AGREEMENT AND PLAN OF MERGER
among
AMERICA ONLINE, INC.,
MQ ACQUISITION, INC.
and
MAPQUEST.COM, INC.
Dated as of December 21, 1999
TABLE OF CONTENTS
Page
ARTICLE I THE MERGER 2
1.1 The Merger 2
1.2 Effective Time 2
1.3 Effect of the Merger 2
1.4 Certification of Incorporation; Bylaws 2
1.5 Directors and Officers 2
1.6 Conversion of Company Common Stock, Etc 3
1.7 Cancellation of Treasury Stock and Parent-Owned Stock 3
1.8 Stock Options and Warrants 3
1.9 Capital Stock of Merger Sub 4
1.10 Adjustments to Exchange Ratio 4
1.11 Fractional Shares 4
1.12 Further Ownership Rights in Company Common Stock 6
1.13 Closing 6
1.14 Lost, Stolen or Destroyed Certificates 7
1.15 Tax Consequences 7
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE COMPANY 7
2.1 Organization and Qualification; Subsidiaries 7
2.2 Certificate of Incorporation and Bylaws 8
2.3 Capitalization 8
2.4 Authority; Enforceability 10
2.5 Required Vote 10
2.6 No Conflict; Required Filings and Consents 11
2.7 Material Agreements 12
2.8 Compliance 14
2.9 SEC Filings; Financial Statements 14
2.10 Absence of Certain Changes or Events 15
2.11 No Undisclosed Liabilities 15
2.12 Absence of Litigation 15
2.13 Employee Benefit Plans 16
2.14 Employment and Labor Matters 18
2.15 Registration Statement; Proxy Statement/Prospectus 19
2.16 Absence of Restrictions on Business Activities 20
2.17 Title to Assets; Leases 20
2.18 Taxes 21
2.19 Environmental Matters 23
2.20 Intellectual Property 24
2.21 Year 2000 Compliance and Security 26
2.22 Insurance 27
2.23 No Restrictions on the Merger; Takeover Statutes 27
2.24 Pooling; Tax Matters 28
2.25 Brokers 28
2.26 Certain Business Practices 28
2.27 Interested Party Transactions 29
2.28 Opinion of Financial Advisor 29
ARTICLE III REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB 29
3.1 Organization and Qualification 29
3.2 Capitalization 30
3.3 Authority; Enforceability 30
3.4 No Conflict; Required Filings and Consents 30
3.5 SEC Filings; Financial Statements 31
3.6 Absence of Litigation 31
3.7 Registration Statement; Proxy Statement/Prospectus 32
3.8 Pooling; Tax Matters 32
ARTICLE IV CONDUCT OF BUSINESS PENDING THE MERGER 32
4.1 Conduct of Business by the Company Pending the Merger 32
4.2 Solicitation of Other Proposals 35
ARTICLE V ADDITIONAL AGREEMENTS 37
5.1 Registration Statement; Proxy Statement/Prospectus 37
5.2 Meeting of Company's Stockholders 38
5.3 Access to Information; Confidentiality 39
5.4 Reasonable Best Efforts; Further Assurances 40
5.5 Stock Options and Stock Plan; Options 41
5.6 Employee Benefits 42
5.7 Pooling; Reorganization 43
5.8 Notification of Certain Matters 44
5.9 Listing on the New York Stock Exchange 45
5.10 Public Announcements 45
5.11 Takeover Laws 45
5.12 Accountant's Letters 45
5.13 Indemnification; Directors and Officer Insurance 46
5.14 Stockholders Agreement 46
5.15 Option Agreement 47
5.16 Release Agreements 47
5.17 Optionholder Letters 47
ARTICLE VI CONDITIONS OF MERGER 47
6.1 Conditions to Obligation of Each Party to Effect the Merger 47
6.2 Additional Conditions to Obligations of Parent and
Merger Sub 48
6.3 Additional Conditions to Obligations of the Company 50
ARTICLE VII TERMINATION, AMENDMENT AND WAIVER 50
7.1 Termination 50
7.2 Effect of Termination 52
7.3 Fees and Expenses 52
7.4 Amendment 53
7.5 Waiver 53
ARTICLE VIII GENERAL PROVISIONS 54
8.1 Survival of Representations and Warranties 54
8.2 Notices 54
8.3 Disclosure Schedules 55
8.4 Certain Definitions 55
8.5 Interpretation 58
8.6 Severability 59
8.7 Entire Agreement 59
8.8 Assignment 59
8.9 Parties in Interest 59
8.10 Failure or Indulgence Not Waiver; Remedies Cumulative 59
8.11 Governing Law; Enforcement 59
8.12 Counterparts 60
EXHIBITS
EXHIBIT A - Form of Stockholders Agreement
EXHIBIT B - Form of Stock Option Agreement
EXHIBIT C - Form of Company Affiliate Pooling Agreement
EXHIBIT D - Form of Release Agreement
Index of Defined Terms
Acquisition Proposal 4.2(a)
Affiliate 8.4(a)
Agreement Preamble
Approvals 2.1(a)
Balance Sheet 8.4(b)
Beneficial owner 8.4(c)
Blue Sky Laws 2.6(b)
Business Day 8.4(d)
Certificate of Merger 1.2
Certificates 1.12(c)
Closing 1.14
Closing Date 1.14
COBRA Coverage 2.13(d)
Code Recitals
Company Preamble
Company Affiliate Pooling Agreement 5.7(b)
Company Common Stock 1.6(a)
Company Disclosure Schedule 8.4(e)
Company Employee 5.6(a)
Company Financial Advisors 2.25
Company Preferred Stock 2.3(a)
Company Representatives 4.2(a)
Company SEC Reports 2.9(a)
Company Stipulated Expenses 7.3(d)
Company Stockholders' Meeting 2.15
Company's Accountants 2.24(c)
Company's D&O Insurance 5.13(b)
Confidentiality Agreement 5.3(b)
Contract 8.4(f)
Control 8.4(g)
Court 8.4(h)
Determination Date 1.6(b)
DGCL Recitals
Effective Time 1.2
Employee Plans 2.13(a)
Environmental Laws 2.19(c)
Environmental Permits 2.19(c)
Environmental Report 2.19(c)
ERISA 2.13(a)
ERISA Affiliate 2.13(a)
Exchange Act 2.6(b)
Exchange Agent 8.4(i)
Exchange Ratio 1.6(a)
Foreign Competition Laws 8.4(j)
GAAP 2.9(b)
Governmental Authority 8.4(k)
HSR Act 2.6(b)
Infringe 2.20(f)
Intellectual Property 8.4(l)
IRS 2.13(b)
Knowledge 8.4(m)
Law 8.4(n)
License Agreements 2.20(c)
Lien 8.4(o)
Litigation 8.4(p)
Material Adverse Effect 8.4(q)
Material Agreements 2.7(a)
Material Subsidiary 4.2(c)
Materials of Environmental Concern 2.19(c)
Maximum Premium 5.13(b)
Merger Recitals Merger Consideration 1.6(a)
Merger Sub Preamble
Merger Sub Common Stock 1.9
NYSE 1.6(b)
Option Agreement Recitals
Option Plans 1.8(a)
Order 8.4(r)
Outstanding Employee Options 2.3(a)
Parent Preamble
Parent Affiliate Pooling Agreement 5.7(d)
Parent Common Stock 1.6(a)
Parent Representatives 5.3(a)
Parent Right 1.6(b)
Parent Rights Agreement 1.6(b)
Parent SEC Reports 3.5(a)
Parent Stipulated Expenses 7.3(c)
Parent's Accountants 5.7(c)
Person 8.4(s)
Proxy Statement 2.15
Purchase Plan 2.3(a)
Real Property 2.17(b)
Registration Statement 2.15
Regulation 8.4(t)
Related Agreements 6.2(f)
Release Agreements 5.16
SEC 2.9(a)
Securities Act 2.6(b)
Stockholders Agreement Recitals
Software 8.4(u)
Stock-Based Rights 2.3(c)
Subsidiaries 8.4(v)
Subsidiary 8.4(v)
Superior Proposal 4.2(c)
Surviving Corporation 1.1
Systems 2.21(a)
Tax 2.18
Tax Returns 2.18
Taxes 2.18
Termination Fee 7.3(b)
WARN Act 2.14(b)
Year 2000 Compliant 2.21(a)
1995 Plan 1.8(a)
1999 Plan 1.8(a)
401(k) Plan 5.6(c)
AGREEMENT AND PLAN OF MERGER, dated as of December 21, 1999
(the "Agreement") among AMERICA ONLINE, INC., a Delaware corporation ("Parent"),
MQ ACQUISITION, INC., a Delaware corporation and a wholly owned subsidiary of
Parent ("Merger Sub"), and ANATOLIA, INC., a Delaware corporation (the
"Company").
WHEREAS, the Boards of Directors of Parent, Merger Sub and the
Company have each determined that it is in the best interests of their
respective Stockholders for Parent to acquire the Company upon the terms and
subject to the conditions set forth herein;
WHEREAS, in furtherance of such acquisition, the Boards of
Directors of Parent, Merger Sub and the Company have each approved the merger
(the "Merger") of Merger Sub with and into the Company, in accordance with the
General Corporation Law of the State of Delaware (the "DGCL") and subject to the
conditions set forth herein, which Merger will result in, among other things,
the Company becoming a wholly owned subsidiary of Parent;
WHEREAS, as a condition to the willingness of, and an
inducement to, Parent and Merger Sub to enter into this Agreement,
contemporaneously with the execution and delivery of this Agreement, certain
holders of Company Common Stock (as defined herein), are entering into an
agreement dated as of the date hereof (the "Stockholders Agreement") in the form
of Exhibit A attached hereto, providing for certain actions relating to the
transactions contemplated by this Agreement;
WHEREAS, as a condition to the willingness of, and an
inducement to, Parent and Merger Sub to enter into this Agreement,
contemporaneously with the execution and delivery of this Agreement, the Company
is entering into a Stock Option Agreement dated as of the date hereof (the
"Option Agreement") in the form of Exhibit B attached hereto, granting Parent an
irrevocable option to purchase up to that number of shares of Company Common
Stock as shall represent 10% (by voting power) of the total outstanding Company
Common Stock, on the terms and subject to the conditions set forth therein;
WHEREAS, for federal income tax purposes, it is intended that
the Merger shall qualify as a tax-free reorganization within the meaning of
Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code");
and
WHEREAS, for accounting purposes, it is intended that the
Merger shall qualify for "pooling-of-interests" treatment.
NOW, THEREFORE, in consideration of the foregoing and the
mutual representations, warranties, covenants and agreements herein contained,
and intending to be legally bound hereby, Parent, Merger Sub and the Company
hereby agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger. At the Effective Time (as defined in Section 1.2)
and subject to and upon the terms and conditions of this Agreement and the DGCL,
(a) Merger Sub shall be merged with and into the Company, (b) the separate
corporate existence of Merger Sub shall cease, and (c) the Company shall, as the
surviving corporation in the Merger, continue its existence under Delaware law
as a wholly owned subsidiary of Parent. The Company as the surviving corporation
after the Merger is hereinafter sometimes referred to as the "Surviving
Corporation."
1.2 Effective Time. As promptly as practicable after the
satisfaction or, to the extent permitted hereunder, waiver of the conditions set
forth in Article VI, the parties hereto shall cause the Merger to be consummated
by filing a certificate of merger (the "Certificate of Merger") with the
Secretary of State of the State of Delaware, in such form as required by and
executed in accordance with the relevant provisions of the DGCL (the date and
time of such filing, or such later date and time as may be specified in the
Certificate of Merger by mutual agreement of Parent, Merger Sub and the Company,
being the "Effective Time").
1.3 Effect of the Merger. At the Effective Time, the effect of the
Merger shall be as provided in the applicable provisions of the DGCL, including
Section 259 thereof. Without limiting the generality of the foregoing, and
subject thereto, at the Effective Time, all the assets, property, rights,
privileges, immunities, powers and franchises of the Company and Merger Sub
shall vest in the Surviving Corporation, and all debts, liabilities and duties
of the Company and Merger Sub shall become the debts, liabilities and duties of
the Surviving Corporation.
1.4 Certification of Incorporation; Bylaws. Unless otherwise
determined by Parent prior to the Effective Time, at the Effective Time and
without any further action on the part of the parties hereto, (a) the
Certificate of Incorporation of Merger Sub shall be the Certificate of
Incorporation of the Surviving Corporation until thereafter amended as provided
by the DGCL; provided that Article First of the Certificate of Incorporation of
Merger Sub shall be amended to read in its entirety as follows: "The name of the
corporation is "MapQuest.com, Inc." and (b) the Bylaws of Merger Sub shall be
the Bylaws of the Surviving Corporation until thereafter amended as provided by
the DGCL.
1.5 Directors and Officers. The directors of Merger Sub immediately
prior to the Effective Time shall be the initial directors of the Surviving
Corporation, each to hold office in accordance with the Certificate of
Incorporation and the Bylaws of the Surviving Corporation until their respective
successors are duly elected or appointed and qualified or until their earlier
death, resignation or removal in accordance with the Surviving Corporation's
Certificate of Incorporation and Bylaws. The officers of the Company immediately
prior to the Effective Time shall be the initial officers of the Surviving
Corporation.
1.6 Conversion of Company Common Stock, Etc. At the Effective Time,
by virtue of the Merger and without any action on the part of the parties hereto
or the holders of the following securities:
(a) Subject to the provisions of this Article I, each share of
Common Stock, par value $.001 per share, of the Company (the "Company Common
Stock") issued and outstanding immediately prior to the Effective Time (other
than any shares of the Company Common Stock to be canceled pursuant to Section
1.7 and subject to Section 1.10 and Section 1.1) will be converted automatically
into the right to receive 0.31558 of a fully paid and nonassessable share (the
"Exchange Ratio") of the Common Stock, par value $0.01 per share (the "Parent
Common Stock"), of Parent (and a related portion of a Parent Right in accordance
with Section 1.6(b) hereof)(the "Merger Consideration").
(b) Each share of the Parent Common Stock to be issued upon
conversion of the Company Common Stock in accordance with Section 1.6(a) shall
include the corresponding percentage of a right (a "Parent Right") to purchase
shares of Series A-1 Junior Participating Preferred Stock, $.01 par value, of
Parent pursuant to the Rights Agreement dated as of May 12, 1998, as amended
(the "Parent Rights Agreement"), between Parent and BankBoston, N.A., as Rights
Agent. Prior to the Distribution Date (as defined in the Parent Rights
Agreement), all references in this Agreement to the Parent Common Stock shall be
deemed to include Parent Rights.
(c) Each share of the Company Common Stock issued and
outstanding immediately prior to the Effective Time shall automatically be
redeemed and canceled and shall cease to exist, and each holder of a certificate
representing any such Company Common Stock shall cease to have any rights with
respect thereto, except the right to receive the Merger Consideration and any
cash in lieu of fractional shares of Parent Common Stock to be issued or paid in
consideration therefor upon surrender of such certificate in accordance with
Section 1.12 hereof, without interest.
1.7 Cancellation of Treasury Stock and Parent-Owned Stock.
(a) Each share of the Company Common Stock held in the treasury
of the Company, if any, and each share of Company Common Stock, if any, owned by
Parent or Merger Sub, in each case immediately prior to the Effective Time,
shall be canceled and extinguished without any conversion thereof and no payment
or distribution shall be made with respect thereto.
1.8 Stock Options and Warrants.
(a) At the Effective Time, all options to purchase Company
Common Stock then outstanding under the Company's 1995 Stock Option Plan, as
amended (the "1995 Plan"), the Company's 1999 Stock Plan, as amended (the "1999
Plan" and, together with the 1995 Plan, the "Option Plans") by virtue of the
Merger and without any action on the part of the holder thereof, shall be
assumed by Parent in accordance with Section 5.5.
(b) The Company and its Board of Directors shall promptly take
all actions necessary to ensure that following the Effective Time no holder of
any options or other rights pursuant to, nor any participant in or party to, the
Option Plans or any other Employee Plan (as defined herein) or other plan,
program, arrangement, agreement or other commitment providing for the issuance
or grant of any interest in respect of the capital stock of the Company or any
Subsidiary of the Company will have any rights thereunder to acquire equity
securities, or any right to payment in respect of the equity securities, of
Parent, the Company, or the Surviving Corporation or any of their Subsidiaries,
except as provided herein.
1.9 Capital Stock of Merger Sub. Each share of Common Stock, par
value $0.01 per share, of Merger Sub (the "Merger Sub Common Stock") issued and
outstanding immediately prior to the Effective Time shall be automatically
converted into one validly issued, fully paid and nonassessable share of common
stock of the Surviving Corporation and shall thereafter constitute all of the
issued and outstanding capital stock of the Surviving Corporation. Each stock
certificate of Merger Sub evidencing ownership of any shares of Merger Sub
Common Stock shall continue to evidence ownership of such shares of capital
stock of the Surviving Corporation.
1.10 Adjustments to Exchange Ratio. Without limiting any other
provision of this Agreement, the Exchange Ratio shall be adjusted to reflect
fully the effect of any stock split, reverse split, stock dividend (including
any dividend or distribution of securities convertible into Parent Common Stock
or Company Common Stock), reorganization, recapitalization or other like change
with respect to Parent Common Stock or Company Common Stock occurring after the
date hereof and prior to the Effective Time.
1.11 Fractional Shares. No certificates or scrip representing
fractional shares of Parent Common Stock shall be issued in connection with the
Merger, and such fractional interests will not entitle the owner thereof to any
rights of a Stockholder of Parent. In lieu thereof, each holder of shares of
Company Common Stock exchanged pursuant to Section 1.6 or of options or warrants
exchanged pursuant to Section 1.8(b) who would otherwise be entitled to a
fraction of a share of Parent Common Stock (after aggregating all fractional
shares of Parent Common Stock to have been otherwise received by such holder)
shall receive from Parent an amount of cash (rounded down to the nearest whole
cent and without interest) equal to the product of such fractional part of a
share of Parent Common Stock multiplied by the average closing price per share
of Parent Common Stock (rounded to the nearest cent) on the New York Stock
Exchange, Inc. (the "NYSE") (as reported in the Wall Street Journal, or, if not
reported therein, any other authoritative source selected by Parent) for the 20
trading days ending on the third trading day immediately prior to (and excluding
the date of) the Effective Time.
1.12 Surrender of Certificates.
(a) Exchange Agent. Prior to the Effective Time, Parent shall
designate a bank or trust company to act as the Exchange Agent in the Merger.
(b) Parent to Provide Common Stock. When and as needed, Parent
shall make available to the Exchange Agent for exchange in accordance with this
Article I, through such reasonable procedures as Parent may adopt, sufficient
shares of Parent Common Stock to be exchanged pursuant to Section 1.6.
(c) Exchange Procedures. Promptly after the Effective Time, the
Surviving Corporation shall cause to be mailed to each holder of record of a
certificate or certificates (the "Certificates") that represented as of the
Effective Time outstanding shares of Company Common Stock to be exchanged
pursuant to Section 1.6, a letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates shall
pass, only upon delivery of the Certificates to the Exchange Agent and shall be
in such form and have such other provisions as Parent may reasonably specify)
and instructions for use in effecting the surrender of the Certificates in
exchange for certificates representing shares of Parent Common Stock. Upon
surrender of a Certificate to the Exchange Agent, together with such letter of
transmittal, duly completed and validly executed in accordance with the
instructions thereto, and such other documents as may be required pursuant to
such instructions, the holder of such Certificate shall be entitled to receive
in exchange therefor a certificate representing the number of whole shares of
Parent Common Stock and payment in lieu of fractional shares which such holder
has the right to receive pursuant to Sections 1.6 and 1.11, after giving effect
to any required (as defined herein) Tax withholdings, and the Certificate so
surrendered shall forthwith be canceled. At any time following 6 months after
the Effective Time, all or any number of shares of Parent Common Stock (and any
or all cash payable in lieu of fractional shares of Parent Common Stock)
deposited with or made available to the Exchange Agent pursuant to Section
1.12(b), which remain undistributed to the holders of the Certificates
representing shares of Company Common Stock, shall be delivered to Parent upon
demand, and thereafter such holders of unexchanged shares of Company Common
Stock shall be entitled to look only to Parent (subject to abandoned property,
escheat or other similar laws) only as general creditors thereof with respect to
the shares of Parent Common Stock for payment upon due surrender of their
Certificates.
(d) Distributions With Respect to Unexchanged Shares. No
dividends or other distributions declared or made after the Effective Time with
respect to shares of Parent Common Stock with a record date after the Effective
Time will be paid to the holder of any unsurrendered Certificate with respect to
the whole shares of Parent Common Stock represented thereby until the holder of
record of such Certificate shall surrender such Certificate. Subject to
applicable law, following surrender of any such Certificate, there shall be paid
to the record holder of the certificates representing whole shares of Parent
Common Stock issued in exchange therefor, without interest, at the time of such
surrender, the amount of dividends or other distributions with a record date
after the Effective Time and payable between the Effective Time and the time of
such surrender with respect to such whole shares of Parent Common Stock.
(e) Transfers of Ownership. If any certificate for shares of
Parent Common Stock is to be issued in a name other than the name in which the
Certificate surrendered in exchange therefor is registered, it will be a
condition of the issuance thereof that (i) the Certificate so surrendered will
be properly endorsed and otherwise in proper form for transfer and that the
Person requesting such exchange will have paid any transfer or other Taxes
required by reason of the issuance of a certificate for shares of Parent Common
Stock in a name other than the name of the registered holder of the Certificate
surrendered or (ii) established to the satisfaction of Parent, or any agent
designated by Parent, that such Tax has been paid or is not applicable.
(f) No Liability. Notwithstanding anything to the contrary in
this Agreement, none of the Exchange Agent, Parent, the Merger Sub or the
Surviving Corporation shall be liable to a holder of a Certificate for any
Parent Common Stock (and any cash payable for fractional shares of Parent Common
Stock or any other amount due, if any) that was properly delivered to a public
official pursuant to any applicable abandoned property, escheat or similar Law.
(g) Withholding of Tax. Parent or the Exchange Agent will be
entitled to deduct and withhold from the consideration otherwise payable
pursuant to this Agreement to any holder of Company Common Stock such amounts as
Parent (or any Affiliate thereof) or the Exchange Agent shall determine in good
faith they are required to deduct and withhold with respect to the making of
such payment under the Code, or any provision of federal, state, local or
foreign Tax Law. To the extent that amounts are so withheld by Parent or the
Exchange Agent, such withheld amounts will be treated for all purposes of this
Agreement as having been paid to the holder of the Company Common Stock in
respect of whom such deduction and withholding were made by Parent.
1.13 Further Ownership Rights in Company Common Stock. All shares of
Parent Common Stock issued upon the surrender for exchange of Company Common
Stock in accordance with the terms of this Article I (including any cash paid in
respect thereof) shall be deemed to have been issued in full satisfaction of all
rights pertaining to such Company Common Stock. At the Effective Time, the stock
transfer books of the Company shall be closed, and thereafter there shall be no
further registration of transfers of shares of Company Common Stock on the
records of the Surviving Corporation. From and after the Effective Time, the
holders of Certificates evidencing ownership of shares of Company Common Stock
outstanding shall cease to have any rights with respect to such shares of
Company Common Stock except as otherwise provided for herein. If, after the
Effective Time, Certificates are presented to the Surviving Corporation for any
reason, they shall be canceled and exchanged as provided in this Article I.
1.14 Closing. Unless this Agreement shall have been terminated and
the transactions contemplated by this Agreement abandoned pursuant to the
provisions of Article VII, and subject to the provisions of Article VI, the
closing of the Merger (the "Closing") will take place at 10:00 a.m. (Eastern
time) on a date (the "Closing Date") to be mutually agreed upon by the parties,
which date shall be not later than the third Business Day after all the
conditions set forth in Article VI shall have been satisfied (or waived in
accordance with Section 7.5, to the extent the same may be waived), unless
another time and/or date is agreed by the parties hereto. The Closing shall take
place at the offices of Simpson Thacher & Bartlett, 425 Lexington Avenue, New
York, New York or such other place as the parties hereto otherwise agree.
1.15 Lost, Stolen or Destroyed Certificates. In the event any
Certificates evidencing Company Common Stock shall have been lost, stolen or
destroyed, the Exchange Agent shall issue in exchange for such lost, stolen or
destroyed Certificates, upon the making of an affidavit of that fact by the
holder thereof, such shares of Parent Common Stock and cash for fractional
shares, if any, as may be required pursuant to Section 1.11; provided, however,
that Parent may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen or destroyed certificates to
deliver a bond in such sum as it may reasonably direct as indemnity against any
claim that may be made against Parent or the Exchange Agent with respect to the
Certificates alleged to have been lost, stolen or destroyed.
1.16 Tax Consequences. For federal income tax purposes, the parties
intend that the Merger be treated as a reorganization within the meaning of
Section 368(a) of the Code, and that this Agreement shall be, and is hereby,
adopted as a plan of reorganization for purposes of Section 368 of the Code. The
parties shall not take a position on any Tax Return (as defined herein)
inconsistent with this Section 1.16.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent and Merger Sub
as follows:
2.1 Organization and Qualification; Subsidiaries.
(a) The Company is a corporation duly organized, validly
existing and in good standing under Delaware law and has all the requisite
corporate power and authority, and is in possession of all franchises, grants,
authorizations, licenses, permits, easements, consents, waivers, qualifications,
certificates, Orders (as defined herein) and approvals (collectively,
"Approvals") necessary to own, lease and operate its properties and to carry on
its business as it is now being conducted, except for such Approvals, the
failure of the Company to be in possession of could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. The Company
is duly qualified or licensed as a foreign corporation to do business, and is in
good standing, in each jurisdiction where the character of the properties owned,
leased or operated by it or the nature of its activities makes such
qualification or licensing necessary, except where the failure to be so
qualified could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
(b) Each Subsidiary of the Company is a legal entity, duly
organized, validly existing and in good standing under the laws of its
respective jurisdiction of incorporation or organization and has all the
requisite power and authority, and is in possession of all Approvals necessary
to own, lease and operate its properties and to carry on its business as it is
now being conducted. Each Subsidiary is duly qualified or licensed as a foreign
corporation to do business, and is in good standing, in each jurisdiction where
the character of the properties owned, leased or operated by it or the nature of
its activities makes such qualification or licensing necessary, except where the
failure to be so qualified could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(c) Section 2.1(c) of the Company Disclosure Schedule sets
forth, as of the date hereof, a true and complete list of all of the Company's
directly and indirectly owned Subsidiaries, together with the jurisdiction of
incorporation or organization of each Subsidiary and the percentage of each
Subsidiary's outstanding capital stock or other equity or other interest owned
by the Company or another Subsidiary of the Company. Except as set forth in
Section 2.1(c) of the Company Disclosure Schedule, neither the Company nor any
of its Subsidiaries owns any equity or similar interest in, or any interest
convertible into or exchangeable or exercisable for, directly or indirectly, any
equity or similar interest in, any Person.
2.2 Certificate of Incorporation and Bylaws. The Company has
heretofore furnished to Parent a true and complete copy of each of its and each
of its Subsidiaries' Certificate of Incorporation and Bylaws or equivalent
organizational documents, as amended or restated to the date hereof. Such
Certificate of Incorporation and Bylaws and equivalent organizational documents
of the Company and each of its Subsidiaries are in full force and effect, and no
other organizational documents are applicable to or binding upon the Company or
its Subsidiaries.
2.3 Capitalization.
(a) The authorized capital of the Company consists of
105,000,000 shares, divided into 100,000,000 shares of Company Common Stock and
5,000,000 shares of preferred stock, par value $.01 per share (the "Company
Preferred Stock"). As of December 20, 1999, (i) 35,716,607 shares of Company
Common Stock were issued and outstanding; (ii) no shares of Company Preferred
Stock were issued or outstanding; (iii) no shares of Company Common Stock were
held in the treasury of the Company; (iv) no shares of Company Common Stock were
held by any Subsidiary of the Company; (v) 5,863,086 shares of Company Common
Stock were duly reserved for future issuance pursuant to employee stock options
granted pursuant to the Option Plans (the "Outstanding Employee Options"); (vi)
1,755,000 shares of Company Common Stock were duly reserved for future issuance
pursuant to the Purchase Plan; and (vii) 3,571,661 shares of Company Common
Stock were reserved for issuance pursuant to the Option Agreement. None of the
outstanding shares of Company Common Stock are subject to, nor were they issued
in violation of any, purchase option, call option, right of first refusal,
preemptive right, subscription right or any similar right. Except as set forth
above and in Section 2.3(a) of the Company Disclosure Schedule, as of the date
hereof, no shares of voting or non-voting capital stock, other equity interests,
or other voting securities of the Company were issued, reserved for issuance or
outstanding. Except as described in Section 2.3(a) of the Company Disclosure
Schedule, all outstanding options to purchase Company Common Stock were granted
under Company's Option Plans and the Option Agreement. Section 2.3(a) of the
Company Disclosure Schedule lists all outstanding options and warrants to
purchase Company Common Stock, the record holder thereof and the exercise prices
thereof. No payroll deductions have been made and no amounts are held in any
participant accounts under the Company's Employee Stock Purchase Plan (the
"Purchase Plan"), no Company Common Stock or options to purchase Company Common
Stock have been granted under the Purchase Plan and the Purchase Plan is not in
effect. All outstanding shares of capital stock of the Company are, and all
shares which may be issued upon the exercise of stock options and warrants will
be, and all shares which may be issued pursuant to the Option Agreement will be,
when issued, duly authorized, validly issued, fully paid and nonassessable and
not subject to any kind of preemptive (or similar) rights. There are no bonds,
debentures, notes or other indebtedness of the Company with voting rights (or
convertible into, or exchangeable for, securities with voting rights) on any
matters on which Stockholders of the Company may vote.
(b) Section 2.3(b) of the Company Disclosure Schedule sets forth
the number of authorized and outstanding shares of capital stock, and ownership
thereof, of each of the Company's Subsidiaries. All of the outstanding shares of
capital stock of each of the Company's Subsidiaries have been duly authorized,
validly issued, fully paid and nonassessable, are not subject to, and were not
issued in violation of, any preemptive (or similar) rights, and are owned, of
record and beneficially, by the Company or one of its direct or indirect
Subsidiaries, free and clear of all Liens whatsoever. Except as set forth in
Section 2.3(b) of the Company Disclosure Schedule, there are no restrictions of
any kind which prevent the payment of dividends by any of the Company's
Subsidiaries, and neither the Company nor any of its Subsidiaries is subject to
any obligation or requirement to provide funds for or to make any investment (in
the form of a loan or capital contribution) to or in any Person.
(c) Except as described in Section 2.3(c) of the Company
Disclosure Schedule, as of the date hereof, there are no outstanding securities,
options, warrants, calls, rights, convertible or exchangeable securities,
commitments, agreements, arrangements or undertakings of any kind (contingent or
otherwise) to which the Company or any of its Subsidiaries is a party or by
which any of them is bound obligating the Company or any of its Subsidiaries to
issue, deliver or sell, or cause to be issued, delivered or sold, additional
shares of capital stock or other voting securities of the Company or of any of
its Subsidiaries or obligating the Company or any of its Subsidiaries to issue,
grant, extend or enter into any such security, option, warrant, call, right,
commitment, agreement, arrangement or undertaking. There are no outstanding
contractual obligations of the Company or any of its Subsidiaries to repurchase,
redeem or otherwise acquire any shares of capital stock (or options or warrants
to acquire any such shares) of the Company or its Subsidiaries. Except as
described in Section 2.3(c) of the Company Disclosure Schedule, as of the date
hereof, there are no stock-appreciation rights, stock-based performance units,
"phantom" stock rights or other agreements, arrangements or commitments of any
character (contingent or otherwise) pursuant to which any Person is or may be
entitled to receive any payment or other value based on the revenues, earnings
or financial performance, stock price performance or other attribute of the
Company or any of its Subsidiaries or assets or calculated in accordance
therewith (other than ordinary course payments or commissions to sales
representatives of the Company based upon revenues generated by them without
augmentation as a result of the transactions contemplated hereby) (collectively,
"Stock-Based Rights") or to cause the Company or any of its Subsidiaries to file
a registration statement under the Securities Act, or which otherwise relate to
the registration of any securities of the Company. Except as set forth in
Section 2.3(c) of the Company Disclosure Schedule or the Stockholders Agreement,
there are no voting trusts, proxies or other agreements, commitments or
understandings of any character to which the Company or any of its Subsidiaries
or, to the Knowledge (as defined herein) of the Company, any of the Company's
Stockholders is a party or by which any of them is bound with respect to the
issuance, holding, acquisition, voting or disposition of any shares of capital
stock of the Company or any of its Subsidiaries.
2.4 Authority; Enforceability. The Company has all necessary
corporate power and authority to execute and deliver this Agreement, each
Related Agreement (as defined herein) to which it is a party and each instrument
required to be executed and delivered by it at the Closing, and to perform its
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution and delivery by the Company of
this Agreement and each Related Agreement to which it is a party, the
performance of its obligations hereunder and thereunder, and the consummation by
the Company of the transactions contemplated hereby and thereby, have been duly
and validly authorized by all corporate action and no other corporate
proceedings on the part of the Company are necessary to authorize this Agreement
or any Related Agreement to which it is a party or to consummate the
transactions so contemplated (other than, with respect to the Merger, the
approval and authorization of this Agreement by votes of the holders of a
majority of the outstanding Company Common Stock in accordance with Delaware law
and the Company's Certificate of Incorporation and Bylaws) herein or therein.
Each of this Agreement and Related Agreements to which it is a party has been
duly and validly executed and delivered by the Company and, assuming the due
authorization, execution and delivery thereof by Parent and Merger Sub,
constitutes a legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms.
2.5 Required Vote. As of the date hereof and, except as permitted by
Section 4.2(c), as of the Effective Time, the Board of Directors of the Company
has, at a meeting duly called and held, (i) approved and declared advisable this
Agreement and each Related Agreement to which it is a party, (ii) determined
that the transactions contemplated hereby and thereby are advisable, fair to and
in the best interests of the holders of Company Common Stock, (iii) resolved to
recommend adoption of this Agreement, the Merger, the Related Agreements to
which it is a party and the other transactions contemplated hereby and thereby
to the Stockholders of the Company and (iv) directed that this Agreement be
submitted to the Stockholders of the Company for their approval and
authorization. The affirmative vote of a majority of all outstanding shares of
Company Common Stock is the only vote of the holders of any class or series of
capital stock of the Company necessary to approve and authorize this Agreement,
the Merger, the Related Agreements and the other transactions contemplated
hereby and thereby. As of December 20, 1999, the holders of the Company Common
Stock that are parties to the Stockholders Agreement own (beneficially and of
record) and have the right to vote, in the aggregate, approximately 75.0% of the
total issued and outstanding Company Common Stock.
2.6 No Conflict; Required Filings and Consents.
(a) The execution and delivery by the Company of this Agreement,
the Related Agreements to which it is a party or any instrument required by this
Agreement to be executed and delivered by the Company or any of its Subsidiaries
at the Closing do not, and the performance of this Agreement, the Related
Agreement to which it is a party or any instrument required by this Agreement to
be executed and delivered by the Company or any of its Subsidiaries at the
Closing, shall not, (i) conflict with or violate the Certificate of
Incorporation or Bylaws or equivalent organizational documents of the Company or
any of its Subsidiaries, (ii) conflict with or violate any Law or Order in each
case applicable to the Company or any of its Subsidiaries or by which its or any
of their respective properties or assets is bound or affected, or (iii) result
in any breach or violation of or constitute a default (or an event that with
notice or lapse of time or both would become a default) under, or impair the
Company's or any of its Subsidiaries' rights or alter the rights or obligations
of any third party under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in the creation of a Lien
on any of the properties or assets of the Company or any of its Subsidiaries
pursuant to, any note, bond, mortgage, indenture, Contract, permit, franchise or
other instrument or obligation to which the Company or any of its Subsidiaries
is a party or by which the Company or any of its Subsidiaries or its or any of
their respective properties or assets is bound or affected, except (A) as set
forth in Section 2.6(a) of the Company Disclosure Schedule or (B) in the case of
clause (ii) or (iii) above, for any such conflicts, breaches, violations,
defaults or other occurrences that could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(b) The execution and delivery by the Company of this Agreement,
the Related Agreements to which it is a party or any instrument required by this
Agreement to be executed and delivered by the Company or any of its Subsidiaries
at the Closing do not, and the performance of this Agreement, any Related
Agreement to which it is a party and any instrument required by this Agreement
to be executed and delivered by the Company or any of its Subsidiaries at the
Closing, shall not, require the Company or any of its Subsidiaries to, except as
set forth in Section 2.6(b) of the Company Disclosure Schedule, obtain any
Approval of any Person or Approval of, observe any waiting period imposed by, or
make any filing with or notification to, any Governmental Authority, domestic or
foreign, except for (A) compliance with applicable requirements of the
Securities Act of 1933, as amended (the "Securities Act"), the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), state securities laws
("Blue Sky Laws"), the pre-Merger notification requirements of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), or Foreign Competition Laws, (B) the filing of the Certificate of Merger
in accordance with Delaware law or (C) where the failure to obtain such
Approvals, or to make such filings or notifications, could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
2.7 Material Agreements.
(a) Section 2.7(a) of the Company Disclosure Schedule sets forth
a true and complete list, and if oral, an accurate and complete summary, of all
material Contracts to which the Company or any of its Subsidiaries is a party or
by which any of them or their properties or assets are bound as of the date
hereof (collectively, "Material Agreements"), including the following
agreements:
(i) employment Contracts with officers of the Company and
other Contracts with current or former officers, directors or Stockholders of
the Company, and all severance, change in control (except pursuant to the Option
Plans) or similar Contracts with any current or former Stockholders, directors,
officers, employees or agents of the Company that will result in any obligation
(absolute or contingent) of the Company or any of its Subsidiaries to make any
payment to any current or former Stockholders, directors, officers, employees or
agents of the Company following either the consummation of the transactions
contemplated hereby, termination of employment (or the relevant relationship),
or both;
(ii) labor Contracts (if any);
(iii) Contracts involving annual revenues, expenditures or
liabilities in excess of $250,000 per annum which are not cancelable (without
material penalty, cost or other liability) within 60 days;
(iv) promissory notes, loans, agreements, indentures,
evidences of indebtedness or other instruments and Contracts providing for the
borrowing or lending of money, whether as borrower, lender or guarantor, in each
case, relating to indebtedness or obligations in excess of $100,000;
(v) Contracts containing a covenant limiting the freedom of
the Company or any of its Subsidiaries (or which purport to limit the freedom of
Parent) to engage in any line of business or compete with any Person or operate
at any location in the world;
(vi) joint venture or partnership agreements or joint
development, distribution or similar agreements pursuant to which any third
party is entitled or obligated to develop or distribute any products on behalf
of the Company or any of its Subsidiaries or pursuant to which the Company or
any of its Subsidiaries is entitled or obligated to develop or distribute any
products on behalf of any third party;
(vii) Contracts for the acquisition, directly or indirectly
(by merger or otherwise) of material assets (whether tangible or intangible) or
the capital stock of another Person;
(viii) Contracts involving the issuance or repurchase of any
capital stock of the Company or any of its Subsidiaries (including newly formed
Subsidiaries), other than, with respect to the issuance of Company Common Stock,
the options or warrants listed in Section 2.3(a) of the Company Disclosure
Schedule
(ix) Contracts under which the Company or any of its
Subsidiaries has granted or received exclusive rights;
(x) any interest rate swaps, caps, floors or option
agreements or any other interest rate risk management arrangement or foreign
exchange Contracts; and
(xi) Contracts for the license or supply of any geographic or
similar data to the Company or any of its Subsidiaries.
True and complete copies of all written Material Agreements have been delivered
or been made available to Parent by the Company. Section 2.7(a) of the Company
Disclosure Schedule sets forth a true and complete list of all Contracts that
would purport to bind Parent or any of its Affiliates (other than the Company or
its Subsidiaries) following the consummation of the Merger.
(b) Other than Material Agreements that have terminated or
expired in accordance with their terms, each Material Agreement is in full force
and effect, is a valid and binding obligation of the Company or such Subsidiary
and of each other party thereto and is enforceable, in accordance with its
terms, against the Company or such Subsidiary and against each other party
thereto, in each case except that the enforcement thereof may be limited by (A)
the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar Laws affecting creditors' rights generally, (B)
general principles of equity (whether in a proceeding in equity or at law) and
(C) an implied covenant of good faith and fair dealing, and such Material
Agreements will continue to be valid, binding and enforceable in accordance with
their respective terms and in full force and effect immediately following the
consummation of the transactions contemplated hereby, with no material
alteration or acceleration or increase in fees or liabilities. Neither the
Company nor any of its Subsidiaries is or alleged to be and, to the best
Knowledge of the Company, no other party is or alleged to be in default under,
or in breach or violation of, any Material Agreement and, to the best Knowledge
of the Company, no event has occurred which, with the giving of notice or
passage of time or both, would constitute such a default, breach or violation.
The designation or definition of Material Agreements for purposes of this
Section 2.7 and the disclosures made pursuant thereto will not be construed or
utilized to expand, limit or define the terms "material" and "Material Adverse
Effect" as otherwise referenced and used in this Agreement.
2.8 Compliance. The Company and each of its Subsidiaries are in
compliance with, and are not in default or violation of, (i) the Certificate of
Incorporation and Bylaws of the Company or the equivalent organizational
documents of such Subsidiary, (ii) any Law or Order or by which any of their
respective assets or properties are bound or affected and (iii) the terms of all
notes, bonds, mortgages, indentures, Contracts, permits, franchises and other
instruments or obligations to which any of them are a party or by which any of
them or any of their respective assets or properties are bound or affected,
except, in the case of clauses (ii) and (iii), for any such failures of
compliance, defaults and violations which could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. The Company
and its Subsidiaries are in compliance with the terms of all Approvals, except
where the failure to so comply could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. Except as set forth in
Section 2.8 of the Company Disclosure Schedule or as could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect,
neither the Company nor any of its Subsidiaries has received notice of any
revocation or modification of any federal, state, local or foreign Governmental
Authority, any Approval of any federal, state, local or foreign Governmental
Authority that is material to the Company or any of its Subsidiaries.
2.9 SEC Filings; Financial Statements.
(a) The Company has filed all forms, reports, schedules,
statements and documents required to be filed with the Securities and Exchange
Commission ("SEC") since January 1, 1999 (collectively, the "Company SEC
Reports") pursuant to the federal securities Laws and the Regulations of the SEC
promulgated thereunder, and all Company SEC Reports have been filed in all
material respects on a timely basis. The Company SEC Reports were prepared in
accordance, and complied as of their respective filing dates in all material
respects, with the requirements of the Exchange Act and the Securities Act and
the Regulations promulgated thereunder and did not at the time they were filed
(or if amended or superseded by a filing prior to the date hereof, then on the
date of such filing) contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading. None of the Company's Subsidiaries has filed, or is
obligated to file, any forms, reports, schedules, statements or other documents
with the SEC.
(b) Each of the audited and unaudited consolidated financial
statements (including, in each case, any related notes thereto) contained in the
Company SEC Reports (i) complied in all material respects with applicable
accounting requirements and the published Regulations of the SEC with respect
thereto, (ii) were prepared in accordance with generally accepted accounting
principles ("GAAP") (except, in the case of unaudited statements, as permitted
by Form 10-Q of the SEC) applied on a consistent basis throughout the periods
involved and (iii) fairly present the consolidated financial position of the
Company and its Subsidiaries as at the respective dates thereof and the
consolidated results of its operations and cash flows for the periods indicated,
except that the unaudited interim financial statements included in the Company's
Form 10-Q reports were or are subject to normal and recurring year-end
adjustments that have not been and are not expected to be material to the
Company.
2.10 Absence of Certain Changes or Events.
(a) Except as described in Section 2.10(a) of the Company
Disclosure Schedule, since December 31, 1998, the Company and its Subsidiaries
have conducted their, businesses only in the ordinary and usual course and in a
manner consistent with past practice, and, since such date, there has not been
any change, development, circumstance, condition, event, occurrence, damage,
destruction or loss that has had or could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
(b) Except as described in Section 2.10(b) of the Company
Disclosure Schedule, during the period from December 31, 1998 to the date
hereof, (i) there has not been any change by the Company in its accounting
methods, principles or practices, any revaluation by the Company of any of its
assets, including, writing down the value of inventory or writing off notes or
accounts receivable, and (ii) there has not been any action or event, and
neither the Company nor any of its Subsidiaries has agreed in writing or
otherwise to take any action, that would have required the consent of Parent
pursuant to Section 4.1 had such action or event occurred or been taken after
the date hereof and prior to the Effective Time.
2.11 No Undisclosed Liabilities. Neither the Company nor any of its
Subsidiaries has any liabilities or obligations of any nature (whether absolute,
accrued, fixed, contingent or otherwise), and there is no existing fact,
condition or circumstance which could reasonably be expected to result in such
liabilities or obligations, except liabilities or obligations (i) reflected in
the Company SEC Reports filed and publicly available prior to the date hereof,
(ii) disclosed in Section 2.11 of the Company Disclosure Schedule, or (
