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EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (hereinafter called the "Merger
Agreement") is made as of May __, 1999, by and between XXXXX.XXX NETWORKS, a
California corporation ("Xxxxx.xxx"), and HEARST HOMEARTS, INC., a Delaware
corporation ("HomeArts"). Xxxxx.xxx and HomeArts are sometimes referred to as
the "Constituent Corporations."
The authorized capital stock of Xxxxx.xxx consists of ___________
(_________) shares of Common Stock, and _________ (________) shares of Preferred
Stock. The authorized capital stock of HomeArts, upon effectuation of the
transactions set forth in this Merger Agreement, will consist of One Hundred
Ninety Five Million (195,000,000) shares of Common Stock, $0.001 par value and
5,000,000 shares of Preferred Stock, $0.001 par value.
The directors of the Constituent Corporations deem it advisable and to
the advantage of the Constituent Corporations that Xxxxx.xxx merge into HomeArts
upon the terms and conditions herein provided.
NOW, THEREFORE, the parties do hereby adopt the plan of reorganization
encompassed by this Merger Agreement and do hereby agree that Xxxxx.xxx shall
merge into HomeArts on the following terms, conditions and other provisions:
1. TERMS AND CONDITIONS.
1.1 MERGER. Xxxxx.xxx shall be merged with and into HomeArts (the
"Merger"), and HomeArts shall be the surviving corporation (the "Surviving
Corporation") effective upon the date that this Merger Agreement is filed with
the Secretary of State of Delaware (the "Effective Date").
1.2 NAME CHANGE. On the Effective Date, the name of HomeArts shall
be Xxxxx.xxx Networks, Inc.
1.3 SUCCESSION. On the Effective Date, HomeArts shall continue its
corporate existence under the laws of the State of Delaware, and the separate
existence and corporate organization of Xxxxx.xxx, except insofar as it may be
continued by operation of law, shall be terminated and cease.
1.4 TRANSFER OF ASSETS AND LIABILITIES. On the Effective Date, the
rights, privileges, powers and franchises, both of a public as well as of a
private nature, of each of the Constituent Corporations shall be vested in and
possessed by the Surviving Corporation, subject to all of the disabilities,
duties and restrictions of or upon each of the Constituent Corporations; and all
and singular rights, privileges, powers and franchises of each of the
Constituent Corporations, and all property, real, personal and mixed, of 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; and all property, rights, privileges, powers and
franchises, and all and every other interest, shall be thereafter the property
of the Surviving Corporation as they were of the Constituent Corporations, and
the title to any real estate 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;
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provided, however, that the liabilities of the Constituent Corporations and of
their shareholders, directors and officers 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 existing or action or
proceeding pending by or against either of the Constituent Corporations may be
prosecuted to judgment as if the 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 debts, liabilities and duties had been incurred or contracted by it.
1.5 COMMON STOCK OF XXXXX.XXX AND HOMEARTS. On the Effective Date,
by virtue of the Merger and without any further action on the part of the
Constituent Corporations or their shareholders, each share of Common Stock of
Xxxxx.xxx issued and outstanding immediately prior thereto shall be converted
into one (1) fully paid and nonassessable share of the Common Stock of HomeArts.
Each share of Common Stock of HomeArts issued and outstanding immediately prior
thereto shall remain outstanding. No fractional shares of Common Stock shall be
issued upon conversion. If the conversion would result in the issuance of any
fractional shares, the Surviving Corporation shall, in lieu of issuing any
fractional shares, pay cash equal to the product of such fraction multiplied by
the Common Stock's fair market value (as determined by the Board of Directors)
on the date of conversion.
1.6 PREFERRED STOCK OF XXXXX.XXX AND HOMEARTS. On the Effective
Date, by virtue of the Merger and without any further action on the part of the
Constituent Corporations or their shareholders, each share of Preferred Stock of
Xxxxx.xxx issued and outstanding immediately prior thereto shall be converted
into one (1) fully paid and nonassessable share of Common Stock of HomeArts;
provided, however, if the Common Stock of HomeArts is priced below $10.00 per
share in the underwriting agreement immediately after the effectiveness of the
HomeArts' initial public offering (the "Pricing"), the Conversion Price for
such Series E Preferred Stock in effect immediately prior to the Pricing (as
set forth in Xxxxx.xxx's Amended and Restated Articles of Incorporation) shall
forthwith be adjusted to a price per share of such Common Stock of HomeArts as
determined in such Pricing and the conversion ratio for such Series E Preferred
Stock into HomeArts Common Stock shall be determined by the following fraction
(a) $10.00 divided by (b) such new Series E Conversion Price as adjusted.
1.7 STOCK CERTIFICATES. On and after the Effective Date, all of the
outstanding certificates which prior to that time represented shares of the
Common Stock or of the Preferred Stock of Xxxxx.xxx shall be deemed for all
purposes to evidence ownership of and to represent the shares of HomeArts into
which the shares of Xxxxx.xxx represented by such certificates have been
converted as herein provided and shall be so registered on the books and records
of the Surviving Corporation or its transfer agents. The registered owner of any
such out-standing stock certificate shall, until such certificate shall have
been surrendered for transfer or conversion or otherwise accounted for to the
Surviving Corporation or its transfer agent, have and be entitled to exercise
any voting and other rights with respect to and to receive any dividend and
other distributions upon the shares of HomeArts evidenced by such outstanding
certificate as above provided.
1.8 OPTIONS. On the Effective Date, the Surviving Corporation will
assume and continue Xxxxx.xxx's 1994 Stock Option Plan, 1998 Amended and
Restated Equity Incentive Plan, the 1999 Employee Stock Purchase Plan and the
outstanding and unexercised portions of all options to purchase Common Stock of
Xxxxx.xxx, including without limitation all options outstanding under such stock
plans and any other outstanding options, shall be converted into options of
HomeArts, such that an option for one (1) share of Xxxxx.xxx shall be converted
into an option for one (1) share of HomeArts, with no change in the exercise
price of the HomeArts option. No other changes in the terms and conditions of
such options will occur. Effective on the Effective Date, HomeArts hereby
assumes the outstanding and unexercised portions of such options and the
obligations of Xxxxx.xxx with respect thereto.
1.9 WARRANTS. On the Effective Date, the Surviving Corporation will
assume and continue warrants of Xxxxx.xxx, and the outstanding and unexercised
portions of all warrants shall be converted into warrants of HomeArts, such that
a warrant for one (1) share of
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Xxxxx.xxx shall be converted into a warrant for one (1) share of HomeArts, with
no change in the exercise price of the HomeArts warrant. No other changes in the
terms and conditions of such warrants will occur. Effective on the Effective
Date, HomeArts hereby assumes the outstanding and unexercised portions of such
warrants and the obligations of Xxxxx.xxx with respect thereto.
1.10 EMPLOYEE BENEFIT PLANS. On the Effective Date, the Surviving
Corporation shall assume all obligations of Xxxxx.xxx under any and all employee
benefit plans in effect as of such date. On the Effective Date, the Surviving
Corporation shall adopt and continue in effect all such employee benefit plans
upon the same terms and conditions as were in effect immediately prior to the
Merger and shall reserve that number of shares of HomeArts Common Stock with
respect to each such employee benefit plan as is proportional to the number of
shares of Xxxxx.xxx Common Stock (if any) so reserved on the Effective Date.
2. CHARTER DOCUMENTS, DIRECTORS AND OFFICERS.
2.1 CERTIFICATE OF INCORPORATION AND BYLAWS. The Certificate of
Incorporation of HomeArts in effect on the Effective Date shall continue to be
the Certificate of Incorporation of the Surviving Corporation. The Bylaws of
HomeArts in effect on the Effective Date shall continue to be the Bylaws of the
Surviving Corporation
2.2 DIRECTORS. Upon the Effective Date, the current Board of
Directors of HomeArts shall resign and the Board of Directors of the Surviving
Corporation shall be replaced by the current Management Committee of Xxxxx.xxx
Networks, LLC. Such directors shall serve until the expiration of their terms
and until their successors are elected and qualified.
2.3 OFFICERS. The officers of HomeArts immediately prior to the
Effective Date shall resign on the Effective Date and the officers of Xxxxx.xxx
immediately preceding the Effective Date shall become the officers of the
Surviving Corporation on and after the Effective Date to serve at the pleasure
of its Board of Directors.
3. MISCELLANEOUS.
3.1 FURTHER ASSURANCES. From time to time, and when required by the
Surviving Corporation or by its successors and assigns, there shall be executed
and delivered on behalf of Xxxxx.xxx such deeds and other instruments, and there
shall be taken or caused to be taken by it such further and other action, as
shall be appropriate or necessary in order to vest or perfect in or to conform
of record or otherwise, in the Surviving Corporation the title to and possession
of all the property, interests, assets, rights, privileges, immunities, powers,
franchises and authority of Xxxxx.xxx and otherwise to carry out the purposes of
this Merger Agreement, and the officers and directors of the Surviving
Corporation are fully authorized in the name and on behalf of Xxxxx.xxx or
otherwise to take any and all such action and to execute and deliver any and all
such deeds and other instruments.
3.2 AMENDMENT. At any time before or after approval by the
shareholders of Xxxxx.xxx and HomeArts, this Merger Agreement may be amended in
any manner (except that, after the approval of the Merger Agreement by the
shareholders of Xxxxx.xxx and HomeArts, the principal terms may not be amended
without the further approval of the shareholders of Xxxxx.xxx and HomArts) as
may be determined in the judgment of the respective Board of Directors of
HomeArts and Xxxxx.xxx to be necessary, desirable, or
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expedient in order to clarify the intention of the parties hereto or to effect
or facilitate the purpose and intent of this Merger Agreement.
3.3 CONDITIONS TO MERGER. The obligations of the Constituent
Corporations to effect the transactions contemplated hereby is subject to
satisfaction of the following conditions (any or all of which may be waived by
either of the Constituent Corporations in its sole discretion to the extent
permitted by law):
(a) the Merger shall have been approved by the shareholders
of Xxxxx.xxx in accordance with applicable provisions of the California
Corporations Code of the State of California;
(b) the Merger shall have been approved by the stockholders
of HomeArts in accordance with the applicable provisions of the General
Corporation Law of the State of Delaware; and
(c) any and all material consents, permits, authorizations,
approvals, and orders for the consummation of the Merger shall have been
obtained.
3.4 ABANDONMENT OR DEFERRAL. At any time before the Effective Date,
this Merger Agreement may be terminated and the Merger may be abandoned by the
mutual agreement of the Board of Directors of both Xxxxx.xxx and HomeArts.
Notwithstanding the approval of this Merger Agreement by the shareholders of
Xxxxx.xxx or the stockholders of HomeArts, the consummation of the Merger may be
deferred for a reasonable period of time if, by mutual agreement of the Board of
Directors of both Xxxxx.xxx and HomeArts, such action would be in the best
interest of such corporations. In the event of termination of this Merger
Agreement, this Merger Agreement shall become void and of no effect and there
shall be no liability on the part of either Constituent Corporation or its Board
of Directors or shareholders with respect thereto.
3.5 COUNTERPARTS. In order to facilitate the filing and recording of
this Merger Agreement, the same may be executed in any number of counterparts,
each of which shall be deemed to be an original.
IN WITNESS WHEREOF, this Merger Agreement, having first been duly
approved by the Board of Directors of Xxxxx.xxx and HomeArts, is hereby executed
on behalf of each said corporation and attested by their respective officers
thereunto duly authorized.
XXXXX.XXX NETWORKS,
a California corporation
By: /s/ Xxxxxxx XxXxxxxx
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Xxxxxxx XxXxxxxx
President
ATTEST:
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By: /s/ Xxxxx Pack
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Xxxxx Pack
Secretary
HEARST HOMEARTS, INC.,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
President
ATTEST:
By: /s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx
Secretary
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