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EXHIBIT 2.1
ASSET CONTRIBUTION AND REORGANIZATION AGREEMENT
BETWEEN
XXXXXXXX.XXX, INC.,
PRX HOLDINGS, INC.,
PRX ACQUISITION CORP.
XXXXXXXXXXXX.XXX, INC.
AND
EXPRESS SCRIPTS, INC.
August 31, 1999
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TABLE OF CONTENTS
Page
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1. Basic Transactions..........................................................................1
(a) Contribution of Assets by/Assumption of Liabilities of YPC......................................1
(b) The Merger......................................................................................2
(c) The Closing.....................................................................................2
(d) Deliveries at the Closing.......................................................................3
2. Representations and Warranties of ESI and YPC...............................................3
(a) Organization of YPC.............................................................................3
(b) Authorization of Transaction....................................................................3
(c) Noncontravention................................................................................4
(d) Brokers' Fees...................................................................................4
(e) Title to Assets.................................................................................4
(f) Investment......................................................................................5
(g) Year 2000.......................................................................................5
(h) Disclaimer of Other Representations and Warranties..............................................5
3. Representations and Warranties of PlanetRx, Holdings
and Merger Sub..............................................................................6
(a) Organization of PlanetRx, Holdings and Merger Sub...............................................6
(b) Authorization of Transaction....................................................................6
(c) Noncontravention................................................................................6
(d) Brokers' Fees...................................................................................7
(e) Valid Issuance of Stock.........................................................................7
(f) Litigation......................................................................................7
(g) Compliance with Laws............................................................................7
(h) Year 2000.......................................................................................8
4. Covenants...................................................................................8
(a) General.........................................................................................8
(b) Notices and Consents............................................................................8
(c) Full Access.....................................................................................9
(d) Notice of Developments..........................................................................9
(e) Exclusivity.....................................................................................9
(f) Certificate of Incorporation of Holdings........................................................9
(g) ESI Consents...................................................................................10
(h) Registration of Holdings Shares................................................................10
(i) Lock-up Agreement/NASD Questionnaire...........................................................10
(j) YPC Employees..................................................................................11
(k) Board Seat.....................................................................................11
(l) Shut-down Costs.................................................................................9
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5. Conditions to Obligation to Close...........................................................9
(a) Conditions to Obligation of Holdings...........................................................12
(b) Conditions to Obligation of YPC................................................................13
6. Termination of Agreement...................................................................14
7. Miscellaneous..............................................................................14
(a) Survival of Representations and Warranties.....................................................14
(b) Press Releases and Public Announcements........................................................14
(c) Third-Party Beneficiaries......................................................................15
(d) Entire Agreement...............................................................................15
(e) Succession and Assignment......................................................................15
(f) Counterparts...................................................................................15
(g) Headings.......................................................................................15
(h) Notices........................................................................................16
(i) Governing Law..................................................................................17
(j) Amendments and Waivers.........................................................................17
(k) Severability...................................................................................17
(l) Expenses.......................................................................................17
(m) Construction...................................................................................18
(n) Incorporation of Exhibits and Schedules........................................................18
(o) Specific Performance...........................................................................18
(p) Bulk Transfer Laws.............................................................................18
Exhibit A--Agreement and Plan of Merger
Exhibit B--Registration Rights
Schedule I - Contributed Assets
Schedule II - Assumed Liabilities
ii.
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ASSET CONTRIBUTION AND REORGANIZATION AGREEMENT
Asset Contribution and Reorganization Agreement entered into as of
August 31, 1999, by and among XxxxxxXx.xxx, Inc., a Delaware corporation
("PlanetRx"), PRX Holdings, a Delaware corporation ("Holdings"), PRX Acquisition
Corp., a Delaware corporation and a wholly-owned subsidiary of Holdings ("Merger
Sub"), XxxxXxxxxxxx.xxx, Inc., a Delaware corporation ("YPC"), and Express
Scripts, Inc., a Delaware corporation ("ESI"). PlanetRx, Holdings, Merger Sub,
YPC and ESI are collectively referred to herein as the "Parties," and each
individually as a "Party."
WITNESSETH
WHEREAS, the Boards of Directors of PlanetRx and YPC have determined
that it is in the best interests of their respective stockholders that PlanetRx
be combined with certain assets of YPC's online pharmacy business;
WHEREAS, to effect such combination, PlanetRx has caused Holdings and
Merger Sub to be formed;
WHEREAS, for federal income tax purposes, it is intended that the
Contribution (as defined in Section 1(a)) and the Merger (as defined in Section
1(b)) shall constitute one or more integrated aspects of a transaction
qualifying as a tax-deferred property-for-stock exchange described under Section
351 of the Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, the Contribution and the Merger are to occur simultaneously
with the closing of Holdings' initial public offering of Common Stock (the
"IPO"), and as a result of these transactions, the issued and outstanding
capital stock of Holdings immediately after the Merger will be held by YPC, the
former stockholders of PlanetRx and purchasers in the IPO.
Now, therefore, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations, warranties,
and covenants herein contained, the parties agree as follows:
1. Basic Transactions.
(a) Contribution of Assets by/Assumption of Liabilities of YPC. In
consideration for the issuance of a certain number of fully paid, non-assessable
shares of common stock of Holdings equal to 19.9% of Holdings' outstanding
common stock immediately after the closing of the IPO (including, at YPC's
option and in
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its sole discretion, for purposes of calculating the number of shares
outstanding as of the time of the initial closing of the IPO any shares that may
be sold by Holdings pursuant to exercises of the underwriters' over-allotment
option) (the "Holdings Shares"), and the assumption by Holdings of the
liabilities of YPC set forth on Schedule II to this Agreement (the "Assumed
Liabilities"), YPC agrees to assign, transfer, convey, and deliver to Holdings
all of the right, title, and interest in and to the assets of YPC set forth on
Schedule I to this Agreement (the "Contributed Assets"). Holdings will not
assume or have any responsibility with respect to any other obligation or
liability of YPC, including any tax liabilities incurred or accrued prior to the
Closing, not included within the definition of Assumed Liabilities. The
transaction referred to in this Section 1 is referred to herein as the
"Contribution." It is the intention of the parties that YPC shall hold 19.9% of
Holdings outstanding common stock immediately after the closing of the IPO and
the transactions contemplated herein, including after any exercise of the
underwriters' over-allotment option in connection with the IPO. In the event the
underwriters' over-allotment option shall not be exercised in full within the
30-day period after the pricing of the IPO, YPC agrees to return to Holdings
free of charge the number of Holdings Shares as may be necessary to cause YPC's
ownership of Holdings outstanding common stock as of such time not to exceed
19.9%.
(b) The Merger. Holdings, PlanetRx and Merger Sub shall enter into an
Agreement and Plan of Merger (the "Merger Agreement") in the form attached
hereto as Exhibit A, and in compliance with Section 251(g) of the Delaware
General Corporation Law ("Delaware Law"), pursuant to which, among other things,
Merger Sub shall be merged with and into PlanetRx, the separate corporate
existence of Merger Sub shall cease, the PlanetRx stockholders shall receive
shares of Holdings' common stock in exchange for their shares of PlanetRx, and
PlanetRx shall continue as the surviving corporation and a wholly-owned
subsidiary of Holdings (the "Merger").
(c) The Closing. For purposes hereof, the Parties agree that the
closing of the Merger shall take place immediately prior to the closing of the
Contribution (collectively, the "Closing"), both of which shall take place
immediately prior to the closing of the IPO at the time and place designated for
the closing of the IPO (the "Closing Date").
(d) Deliveries at the Closing. At the Closing,
(i) YPC will deliver to Holdings the various certificates,
instruments, and documents referred to in Section 5(a) below;
(ii) Holdings will deliver to YPC the various certificates,
instruments, and documents referred to in Section 5(b) below;
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(iii) YPC will execute, acknowledge, and deliver to Holdings
(A) assignments (including intellectual property transfer documents) in the form
customary for transactions of this type and (B) such other instruments of sale,
transfer, conveyance, and assignment as Holdings and its counsel reasonably may
request;
(iv) Holdings will execute, acknowledge, and deliver to YPC
(A) an assumption in the form customary for transactions of this type and (B)
such other instruments of assumption as YPC and its counsel reasonably may
request;
(v) Holdings will deliver to YPC the Holdings Shares; and
(vi) the Parties shall cause the Merger to be consummated by
filing the Merger Agreement with the Secretary of State of the State of
Delaware, as provided in the Merger Agreement.
2. Representations and Warranties of ESI and YPC. YPC and ESI represent and
warrant to PlanetRx, Holdings and Merger Sub that the statements contained in
this Section 2 are correct and complete as of the date of this Agreement and
will be correct and complete as of the Closing Date (as though made then and as
though the Closing Date were substituted for the date of this Agreement
throughout this Section 2).
(a) Organization of YPC. YPC and ESI are corporations duly organized,
validly existing, and in good standing under the laws of their respective
jurisdictions of incorporation.
(b) Authorization of Transaction. YPC and ESI each have full power and
authority (including full corporate power and authority) to execute and deliver
this Agreement and to perform their respective obligations hereunder. Without
limiting the generality of the foregoing, ESI, as YPC's sole stockholder, has
duly authorized the execution, delivery, and performance of this Agreement by
YPC. This Agreement constitutes the valid and legally binding obligation of each
of YPC and ESI, enforceable in accordance with its terms and conditions.
(c) Noncontravention. The execution and delivery of this Agreement,
consummation of the transactions contemplated hereby, and compliance with the
terms and provisions hereof will not conflict with or result in a breach of the
terms and conditions of, or constitute a default under the Certificate of
Incorporation or Bylaws of YPC or ESI or of any contract or agreement to which
YPC or ESI are now a party, except where such conflict, breach or default of any
such contract or agreement, either individually or in the aggregate, would not
have a material adverse effect on the YPC's or ESI's business, financial
condition or results of operations or the Contributed Assets or Assumed
Liabilities; provided, however, that each of YPC's and ESI's performance under
this Agreement shall require the consent of (i) the lenders under ESI's credit
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agreement, dated as of April 1, 1999, among Express Scripts, Inc., the lenders
listed therein, Credit Suisse First Boston, as lead arranger, administration
agent and collateral agent, Bankers Trust Company, as syndication agent, BT Xxxx
Xxxxx, Incorporated, as co-arranger, the First National Bank of Chicago, as
documentation agent, and Mercantile Bank N.A., as documentation agent; and (ii)
the holders of ESI's 9-5/8% Senior Notes due 2009 (collectively the "ESI
Consents").
(d) Brokers' Fees. Neither YPC nor ESI has any liability or obligation
to pay any fees or commissions to any broker, finder, or agent with respect to
the transactions contemplated by this Agreement for which Holdings could become
liable or obligated.
(e) Title to Assets. YPC has good and marketable title to all of the
Contributed Assets, free and clear of any restriction on transfer or any
mortgage, pledge, lien, encumbrance, charge, or other security interest, other
than (a) mechanic's, materialmen's, and similar liens, (b) liens for taxes not
yet due and payable or for taxes that the taxpayer is contesting in good faith
through appropriate proceedings, (c) purchase money liens and liens securing
rental payments under capital lease arrangements, and (d) other liens arising in
the ordinary course of business and not incurred in connection with the
borrowing of money.
(f) InvestmentYPC (i) is acquiring the Holdings Shares solely for its
own account for investment purposes, and not with a view to the distribution
thereof (except to YPC's affiliates, including ESI), (ii) is a sophisticated
investor with knowledge and experience in business and financial matters, (iii)
has received certain information concerning Holdings and has had the opportunity
to obtain additional information as desired in order to evaluate the merits and
the risks inherent in investing in the Holdings Shares, and (iv) is an
Accredited Investor as such term is defined in Rule 502 under the Securities Act
of 1933, as amended.
(g) Year 2000. YPC has developed a plan (the "YPC-Y2K Plan") intended
to ensure that all computer hardware and software used in and material to its
business is designed to be Year 2000 Compliant. The YPC-Y2K Plan includes
reasonable steps to determine whether the failure of any suppliers or customers
with which YPC has a material relationship to be Year 2000 Compliant would have
or would reasonably be expected to have a material adverse effect on YPC and
assuming the consummation of the YPC-Y2K Plan, the occurrence of calendar year
2000 will not cause or will not reasonably be expected to have a material
adverse effect on YPC. For purposes of this subsection and Section 3(h), "Date
Data" means any data of any kind that includes date information or which is
otherwise derived from, dependent on or related to date information;
"Date-Sensitive System" means any software,
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microcode or hardware system or component, including any electronic or
electronically controlled system or component that processes any Date Data and
that is installed, in development or on order, for internal or external use, or
the provision or operation of which provides a benefit to customers, vendors,
suppliers or any other party; and "Year 2000 Compliant" means (i) with respect
to Date Data, that such data is in proper format and accurate for all dates in
the twentieth and twenty-first centuries, and (ii) with respect to
Date-Sensitive Systems, that each such system accurately processes all Date
Data, including for the twentieth and twenty-first centuries, without loss of
any functionality or performance, including, without limitation, calculating,
comparing, sequencing, storing and displaying such Date Data (including all leap
year considerations), when used as a stand-alone system or in combination with
other software or hardware.
(h) Disclaimer of Other Representations and Warranties. Except as
expressly set forth in this Section 2, YPC and ESI make no representation or
warranty, express or implied, at law or in equity, in respect of any of YPC's
assets (including, without limitation, the Contributed Assets), liabilities or
operations, including, without limitation, with respect to merchantability or
fitness for any particular purpose, and any such other representations or
warranties are hereby expressly disclaimed. Holdings hereby acknowledges and
agrees that, except to the extent specifically set forth in this Section 2,
Holdings is purchasing the Contributed Assets on an "as-is, where-is" basis.
Without limiting the generality of the foregoing, YPC and ESI make no
representation or warranty regarding any assets other than the Contributed
Assets or any liabilities other than the Assumed Liabilities, and none shall be
implied at law or in equity.
3. Representations and Warranties of PlanetRx, Holdings and Merger Sub. Each of
PlanetRx, Holdings and Merger Sub represents and warrants to YPC and ESI that
the statements contained in this Section 3 are correct and complete as of the
date of this Agreement and will be correct and complete as of the Closing Date
(as though made then and as though the Closing Date were substituted for the
date of this Agreement throughout this Section 3).
(a) Organization of PlanetRx, Holdings and Merger Sub. Each of
PlanetRx, Holdings and Merger Sub is a corporation duly organized, validly
existing, and in good standing under the laws of the jurisdiction of its
incorporation.
(b) Authorization of Transaction. Each of PlanetRx, Holdings and Merger
Sub has full power and authority (including full corporate power and authority)
to execute and deliver this Agreement and to perform its obligations hereunder.
This Agreement constitutes the valid and legally binding obligation of each of
PlanetRx, Holdings and Merger Sub, enforceable in accordance with its terms and
conditions.
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(c) Noncontravention. The execution and delivery of this Agreement,
consummation of the transactions contemplated hereby, and compliance with the
terms and provisions hereof will not conflict with or result in a breach of the
terms and conditions of, or constitute a default under the Certificate of
Incorporation or Bylaws of PlanetRx, Holdings or Merger Sub or of any contract
or agreement to which any of them is now a party, except where such conflict,
breach or default of any such contract or agreement, either individually or in
the aggregate, would not have a material adverse effect on such party's
business, financial condition or results of operations.
(d) Brokers' Fees. None of PlanetRx, Holdings and Merger Sub has any
liability or obligation to pay any fees or commissions to any broker, finder, or
agent with respect to the transactions contemplated by this Agreement for which
YPC or ESI could become liable or obligated; without limiting the generality of
the foregoing, YPC and ESI shall have no liability or obligation with respect to
any fee owed by PlanetRx or Holdings to Xxxxxxx Xxxxx & Company in connection
with the transactions contemplated under this Agreement.
(e) Valid Issuance of Stock. The Holdings Shares, when issued, sold and
delivered in accordance with the terms hereof for the consideration expressed,
will be duly and validly issued, fully paid and nonassessable and, based in part
upon the representations of YPC in this Agreement, will be issued in compliance
with all applicable federal and state securities laws.
(f) Litigation. Except as set forth in Holdings' registration statement
prepared in connection with the IPO, as filed with the Securities and Exchange
Commission ("SEC") and amended from time to time (the "Registration Statement"),
there are no actions, proceedings or investigations pending or, to the best of
Holdings' or PlanetRx's knowledge, any basis therefor or threat thereof, against
or affecting Holdings or PlanetRx that, either in any case or in the aggregate,
would result in any material adverse change in the business, financial
condition, or results of operations of Holdings or PlanetRx.
(g) Compliance with Laws. PlanetRx and Holdings are not in violation of
any applicable statute, rule, regulation, order or restriction (including any
resident and non-resident pharmacy laws) of any domestic government or any
instrumentality or agency thereof in respect of the conduct of their businesses
or the ownership of their properties which violation would materially and
adversely affect the business, assets, liabilities, financial condition,
operations or prospects of PlanetRx or Holdings. No governmental orders,
permissions, consents, approvals or authorizations are required to be obtained
and no registrations or declarations are required to be filed in connection with
the execution and delivery of this Agreement and the issuance of the Holdings
Shares, except such as have been duly and validly obtained or filed, or with
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respect to any filings that must be made after the Closing, as will be filed in
a timely manner. PlanetRx and Holdings have all franchises, permits, licenses
and any similar authority necessary for the conduct of their businesses as now
being conducted, the lack of which could materially and adversely affect the
business, properties, prospects or financial condition of PlanetRx and Holdings
and each believes it can obtain, without undue burden or expense, any similar
authority for the conduct of its business as planned to be conducted.
(h) Year 2000. Each of PlanetRx and Holdings has developed a plan (the
"Y2K Plan") intended to ensure that all computer hardware and software used in
and material to their businesses is designed to be Year 2000 Compliant. The Y2K
Plans include reasonable steps to determine whether the failure of any suppliers
or customers with which PlanetRx, Holdings or any subsidiary has a material
relationship to be Year 2000 Compliant would have or would reasonably be
expected to have a material adverse effect on PlanetRx or Holdings and assuming
the consummation of the Y2K Plans, the occurrence of calendar year 2000 will not
cause or will not reasonably be expected to have a material adverse effect on
PlanetRx or Holdings.
4. Covenants.
(a) General. Prior to the Closing, each of the Parties will use its
reasonable best efforts to take all action and to do all things necessary,
proper, or advisable in order to consummate and make effective the transactions
contemplated by this Agreement (including satisfaction, but not waiver, of the
closing conditions set forth in Section 5 below).
(b) Notices and Consents. Prior to the Closing, YPC and ESI will give
any notices to third parties, and each of YPC and ESI will use its reasonable
best efforts to obtain any third party consents, that Holdings reasonably may
request in connection with the Contribution. Each of the Parties will give any
notices to, make any filings with, and use its reasonable best efforts to obtain
any authorizations, consents, and approvals of governments and governmental
agencies in connection with the Contribution and the Merger. Without limiting
the generality of the foregoing, each of the Parties will file any Notification
and Report Forms and related material that it may be required to file with the
Federal Trade Commission and the Antitrust Division of the United States
Department of Justice under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended (the "Xxxx-Xxxxx-Xxxxxx Act"), will use its best efforts to
obtain an early termination of the applicable waiting period, and will make any
further filings pursuant thereto that may be necessary, proper, or advisable in
connection therewith.
(c) Full Access. Prior to the Closing, YPC will permit representatives
of PlanetRx and Holdings to have full access at all reasonable times, and in a
manner so as not to interfere with the normal business operations of YPC, to all
premises, properties, personnel, books, records (including tax records),
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contracts, and documents of or pertaining to the Contributed Assets or Assumed
Liabilities.
(d) Notice of Developments. Each Party will give prompt written notice
to the other Parties of any material adverse development causing a breach of any
of its own representations and warranties in Section 2 and Section 3 above.
(e) Exclusivity. YPC and ESI will not (i) solicit, initiate, or
encourage the submission of any proposal or offer from any individual, a
partnership, a corporation, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization, or a governmental entity (or any
department, agency, or political subdivision thereof) ("Person") relating to the
acquisition of any capital stock or other voting securities, or any substantial
portion of the assets, of YPC (including any acquisition structured as a merger,
consolidation, or share exchange) or (ii) participate in any discussions or
negotiations regarding, furnish any information with respect to, assist or
participate in, or facilitate in any other manner any effort or attempt by any
Person to do or seek any of the foregoing. YPC will notify Holdings immediately
if any Person makes any proposal, offer, inquiry, or contact with respect to any
of the foregoing.
(f) Certificate of Incorporation of Holdings. Immediately prior to the
filing of the Merger Agreement with the Delaware Secretary of State, PlanetRx
shall cause the Certificate of Incorporation of Holdings to be amended and
restated to read as set forth in exhibit 3.2 to the Registration Statement.
Additionally, prior to or at the filing of the Merger Agreement with the
Delaware Secretary of State, the corporate name of Holdings shall be changed to
"XxxxxxXx.xxx, Inc."
(g) ESI Consents. . ESI shall use its reasonable best efforts to obtain
the ESI Consents within 21 days after the date of this Agreement.
(h) Registration of Holdings Shares. Holdings and PlanetRx agree that,
to the extent allowed by the SEC, Holdings will register the Holdings Shares in
the IPO. Regardless of whether the Holdings Shares are registered in the IPO,
YPC shall be made a party to the Investors Rights Agreement (the "Rights
Agreement") dated as of June 3, 1999 between Holdings (as successor to PlanetRx)
and certain investors of Holdings identified in Schedule A thereto, which Rights
Agreement shall have been amended such that (a) the registration rights provided
for in Section 1.4 of the Rights Agreement shall also be made available upon the
written request of Holders of Registrable Securities with an anticipated
aggregate offering price of at least $2,000,000 and (b) the rights provided for
in Section 1 shall not terminate with respect to YPC until five (5) years
following the consummation of the IPO. In addition, Holdings and PlanetRx
further agree that they shall not consent to any amendment or waiver in
connection with the Rights Agreement the effect of which would materially
adversely affect YPC's substantive rights under said Rights Agreement, unless
YPC has consented to such amendment or waiver. Additionally, if Holdings is
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not able to register the Holdings Shares in the IPO, Holdings and PlanetRx agree
that, upon request by YPC, Holdings will effect registration of the Holdings
Shares in accordance with the provisions contained in Exhibit B attached hereto.
If Holdings is not able to register the Holdings Shares in the IPO, then YPC
understands and agrees that (i) the Holdings Shares will be characterized as
"restricted securities" under the federal securities laws inasmuch as they are
being acquired from Holdings in a transaction not involving a public offering
and that under such laws and applicable regulations such securities may be
resold without registration under the Securities Act only in certain limited
circumstances, and (ii) each certificate representing the Holdings Shares and
any other securities issued in respect of the Holdings Shares upon any stock
split, stock dividend, recapitalization, merger or similar event (unless no
longer required in the opinion of counsel for Holdings) shall be stamped or
otherwise imprinted with appropriate legends mandated by federal and state
securities laws.
(i) Lock-up Agreement/NASD Questionnaire. Prior to the Closing, YPC
shall execute a 180-day lock-up agreement with respect to the IPO in the form
signed by Holdings' officers, directors and other stockholders, except as
provided in Section 1(a) above. Additionally, YPC shall complete and deliver to
Holdings such questionnaires and other information reasonably and customarily
requested from stockholders in connection with an initial public offering of
common stock, including a form of NASD questionnaire.
(j) YPC Employees. Immediately after the Closing, Holdings shall offer
employment to all YPC employees. Holdings shall reimburse YPC for any severance
costs incurred by YPC for employees who do not accept employment with Holdings,
up to a maximum of $2,500,000. Effective at the Closing, the YPC's Stock
Option/Stock Issuance Plan (the "YPC Stock Plan") and each outstanding option to
purchase shares of YPC Common Stock under the YPC Stock Plan, whether vested or
unvested, will be assumed by Holdings, and such obligations shall be included
within the Assumed Liabilities; provided, however, that the number of shares
underlying such assumed options shall not exceed 3.6% of Holdings' outstanding
common stock after giving effect to the closing of the IPO and the issuance of
the Holdings Shares. Each such option so assumed by Holdings under this
Agreement shall continue to have, and be subject to, the same terms and
conditions set forth in the YPC Stock Plan and the applicable stock option
agreement immediately prior to the Closing, except that the number of shares
subject to said options shall be adjusted such that the total number of shares
underlying said options shall equate to approximately 3.6% of the total number
of PlanetRx shares outstanding immediately after the closing of the IPO
(excluding any over-allotment shares) and the issuance of the Holdings Shares
(excluding any over-allotment shares) to YPC, and the per share exercise price
thereof shall be adjusted accordingly. Consistent with the terms of the YPC
Stock Plan and the documents governing the outstanding options under such plan,
the Closing will not terminate any of the outstanding options under the YPC
Stock Plan or the shares of Holdings' common stock which will be subject to
those options upon the Holdings's assumption of the options in connection with
this Agreement. After the Closing, Holdings will issue to each person who,
immediately
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prior to the Closing was a holder of an outstanding option under the YPC Stock
Plan a document in form and substance satisfactory to YPC evidencing the
foregoing assumption of such option by Holdings. On or before the Closing Date,
Holdings will reserve a sufficient number of shares of its authorized but
unissued common stock to cover the exercise of all of such assumed options. The
names of employees and the number of options granted by YPC to each shall be
specified in a schedule to be delivered by YPC prior to Closing.
(k) Board Seat. Holdings hereby agrees that ESI, or its designee, shall
be entitled, from and after the Closing, to designate one member of the Board of
Directors of Holdings, such member to be reasonably acceptable to Holdings, it
being understood that Xxxxxxx X. Xxxx or any senior or executive vice president
of ESI shall be deemed acceptable to Holdings (such director being referred to
herein as the "Stockholder Director"). Notwithstanding the foregoing, if at any
time ESI's percentage beneficial ownership of Holdings' outstanding common stock
is less than five percent (5%), ESI thereafter shall not be entitled to
designate a director. The Stockholder Director shall be entitled to the same
indemnification, compensation and other benefits provided to all other
non-employee members of Holdings' Board of Directors. In accordance with the
foregoing, Holdings hereby agrees that its Board of Directors will take all
action necessary such that upon the fifth (5th) business day following the
Closing, Holdings' Board of Directors shall be increased in size, if necessary,
and the person designated by ESI shall be elected as a director effective upon
such date. Following the Closing, Holdings shall cause (i) the person designated
by ESI as a director to be included (consistent with applicable law and
Holdings' Certificate of Incorporation) in the group of nominees who are
recommended for election to the Board of Directors by the management of Holdings
and included in Holdings' proxy statement pursuant to the Securities Exchange
Act of 1934, as amended, at each meeting of stockholders of Holdings when
directors are to be elected, and (ii) at any special meeting of the Board of
Directors held as soon as practicable after the creation of any vacancy as a
result of the death, resignation or removal of the Stockholder Director, the
appointment of such person or persons as are designated by ESI to fill any such
vacancy. Unless written notice, signed by the President of ESI, designating
another individual shall be received by Holdings, the Stockholder Director shall
be Xxxxxxx X. Xxxx.
(l) Shut-down Costs. Holdings shall reimburse YPC for any costs
relating to terminating any of YPC's functions in connection with the
Contributions, not to exceed $500,000 (exclusive of severance costs set forth in
Section 4(j)).
5. Conditions to Obligation to Close.
(a) Conditions to Obligation of Holdings. The obligation of Holdings to
consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following conditions:
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(i) the representations and warranties set forth in Section
2 above shall be true and correct in all material respects at and as of the
Closing Date;
(ii) YPC shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;
(iii) YPC shall have procured all of the third party consents
specified in Section 4(b) above;
(iv) no action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency of any
federal, state, local, or foreign jurisdiction wherein an unfavorable
injunction, judgment, order, decree, ruling, or charge would (A) prevent
consummation of any of the transactions contemplated by this Agreement, (B)
cause any of the transactions contemplated by this Agreement to be rescinded
following consummation, or (C) affect adversely the right of Holdings to own the
Contributed Assets;
(v) YPC shall have delivered to Holdings a certificate to
the effect that each of the conditions specified above in Section 5(a)(i)-(iv)
is satisfied in all respects;
(vi) all authorizations, approvals or permits, if any, of
any governmental authority or regulatory body that are required in connection
with transactions to be consummated pursuant to this Agreement (including, if
applicable, the expiration of any waiting period under the Xxxx-Xxxxx-Xxxxxx
Act) shall have been duly obtained and shall be effective on and as of the
Closing; and
(vii) The offer and sale of the Holdings Shares to YPC
pursuant to this Agreement shall be either (i) registered under the Securities
Act or (ii) exempt from the registration requirements of the Securities Act and
the registration and/or qualification requirements of all applicable state
securities laws.
(b) Conditions to Obligation of YPC. The obligation of YPC to
consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in Section
3 above shall be true and correct in all material respects at and as of the
Closing Date;
(ii) Holdings and PlanetRx shall have performed and complied
with all of its covenants hereunder in all material respects through the
Closing;
(iii) no action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency of any
federal, state, local, or foreign jurisdiction or before any arbitrator wherein
an unfavorable injunction, judgment, order, decree, ruling, or charge would (A)
prevent consummation of any of the transactions contemplated by this Agreement
or (B) cause any of the transactions contemplated by this Agreement to be
rescinded
11
15
following consummation (and no such injunction, judgment, order, decree, ruling,
or charge shall be in effect);
(iv) Holdings and PlanetRx shall have delivered to YPC a
certificate to the effect that each of the conditions specified above in Section
5(b)(i)-(iii) is satisfied in all respects;
(v) YPC and ESI shall have obtained the ESI Consents;
(vi) all authorizations, approvals or permits, if any, of
any governmental authority or regulatory body that are required in connection
with transactions to be consummated pursuant to this Agreement (including, if
applicable, the expiration of any waiting period under the Xxxx-Xxxxx-Xxxxxx
Act) shall have been duly obtained and shall be effective on and as of the
Closing;
(vii) all actions to be taken by PlanetRx, Holding and Merger
Sub in connection with consummation of the transactions contemplated hereby and
all certificates, opinions, instruments, and other documents required to effect
the transactions contemplated hereby will be reasonably satisfactory in form and
substance to YPC;
(viii) The offer and sale of the Holdings Shares to YPC
pursuant to this Agreement shall be either (i) registered under the Securities
Act or (ii) exempt from the registration requirements of the Securities Act and
the registration and/or qualification requirements of all applicable state
securities laws; and
(ix) The IPO shall have occurred.
YPC may waive any condition specified in this Section 6(b) if it executes a
writing so stating at or prior to the Closing.
6. Termination of Agreement. YPC may terminate this Agreement by giving written
notice to Holdings if the Closing shall not have occurred within 120 days of the
date of this Agreement. If the failure to close does not occur through the fault
of YPC or ESI, PlanetRx shall pay YPC a termination fee of $10,000,000.
7. Miscellaneous.
(a) Survival of Representations and Warranties. The representations and
warranties of the parties contained in this Agreement shall survive the Closing
hereunder.
(b) Press Releases and Public Announcements. No Party shall issue any
press release or make any public announcement relating to the subject matter of
this without the prior written approval of the other Party; provided, however,
that any Party may make any public disclosure it believes in good faith is
required by applicable law (including its reporting obligations under the
Securities Exchange Act of 1934, as amended) or any listing or trading agreement
12
16
concerning its publicly-traded securities (in which case the disclosing Party
will use its best efforts to advise the other Party prior to making the
disclosure).
(c) Third-Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns.
(d) Entire Agreement. This Agreement (including the documents referred
to herein) constitutes the entire agreement between the Parties and supersedes
any prior understandings, agreements, or representations by or between the
Parties, written or oral, to the extent they related in any way to the subject
matter hereof.
(e) Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. No Party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other Party, except that YPC may assign any of its rights and interests
in this Agreement (including its registration rights as set forth in Section 4),
to ESI.
(f) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(g) Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(h) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then two
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
If to YPC:
Xxxxxxx X. Xxxx
c/o Express Scripts, Inc.
00000 Xxxxxxxxx Xxxxx
Xx. Xxxxx, XX 00000
fax: (000) 000-0000
Copies to:
Xxxxxxx X. Xxxxxxxxx, Esq. Express Scripts, Inc.
Xxxxxxx, Phleger & Xxxxxxxx, LLP 00000 Xxxxxxxxx Xxxxx
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17
000 Xxxxxxxxxxx Xxxx., Xxxxx 000 Xx. Xxxxx, XX 00000
Xxxxxxxxxx, XX 00000 Attention: General Counsel
fax: (000) 000-0000 Fax: (000) 000-0000
If to the PlanetRx, Holdings or Merger Sub:
Xxxxxxx X. Xxxxxxx
PlanetRx
000 Xxxxxx Xxxxx Xxxx., Xxxxx 000
Xxxxx Xxx Xxxxxxxxx, XX 00000
Fax: (000) 000-0000
Copy to:
Xxxxxxx X. Xxxxxxx
Xxxxxxxxx Xxxxxxx
000 Xxxxxxxxxxxx Xxxxx
Xxxxx Xxxx, XX 00000
Fax: (000) 000-0000
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Any
Party may change the address to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving the other Party
notice in the manner herein set forth.
(i) Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Delaware without giving effect
to any choice or conflict of law provision or rule (whether of the State of
Delaware or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Delaware.
(j) Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by
PlanetRx, Holdings and Merger Sub and YPC. YPC may consent to any such amendment
at any time prior to the Closing with the prior authorization of its board of
directors; provided, however, that any amendment effected after YPC Stockholders
have approved this Agreement will be subject to the restrictions contained in
the Delaware General Corporation Law. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant
14
18
hereunder or affect in any way any rights arising by virtue of any prior or
subsequent such occurrence.
(k) Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(l) Expenses. Each of PlanetRx, Holdings and Merger Sub on the one
hand, and YPC on the other hand, will bear his or its own costs and expenses
(including legal fees and expenses) incurred in connection with this Agreement
and the transactions contemplated hereby. YPC agrees that none of its
Subsidiaries has borne or will bear any of the costs and expenses of YPC and YPC
Stockholders (including any of their legal fees and expenses) in connection with
this Agreement or any of the transactions contemplated hereby. YPC also agrees
that it has not paid any amount to any third party, and will not pay any amount
to any third party until after the Closing, with respect to any of the costs and
expenses of YPC and YPC Stockholders (including any of their legal fees and
expenses) in connection with this Agreement or any of the transactions
contemplated hereby.
(m) Construction. 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 of
the provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation.
(n) Incorporation of Exhibits and Schedules. The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof.
(o) Specific Performance. Each of the Parties acknowledges and agrees
that the other Party would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, each of the Parties agrees that
the other Party shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Agreement and to enforce specifically this
Agreement and the terms and provisions hereof in any action instituted in any
court of the United States or any state thereof having jurisdiction over the
Parties and the matter [(subject to the provisions set forth in Section 8(p)
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19
below)], in addition to any other remedy to which it may be entitled, at law or
in equity.
(p) Bulk Transfer Laws. Holdings acknowledges that YPC will not comply
with the provisions of any bulk transfer laws of any jurisdiction in connection
with the transactions contemplated by this Agreement.
*****
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16
20
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.
XXXXXXXX.XXX, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------------------
Title: Chairman and Chief Executive Officer
-----------------------------------------
PRX HOLDINGS, INC.,
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------------------
Title: Chairman and Chief Executive Officer
-----------------------------------------
PRX ACQUISITION CORP.
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------------------
Title: Chairman and Chief Executive Officer
-----------------------------------------
XXXXXXXXXXXX.XXX, INC.
By: /s/ Xxxxxxx Xxxx
--------------------------------------------
Title: President and Chief Executive Officer
-----------------------------------------
EXPRESS SCRIPTS, INC.
By: /s/ Xxxxxxx Xxxx
--------------------------------------------
Title: President and Chief Executive Officer
-----------------------------------------
21
EXHIBIT A
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER ( the "Agreement") is made and
entered into this __ day of ___, 1999 by and between PRX Acquisition Corp., a
Delaware corporation (the "Disappearing Corporation"), XxxxxxXx.xxx, Inc., a
Delaware corporation (the "Surviving Corporation") and PRX Holdings, Inc., a
Delaware corporation ("Parent Corporation").
R E C I T A L S
A. The Surviving Corporation has the authority to issue ____ shares of
common stock, par value $.0001 per share, of which there are 100 shares issued
and outstanding as of the date hereof ("Company Common Stock").
B. The Disappearing Corporation has the authority to issue 100 shares
of common stock, no par value, of which there are 100 shares issued and
outstanding as of the date hereof.
C. The Board of Directors of each of the Parent Corporation, the
Surviving Corporation and the Disappearing Corporation deem it advisable and in
the best interest of the Surviving Corporation and the Disappearing Corporation
that the Disappearing Corporation be merged into and with the Surviving
Corporation as permitted by the Delaware General Corporation Law. The Surviving
Corporation and the Disappearing Corporation are sometimes collectively referred
to herein as the "Constituent Corporation".
D. This Agreement has been approved by the Board of Directors of each
of the Parent Corporation, the Surviving Corporation and the Disappearing
Corporation and by the stockholders of each of the Constituent Corporations.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, the Disappearing Corporation and the
Surviving Corporation agree to merge pursuant to the following terms and
conditions:
(a) Merger.
A-1
22
(i) Effect of Merger. As of the Effective Date (defined in
Section 1.2), the Disappearing Corporation shall be merged into and with the
Surviving Corporation (the "Merger"). The Surviving Corporation shall survive
the Merger and the separate corporate existence of the Disappearing Corporation
shall cease.
(ii) Effective Date. The date on which the Merger occurs
and becomes effective is hereby defined to be and is hereinafter referred to as
the Effective Date. The Merger shall occur and be effective on the date that
this Agreement and Plan of Merger is filed with the Delaware Secretary of State.
(iii) Surviving Corporation. XxxxxxXx.xxx, Inc., a Delaware
corporation, as the Surviving Corporation, shall continue its corporate
existence under the laws of the State of Delaware under the name
"______________" upon the effective date of the Merger pursuant to the
provisions of the Delaware General Corporation Law.
(b) Amendment of Articles of Incorporation.
The Articles of Incorporation of the Surviving Corporation shall be
amended to real in full as set forth in Exhibit "A" hereto.
(c) Effect of Merger on Outstanding Shares.
On the Effective Date, each share of Company Common Stock issued and
outstanding immediately prior to the Merger, shall, by virtue of the Merger and
without any action on the part of the holder thereof, be converted into and
become one (1) fully paid and nonassessable shares of common stock of the Parent
Corporation, par value $.0001 per share. On the Effective Date, each share of
the common stock of the Disappearing Corporation issued and outstanding
immediately prior to the Merger shall, by virtue of the Merger and without any
action on the part of the holder thereof, be converted into and become one fully
paid and nonassessable share of common stock, par value $.0001 per share, of the
Surviving Corporation. On the Effective Date, each share of Company Common Stock
owned by Parent Corporation or any subsidiary of Parent Corporation or held in
treasury immediately prior to the Effective Date, if any, shall be cancelled and
cease to exist from and after the Effective Date. From and after the Effective
Date, all Company Common Stock outstanding prior to the Merger shall no longer
be outstanding and shall automatically be cancelled and retired and shall cease
to exist, and each holder of a certificate representing shares of Company Common
Stock shall cease to have any rights with respect thereto, except the right to
receive in exchange thereof, upon surrender thereof to Parent Corporation, a
certificate of certificates representing the number of whole shares of Parent
Corporation Common Stock to which such holder is entitled pursuant to this
Section 3.
23
(d) Transfer Provisions.
(iv) Transfer of Assets and Liabilities. On the Effective
Date, the rights, privileges, powers, property and franchises and all other
interests of the Constituent Corporations shall be transferred to, vested in and
possessed by the Surviving Corporation, subject to all the liabilities, duties
and restrictions of or upon each of the Constituent Corporations; and all debts
due to each of the Constituent Corporations on whatever account, and all things
in action or belonging to each of the Constituent Corporations shall be
transferred to and vested in the Surviving Corporation. All property, rights,
privileges, powers and franchises, and every other interest shall thereafter be
the property of the Surviving Corporation as they were of the Constituent
Corporations, and all title to real property vested by deed or otherwise in
either of the Constituent Corporations shall not revert or be in any way
impaired by reason of the Merger; provided, however, that the liabilities of the
Constituent Corporations and the officers and directors shall not be affected,
and all rights of creditors, and all liens upon any property of either of the
Constituent Corporations, shall be preserved unimpaired, and any claim, action
or proceeding existing, or pending by or against either of the Constituent
Corporations may be prosecuted to judgment as if such Merger had not taken place
except as they may be modified with the consent of such creditors, and all
debts, liabilities and duties of or upon each of the Constituent Corporations
shall attach to the Surviving Corporation, and may be enforced against it to the
same extent as if such debt, liabilities and duties had been incurred or
contracted by the Surviving Corporation.
(v) Further Actions. Each of the parties hereto shall use
its best efforts to take all such action as may be necessary or appropriate to
effectuate the Merger in accordance with this Agreement. If, at any time after
the Effective Date, any further action may be necessary or appropriate to vest,
perfect, confirm or assure the Surviving Corporation's title to and possession
of all of said property, rights, privileges, immunities, powers and franchises,
or otherwise to carry out the intent and purposes of this Agreement, the
officers of the Surviving Corporation are fully authorized, in the name and on
behalf of each Constituent Corporation or otherwise, to take, and shall take,
all such lawful and necessary action.
(e) Miscellaneous Provisions.
(vi) Expenses. Except as otherwise expressly provided
herein, each of the Surviving Corporation and the Disappearing Corporation shall
pay all of their own expenses (including attorneys' fees) incurred in connection
with the negotiation of this Agreement, the performance of their respective
obligations under this Agreement, and the consummation of the transactions
contemplated hereby and thereby (whether consummated or not).
(vii) Governing Law. This Agreement and the rights and
obligations hereunder of the parties hereto shall be governed by and construed
in accordance with the laws of the State of Delaware.
(viii) Headings. The various headings used in this Agreement
are inserted for convenience only and shall not affect the meaning or
interpretation of this Agreement or any provision hereof.
24
(ix) Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed to be
an original instrument, but all of such counterparts together shall constitute
one and the same instrument.
[Remainder of page intentionally left blank.]
25
IN WITNESS WHEREOF, the parties hereto have caused this Agreement and
Plan of Merger to be executed by the officers set forth below as of the day and
year first above written.
"SURVIVING CORPORATION" XXXXXXXx.XXX, INC., a Delaware corporation
By:
-----------------------------------------
Chairman of the Board and
Chief Executive Officer
"DISAPPEARING CORPORATION" PRX ACQUISITION CORP., a Delaware corporation
By:
-----------------------------------------
Chairman of the Board
By:
-----------------------------------------
Secretary
"PARENT CORPORATION" PRX HOLDINGS, INC., a Delaware corporation
By:
-----------------------------------------
Chairman of the Board
By:
-----------------------------------------
Secretary
26
EXHIBIT B
1. Registration Rights. Holdings covenants and agrees as follows:
1.1 Definitions. For purposes of this Exhibit B, capitalized terms
used herein and not otherwise defined shall have the meanings ascribed to them
in the Asset Contribution and Reorganization Agreement between Holdings and YPC
to which this Exhibit B is attached. In addition, the following terms used
herein shall have the following meanings:
(a) The term "Form S-1" means such form under the Act as in
effect on the date hereof or any registration form under the Act subsequently
adopted by the SEC which does not permit inclusion or incorporation of
substantial information by reference to other documents filed by Holdings with
the SEC.
(b) The term "Form S-3" means such form under the Act as in
effect on the date hereof or any registration form under the Act subsequently
adopted by the SEC which permits inclusion or incorporation of substantial
information by reference to other documents filed by Holdings with the SEC.
(c) The term "1934 Act" means the Securities Exchange Act of
1934, as amended.
(d) The term "register", "registered," and "registration"
refer to a registration effected by preparing and filing a registration
statement or similar document in compliance with the Act, and the declaration or
ordering of effectiveness of such registration statement or document.
(e) The term "stock" means the Holdings Shares, as defined
in the Asset Contribution and Reorganization Agreement
1.2 Request for Registration. As soon as practicable after the
Closing, Holdings shall effect a registration on a Form S-1 and any related
qualification or compliance with respect to one half of the Stock and all such
qualifications and compliances as may be so requested and as would permit or
facilitate the sale and distribution of such Stock. Notwithstanding anything to
the contrary in this Section 1.2, Holdings shall not be obligated to effect any
such registration, qualification or compliance, pursuant to this Section 1.2:
(i) if Holdings shall furnish to YPC a certificate signed by the President of
Holdings stating that, in the good faith judgment of the Board of Directors of
Holdings, such registration should be deferred due to material events directly
relating to Holdings, in which event Holdings shall have the right to defer the
filing of the Form S-1 for a period of not more than 90 days after receipt of
the request of YPC under this Section 1.2 (provided, however, that Holdings may
27
defer such registration only once); or (ii) in any particular jurisdiction in
which Holdings would be required to qualify to do business or to execute a
general consent to service of process in effecting such registration,
qualification or compliance.
1.3 Obligations of Holdings. In connection with the registration
on Form S-1, Holdings shall:
(a) Prepare and file with the SEC a Form S-1 with respect to
such Stock and use its best efforts to cause such registration statement to
become effective as soon as reasonably practicable but in no event later than
one hundred and eighty (180) days after the Closing. Holdings shall keep such
registration statement effective until the earlier of (i) two (2) years after
the Closing, (ii) the distribution of all of the Stock as contemplated in the
registration statement has been completed, and (iii) the date which all shares
of the Stock held by YPC may immediately be sold under Rule 144 during any
90-day period.
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Act with respect to the disposition of all securities covered
by such registration statement.
(c) Furnish to YPC such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Act, and such other documents as YPC may reasonably request in order to
facilitate the disposition of the Stock.
(d) Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by YPC;
provided that Holdings shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions.
(e) Notify YPC covered by such registration statement at any
time when a prospectus relating thereto is required to be delivered under the
Act of the happening of any event as a result of which the prospectus included
in such registration statement, as then in effect, includes an untrue statement
of a material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in the light
of the circumstances then existing.
(f) Cause all such Stock registered pursuant hereunder to be
listed on each securities exchange on which similar securities issued by
Holdings are then listed.
(g) Provide a transfer agent and registrar for all of the
Stock registered pursuant hereunder and a CUSIP number for all such Stock, in
each case not later than the effective date of such registration.
28
1.4 Investor Obligation to Furnish Information. It shall be a
condition precedent to the obligations of Holdings to take any action pursuant
hereto with respect to the Stock that YPC shall furnish to Holdings such
information regarding itself, the Stock, and the intended method of disposition
of such securities as shall be required to effect the registration of such
Stock.
1.5 Expenses of Registration. All expenses incurred in connection
with registrations, filings or qualifications pursuant hereto, including
(without limitation) all registration, filing and qualification fees, printers'
and accounting fees, fees and disbursements of counsel for Holdings (including
fees and disbursements of counsel for Holdings in its capacity as counsel to YPC
hereunder but excluding the fees and disbursements of any other counsel for YPC)
shall be borne by Holdings.
1.6 Indemnification. In the event any Stock is included in a
registration statement under Section 1.2:
(a) To the extent permitted by law, Holdings will indemnify
and hold harmless YPC, any underwriter (as defined in the Act) for YPC and each
person, if any, who controls YPC or underwriter within the meaning of the Act or
the 1934 Act, against any losses, claims, damages, or liabilities (joint or
several) to which they may become subject under the Act, the 1934 Act or other
federal or state law, insofar as such losses, claims, damages, or liabilities
(or actions in respect thereof) arise out of or are based upon any of the
following statements, omissions or violations (collectively a "Violation"): (i)
any untrue statement or alleged untrue statement of a material fact contained in
such registration statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements thereto, (ii) the
omission or alleged omission to state therein a material fact required to be
stated therein, or necessary to make the statements therein not misleading, or
(iii) any violation or alleged violation by Holdings of the Act, the 1934 Act,
any state securities law or any rule or regulation promulgated under the Act,
the 1934 Act or any state securities law; and Holdings will pay to YPC, or such
underwriter or controlling person, as incurred, any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability, or action; provided, however, that the
indemnity agreement contained in this subsection (a) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability, or action if such
settlement is effected without the consent of Holdings (which consent shall not
be unreasonably withheld), nor shall Holdings be liable in any such case for any
such loss, claim, damage, liability, or action to the extent that it arises out
of or is based upon a Violation which occurs in reliance upon and in conformity
with written information furnished expressly for use in connection with such
registration by any such Investor, underwriter or controlling person.
(b) To the extent permitted by law, YPC will indemnify and
hold harmless Holdings, each of its directors, each of its officers who has
signed the registration statement, each person, if any, who controls Holdings
within the meaning of the Act, any underwriter, and any controlling person of
any such underwriter, against any losses, claims,
29
damages, or liabilities (joint or several) to which any of the foregoing persons
may become subject, under the Act, the 1934 Act or other federal or state law,
insofar as such losses, claims, damages, or liabilities (or actions in respect
thereto) arise out of or are based upon any Violation, in each case to the
extent (and only to the extent) that such Violation occurs in reliance upon and
in conformity with written information furnished by such Investor expressly for
use in connection with such registration; and each such Investor will pay, as
incurred, any legal or other expenses reasonably incurred by any person intended
to be indemnified pursuant to this subsection (b), in connection with
investigating or defending any such loss, claim, damage, liability, or action;
provided, however, that the indemnity agreement contained in this subsection (b)
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of YPC,
which consent shall not be unreasonably withheld; provided, that, in no event
shall any indemnity under this subsection (b) exceed the gross proceeds from the
offering received by YPC.
(c) Promptly after receipt by an indemnified party under
this Section 1.6 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 1.6, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party
(together with all other indemnified parties which may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
1.6, but the omission so to deliver written notice to the indemnifying party
will not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section 1.6.
(d) If the indemnification provided for in this Section 1.6
is held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, liability, claim, damage, or expense referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage, or expense
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in
connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
30
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.
(e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in an underwriting
agreement entered into in connection with the underwritten public offering are
in conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.
(f) The obligations of Holdings and YPC under this Section
1.6 shall survive the completion of any offering of the Stock in a registration
statement pursuant hereto, and otherwise.
1.7 Termination. Holdings' obligation to register the Stock
pursuant to this agreement shall terminate on the earlier of (i) the second
anniversary of the Closing and (ii) the date on which all shares of the Stock
held by YPC may immediately be sold under Rule 144 during any 90-day period.
31
SCHEDULE I
CONTRIBUTED ASSETS
The amounts included represent the balance of the contributed assets as of June
30, 1999.
A. Prepaid Expenses
Jupiter Communications, Inc. $30,983
=================
B. Furniture and Fixtures, net $81,307
=================
Sys No. 8. Acq. 9. Description
------- ---- -----------
Date
----
87 02/01/95 Bus Essen - 4-Drawer Lateral Firefile
72 05/01/99 Office Solutions- workstations 6'x5.5' work areas
73 05/01/99 Office Solutions- workstations 6'x5.5' work areas
74 05/01/99 Office Solutions- workstations 6'x5.5' work areas
75 05/01/99 Office Solutions- workstations 6'x5.5' work areas
76 05/01/99 Office Solutions- workstations 6'x5.5' work areas
77 05/01/99 Office Solutions- workstations 6'x5.5' work areas
78 05/01/99 Office Solutions- workstations 6'x5.5' work areas
79 05/01/99 Office Solutions- workstations 6'x5.5' work areas
80 05/01/99 Office Solutions- workstations 6'x5.5' work areas
81 05/01/99 Office Solutions- workstations 6'x5.5' work areas
82 05/01/99 Office Solutions- workstations 6'x5.5' work areas
83 05/01/99 Office Solutions- workstations 6'x5.5' work areas
84 05/01/99 Office Solutions- workstations 6'x5.5' work areas
85 05/01/99 Office Solutions- workstations 6'x5.5' work areas
86 08/01/94 Bus Essen - 4 Drawer File
12 12/01/98 Office Solns - Furniture for private office - 12 workstations
13 01/01/99 Office Solutions Inc.-Workstation
C. Personal Computers, net $94,851
=================
Sys No. 10. Acq. 11. Description
------- ---- -----------
Date
----
49 04/01/99 GE Capital-NEC Multisync A900 19" Monitor
50 04/01/99 GE Capital-NEC Multisync A900 19" Monitor
51 04/01/99 GE Capital-NEC Multisync A900 19" Monitor
52 04/01/99 GE Capital-NEC Multisync A900 19" Monitor
53 04/01/99 GE Capital-NEC Multisync A900 19" Monitor
54 04/01/99 GE Capital-NEC Multisync A900 19" Monitor
55 04/01/99 GE Capital-NEC Multisync A900 19" Monitor
56 04/01/99 GE Capital-NEC Multisync A900 19" Monitor
57 04/01/99 GE Capital-NEC Multisync A900 19" Monitor
32
58 04/01/99 GE Capital-NEC Multisync A900 19" Monitor
90 04/01/96 Srv Assur - (2) Prolinea 575 PC's
91 09/01/96 Srv Assur - (4) Compaq DP 2000 P166 PCs
94 12/01/97 Dynamic Computer - Everex Stepnote 5/150
97 06/01/99 GE Capital-CPQ Deskpro EN M6350x/6400 32mb, CPQ 32mb100mhz dimm
89 03/01/96 Srv Assur - (7) Prolinea 5/120 PC's
103 06/01/99 GE Cap-CPQ Desk Pro ENM6350x/6400 32mb,CPQ 32mb 100mhzmem,
19"mo
96 06/01/99 Gateway-Solo5150SELaptop, 17"Monitor, Port Replicator
102 06/01/99 GE Cap-CPQ Desk Pro ENM6350x/6400 32mb,CPQ 32mb 100mhzmem, 19"mo
68 05/01/99 Gateway-Solo 5150se Laptop
69 05/01/99 Gateway-Solo 5150se Laptop
70 05/01/99 Gateway-Solo 5150se Laptop
101 06/01/99 GE Cap-CPQ Desk Pro ENM6350x/6400 32mb,CPQ 32mb 100mhzmem, 19"mo
2 11/01/98 Gateway - Solo 5150SE laptop Pent II 233MHz 14" 20X CD 17"
3 11/01/98 Gateway - Solo 5150SE laptop Pent II 233MHz 14" 20X CD 17"
4 11/01/98 Gateway - Solo 5150SE laptop Pent II 233MHz 14" 20X CD 17"
5 12/01/98 Gateway - 5150SE Ntbk II 233MHz
6 12/01/98 Gateway - 5150SE Ntbk II 233MHz
7 12/01/98 Gateway - 5150SE Ntbk II 233MHz
15 03/01/99 Gateway-Sola 5150SE SN 1001904
17 00/00/00 XX Xxxxxxx-XXX XX XX X0000x,-XXX SDRAM100MHZ, XXXxxx 00
00 03/01/99 GE Capital-CPQ DP EN M6350x,-CPQ SDRAM100MHZ, XXXxxx 00
00 03/01/99 GE Capital-CPQ DP EN M6350x,-CPQ SDRAM100MHZ, XXXxxx 00
00 03/01/99 GE Capital-CPQ DP EN M6350x,-CPQ SDRAM100MHZ, XXXxxx 00
00 03/01/99 GE Capital-CPQ DP EN M6350x,-CPQ SDRAM100MHZ, XXXxxx 00
00 03/01/99 GE Capital-CPQ DP EN M6350x,-CPQ SDRAM100MHZ, XXXxxx 00
00 03/01/99 GE Capital-CPQ DP EN M6350x,-CPQ SDRAM100MHZ, XXXxxx 00
00 06/01/99 GE Capital-CPQ Deskpro EN M6350x/6400 32mb, CPQ 32mb100mhz dimm
99 06/01/99 GE Capital-CPQ Deskpro EN M6350x/6400 32mb, CPQ 32mb100mhz dimm
100 06/01/99 GE Capital-CPQ Deskpro EN M6350x/6400 32mb, CPQ 32mb100mhz dimm
104 06/01/99 GE Cap-CPQ Desk Pro ENM6350x/6400 32mb,CPQ 32mb 100mhzmem, 19"mo
105 06/01/99 GE Cap-CPQ Desk Pro ENM6350x/6400 32mb,CPQ 32mb 100mhzmem, 19"mo
106 06/01/99 GE Cap-CPQ Desk Pro ENM6350x/6400 32mb,CPQ 32mb 100mhzmem, 19"mo
107 06/01/99 GE Cap-CPQ Desk Pro ENM6350x/6400 32mb,CPQ 32mb 100mhzmem, 19"mo
108 06/01/99 GE Cap-CPQ Desk Pro ENM6350x/6400 32mb,CPQ 32mb 100mhzmem, 19"mo
24 03/01/99 GE Capital-CPQ DP EN M6350x,-CPQ SDRAM100MHZ, XXXxxx 00
00 03/01/99 GE Capital-CPQ DP EN M6350x,-CPQ SDRAM100MHZ, XXXxxx 00
00 03/01/99 GE Capital-CPQ DP EN M6350x,-CPQ SDRAM100MHZ, CDRolm 32
33
27 03/01/99 GE Capital-CPQ DP EN M6350x,-CPQ SDRAM100MHZ, XXXxxx 00
00 03/01/99 GE Capital-CPQ DP EN M6350x,-CPQ SDRAM100MHZ, XXXxxx 00
00 03/01/99 GE Capital-CPQ DP EN M6350x,-CPQ SDRAM100MHZ, XXXxxx 00
00 03/01/99 GE Capital-CPQ DP EN M6350x,-CPQ SDRAM100MHZ, XXXxxx 00
00 03/01/99 GE Capital-CPQ DP EN M6350x,-CPQ SDRAM100MHZ, XXXxxx 00
00 03/01/99 GE Capital-CPQ DP EN M6350x,-CPQ SDRAM100MHZ, XXXxxx 00
00 03/01/99 GE Capital-CPQ DP EN M6350x,-CPQ SDRAM100MHZ, XXXxxx 00
00 03/01/99 GE Capital-CPQ DP EN M6350x,-CPQ SDRAM100MHZ, XXXxxx 00
00 03/01/99 GE Capital-CPQ DP EN M6350x,-CPQ SDRAM100MHZ, XXXxxx 00
00 03/01/99 GE Capital-CPQ DP EN M6350x,-CPQ SDRAM100MHZ, XXXxxx 00
00 04/01/99 GE Capital-NEC Multisync A900 19" Monitor
40 04/01/99 GE Capital-NEC Multisync A900 19" Monitor
41 04/01/99 GE Capital-NEC Multisync A900 19" Monitor
42 04/01/99 GE Capital-NEC Multisync A900 19" Monitor
43 04/01/99 GE Capital-NEC Multisync A900 19" Monitor
44 04/01/99 GE Capital-NEC Multisync A900 19" Monitor
45 04/01/99 GE Capital-NEC Multisync A900 19" Monitor
46 04/01/99 GE Capital-NEC Multisync A900 19" Monitor
47 04/01/99 GE Capital-NEC Multisync A900 19" Monitor
48 04/01/99 GE Capital-NEC Multisync A900 19" Monitor
D. Machinery and equipment, net $296,045
==================
Sys No. 12. Acq. 13. Description
------- ---- -----------
Date
----
59 04/01/99 GE Capital-SERVER ROOM CPQ PROL 1850r 6/450-1
60 04/01/99 GE Capital-SERVER ROOM CPQ PROL 1850r 6/450-1
61 04/01/99 GE Capital-SERVER ROOM CPQ INT 35/70GB DLT DRV
62 04/01/99 GE Capital-SERVER ROOM CPQ SMART ARRAY 3200
63 04/01/99 GE Capital-SERVER ROOM CPQ MULI-ITEMS SEE INVOICE 90299269
65 05/01/99 Xxxxxxxx & Xxxxxxxx: Lexmark Optra SE 3455 Laser Printer
66 05/01/99 GE Capital- Server Room-combination 5 invoices
67 05/01/99 GE Capital- Server Room-HPC LJ 8000n/mn/24ppm/1200dpi/network, c
64 05/01/99 Xxxxxxxx & Xxxxxxxx: Lexmark Optra SE 3455 Laser Printer
92 09/01/96 Ent Ofc - Xerox Telecopier
93 07/01/97 Datamax - (2) Canon Fax Machines
88 11/01/95 Datamax - HP4+ Laser Printer
95 06/01/99 Xxxxxxxx & Xxxxxxxx-Lexmark Optra SE Laser Printer ESIOL
71 05/01/99 GE Captial-Server-cpq prol 5500r p2, smart array 3200, hd9.1gb,
14 02/01/99 Data Projections - Projector and remote control
16 03/01/99 GE Capital-Printer HPC LJ USDD001342 8000N/MN/24PPM/1200DPI
37 07/01/96 Boxlight - Projector
38 04/01/99 GE Capital-CAS FAX 5000 10/100MBS 8Line Fax XX
0000 Server located at Mediapolis, Inc.
E. Software-Purchased, net $16,000
=================
34
Sys No. 14. Acq. 15. Description
------- ---- -----------
Date
----
10 12/01/98 Mediapolis - Software License
F. Software-Developed, net $279,080
==================
Sys No. 16. Acq. 17. Description
------- ---- -----------
Date
----
1999 Customer service call center
G. Other
Various contract rights, intangible assets and the goodwill associated
with the xxxxXxxxxxxx.xxx e-commerce business.
35
SCHEDULE II
ASSUMED LIABILITIES
The amounts included represent the balance of the assumed liabilities as of June
30, 1999.
A. Accounts Payable $318,743
==================
B. Accrued Product Development
Mediapolis $242,200
Xxxxxx Xxxxxxxx 42,095
Global Solutions 26,723
==================
$311,018
==================
C. Accrued Compensation
Accrued payroll $69,616
Fringe benefits 42,380
Accrued vacation 49,791
Accrued bonus 325,000
Accrued payroll taxes 15,266
==================
$502,053
==================
D. Accrued Other
Adventures in Advertising $109,385
Xxxxxxxxx Research 62,000
The Arbor Group 18,265
Creative Producers 17,350
Executech 12,500
Remedy 10,000
Digital Impact, Inc. 5,000
Miscellaneous 33,854
==================
$268,354
==================
E. Other Long-Term Liabilities
Deferred taxes $3,756
==================
F. Additional Liabilities
PlanetRx will assume additional liabilities incurred post June 30, 1999
in the ordinary course of business in an aggregate amount up to
$750,000 (unless otherwise agreed to in writing by PlanetRx); provided
that PlanetRx shall not be obligated to assume any individual liability
incurred after the execution of this Agreement in an amount of $50,000
or more unless PlanetRx shall have approved of the incurrence of such
liability in writing.
