 and 5.06 which it files with the SEC on or after the date hereof,
and Company and Parent, as the case may be, each covenant and warrant that as of
the respective dates thereof, such reports will not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. Any unaudited
consolidated interim financial statements included in such reports (including
any related notes and schedules) will fairly present, in all material respects,
the financial position of Company and its consolidated subsidiaries, or Parent
and its consolidated subsidiaries, as the case may be, as of the dates thereof
and the results of operations and changes in financial position or other
information including therein for the periods or as of the date then ended
(subject, where appropriate, to normal year-end adjustments), in each case in
accordance with past practice and U.S. GAAP (except for the absence of
footnotes) consistently applied during the periods involved (except as otherwise
disclosed in the notes thereto).
SECTION 6.09 Tax Matters. Company shall provide the following
information to Parent not later than ten (10) Business Days after the date of
this Agreement: (i) a complete list of the types of Tax Returns being filed by
Company in each taxing jurisdiction, (ii) a list of any deferred intercompany
gain with respect to transactions to which Company has been a party and (iii) a
depreciation schedule for the most recently filed federal income tax return for
Company. Company shall provide Parent and its accountants, counsel and other
representatives reasonable access, during normal business hours from the date
hereof through the Effective Time, to all of Company's Tax Returns and other
records and workpapers relating to Taxes.
SECTION 6.10 Employee Benefits.
(a) From and after the Effective Time, the Surviving Corporation and
its Subsidiaries will honor in accordance with their terms all existing
employment, severance, consulting and salary continuation agreements between
Company or any of the Company Subsidiaries and any current or former executive
officer or director of Company or any of the Company Subsidiaries, subject to
any modifications thereto agreed to by any such officers or directors with the
Surviving Corporation.
(b) At the Effective Time or following a transition period during which
employees of Company continue to participate in one or more Company Benefit
Plans, Parent will cause the Surviving Corporation to provide the benefits to
employees of Company who are retained by Parent or the Surviving Corporation
(including health benefits, severance policies and general employment policies
and procedures) which are substantially comparable in the aggregate to benefits
that are available to similarly situated employees of Parent and the Parent
Subsidiaries, provided, however, that such insurance carriers, outsider
providers or the like are
40
able to provide such benefits on terms reasonably acceptable to Parent, and
provided, further, that nothing in this Section 6.10(b) shall prevent the
Surviving Corporation or any of its Subsidiaries from making any change required
by applicable Law, and provided, further, that it shall not result in any
duplication of benefits.
(c) To the extent permitted under applicable Law, each employee of
Company or the Company Subsidiaries shall be given credit for all service with
Company or the Company Subsidiaries (or service credited by Company or its
Subsidiaries) under all employee benefit plans, programs, policies and
arrangements maintained by Parent or the Surviving Corporation (other than
sabbatical benefits, for which employees of Company or the Company Subsidiaries
will not receive any such past service credit) in which they participate or in
which they become participants for purposes of eligibility and vesting;
provided, however, that insurance carriers, outsider providers or the like are
able to honor such commitments on terms reasonably acceptable to Parent.
ARTICLE VII
ADDITIONAL AGREEMENTS
SECTION 7.01 Registration Statement; Proxy Statement.
(a) Parent and Company shall jointly prepare and shall use commercially
reasonable efforts to cause to be filed with the SEC, within 21 days of the date
of this Agreement, a document or documents that will constitute (i) the
registration statement on Form S-4 of Parent (together with all amendments
thereto, the "Registration Statement"), in connection with the registration
under the Securities Act of Parent Common Stock to be issued to Company's
stockholders pursuant to the Merger and (ii) the proxy statement with respect to
the Merger relating to the Company Stockholders' Meeting (together with any
amendments thereto, the "Proxy Statement"). Copies of the Proxy Statement shall
be provided to the NNM in accordance with its rules. Each of the parties hereto
shall use reasonable efforts to cause the Registration Statement to become
effective as promptly as practicable after the date hereof, and, prior to the
effective date of the Registration Statement, the parties hereto shall take all
action required under any applicable Laws in connection with the issuance of
shares of Parent Common Stock pursuant to the Merger. Parent or Company, as the
case may be, shall furnish all information concerning Parent or Company as the
other party may reasonably request in connection with such actions and the
preparation of the Registration Statement and the Proxy Statement. Each of
Parent and Company shall notify the other of the receipt of any comments from
the SEC on the Registration Statement and the Proxy Statement and of any
requests by the SEC for any amendments or supplements thereto or for additional
information and shall provide to each other promptly copies of all
correspondence between Parent, Company or any of their representatives and
advisors and the SEC. As promptly as practicable after the effective date of the
Registration Statement, the Proxy Statement shall be mailed to the stockholders
of Company. Each of the parties hereto shall cause the Proxy Statement to comply
as to form and substance, as to matters relating to, and supplied for inclusion
therein by, such party, in all material respects with the applicable
requirements of (i) the Exchange Act, (ii) the Securities Act and (iii) the
rules and regulations of the NNM.
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(b) The Proxy Statement shall include with respect to Company and its
stockholders, (i) the approval of the Merger and the recommendation of the board
of directors of Company to Company's stockholders that they vote in favor of
approval and adoption of this Agreement and the Merger, unless a withdrawal of
such approval and recommendation is permitted pursuant to Section 6.04 following
receipt by Company of a Company Superior Proposal, and (ii) the opinion of
Company Financial Advisor referred to in Section 4.20.
(c) No amendment or supplement to the Proxy Statement or the
Registration Statement shall be made without the approval of Parent and Company,
which approval shall not be unreasonably withheld or delayed; provided, however,
that the consent of Parent shall not be required to amend or supplement the
Proxy Statement to reflect the amendment, modification or withdrawal of the
recommendation of Company's board of directors that Company's stockholders vote
in favor of the approval of this Agreement in accordance with Section 6.04
following receipt by Company of a Company Superior Proposal. Each of the parties
hereto shall advise the other parties hereto, promptly after it receives notice
thereof, of the time when the Registration Statement has become effective or any
supplement or amendment has been filed, of the issuance of any stop order, of
the suspension of the qualification of the Parent Common Stock issuable in
connection with the Merger for offering or sale in any jurisdiction, or of any
request by the SEC for amendment of the Proxy Statement or the Registration
Statement or comments thereon and responses thereto or requests by the SEC for
additional information.
(d) None of the information supplied by Company for inclusion or
incorporation by reference in the Registration Statement or the Proxy Statement
shall, at the respective times filed with the SEC or other regulatory agency
and, in addition, (A) in the case of the Proxy Statement, at the date it or any
amendments or supplements thereto are mailed to stockholders of Company, at the
time of the Company Stockholders' Meeting and at the Effective Time and (B) in
the case of the Registration Statement, when it becomes effective under the
Securities Act and at the Effective Time, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading. If, at any time prior
to the Effective Time, any event or circumstance relating to Company or any
Company Subsidiary, or their respective officers or directors, should be
discovered by Company that should be set forth in an amendment or a supplement
to the Registration Statement or the Proxy Statement, Company shall promptly
inform Parent. All documents that Company is responsible for filing with the SEC
in connection with the Merger will comply as to form in all material respects
with the applicable requirements of the rules and regulations of the Securities
Act and the Exchange Act.
(e) None of the information supplied by Parent for inclusion or
incorporation by reference in the Registration Statement or the Proxy Statement
shall, at the respective times filed with the SEC or other regulatory agency
and, in addition, (A) in the case of the Proxy Statement, at the date it or any
amendments or supplements thereto are mailed to stockholders of Company, at the
time of the Company Stockholders' Meeting and at the Effective Time and (B) in
the case of the Registration Statement, when it becomes effective under the
Securities Act and at the Effective Time, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading. If, at any time prior
to
42
the Effective Time, any event or circumstance relating to Parent or any Parent
Subsidiary, or their respective officers or directors, should be discovered by
Parent that should be set forth in an amendment or a supplement to the
Registration Statement or the Proxy Statement, Parent shall promptly inform
Company. All documents that Parent is responsible for filing with the SEC in
connection with the Merger will comply as to form in all material respects with
the applicable requirements of the rules and regulations of the Securities Act
and the Exchange Act.
(f) Xxxxxx Godward LLP will provide an opinion addressed to Company
which will be filed as Exhibit 8.1 to the Registration Statement, and Xxxxxxx,
Phleger & Xxxxxxxx LLP will provide an opinion addressed to Parent which will be
filed as Exhibit 8.2 to the Registration Statement, in each case to the effect
that the description in the Registration Statement of the material federal
income tax consequences of the Merger is correct in all material respects. Each
of such opinions shall be based on representation letters in form and substance
acceptable to the rendering counsel and executed by Company, Parent and Merger
Sub.
SECTION 7.02 Company Stockholders' Meetings. Company shall call and
hold a special meeting of the stockholders of Company (the "Company
Stockholders' Meeting"), as promptly as practicable after the date hereof
(subject to applicable Laws), for the purpose of voting upon the approval and
adoption of this Agreement and the Merger pursuant to the Proxy Statement, and
Company shall use all reasonable efforts to hold the Company Stockholders'
Meeting as soon as practicable after the date on which the Registration
Statement becomes effective. Unless Company's board of directors has withheld,
amended, modified or withdrawn its recommendation in compliance with Section
6.04, Company shall use all reasonable efforts to solicit from its stockholders
proxies in favor of the approval of this Agreement and the Merger pursuant to
the Proxy Statement and shall take all other action necessary or advisable to
secure the vote or consent of stockholders required by the DGCL or applicable
stock exchange requirements to obtain such approval. Each of the parties hereto
shall take all other action necessary or, in the reasonable opinion of the other
parties hereto, advisable to promptly and expeditiously secure any vote or
consent of stockholders required by applicable Law and such party's certificate
of incorporation and bylaws to effect the Merger. Company shall call and hold
the Company Stockholders' Meeting for the purpose of voting upon the approval
and adoption of this Agreement and the Merger whether or not Company's board of
directors at any time subsequent to the date hereof determines that this
Agreement is no longer advisable or recommends that Company's stockholders
reject it.
SECTION 7.03 Indemnification; Directors' and Officers' Insurance.
(a) From and after the Effective Time, (i) Parent will, and Parent will
cause the Surviving Corporation to, indemnify and hold harmless, and will
provide advancement of expenses to, each person who is or was a director or
officer of Company or any of its Subsidiaries at or at any time prior to the
Effective Time (an "Indemnified Party"), to the same extent such persons are
indemnified or have the right to the advancement of expenses as of the date of
this Agreement by Company pursuant to Company's certificate of incorporation and
bylaws as in effect on the date of this Agreement; provided that the Indemnified
Party to whom expenses are advanced provides an undertaking to repay such
advances if it is ultimately and finally determined that such Indemnified Party
is not entitled to indemnification, and (ii) Parent
43
will cause the Surviving Corporation to fulfill and honor in all respects the
obligations of Company pursuant to any indemnification agreements (including,
without limitation, those set forth in Company's certificate of incorporation
and bylaws as in effect on the date of this Agreement) between Company and any
of the Indemnified Parties in effect immediately prior to the date of this
Agreement.
(b) In the event the Company or the Surviving Corporation or any of
their respective successors or assigns (i) consolidates with or merges into any
other Person and shall not be the continuing or surviving corporation or entity
of such consolidation or merger or (ii) transfers a material amount of its
properties and assets to any Person in a single transaction or a series of
transactions, then, and in each such case, Parent will either guaranty the
indemnification obligations referred to in this Section 7.03 or will make or
cause to be made proper provision so that the successors and assigns of the
Company or the Surviving Corporation, as the case may be, assume the
indemnification obligations described herein for the benefit of the indemnified
parties and have substantially equal financial ability as the Company
(immediately prior to the Effective Time) to satisfy the obligations of the
parties pursuant to this Section 7.03 as a condition to such merger,
consolidation or transfer becoming effective.
(c) The provisions of this Section 7.03 are (i) intended to be for the
benefit of, and will be enforceable by, each of the Indemnified Parties and (ii)
in addition to, and not in substitution for, any other rights to indemnification
or contribution that any such Person may have by contract or otherwise.
(d) For a period of six years after the Effective Time, Parent shall
maintain in effect the directors' and officers' liability insurance policies
maintained by Company; provided, however, that in no event shall Parent be
required to expend in any one year in excess of 150% of the annual premium
currently paid by Company for such coverage, which annual premium Company hereby
represents is $310,000; and provided further, that if the premium for such
coverage, exceeds such amount, Parent shall purchase a policy with the greatest
coverage available for such 150% of the annual premium.
SECTION 7.04 No Shelf Registration. Parent shall not be required to
amend or maintain the effectiveness of the Registration Statement for the
purpose of permitting resale of the shares of Parent Common Stock received
pursuant hereto by the Persons who may be deemed to be "affiliates" of Company
within the meaning of Rule 145 promulgated under the Securities Act.
SECTION 7.05 Public Announcements. The initial press release concerning
the Merger to be released in connection with the execution and delivery of this
Agreement shall be a joint press release and, thereafter, Parent and Company
shall consult with each other before issuing any press release or otherwise
making any public statements with respect to this Agreement or the Merger and
shall not issue any such press release or make any such public statement without
the prior written approval of the other (which shall not be unreasonably
withheld or delayed), except to the extent required by applicable Law or the
requirements of the rules and regulations of the NNM, in which case the issuing
party shall use all reasonable efforts to consult with the other party before
issuing any such release or making any such public statement.
44
SECTION 7.06 NNM Listing. Prior to the Effective Time, Parent shall use
all reasonable efforts to obtain approval from the NNM of the listing, as of the
Effective Time, of the shares of Parent Common Stock to be issued in connection
with the Merger.
SECTION 7.07 Company Stock Options/Registration Statements on Form S-8.
Prior to the Effective Time, Company and Parent shall take, or cause to be
taken, all action necessary and appropriate to effect the assumption of the
Company Stock Options and Company Warrants as contemplated by Section 3.05,
including obtaining the consent of affected optionees and warrant holders.
Parent shall reserve for issuance the number of shares of Parent Common Stock
that will be issuable upon exercise of Company Stock Options and Company
Warrants assumed pursuant to Section 3.05 hereof. As promptly as reasonably
practical after the Effective Time, Parent shall file with the SEC one or more
registration statements on Form S-8 for the shares of Parent Common Stock
issuable with respect to Company Stock Options and will maintain the
effectiveness of such registration statements for so long as any of such options
or other rights remain outstanding.
SECTION 7.08 Employee Benefit Matters. As of the Effective Time, Parent
shall cause the Surviving Corporation to honor and satisfy all obligations and
liabilities with respect to the Company Benefit Plans, other than the Company
Stock Purchase Plan. Notwithstanding the foregoing, the Surviving Corporation
shall not be required to continue any particular Company Benefit Plan after the
Effective Time, and any Company Benefit Plan may be amended or terminated or may
be merged with any Parent Benefit Plans in accordance with its terms and
applicable Law so long as employees of Company who are employed by the Surviving
Corporation or Parent are provided benefits and coverage by the Surviving
Corporation or Parent that are the same or substantially the same as that
provided by Parent to similarly situated employees. If requested by Parent prior
to the Effective Time, Company shall take all actions necessary and appropriate
to terminate any Company Benefit Plan that is a 401(k) plan (each, a "401(k)
Plan") as of the last day of the payroll period immediately preceding the
Closing Date and no further contributions shall be made to any 401(k) Plan, and
Company shall provide to Parent (i) executed resolutions by the board of
directors of Company, as applicable, authorizing such termination and (ii) an
executed amendment to each 401(k) Plan sufficient to assure compliance with all
applicable requirements of the Code and regulations thereunder so that the
tax-qualified status of such 401(k) Plan will be maintained at the time of
termination.
SECTION 7.09 Affiliates. Parent shall be entitled to place legends on
the certificates evidencing any of the Parent Common Stock to be received by (i)
any Affiliate of Company or (ii) any Person Parent reasonably identifies (by
written notice to Company) as being a Person who may be deemed an "affiliate"
within the meaning of Rule 145 promulgated under the Securities Act, and to
issue appropriate stop transfer instructions to the transfer agent for such
Parent Common Stock.
SECTION 7.10 Taking of Additional Actions. Company shall, prior to the
Effective Time, use its commercially reasonable efforts to take the actions
specified on Schedule 7.10 of the Company Disclosure Schedule.
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ARTICLE VIII
CONDITIONS TO THE MERGER
SECTION 8.01 Conditions to the Obligations of Each Party to Consummate
the Merger. The obligations of the parties hereto to consummate the Merger are
subject to the satisfaction or, if permitted by applicable Law, waiver of the
following conditions by joint action of the parties hereto:
(a) the Registration Statement shall have been declared
effective by the SEC under the Securities Act and no stop order
suspending the effectiveness of the Registration Statement shall have
been issued by the SEC and no proceeding for that purpose shall have
been initiated by the SEC and not concluded or withdrawn;
(b) this Agreement and the Merger shall have been duly
approved and adopted by the requisite vote of stockholders of Company
in accordance with the DGCL;
(c) no order, statute, rule, regulation, executive order,
stay, decree, writ, judgment or injunction shall have been enacted,
entered, promulgated or enforced by any court of competent jurisdiction
or Governmental Entity which prohibits or prevents the consummation of
the Merger which has not been vacated, dismissed or withdrawn prior to
the Effective Time. Company and Parent shall use their reasonable best
efforts to have any of the foregoing vacated, dismissed or withdrawn by
the Effective Time;
(d) any waiting period (and any extension thereof) applicable
to the consummation of the Merger under the HSR Act or any other
applicable competition, merger control or similar Law shall have
expired or been terminated;
(e) all consents, approvals and authorizations legally
required to be obtained to consummate the Merger shall have been
obtained from all Governmental Entities, except where the failure to
obtain any such consent, approval or authorization could not reasonably
be expected to result in a Parent Material Adverse Effect or a Company
Material Adverse Effect; and
(f) the shares of Parent Common Stock to be issued in the
Merger shall have been authorized for listing on the NNM, subject to
notice of issuance.
SECTION 8.02 Conditions to the Obligations of Company. The obligations
of Company to consummate the Merger, or to permit the consummation of the
Merger, are subject to the satisfaction or, if permitted by applicable Law,
waiver of the following further conditions:
(a) each of the representations and warranties of Parent and
Merger Sub contained in this Agreement shall be true, complete and
correct in all respects both (i) when made and (ii) on and as of the
Effective Time as if made at and as of the Effective Time (other than
representations and warranties which address matters only as of a
certain date, which shall be so true, complete and correct as of such
certain date),
46
except in each case for any failures to be true, complete and correct
which do not, in the aggregate, have a Parent Material Adverse Effect;
and Company shall have received a certificate of the Chief Executive
Officer and Chief Financial Officer of Parent to such effect;
(b) Parent and Merger Sub shall have performed or complied in
all material respects with all covenants required by this Agreement to
be performed or complied with by them on or prior to the Effective
Time, except where the failure to so comply has not resulted in a
Parent Material Adverse Effect, and Company shall have received
certificates of the Chief Executive Officer and Chief Financial Officer
of Parent and the President of Merger Sub to that effect; and
(c) Company shall have obtained an opinion from Company's
legal counsel, dated the date of the Closing, in form and substance
reasonably satisfactory to it and issued in reliance on the officer's
certificate described in Section 6.05(b) hereof, based upon customary
representations of Company and Parent and customary assumptions, to the
effect that if the Merger is consummated in accordance with the
provisions of this Agreement, under current Law, for federal income tax
purposes, the Merger should qualify as a "reorganization" within the
meaning of Section 368(a) of the Code, which opinion shall not have
been withdrawn or modified in any material respect.
(d) Parent shall have obtained an opinion from Parent's legal
counsel, dated the date of the Closing, issued in reliance on the
officer's certificate described in Section 6.05(b) hereof, based upon
customary representations of Company and Parent reasonably satisfactory
to counsel, to the effect that if the Merger is consummated in
accordance with the provisions of this Agreement, under current Law,
for federal income tax purposes, the Merger should qualify as a
"reorganization" within the meaning of Section 368(a) of the Code,
which opinion shall not have been withdrawn or modified in any material
respect, provided however that if the transaction is effected by a
merger of Company into Parent (or a merger of Company into a subsidiary
of Parent), then this condition shall be a condition to Parent's
obligation to consummate the Merger, rather than a condition to
Company's obligation, as set forth in Section 8.03(e).
SECTION 8.03 Conditions to the Obligations of Parent. The obligations
of Parent to consummate the Merger, or to permit the consummation of the Merger,
are subject to the satisfaction or, if permitted by applicable Law, waiver of
the following further conditions:
(a) each of the representations and warranties of Company
contained in this Agreement shall be true, complete and correct in all
respects both (i) when made and (ii) on and as of the Effective Time as
if made at and as of the Effective Time (other than representations and
warranties which address matters only as of a certain date, which shall
be so true, complete and correct as of such certain date), except in
each case for any failures to be true, complete and correct which do
not, in the aggregate, have a Company Material Adverse Effect; and
Parent shall have received a certificate of the Chief Executive Officer
and Chief Financial Officer of Company to such effect;
47
(b) Company shall have performed or complied in all material
respects with all covenants required by this Agreement to be performed
or complied with by it on or prior to the Effective Time, except where
the failure to so comply has not resulted in a Company Material Adverse
Effect; and Parent shall have received a certificate of the Chief
Executive Officer and Chief Financial Officer of Company to that
effect;
(c) all consents of third parties set forth on Schedule
8.03(c) shall have been obtained;
(d) there shall have been no Company Material Adverse Effect
since the date of this Agreement;
(e) Parent shall have obtained the opinion referenced in
Section 8.02(d) if the transaction is to be effected by a merger of
Company into Parent (or a merger of Company into a Subsidiary of
Parent);
(f) Company shall have properly completed and filed all Tax
Returns relating to any Taxes of Company and all Company Subsidiaries
for all periods ending prior to the Effective Time, to the extent the
due date of such returns (determined without regard to extensions) is
on or prior to the Effective Time, and paid in full all such Taxes
shown as due thereon. For this purpose the only state income, privilege
and franchise Tax Returns that must be filed are those for the
following states: Alabama, California, Colorado, Illinois, Kansas (but
only to the extent Taxes are due), Massachusetts (but only to the
extent Taxes are due), New York and Texas (but only to the extent Taxes
are due). Also for this purpose the only sales and use tax returns that
must be filed are those for Colorado and Alabama. Company shall provide
to Parent drafts of all Tax Returns to be filed after the date hereof
no later than fifteen (15) days prior to the proposed filing date
thereof. Such Tax Returns shall be filed only after Parent's approval,
which approval shall not be unreasonably withheld or delayed; and
(g) Company shall have obtained letters relating to
MessageMedia Australia Pty Limited and MessageMedia New Zealand, Ltd.,
respectively, reasonably satisfactory in form and substance to Parent,
to the effect that Company has no existing or future obligations in
respect of MessageMedia Australia Pty Limited or MessageMedia New
Zealand, Ltd. other than with respect to the license agreements between
such parties.
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
SECTION 9.01 Termination. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time, notwithstanding
any requisite adoption and approval of this Agreement, as follows:
(a) by mutual written consent duly authorized by the boards of
directors of each of Parent and Company;
48
(b) by either Parent or Company, if the Effective Time shall
not have occurred on or before October 31, 2001; provided, however,
that the right to terminate this Agreement under this Section 9.01(b)
shall not be available to any party whose failure to fulfill any
obligation under this Agreement shall have caused, or resulted in, the
failure of the Effective Time to occur on or before such date;
(c) by either Parent or Company, if any Governmental Order,
writ, injunction or decree preventing the consummation of the Merger
shall have been entered by any court of competent jurisdiction and
shall have become final and nonappealable;
(d) by Parent, if
(i) the board of directors of Company withdraws, modifies
or changes its recommendation of this Agreement or the Merger in a
manner adverse to Parent or its stockholders or shall have resolved to
do so;
(ii) the board of directors of Company shall have
recommended to the stockholders of Company a Company Competing
Transaction;
(iii) Company fails to comply in all material respects
with Section 6.04 or Section 7.02;
(iv) a party to a Stockholder Agreement (other than
Parent) fails to vote in favor of the Merger in accordance with the
Stockholder Agreement or fails to comply with Section 4(b) of the
Stockholder Agreement;
(v) a Company Competing Transaction shall have been
announced or otherwise publicly known and the board of directors of
Company shall have (A) failed to recommend against acceptance of such
by its stockholders (including by taking no position, or indicating its
inability to take a position, with respect to the acceptance of a
Company Competing Transaction involving a tender offer or exchange
offer) within five (5) Business Days of Parent's written request for
such action or (B) failed to reconfirm its approval and recommendation
of this Agreement and the transactions contemplated hereby within five
(5) Business Days of the first announcement or other public knowledge
of such proposal for a Company Competing Transaction;
(vi) the board of directors of Company shall have
determined that a Company Competing Transaction was a Company Superior
Proposal and to take any of the actions allowed by clause (ii) of
Section 6.04 and shall not have, prior to Parent's termination of this
Agreement pursuant to this Section 9.01(d)(vi), (1) reconfirmed its
approval and recommendation of this Agreement and (2) recommended
against acceptance of such Company Superior Proposal by its
stockholders;
(vii) the board of directors of Company resolves to take
any of the actions described above;
49
(e) by Parent or Company, if this Agreement and the Merger is
brought to a vote and shall fail to receive the requisite votes for
approval at the Company Stockholders' Meeting or any adjournment or
postponement thereof;
(f) by Parent, 20 days after receipt by Company of a written
notice from Parent of a breach of any representation, warranty,
covenant or agreement on the part of Company set forth in this
Agreement, or if any representation or warranty of Company shall have
become untrue, incomplete or incorrect, in either case such that the
conditions set forth in Section 8.03 would not be satisfied (a
"Terminating Company Breach"); provided, however, that if such
Terminating Company Breach is cured by Company within 20 days, Parent
may not terminate this Agreement under this Section 9.01(f); or
(g) by Company, 20 days after receipt by Parent of a written
notice from Company of a breach of any representation, warranty,
covenant or agreement on the part of Parent or Merger Sub set forth in
this Agreement, or if any representation or warranty of Parent or
Merger Sub shall have become untrue, incomplete or incorrect, in either
case such that the conditions set forth in Section 8.02 would not be
satisfied (a "Terminating Parent Breach"); provided, however, that if
such Terminating Parent Breach is cured by Parent within 20 days,
Company may not terminate this Agreement under this Section 9.01(g).
The right of any party hereto to terminate this Agreement pursuant to
this Section 9.01 will remain operative and in full force and effect regardless
of any investigation made by or on behalf of any party hereto, any Person
controlling any such party or any of their respective officers, directors,
representatives or agents, whether prior to or after the execution of this
Agreement.
SECTION 9.02 Effect of Termination. Except as provided in Section 9.05,
in the event of termination of this Agreement pursuant to Section 9.01, this
Agreement shall forthwith become void, there shall be no liability under this
Agreement on the part of any party hereto or any of its Affiliates or any of its
or their officers or directors, and all rights and obligations of each party
hereto shall cease (except for the provisions of Section 6.03(b), this Section
9.02, Section 9.05 and Article X, which provisions shall survive such
termination); provided, however, that nothing herein shall relieve any party
hereto from liability for breach of any of its representations and warranties or
the breach of any of its covenants or agreements set forth in this Agreement. No
termination of this Agreement shall affect the obligations of the parties
contained in the Confidentiality Agreement, which shall survive termination of
this Agreement and remain in full force and effect in accordance with their
terms.
SECTION 9.03 Amendment. This Agreement may be amended by the parties
hereto by action taken by or on behalf of their respective boards of directors
at any time prior to the Effective Time; provided, however, that, after the
approval of this Agreement by the stockholders of Company, no amendment may be
made that changes the amount or type of consideration into which Company Common
Stock will be converted pursuant to this Agreement. This Agreement may not be
amended except by an instrument in writing signed by the parties hereto.
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SECTION 9.04 Waiver. At any time prior to the Effective Time, any party
hereto may (a) extend the time for or waive compliance with the performance of
any obligation or other act of any other party hereto, (b) waive any inaccuracy
in the representations and warranties contained herein or in any document
delivered pursuant hereto and (c) waive compliance by the other party with any
of the agreements or conditions contained herein. Any such extension or waiver
shall be valid if set forth in an instrument in writing signed by the party or
parties to be bound thereby.
SECTION 9.05 Termination Fee; Expenses.
(a) Except as set forth in this Section 9.05, all Expenses incurred in
connection with this Agreement and the Merger shall be paid by the party
incurring such Expenses, whether or not the Merger is consummated, except that
Parent and Company each shall pay one-half of all Expenses incurred solely for
printing, filing and mailing the Registration Statement and the Proxy Statement
and all SEC and other regulatory filing fees incurred in connection with the
Registration Statement and the Proxy Statement (for the avoidance of doubt, not
including related attorneys' and accountants' fees and Expenses) and any fees
required to be paid under the HSR Act.
(b) Without limiting any other remedies available to Parent, in the
event that
(i) Parent shall terminate this Agreement pursuant to
Section 9.01(d) or Section 9.01(f), or
(ii) this Agreement is terminated pursuant to Section
9.01(b) or Section 9.01(e), and (A) at or prior to the time of such termination,
either there shall have been proposed or publicly announced a Company Competing
Transaction or (B) within twelve (12) months after such termination, Company
shall enter into a definitive agreement with respect to any Company Competing
Transaction or any Company Competing Transaction involving Company shall be
consummated,
then Company shall pay to Parent (the "Company Termination Fee") a sum equal to
$1,654,000. Any Company Termination Fee shall be paid in same day funds within
three (3) Business Days after the date this Agreement is terminated or within
three (3) Business Days after the Company Termination Fee otherwise becomes due
and payable pursuant to this Section 9.05(b).
(c) Parent and Company agree that the agreements contained in Section
9.05(b) above are an integral part of the transaction contemplated by this
Agreement and constitute liquidated damages and not a penalty and that without
these Agreements, Parent would not enter into this Agreement or the Stockholder
Agreements. Accordingly, if Company fails to pay to Parent any amounts due under
Section 9.05(b), Company shall pay the fees and expenses (including legal fees
and expenses) in connection with any action, including the filing of any lawsuit
of other legal action, taken to collect payment, together with interest on such
amounts at the prime rate of Citibank, N.A. in effect on the date such payment
was required to be made.
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ARTICLE X
GENERAL PROVISIONS
SECTION 10.01 Non-Survival of Representations and Warranties. The
representations and warranties in this Agreement shall terminate at the
Effective Time or upon the termination of this Agreement pursuant to Section
9.01, as the case may be. This Section 10.01 shall not limit any covenant or
agreement of the parties which by its terms contemplates performance after the
Effective Time.
SECTION 10.02 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in Person, by telecopy
or facsimile, by registered or certified mail (postage prepaid, return receipt
requested) or by a nationally recognized courier service to the respective
parties at the following addresses (or at such other address for a party as
shall be specified in a notice given in accordance with this Section 10.02);
provided that all notices given pursuant to Section 6.04(a) hereof shall be by
telecopy or facsimile in addition to and not in lieu of any other manner:
(a) if to Company:
MessageMedia, Inc.
000 Xxxxxxxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxx
Facsimile: (000) 000-0000
with a copy to:
Xxxxxx Godward LLP
000 Xxxxxxxxxxx Xxxxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx
Facsimile: (000) 000-0000
(b) if to Parent or Merger Sub:
DoubleClick Inc.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxxxx Xxxx
Facsimile: (000) 000-0000
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with a copy to:
Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
SECTION 10.03 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of Law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the Merger is not affected in any manner materially adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in a mutually acceptable manner to the fullest
extent permitted by applicable Law in order that the Merger may be consummated
as originally contemplated to the fullest extent possible.
SECTION 10.04 Assignment; Binding Effect; Benefit. Neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any of the parties hereto (whether by operation of Law or otherwise)
without the prior written consent of the other parties hereto. Subject to the
preceding sentence, this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and permitted
assigns. Notwithstanding anything contained in this Agreement to the contrary,
other than Section 7.03, nothing in this Agreement, expressed or implied, is
intended to confer on any Person other than the parties hereto or their
respective successors and permitted assigns any rights or remedies under or by
reason of this Agreement.
SECTION 10.05 Incorporation of Exhibits. The Parent Disclosure
Schedule, the Company Disclosure Schedule and all Annexes attached hereto and
referred to herein are hereby incorporated herein and made a part of this
Agreement for all purposes as if fully set forth herein. Parent and Company
acknowledge that the Parent Disclosure Schedule and the Company Disclosure
Schedule (i) are qualified in their entirety by reference to specific provisions
of this Agreement and (ii) are not intended to constitute and shall not be
construed as indicating that such matter is required to be disclosed, nor shall
such disclosure be construed as an admission that such information is material
with respect to Parent or Company, as the case may be, except to the extent
required by this Agreement and by applicable Law.
SECTION 10.06 Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the Laws of the State of Delaware,
other than conflict of laws principles thereof directing the application of any
Law other than that of the State of Delaware.
SECTION 10.07 Waiver of Jury Trial. To the fullest extent permitted by
Law, each party hereto hereby irrevocably waives all right to trial by jury in
any proceeding (whether based on contract, tort or otherwise) arising out of or
relating to this Agreement or any
53
transaction or agreement contemplated hereby or the actions of any party hereto
in the negotiation, administration, performance or enforcement hereof.
SECTION 10.08 Headings; Interpretation. The descriptive headings
contained in this Agreement are included for convenience of reference only and
shall not affect in any way the meaning or interpretation of this Agreement. The
parties have participated jointly in the negotiation and drafting of this
Agreement. In the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the parties,
and no presumption or burden of proof shall arise favoring or disfavoring any
party by virtue of the authorship of any provisions of this Agreement.
SECTION 10.09 Counterparts. This Agreement may be executed and
delivered (including by facsimile transmission) in one or more counterparts, and
by the different parties hereto in separate counterparts, each of which when
executed and delivered shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
SECTION 10.10 Entire Agreement. This Agreement (including the
Stockholder Agreements, the Annexes, the Parent Disclosure Schedule and the
Company Disclosure Schedule) and the Confidentiality Agreement constitute the
entire agreement among the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings among the parties with respect
thereto.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
DOUBLECLICK INC.
By: /s/ Xxxx Xxxxxxx
_____________________________
Name: Xxxx Xxxxxxx
Title: Executive Vice President, Strategic Planning
ATLAS ACQUISITION CORP.
By: /s/ Xxxx Xxxxxxx
_____________________________
Name: Xxxx Xxxxxxx
Title: Executive Vice President and Secretary
MESSAGEMEDIA, INC.
By: /s/ A. Xxxxxxxx Xxxxx
_____________________________
Name: A. Xxxxxxxx Xxxxx
Title: President & CEO
